Eurich v. Coffee-Rich, Inc.

• Decision Date: 17 October 1972
• Docket Number: No. 96-71,INC,COFFEE-RIC,96-71
• Citation: 130 Vt. 537,298 A.2d 846
• Parties: Edward R. EURICH, Commissioner of Agriculture v.
• Court: Vermont Supreme Court

Page 846

298 A.2d 846

130 Vt. 537

Edward R. EURICH, Commissioner of Agriculture v. COFFEE-RICH, INC.

No. 96-71.

Supreme Court of Vermont.

Oct. 17, 1972.

Reargument Denied Dec. 5, 1972.

James M. Jeffords, Atty. Gen., and Martin K. Miller, Asst. Atty. Gen., for plaintiff.

Paterson, Gibson, Noble & Brownell, Montpelier, and Elliott Levitas, of Arnall, Golden & Gregory, Atlanta, Ga., for defendant.

Before SHANGRAW, C. J., and BARNEY, SMITH, KEYSER, and DALEY, JJ.

DALEY, Justice.

This case originated in the Washington County Court of Chancery. The plaintiff, the Commissioner of Agriculture of the State of Vermont, hereinafter referred to as commissioner, sought to enjoin the defendant, Coffee-Rich, Inc., from transacting business within the State of Vermont including sale of or distribution of Rich's Coffee-Rich Non-Dairy Creamer until the defendant obtained an imitation dairy product handler's license.

An imitation dairy product handler's license must be secured and held at the cost of $25.00 per year in order for an imitation dairy products handler to transact business in the state. 6 V.S.A. § 2721(b). An imitation dairy products handler is a person, firm, unincorporated association or corporation engaged in the business of buying, selling, packaging, or processing imitation dairy products for sale within or without the state. 6 V.S.A. § 2672(9). An imitation dairy product is either a product (1) containing no milk which by its texture, flavor, color, packaging, or other characteristic which could be confused by consumers with established and defined dairy products, or (2) sold or offered for sale as a substitute for milk or fluid dairy products. 6 V.S.A. § 2672(8).

The commissioner in his bill of complaint against Coffee-Rich, Inc., alleged that the defendant was selling in the state a product labeled Rich's Coffee-Rich Non-Dairy Creamer. The commissioner further alleged in paragraph five and paragraph six of his complaint that Rich's Coffee-Rich Non-Dairy Creamer (1) '. . . contains no milk and by its texture, flavor, color, packaging and other characteristics could be confused by consumers with cream and so-called 'half-and-half', which are dairy products' and (2) '. . . is sold or offered for sale as a substitute for cream and 'half-and-half', which are fluid dairy products.'

The defendant, Coffee-Rich, Inc., admitted in its answer that it was selling Rich's Coffee-Rich Non-Dairy Creamer, but denied specifically those allegations made by the commissioner in paragraphs five and six in his complaint as hereinbefore quoted. The defendant further alleged that the product is a sui generis original development and a distinctive product in itself and not an imitation of any dairy product. The defendant further alleged that the product

'. . . is, in fact, not an imitation cream, imitation half-and-half, imitation milk, imitation dairy product, or imitation of any food product, but is an original and distinctive product and consequently cannot 'be confused by consumers with established and defined dairy products', nor is it 'sold or offered for sale as a substitute for milk or fluid dairy product', but to the contrary, is sold and offered for sale as such original and distinctive product for such use by consumers as they find fit and appropriate.'

The defendant, Coffee-Rich, Inc., further alleged in its answer that the statutes which the commissioner was seeking compliance by the defendant violated both the Constitutions of the United States and the State of Vermont.

At pre-trial conference, both parties agreed by oral stipulation to submit the case to the Chancellor on the factual matters asserted by the plaintiff and admitted by the defendant, and also the factual matters as contained in the defendant's answer. Hence, there was no evidence before the Chancellor other than that contained in the pleadings.

The Chancellor found in his findings of fact:

'17. That Coffee-Rich is a sui generis product and is not an imitation dairy product, nor could it be confused with established and defined dairy products, since Coffee-Rich is a distinctive product in itself.

18. That Coffee-Rich as marketed and described as found aforesaid is sold or offered for sale as a substitute, or, in other words, as a product that is put in place of something else and is available for use instead of something else for milk or for fluid dairy products.'

The Chancellor went on to find that to require the defendant, Coffee-Rich, Inc., to obtain a license to market its product in the state, Rich's Coffee-Rich Non-Dairy Creamer, would violate the Constitutions of the United States and Vermont.

The Chancellor stated in his judgment order that Rich's Coffee-Rich Non-Dairy Creamer was an imitation dairy product as it was offered for sale as a substitute for fluid dairy products, but since it was not constitutionally permissable to require the defendant Coffee-Rich, Inc., to obtain a license for the marketing of its product in the state, the plaintiff's bill of complaint was dismissed with prejudice and plaintiff was enjoined from enforcing the statutory provisions of 6 V.S.A., Chapter 151 against the defendant.

The defendant then brought a motion to alter the judgment order on the grounds that holding Rich's Coffee-Rich Non-Dairy Creamer to be an imitation dairy product was not in accord with finding of fact number 17, supra, and the record of the case. The Chancellor amended his judgment order to read:

'That the Defendant, Coffee-Rich, Inc., is an imitation dairy product handler and that Rich's Coffee-Rich Non- Dairy Creamer, although it is a sui generis product and not an 'imitation dairy product' as defined in the first clause of 6 V.S.A. § 2672(8), said product is sold or offered for sale as substitute for milk or fluid dairy products, as defined in the second clause of the Statute above referred to; and hence the defendant comes within the 'imitation dairy product' definition of 6 V.S.A. § 2672(8).'

The judgment order in all other aspects was not changed.

Both the plaintiff and defendant appeal from the judgment order. The plaintiff finds fault with the holding that 6 V.S.A. Chapter 151 is constitutionally void as applied to the defendant. The defendant finds fault with the holding that Rich's Coffee-Rich Non-Dairy Creamer comes within the statutory definition of 'imitation dairy products' in 6 V.S.A. § 2672(8).

The duty of this Court is to affirm the findings if there is credible evidence to support them; and in turn construe those findings to support the judgment. National Grange Mutual v. Churchill et al., 126 Vt. 428, 432, 234 A.2d 334 (1967). The evidence before this Court consists of the undenied facts alleged by both the plaintiff and the defendant. Elliott v. Fish and Game Commission, 117 Vt. 61, 63, 84 A.2d 588 (1951); Digregorio v. Champlain Valley Fruit Co., 127 Vt. 562, 564, 255 A.2d 183 (1969).

The primary issue is whether there is evidence to support the final judgment that the defendant's product, Rich's Coffee-Rich Non-Dairy Creamer, falls within the statutory definition of an 'imitation dairy product' as stated in 6 V.S.A. § 2672(8), thus imposing the requirements of 6 V.S.A., Chapter 151 on the defendant.

When this case was heard in the court of chancery, the Rules of Practice in the Court of Chancery, 12 V.S.A. App. III, were still in effect. Rule 21 provides that '. . . all facts well pleaded in a bill, . . . that are not denied or put in issue by the answer, shall be deemed to be admitted. . . .' Rule 15 provides that '. . . the defendant may insist in his answer or on any special matter that goes to the merits of the bill, and have the same benefit thereof as if he had pleaded the same....