Dairymen's Co-Operative Sales Assn. v. P. S. C

• Decision Date: 03 October 1934
• Docket Number: 268-1934
• Citation: 115 Pa.Super. 100,174 A. 826
• Parties: Dairymen's Co-Operative Sales Assn. v. P. S. C
• Court: Pennsylvania Superior Court

174 A. 826

115 Pa.Super. 100

Dairymen's Co-Operative Sales Assn. v. P. S. C

No. 268-1934

Superior Court of Pennsylvania

October 3, 1934

Argued May 4, 1934

Appeal by Dairymen's Co-Operative Sales Association, from report and order of the Public Service Commission of the Commonwealth of Pennsylvania at Complaint Docket No. 9706, in the case of Dairymen's Co-Operative Sales Association v The Public Service Commission of the Commonwealth of Pennsylvania, H. B. Robinson and Oliver B. Robinson, trading and doing business as Robinson Bros and Tri-State Milk Haulers Association. Appeal No. 269, April T., 1934, by Dairymen's Co-Operative Sales Association, from report and order of the Public Service Commission of the Commonwealth of Pennsylvania at Complaint Docket No. 9707, in the case of Dairymen's Co-Operative Sales Association v. The Public Service Commission of the Commonwealth of Pennsylvania, Michael Doman and Tri-State Milk Haulers Association. Appeal No. 270, April T., 1934, by Dairymen's Co-Operative Sales Association, from report and order of the Public Service Commission of the Commonwealth of Pennsylvania at Complaint Docket No. 9708, in the case of Dairymen's Co-Operative Sales Association v The Public Service Commission of the Commonwealth of Pennsylvania, W. D. Rubright and Tri-State Milk Haulers Association.

Complaints against J. L. Townsend and Son and W. E. Burket, that they were operating as common carriers in their territory without procuring a certificate of public convenience. Before the Public Service Commission.

The Commission sustained the charges and issued an order directing the respondents to desist from transporting property as common carriers until they received a certificate. Dairymen's Co-Operative Sales Association appealed.

Error assigned, among others, was the order of the Commission.

Reversed.

E. Lowry Humes, for Dairymen's Co-Operative Sales Association, appellant, cited: Blakiston v. Davis, Turner & Co., 42 Pa.Super. 397; Frantz v. Public Service Commission, 93 Pa.Super. 416; Davis v. Commission, 79 Colo. 642, 247 Pacific 801; Hissem v. Guran, 112 O. S. 59, 146 N.E. 808.

Paul H. Rhoads, and with him Samuel Graff Miller, Legal Assistants, E. Everett Mather, Jr., Assistant Counsel and John Fox Weiss, Counsel, for the Public Service Commission, appellee.

D. I. McAlister of Hughes & McAlister for Tri-State Milk Haulers Association, intervenors.

John B. Nicklas, Jr., of McCrady, McClure, Nicklas & Hirschfield, and with him John L. Wilson, attorneys for Michael Doman and W. D. Rubright, intervenors.

D. I. McAlister of Hughes & McAlister, for Oliver B. Robinson, trading and doing busines as Robinson Bros., intervenor.

Before Trexler, P. J., Keller, Cunningham, Baldrige, Stadtfeld and Parker, JJ.

OPINION

Parker, J.

These three appeals involve the same questions and will be disposed of in one opinion. The proceedings were initiated by a complaint against J. L. Townsend and Son and two complaints against W. E. Burket. The complainants, holders of certificates of public convenience issued by the Public Service Commission authorizing the transportation of merchandise and goods between various points in the vicinity of Pittsburgh, charged, in substantially the same language, that the respondents were operating as common carriers in their territory without procuring a certificate of public convenience. The commission, after hearings, sustained the charges and issued an order directing the respondents to desist from transporting property as common carriers until they received a certificate. The Dairymen's Co-operative Sales Association was permitted to intervene in the proceedings before the commission on behalf of the respondents, and the Tri-State Milk Haulers' Association was permitted to intervene in support of the order.

The Dairymen's Co-operative Sales Association, a corporation organized under Act of Assembly approved April 30, 1929, P. L. 885 (14 PS 81), began business April 1, 1932, succeeding the operations of the Dairymen's Co-operative Sales Company, organized under the laws of Ohio. The Ohio corporation was liquidated and its members are now members and stockholders in this association, which was organized "for the purpose of buying, selling and dealing in farm and dairy products; pasteurizing and manufacturing milk into butter, cheese, condensed milk, powdered milk and by-products and selling the same;" buying and selling agricultural implements, farming supplies generally, and distributing the same to its stockholders at cost. The business of the association as actually conducted has not been carried on for profit to it and, so far as the facts affect the matters involved in this appeal, has consisted in finding a market for milk and cream and providing means of transportation for those products from the producer to the market. The buyers with whom the association has dealt have been consumers in large quantities, ice cream manufacturers, cheese makers, and the like. The association has now 17,000 stockholders in western Pennsylvania, northern West Virginia, and eastern Ohio.

The producer, upon becoming a member of the association, enters into an agreement with it whereby, inter alia, he agrees to consign to the association all the milk and cream produced upon his farm, except such as he might give away or retain for home consumption, and the association undertook to find a market for the products. The contract contained this provision: "The Producer agrees to make delivery of said milk and cream by such haulers or carriers and by the use of such hauling equipment and facilities as are approved by said Association."

In April, 1933, the association, after advertising for bids, entered into three-party agreements with a number of its stockholders located in a district and certain truckers including Townsend and Son and Burket. The stockholders by executing the agreement indicated their assent to the terms of the particular agreement, although such written assent was not a necessary condition in the making of a hauling agreement by the association. The hauling contracts were for periods of one year and provided that the hauler should collect daily the milk and cream consigned for sale, by such of the stockholders as the association designated and who accepted the contracts, and deliver the same to the buyer or buyers designated by the association, and thereafter return to the stockholders the containers, for which service the trucker was to receive eighteen cents per hundred weight. The association, on sale of the milk and cream, had the right to receive the price paid for account of the producer but, to save expense, had the buyer remit directly to the producer on apportionments made by the association. The buyer deducted from the amount due the producer the hauling charges and a commission due the association. Of such hauling charges, six-tenths of one per centum were retained by the association and the balance paid by it to the trucker. As a result the producer actually paid the hauling charges. The hauling contract also provided that the carrier should not "solicit or receive for transportation or sale milk from stockholders or others not specifically designated by the first party [the association]," and the trucker agreed to "haul, handle or transport while in the performance of this contract, no produce, commodities or articles not specifically provided for under the terms of this contract."

It is a matter of common knowledge that milk is a fertile medium for the development of bacteria and that to meet proper sanitary requirements, it is essential that the transportation of milk be expedited and its quality thus preserved. These facts necessitate the use of special equipment and other safeguards not only in the production, but also in the transportation of milk for human consumption. To accomplish the purposes of the association it must be in a position to protect the price of milk and make possible the prompt and effective diversion or transfer of milk from one market to another in order to guard against surpluses that accumulate in seasons of plenty. The parties recognized these conditions in their contracts when they became members of the association and authorized the association, under certain circumstances, to divert the milk so that it would not be used as fluid milk, but sold and delivered at different places to dairies and other buyers who manufacture the milk into such products as cheese, ice cream, powdered milk, and the like. This made necessary, the association contends, the securing of a means of transportation which was more flexible than was provided by common carriers with fixed routes or who operated in restricted territory.

There was some evidence offered as to hauling done for others than members of the association, but the commission in its opinion based its conclusions largely, if not entirely, on the dealings of respondents with the members, saying: "Although there is some evidence that both of the respondents have hauled milk for producers which were not members of the Association, the commission is of the opinion that even though the carriage were restricted to the hauling of milk for members only, a sufficiently large portion of the public would be served and offered the service of the respondents to constitute them common carriers." We will, therefore, first examine the dealings among the association, the respondents, and the members of the association.

"In order to subject the appellant [respondent] to the jurisdiction of the commission, it must be made to appear that he is a common carrier; that is, that he undertakes to carry for hire all persons indifferently who apply to him": Harder v. P. S. C., 90 Pa.Super....