Milk Maid Dairy Products, Inc. v. Milk Control Commission of Com. of Pa.
| Decision Date | 16 September 1959 |
| Citation | 190 Pa.Super. 410,154 A.2d 274 |
| Parties | MILK MAID DAIRY PRODUCTS, INC. v. MILK CONTROL COMMISSION OF COMMONWEALTH OF PENNSYLVANIA, Appellant. |
| Court | Pennsylvania Superior Court |
John Patrick McShea, Jr., Marvin D. Weintraub Asst. Dist. Attys., Philadelphia, Anne X. Alpern, Atty. Gen for appellant.
Donald Brown, Robert P. Frankel, Bernard L. Frankel, Fox Rothschild O'Brien & Frankel, Philadelphia, for appellee.
Before RHODES, P. J., and HIRT, GUNTHER, WRIGHT, WOODSIDE, ERVIN and WATKINS, JJ.
This is an appeal from an order of the Court of Common Pleas No. 5 of Philadelphia reversing an order of the Pennsylvania Milk Control Commission suspending the milk dealer's license of Milk Maid Dairy Products, Inc., for violating the Rules of Trade Practices which had been established by the commission.
Section 301 of the Milk Control Law of April 28, 1937, P.L. 417, as amended, 31 P.S. § 700j-301 provides: 'The commission is hereby declared to be the instrumentality of the Commonwealth for the purpose of administering the provisions of this act and * * * it is hereby vested with power to supervise, investigate and regulate the entire milk industry of this Commonwealth, * * * including the establishment of reasonable trade practices, * * *.'
Carrying out the powers vested in it by this provision, the commission established Rules of Trade Practices effective December 12 1956, which included the following: 'A-1, No licensee under the Milk Control Law shall give or lend to any customer any refrigeration equipment, or milk or cream dispenser of any type for the purpose of storing or dispensing milk or cream, * * *.' The rules originally provided that a fair rental value be charged for refrigeration equipment furnished by the wholesaler, but they were amended on April 17, 1957, to include a schedule of rentals deemed to be fair.
In violation of this rule, the appellee, whom we shall refer to as Milk Maid, lent refrigerator equipment free of charge to 22 of its wholesale customers. The commission cited Milk Maid for these violations and, after a hearing and a finding that it had violated the commission's Rules of Trade Practice, suspended its license for 44 days, permitting it to apply for the right to pay $2200 in lieu of the suspension.
Milk Maid appealed to the Common Pleas Court No. 5 of Philadelphia. In its petition for appeal, it did not deny its violation of the commission's rules. It set forth that it 'files this petition for appeal because the Rules of Trade Practices adopted December 12, 1956, and April 17, 1957 by the Commission are invalid and illegal * * *.'
The court below, accepting Milk Maid's contention, held that 'the prohibition upon the mere giving or lending of refrigeration equipment contained in Rules of Trade Practices A-1 is unreasonable, patently beyond the necessities of the case and does not have a real and substantial relation to the objects sought to be attained.' The commission appealed to this Court.
Former Chief Justice Stern said in Gambone v. Commonwealth, 1954, 375 Pa. 547, 550, 551, 101 A.2d 634, 636, 'Probably the most important function of government is the exercise of the police power for the purpose of preserving the public health, safety and morals, and it is true that, to accomplish that purpose, the legislature may limit the enjoyment of personal liberty and property * * * But, * * * a law which purports to be an exercise of the police power must not be unreasonable, unduly oppressive or patently beyond the necessities of the case, and the means which it employs must have a real and substantial relation to the objects sought to be attained.'
We cannot agree with the court below that the commission's rule fails to meet the test of constitutionality set forth above.
The purpose of the Milk Control Law, as stated in its preamble, is to assure consumers a constant and sufficient supply of pure, wholesome milk, primarily through price regulation and control.
Governmental price fixing and its concomitants run counter to the philosophy of free enterprise. They are not palatable to a people who have confidence in substantial freedom in business and economic as well as in religious and political matters. Governmental control of charges made by private business establishments is confined to a relatively few enterprises, such as utilities, and, to a lesser degree, insurance, or it is applied to unusual situations, such as when a war suspends the economic rules of supply and demand. Many people are understandably annoyed by a law which, establishing the price for a product or service, must say to the businessman who violates the established price, 'You are selling your product for less than you should,' or 'Your product is too good for the price you are charging', or 'You are rendering too much service for the price you are charging.' But these are concomitants to price control, particular control of minimum prices, and without them there can be no effective price control.
Milk control grew out of, and survived, the depression of the Thirties. [1] The constitutionality of the Milk Control Law, and later the advisability of retaining the statute, were subjects of bitter arguments in and out of the court rooms and the legislative halls, but now, a quarter of a century after the introduction of milk control into our government and economy, it seems to be firmly established.
Milk control, as the legislature intended it, is founded upon price control.
In the preamble of the Law we find: 'Public health is menaced when milk dealers do not or cannot pay a price to producers commensurate with the cost * * * or when consumers are required to pay excessive prices * * * persons have often combined privately to establish practices or fix prices to the detriment of producers or consumers.' See Act of April 28, 1937, P.L. 417, and Historical Note under 31 P.S. § 700j-101.
A large part of the statute is given to price fixing, and its enforcement. Section 807, as amended, 31 P.S. § 700j-807 provides, inter alia, 'No method or device shall be lawful whereby milk is * * * sold or handled or delivered or made available on consignment or otherwise, * * * at a price less than the minimum price applicable to the particular transaction, whether by any discount, premium, rebate, free service, trading stamps, advertising allowance, or extension of credit, or by a combined price for such milk, together with another commodity or a service which is less, or is represented to be less, than the aggregate of the price of the milk and the price or value of such commodity or service when bought or received or handled on consignment or otherwise, sold or delivered or made available on consignment or otherwise, or offered for sale, delivery, purchase, handling or receiving separately or otherwise.'
To maintain an established price, it is necessary to prevent the seller from giving to the purchaser anything of value related to the sale, which is in addition to the product and service for which the price was established. Only by maintaining established prices can milk control survive.
A rule or order of the commission designed to maintain established prices is presumed to be constitutional. The burden is upon the person who challenges the rule to show that it is unconstitutional. The appellee did not meet this burden.
The law requires the commission to fix prices, which include a reasonable return to the milk dealer or handler, and in doing so to utilize a cross-section representative of the average or normally efficient dealers or handlers. See section 801, 31 P.S. § 700j-801, and Colteryahn Sanitary Dairy v. Milk Control Commission of Pennsylvania, 1938, 332 Pa. 15, 27, 1 A.2d 775, 122 A.L.R. 1049.
To do this the commission must ascertain the expenses of the dealer and the handler. The storing and the refrigeration of milk is a necessary expense. As set forth in the preamble to the commission's amended Rules of Trade Practice, 'when the store spread was originally fixed by the Commission throughout the Commonwealth of Pennsylvania, one of the motivating factors upon which that spread was, and is predicated was the cost of the store of acquiring refrigeration equipment.' If the cost of milk refrigeration in the...
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