People v. Beakes Dairy Co.

CourtNew York Court of Appeals
Citation222 N.Y. 416,119 N.E. 115
PartiesPEOPLE v. BEAKES DAIRY CO.
Decision Date12 February 1918

222 N.Y. 416
119 N.E. 115

PEOPLE
v.
BEAKES DAIRY CO.

Court of Appeals of New York.

Feb. 12, 1918.


Appeal from Supreme Court, Appellate Division, Third Department.

Action by the People of the State of New York against the Beakes Dairy Company. From judgment of the Appellate Division (166 N. Y. Supp. 209), reversing an order denying defendant's motion for judgment on the pleadings and dismissing the complaint, plaintiff appeals. Judgment of the Appellate Division affirmed.

[119 N.E. 116]


[222 N.Y. 417]Merton E. Lewis, Atty. Gen. (Charles M. Stern, of Albany, of counsel), for the People.

222 N.Y. 418]Walter Jeffreys Carlin, of New York City, for respondent.
[222 N.Y. 420]POUND, J.

This is an action to recover judgment against defendant for 298 penalties of $100 each for buying milk or cream within the state from certain producers for the purpose of shipping the same to New York City for consumption or manufacture without having been duly licensed as provided by sections 55 and following of the Agricultural Law (Consol Laws, c. 1), added thereto by chapter 408 of the Laws of 1913, as amemded by chapter 651 of the Laws of 1915. The principal provisions of the statute are as follows:

Ԥ 55. Licensing of Milk-Gathering Stations Where Milk is Bought. On and after September first, nineteen hundred and thirteen, no person, firm, association or corporation, shall buy milk or cream within the state from producers for the purpose of shipping the same to any city for consumption or for manufacture, unless such business be regularly transacted at an office or station within the state and unless such person, firm, association or corporation be duly licensed as provided in this and the ensuing sections of this article. Every such person, firm, association or corporation before engaging or continuing in the business of buying milk or cream for the purposes aforesaid, shall, annually, on or before August first, file an application with the commissioner of agriculture for a license to transact such business. The application shall state the nature of the business, as hereinabove set forth, the full name of the person or corporation applying for the license, and, if the applicant be a firm or association, the full name of each member of such firm or association, [222 N.Y. 421]the city, town or village and street number at which the business is to be conducted, and such other facts as the commissioner of agriculture shall prescribe. The applicant shall further satisfy the commissioner of his or its character, financial responsibility and good faith in seeking to carry on such business. The commissioner shall thereupon issue to such applicant, on payment of ten dollars, a license entitling the applicant to conduct the business of buying milk and cream from producers for the purpose aforesaid at an office or station at the place named in the application until the first day of September next following. * * *

‘A license shall not be issued as provided in this section, on and after the taking effect of this section, unless the applicant for such license shall file with the application a good and sufficient surety bond, executed by a surety company, duly authorized to transact business in this state, in a sum not less than five thousand dollars, or shall be relieved from such requirement as provided herein. Such bond shall be approved as to its form and sufficiency by the commissioner of agriculture.

‘Such applicant may in lieu of such bond deposit with the commissioner of agriculture money or securities in which the trustees of a savings bank may invest the moneys deposited therein, as provided in the banking law, in an amount equal to the sum secured by the bond required to be filed as herein provided.

‘The bond required to be filed hereunder shall be given to the commissioner of agriculture in his official capacity and shall be conditioned for the faithful compliance by the licensee with the provisions of this chapter, as hereby amended, and for the payment of all amounts due to persons who have sold milk or cream to such licensee, during the period that the license is in force. * * *

‘Upon default by the licensee in the payment of any money due for the purchase of milk or cream, which [222 N.Y. 422]payment is secured by a bond or the deposit of money or securities as hereinbefore provided for, the creditor may file with the commissioner of agriculture, upon a form prescribed by him, a verified statement of his claim. If such creditor shall have reduced such claim to judgment or shall thereafter and before the commencement of the action by the commissioner of agriculture, as hereinafter provided for, reduce such claim to judgment, a transcript of such judgment shall also be filed with such commissioner. * * *

‘After the expiration of ninety days from the termination of any license period the commissioner of agriculture shall, by proper action wherein all such creditors and any surety upon any bond given as hereinbefore provided for and the licensee shall be parties, proceed to determine the amount due each such creditor, and the judgment rendered in such action shall be enforced ratably for such creditors against the surety on the bond, if one there be, or against the moneys or securities deposited as hereinbefore provided for. * * *

[119 N.E. 117

‘A person or corporation licensed hereunder shall make a verified statement of his or its disbursements during a period to be prescribed by the commissioner of agriculture, containing the names of the persons from whom such products were purchased, and the amount due to the vendors thereof. Such statement shall be submitted to the commissioner of agriculture when requested by him and shall be in the form prescribed by such commissioner. If it appears from such statement or other facts ascertained by the commissioner of agriculture, upon inspection or investigation of the books and papers of such licensee as authorized by section fifty-six of this chapter, that the security afforded to persons selling milk and cream to such licensee by the bond executed or deposit made by such licensee as herein provided does not adequately protect such vendors, the commissioner of agriculture may [222 N.Y. 423]require such licensee to give an additional bond or to deposit additional moneys or securities, to be executed or denosited as above provided, in a sum to be determined by the commissioner, but not exceeding by more than twenty-five per centum the maximum amount paid out by such licensee to sellers of milk in any one month: Provided, however, that the maximum amount of the bond or deposit required from any applicant under the provisions of this section shall be one hundred thousand dollars; and that any applicant filing a bond or depositing money or securities in such maximum amount shall be exempted from filing either the statements of milk purchased, or the statements of disbursements in this section provided for.

‘If the applicant for a license under this section be a person or a domestic corporation, the commissioner of agriculture may, notwithstanding the provisions of this section, if satisfied from an investigation of the financial condition of such person or domestic corporation that such person or corporation is solvent and possessed of sufficient assets to reasonably assure compensation to probable creditors, by an order filed in the department of agriculture, relieve such person or corporation from the provisions of this section requiring the filing of a bond.

‘The term ‘station’ or ‘milk-gathering station,’ as used in this and the ensuing sections of this article, shall include an established office where the business of buying milk or cream as herein provided is carried on, with or without a place or premises in connection therewith for the physical handling of milk or cream.'

To summarize the principal features of the enactment:

(1) No person, firm, association, or corporation shall, as a business, buy milk or cream within the state from producers for the purpose of shipping the same to any city for consumption or manufacture without having: (a) An established office within the state; and (b) a license.

(2) No such person, firm, association, or corporation [222 N.Y. 424]may obtain a license without: (a) Satisfying the commissioner of agriculture of his character and financial responsibility; (b) either giving a surety company bond of not less than $5,000 or more than $100,000, or making a deposit of money or securities; or (c) if an individual or a domestic corporation, satisfying the commissioner that he ‘is solvent and possessed of sufficient assets to reasonably assure compensation to probable creditors.’

(3) On default of payment by a licensee of money due for the purchase of milk and cream, the commissioner shall apply the security to the extinguishment of the claims of creditors filed with him.

Defendant is a domestic corporation. It demurred to each of the 298 causes of action set forth in the complaint on the ground that the facts stated do not constitute a cause of action, and moved for judgment on the pleadings. At the Special Term the motion was denied, but the Appellate Division reversed the order denying the motion, and dismissed the complaint, one justice dissenting and one not voting, on the ground ‘that the purpose of the statute is to secure payment for the purchase price of merchandise, and is class legislation, and not a valid exercise of the police power.’

[1] Does an action lie to recover a penalty for violation of section 55 of the Agricultural Law? Section 61 as added by Laws 1913, c. 408, provides that:

‘Any person who * * * not being licensed, shall conduct the business of buying milk for shipment as provided in section 55, * * * shall be guilty of a misdemeanor.’

But the Agricultural Law (section 52) also provides for penalties to be collected in a civil action. ‘Every person violating any of the provisions of this chapter, shall forfeit to the people of...

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