Dickey v. Raisin Proration Zone No. 1

151 P.2d 505, 24 Cal. 2d 796, 157 A.L.R. 324, 1944 Cal. LEXIS 280
CourtCalifornia Supreme Court
DecidedAugust 31, 1944
DocketL. A. 18573
StatusPublished
Cited by111 cases

This text of 151 P.2d 505 (Dickey v. Raisin Proration Zone No. 1) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dickey v. Raisin Proration Zone No. 1, 151 P.2d 505, 24 Cal. 2d 796, 157 A.L.R. 324, 1944 Cal. LEXIS 280 (Cal. 1944).

Opinions

CURTIS, J.

This litigation concerns the validity of certain features of a marketing program adopted under authority of the Agricultural Prorate Act of 1933 (Stats. 1933, p. 1969, as amended; Deering’s Gen. Laws, 1937, Act 143a) for the control of the 1938 crop of raisins and the stabilization of the market therefor. The constitutionality of the act has been sustained by both this court and the Supreme Court of the United States (Agricultural Prorate Commission of California v. Superior Ct., 5 Cal.2d 550 [55 P.2d 495]; Parker v. Brown, 317 U.S. 341 [63 S.Ct. 307, 87 L.Ed. 315].)

In preparing a marketing program for the 1938 crop of raisins the program committee and other officials of Raisin Proration Zone No. 1—representing some 8,000 producers of raisins in Fresno, Kings, Kern, Tulare and other adjacent counties—determined that the prorationing of crops and financial support of the market were necessary in order to stabilize prices and to assure to raisin growers in the zone a fair and reasonable economic return. Accordingly, prior to September, 1938, and in pursuance of the provisions of the Agricultural Prorate Act, the program committee drafted a marketing plan for raisins for the 1938-1939 season premised upon the following main factors: (1) That 20 per cent of the crop be prorated and declared to be surplus; (2) That all raisin growers be required to deliver that portion of their output to the zone to be placed in a “stabilization pool” to be withheld from the usual channels of trade and commerce in competition with the balance of the crop (hereinafter called the “free” raisins), which would be marketable by the producers in the zone free of any restrictions; (3) That the Commodity Credit Corporation, an agency of the United States and under the general supervision of the Secretary of Agriculture, make available a sum not to exceed $9,000,000 to all producers in the zone desirous of obtaining non-recourse loans on their “free” raisins at a fixed price of $50 per ton, [799]*799which was deemed a minimum economic return; (4) That Raisin Proration Association, a nonprofit California corporation, whose directorate was composed of the members of the program committee, act as the conduit through which the money for each loan flowed; and (5) That the zone pledge to the Commodity Credit Corporation all raisins in the stabilization pool for these purposes: (a) as security for loans made to the Raisin Proration Association in an amount not to exceed $4.00 per ton on all pooled raisins to cover handling, storage and insurance costs involved in the pooling operations; and (b) as additional collateral for the total advance of non-recourse loans to individual borrowers on their “free” raisin tonnage.

This marketing plan was effectuated according to the following chronology. After notice of a public meeting on the subject scheduled for September 7, 1938, and an opportunity to be heard thereat was furnished to all raisin producers in the zone, the Agricultural Prorate Commission on September 10, 1938, approved the proposed arrangements and the program committee on September 12, 1938, adopted a resolution setting forth the proration terms. On September 24, 1938, the Commodity'Credit Corporation promulgated a resolution reciting the following details affecting the raisin marketing program: (1) That the manager or acting manager of the San Francisco Loan Agency of the Reconstruction Finance Corporation would act as its agent in connection with the $9,000,000 available loan to the Raisin Proration Association and the loans to individual growers; (2) That the Raisin Pro-ration Association should execute a note for $9,000,000 payable November 1, 1939, bearing interest at 4 per cent per annum, payable quarterly; (3) That each advance made to an individual grower be endorsed on this note as credit; (4) That $50 per ton be advanced to growers desiring such loan on non-recourse agreements signed by each grower assigning his “free” raisins as well as his raisins in the stabilization pool as security for the loan; and (5) That the raisins be stored and insured. On October 10, 1938, the Commodity Credit Corporation accepted the $9,000,000 promissory note of the Raisin Proration Association in the form and for the purpose above stated. On October 15, 1938, a “pledge agreement” was executed by the Commodity Credit Corporation and the program committee of the zone and Raisin Proration Association under the terms of which all raisins in the stabili[800]*800zation pool were pledged to the Commodity Credit Corporation in consummation of the aforestated financial arrangements.

During the effective period of said marketing program growers representing 52.74 per cent of the total raisin production in the zone borrowed from the fund made available through the Commodity Credit Corporation, the individual loans aggregating nearly $3,000,000; growers representing the remaining raisin production—47.26 per cent—did not avail themselves of the financing plan. In October and November, 1939, the Commodity Credit Corporation disposed of all the surplus raisins deposited in the stabilization pool by borrowers and non-borrowers alike under the 1938-1939 pro-ration terms, and theretofore pledged to it in the pursuance of the seasonal marketing plan. After crediting its raisin advancement account with the proceeds realized from the disposition of the pledged raisins—the “free” raisin tonnage of the borrowing growers and all the stabilization pool raisins —there still remained a considerable loss to be borne by the Commodity Credit Corporation by reason of its non-recourse loans to the individual growers and the sums advanced to cover expenses incurred by the Raisin Proration Association in handling, storing, insuring and earing for the raisins delivered into the stabilization pool.

In March, 1940, the plaintiff, a raisin producer who had neither borrowed from the available loan fund nor hypothecated either his “free” raisins or his share of surplus raisins in the stabilization pool, commenced this action on behalf of himself and other growers similiarly situated, in protest of the pledge of all the raisins in the stabilization pool as security for the loan transaction consummated with the Commodity Credit Corporation for the 1938-1939 marketing season. The gravamen of the complaint brought against the aforementioned agencies instrumental in the effectuation of the contested marketing program—the Raisin Proration Zone No. 1, the Raisin Proration Association and its directorate, the Proration Program Committee and its members, and the Commodity Credit Corporation—is the charge that the pledge of the stabilization pool raisins was “.void and illegal” under the Agricultural Prorate Act as to all growers who did not borrow from the Commodity Credit Corporation. Accordingly, the plaintiff prayed that the Commodity Credit Corporation be required to account to the non-borrowing growers for the amounts realized by it on the disposition of the [801]*801surplus raisins delivered by them to the stabilization pool. The defendants’ demurrers to the complaint, interposed on the ground that the plaintiff’s pleading failed to state a cause of action in that the pledge of the entire stabilization pool as an integral part of the raisin marketing program for the 1938-1939 season was valid under authority of the Agricultural Prorate Act, were overruled.

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Bluebook (online)
151 P.2d 505, 24 Cal. 2d 796, 157 A.L.R. 324, 1944 Cal. LEXIS 280, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dickey-v-raisin-proration-zone-no-1-cal-1944.