Milk Control Commission v. Friday's Dairy

17 Pa. D. & C.2d 397, 1958 Pa. Dist. & Cnty. Dec. LEXIS 85
CourtPennsylvania Court of Common Pleas, Alleghany County
DecidedNovember 26, 1958
Docketno. 1177
StatusPublished

This text of 17 Pa. D. & C.2d 397 (Milk Control Commission v. Friday's Dairy) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Alleghany County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Milk Control Commission v. Friday's Dairy, 17 Pa. D. & C.2d 397, 1958 Pa. Dist. & Cnty. Dec. LEXIS 85 (Pa. Super. Ct. 1958).

Opinion

Alpern, J.,

This is an appeal by petitioner, National Union Indemnity Company, from a special order of the Milk Control Commission of the Commonwealth of Pennsylvania, hereinafter referred to as the Commission, which decreed:

“1. That the right of the above named defendant to apply for a milk dealer’s license for the year May 1, 1957 to April 30, 1958, inclusive, be, and hereby is, revoked.

“2. That the bonds filed by the defendant milk dealer with the Pennsylvania Milk Control Commission for the license year May 1, 1955 to April 30, 1956, and May 1, 1956. to April 30, 1957, be forfeited according to law.

“3. That a certified copy of this Order be served upon the defendant, according to law, and that the original Order in this matter and a statement in writing of the Findings of Fact in support thereof, be filed in the offices of this Commission. . .

The facts, which are not in dispute, may be summarized as follows: In April 1955, Theodore G. Evans, trading as Friday’s Dairy, applied to the Milk Control Commission for a license to operate as a milk dealer [399]*399in Lawrence County, for the1 licensing year May 1, 1955, to April 30,1956. In accordance with section 501 of the Milk Control Law of April 28, 1937, P. L. 417, a bond in the amount of $5,113.44, executed to the Commonwealth of Pennsylvania as obligee by Mr. Evans as principal and petitioner as corporate surety, accompanied the dealer’s application. This bond, as in the case of all bonds filed with the commission, was conditioned for the payment by the milk dealer of all amounts due under the Milk Control Law for milk purchased from producers by the dealer during the ensuing license year.

In August 1955, subsequent to the issuance of the license applied for and granted, William G. Britner, the marketing supervisor for the commission in northwestern Pennsylvania, received complaints from some of Mr. Evans’ producers relative to delinquent payments. Complaints were also made concerning nonpayment of notes given by Mr. Evans to the producers as evidence of his indebtedness.

After conferring with the dealer and satisfying himself that the dealer was delinquent, Mr. Britner recommended that the dealer pay what he could on the notes outstanding, give new notes for the balance then remaining and pay his current milk account to his producers. Mr. Britner at this time also suggested that the dealer issue checks to the producers for the full amount of the delinquencies existing as of August 24, 1954, have the producers endorse the checks and return them to Mr. Evans with the understanding that they were not to be cashed.

As a result of this conference, and with the apparent consent of the producers involved, the dealer executed judgment notes on August 25, 1955, to four of his producers in the sums of $916.41, $1,027.22, $1,613.26 and $897.48. Contemporaneous therewith, the dealer [400]*400drew checks to these producers in like amounts, had the producers endorse the same and return them to him immediately. The parties to this arrangement fully understood that neither the notes nor checks were intended to or actually would constitute payment of the delinquencies.

One of the purposes of this arrangement was to make it appear to the commission that the dealer was not delinquent and thereby enable defendant to continue operating as a milk dealer. Mr. Britner and the dealer temporarily succeeded in their objective, for on August 29, 1955, an examiner of the commission, under Mr. Britner’s jurisdiction and after an audit of defendant’s books, reported to the commission at Harrisburg that canceled checks were seen and producers paid. Although the checks in question, covering June and July 1955, milk shipments to defendant, had not in fact been canceled, this examiner apparently assumed payment and reported that he had seen canceled checks, solely upon the presentation and observation of the checks that had never been deposited. Mr. Britner testified that he personally never investigated again to see whether these delinquencies had been paid until sometime in May 1957. Moreover, from August 1955, until May 1957, Mr. Britner never notified the commission or his immediate superior of the June and July delinquencies and he compounded his misconduct by submitting reports to Harrisburg each month during this period showing the accounts were paid from month to month.

On October 31, 1955, two of the four producers entered judgments on their respective notes. The third did likewise on May 15, 1957. The fourth producer never entered judgment on his note;

In April 1956, Mr. Evans filed an application for a license for the 1956-1957 license year and posted with [401]*401the commission a corporate surety bond, on a form identical to the 1955-1956 bond, on which petitioner again appeared as surety for the sum of $6,222.45.

Toward the close of this license year, in March and April 1957, Mr. Evans purchased from the Erie-Crawford Dairy Co-operative Association, a producer within the meaning of the law, milk having a total value of $6,336.58. Shortly after May 1, 1957, Mr. Evans sold his milk business and discontinued operating as a milk dealer, owing the cooperative for the value of the March and April milk referred to above. In May 1957, the commission was notified for the first time of the June-July 1955 and the March-April 1957 delinquencies. Approximately one month thereafter, on June 17,1957, the commission issued a citation against the dealer and sent notice to petitioner surety to show cause why it should not suspend or revoke the milk dealer defendant’s right to apply for a license for the year May 1, 1957, to April 30, 1958, because of the foregoing delinquencies.

Within the 20-day period provided in section 902 of the Milk Control Law the surety filed this appeal from the commission’s order, set out herein, supra.

Petitioner complains of the order of the commission which purports to forfeit the bonds upon which it is surety for the license years 1955-56 and 1956-57. Petitioner also complains that the commission failed to find that whatever is due on the bonds by Mr. Evans, petitioner as surety has no liability on either bond for any amount.

It is the position of petitioner with respect to the first complaint that the powers of the commission under sections 509 and 510 of the Milk Control Law of April 28, 1937, P. L. 417, 331 PS §700j-509, are limited to ordering the revocation of Mr. Evans’ right to apply for a license and to a finding of the amount due under [402]*402such bond. As set out in petitioner’s brief on page 6: “If the Commission desires, on behalf of producers, to realize on the bond or to do anything further with respect thereto, it must commence an action on the bond as statutory agent for the producers in the same way as any person desiring to recover a debt.” If the commission were to decide or adjudicate the rights and defenses of petitioner in a proceeding before it, contends petitioner, its right to a trial by jury guaranteed by the Constitution would be violated.

The answer of respondent is that the commission’s order does not forfeit either bond and even if it did petitioner waived its right to a trial by jury by appealing to the court directly from the commission’s order.

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Related

Commonwealth v. Ziegler Dairy Co.
11 A.2d 669 (Superior Court of Pennsylvania, 1939)
Devlin v. Milk Control Com. of Pa.
36 A.2d 185 (Superior Court of Pennsylvania, 1943)

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Bluebook (online)
17 Pa. D. & C.2d 397, 1958 Pa. Dist. & Cnty. Dec. LEXIS 85, Counsel Stack Legal Research, https://law.counselstack.com/opinion/milk-control-commission-v-fridays-dairy-pactcomplallegh-1958.