Wilson v. Israel

• Decision Date: 06 January 1920
• Citation: 227 N.Y. 423,125 N.E. 819
• Parties: WILSON, State Com'r of Agriculture, v. ISRAEL et al.
• Court: New York Court of Appeals Court of Appeals

227 N.Y. 423

125 N.E. 819

WILSON, State Com'r of Agriculture,

v.ISRAEL et al.

Court of Appeals of New York.

Jan. 6, 1920.

Action by Charles S. Wilson, as Commissioner of Agriculture of the State of New York, against Joseph Israel, the Globe Indemnity Company, and the Cold Spring Cooperative Creamery Association of Roxbury, N. Y. From a judgment dismissing the complaint on the merits after trial without a jury, plaintiff and defendant Creamery Association appealed to the Appellate Division of the Supreme Court, which reversed, and directed verdict for plaintiff (185 App. Div. 816,173 N. Y. Supp. 842), and the Indemnity Company appeals.

Reversed.

Cardozo and Crane, JJ., dissenting.

Appeal from Supreme Court, Appellate Division, First department.

James A. Foley, of New York City, for appellant.

Robert P. Beyer, of New York City, for respondent Wilson.

Charles R. O'Connor, of Hobart, for respondent Creamery Ass'n.

HISCOCK, C. J.

This action is brought by the plaintiff in his official capacity to recover for the benefit of the respondent Cold Spring Co-operative Creamery Association, on a bond given by the appellant corporation conditioned for the payment by one Israel of amounts due to the creamery association for milk and cream purchased from it. The bond was executed under the assumed authorization of section 55 of the Agricultural Law (Consol. Laws, c. 1), which permits such a bond to be taken for the benefit of ‘producers' of milk and cream, and the determinative question to be considered is the one whether the creamery association was a ‘producer’ of milk within the meaning of that section.

This association, so called, was a corporation organized under the Business Corporations Law (Consol. Laws, c. 4), with a capital stock of $4,000, and all of which, with the exception of a one-half share, was held by its patrons. By its articles of incorporation it was organized for the purpose of owning and operation a creamery, and for the purpose of ‘purchasing, manufacturing, selling, and dealing in milk, cream, butter, cheese, and other dairy products.’ It did some manufacturing of cheese, but apparently the largest portion of its business consisted in buying milk and cream which it marketed in New York City. About 90 per cent. of the persons from whom it took milk and cream were its stockholders. It paid these respectively each month in cash for the deliveries of the preceding month, and it collected the proceeds of the milk and cream which it sold. After deducting the expense of running the business and losses, and reserving the necessary amount with which to pay a dividend of 6 per cent. upon its capital stock, it then distributed the balance of its receipts on a fixed basis amongst those from whom it had purchased. It kept no cows, and received and had no milk, except through the methods above mentioned.

Amongst the persons to whom it sold milk and cream was one named Israel, and in his behalf there was executed by the appellant corporation the bond upon which this action is based. That bond, as has been stated, was exacted and taken by the commissioner of agriculture under the assumed authority of section 55, and upon the provisions of that section must rest the right to take and enforce it for the benefit of the creamery association in this action. We turn to these provisions to search for the authority.

Omitting many provisions which are inconsequential here, we find the following ones which are material:

‘No person * * * shall buy milk or cream within the state from producers for the purpose of shipping the same to any city for consumption * * * unless such person * * * be duly licensed.’

Provision is then made for setting forth in the application to be filed for a license various particulars and the conditions are prescribed under which a license may be issued. Amongst others is the one:

‘A license shall not be issued as provided in this section, * * * unless the applicant for such license shall file with the application a good and sufficient surety bond, * * * in a sum not less than five thousand dollars. * * * 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 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.’

From these provisions it will be seen that the statute is enacted for the protection of ‘producers'; that no one is permitted to buy milk or cream from them without securing a license; and that no license can be issued-with exceptions not material here-unless a bond...