Reynolds v. Milk Comm'n Of Va.

• Decision Date: 29 March 1935
• Citation: 179 S.E. 507
• Parties: REYNOLDS et al. v. MILK COMMISSION OF VIRGINIA.
• Court: Virginia Supreme Court

179 S.E. 507

REYNOLDS et al.

v.MILK COMMISSION OF VIRGINIA.

Supreme Court of Appeals of Virginia.

March 29, 1935.

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HOLT, HUDGINS, and CHINN, JJ., dissenting.

Appeal from Law and Equity Court of City of Richmond, Part 2.

Suit by the Milk Commission of Virginia against R. J. Reynolds and others. From an adverse decree defendants appeal.

Affirmed.

Superseding opinion in 177 S. E. 44.

Argued before CAMPBELL, C. J., and HOLT, HTJDGINS, GREGORY, BROWNING, CHINN, and EGGLESTON, JJ.

S. D. Timberlake, Jr., of Staunton, Va., for appellants.

The Attorney General, for appellee.

GREGORY, Justice.

The appellants were perpetually enjoined and restrained from distributing milk in the city of Staunton until they shall have re ceived a license from the Milk Commission, and from selling milk in the Staunton Waynesboro Market area at any other price than that fixed by the commission. They were also required to pay any and all assessments levied upon them under the authority of the commission. It is of the decree carrying the injunction into effect that the appellants complain.

The pleadings in the case consist of the bill of complaint filed by the Milk Commission and the answer thereto filed by the appellants. The cause was heard upon an agreed statement of facts.

In the bill of complaint it was alleged that the complainant the Milk Commission was created by the provisions of chapter 357, p. 558, of the Acts of the General Assembly of 1934; that said act grants authority to the complainant to regulate and control the milk industry in Virginia, and to make, adopt, and enforce all rules, regulations, and orders necessary to carry out the purposes of the act; that the complainant was given power to define and create natural market areas within which milk shall be produced to supply such area; that the commission may require all distributors to obtain a license and that licenses may be classified; that complying with the provisions of the act, the commission established the Staunton-Waynesboro Market area, fixed the price of milk, and adopted rules and regulations for the industry; that 75 per cent. of the producers and distributorsin that area were desirous of having the commission exercise its power there; that previously, milk was being sold in Staunton at prices ranging from 8 cents to 12 cents per quart; that all efforts to stabilize the price had failed because a few producers and distributors declared their purpose and intention to market milk below the cOst of milk produced in compliance with the health laws of the state.

The commission finds and alleges that milk is an essential item of diet; that the production and distribution thereof is a major industry and represents more than 25 per cent. of all agricultural income of the state; that it is of greater value than the combined income from corn, wheat, tobacco, and apples; and that it represents an investment of many millions of dollars.

It is alleged:

"That the fluid milk production, sale and distribution is affected by many factors peculiar to itself and necessitates governmental control in order to insure an economical, profitable-and healthful conduct of the business; that milk is perishable, cannot be stored, and is a medium for the growth of bacteria and the transmission of diseases; that, under approved methods of distribution into larger markets, the industry must carry a surplus of approximately twenty per cent., as the demand and supply vary from day to day; that the adjustment of supply and demand is hindered by factors difficult to control, as surplus presents very difficult problems, as the price realizable is necessarily much less than that for milk sold for consumption in fluid form, and that the stabilization of prices requires that the burden of the loss in the marketing of surplus milk be shared equally by all producers and distributors in each market area; that, if this burden is not shared by all, a condition arises resulting in a demoralized situation on the market, leading in practically all instances to disastrous price cutting, and that this market condition may be and is brought about by small distributors carrying a much less surplus in proportion to that necessarily carried by the larger distributors.

"While complainant has not had the advantage of the findings of a commission of inquiry into the dairy business in Virginia, the Virginia State Dairymen's Association began an extensive study of all of the numerous phases in connection with the production and distribution of milk in Virginia as early as May, 1933. These associations reached the conclusion, after a most extensive investiga tion, that milk and cream were sold in a large majority of cities at prices substantially be low a reasonable cost of production of high-grade, healthful milk, and that many unfair trade practices made it impossible for pro-ducers to receive a fair price for their milk: that science has demonstrated tnat the unregulated production of milk and unrestricted prices of cost production of milk under exceedingly unsanitary conditions, and the dis-tribution and sale without careful marketing precautions, and the consumption of all milk except that which is carefully and cleanly produced are exceedingly harmful to all class-es of consumers and especially dangerous to the many infants who are principally reared upon fluid milk and to children a large part of whose diet consists of milk.

"That the public have accepted the findings of science is best illustrated by the fact of common knowledge to all; that practically all cities and almost all incorporated towns have passed ordinances regulating the production and distribution of milk and requiring tests of all milch cows kept in dairy herds, and providing for the feeding of cows, the conditions and surroundings of barns, the kind, care and cleanliness of utensils, the cleanliness of the clothing, and for the peri-odical, personal inspection of persons con cerned in milk production."

Complainant then alleges that Reynolds Miller, and Montgomery, the appellants here, are selling milk in Staunton without a licens as is required by the act; that they are sell ing below the prices fixed by the commission for that market; that they have declared their intention to continue to sell below th market price and they refuse to pay the assessments provided for in the act and rules promulgated thereunder. It is then alleged that the success of the purpose of the General Assembly will fail if they are permitted to continue to violate the regulations and the act.

The defendants filed their answer in the court below. They denied none of the allegations above set forth, but admitted that they were violating the act, in that they were selling milk in Staunton without first secur-ing a license; that they were not complying with the price regulations; and that they were selling below the prices fixed by the commission.

They give as their reason for their admitted violation of the act that it is unconstitutional and void; that it contravenes section 1, art. 1, of the Constitution of Virginia; and that it contravenes the Fourteenth Amend ment to the Constitution of the United States.

After hearing the cause upon the bill, answer, and an agreed statement of facts, the chancellor perpetuated an injunction, which had been previously awarded, restraining the defendants from violating the act or the regulations, and in an able opinion gave his reasons for so doing.

In the main there are just two questions to be decided. Does the act contravene the Virginia Constitution? Does it contravene the Fourteenth Amendment of the Federal Constitution?

It is conceded that if the Virginia act is no broader than a somewhat similar act which was recently enacted by the Legislature of New York, the decision of the Supreme Court in the case of Nebbia v. People of State of New York, 291 U. S. 502, 54 S. Ct. 505, 78 L. Ed. 940, 89 A. L. R. 1469, where the New York act was upheld as not violative of the Fourteenth Amendment, is binding here and decisive of that question. However, section 1, art. 1, of the Virginia Constitution is relied upon here as having been violated by the Virginia Act. The challenged provisions of the Virginia and Federal Constitutions are quite similar. Both guarantee to the citizens certain inherent rights, and, in my opinion, if the act violates the Federal Constitution it also will violate the Virginia Constitution. On the other hand, if it does not offend the Federal Constitution then it will not offend the Virginia Constitution.

On March 29, 1934, the General Assembly enacted as an emergency measure the act in question which provides for the supervision, regulation, and control of the milk industry in Virginia (chapter 357, Acts 1934, p. 558). The preamble to the act sets forth the legislative determination and declaration of certain facts. Briefly, those facts are that the production and distribution of milk and cream is an industry upon which, to a substantial degree, the prosperity and health of the commonwealth depend; "and the present economic emergency is in part the result of the disparity between the prices of milk and cream and other commodities, which disparity has diminished the power of milk producers to purchase industrial products, has broken down the orderly production and marketing of milk and cream, and has seriously impaired the agricultural assets supporting the credit structure of the Commonwealth and local political sub-divisions thereof"; that unfair, unhealthful, unjust, destructive, and demoralizing trade practices exist and are carried on in the dairy industry which impair the industry and the constant supply of pure wholesome milk to the inhabitants of the state and constitute a menace to the health and welfare of the people.

To protect the well-being of the people of the state and to promote the public welfare, public health, and public peace, the production, distribution, and sale of milk is declared by the...