Rau v. Milk Control Commission

64 Pa. D. & C. 251, 1946 Pa. Dist. & Cnty. Dec. LEXIS 91
CourtPennsylvania Court of Common Pleas, Northampton County
DecidedJuly 15, 1946
Docketno. 24
StatusPublished

This text of 64 Pa. D. & C. 251 (Rau v. Milk Control Commission) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Northampton County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rau v. Milk Control Commission, 64 Pa. D. & C. 251, 1946 Pa. Dist. & Cnty. Dec. LEXIS 91 (Pa. Super. Ct. 1946).

Opinion

Frack, J.,

This matter is before us on an appeal by John F. Rau, trading as Rau’s Dairy, from a decision and order of the Milk Control Commission of the Commonwealth of Pennsylvania, revoking his milk dealer’s licenses for the license years 1941-1942, 1942-1943, 1943-1944, and suspending his right to apply for a license for the year 1944-1945. The commission originally issued a citation, which was subsequently amended, directed to licensee and to his surety on his milk dealer’s bond to show cause why it should not revoke or suspend his licenses for making underpayments to 19 milk producers from whom he purchased milk during the period from August 1, 1940, to June 30,1941, because he had failed to account and to make payments for milk in accordance with official general orders of the Milk Control Commission. After hearings held, the commission found that the licensee had underpaid said producers during said period in the total sum of $4,132.21 and fixed the specific amount due to each producer by reason of the underpayments made. From the commission’s findings [252]*252and orders of revocation and of suspension, appellant appealed and assigned numerous reasons in support of the appeal. By stipulation, the appeal in all respects has been discontinued excepting on the single question stated to be “Does the Milk Control Law of the Commonwealth of Pennsylvania of April 28, 1937, P. L. 417, prohibit a milk dealer from placing milk, produced by his own herd, in class 1?”

Appellant is engaged in the business of producing, distributing and selling milk and milk products. Milk produced by his own herd is in excess of his need for his sales of raw and grade A milk. The surplus of milk produced by himself, not sold as raw and grade A milk, along with milk purchased from producers other than himself is distributed and sold by this dealer to consumers as grade B milk and milk products. During the 11-month period covered by this citation, appellant marketed as grade B milk products 517,226 pounds of milk produced by his own herd and 1,509,391 pounds of milk purchased from other producers. All grade B milk was utilized in three classes: (1) as grade B, class 1 milk; (2) as grade B, class 1-A milk; and (3) as grade B, class 3 milk. Under the official general orders of the Milk Control Commission, milk utilized as grade B, class 1 milk with a four percent butterfat content during the period of time in question must be bought from the producer at a minimum price of $2.70 per hundredweight; grade B, class 1-A, with the same butterfat content had a minimum price payable to producers of $2 per hundredweight during the months of June, July and August, and $2.20. per hundredweight during the remaining months of the year; and the minimum price payable by a dealer to a producer for milk utilized in manufacturing as grade B, class 3 is $1.15 per hundredweight where the butterfat content is four percent. The first two classes are used in fluid form, have an ephemeral life and can travel only within a restricted area. Manufactured milk [253]*253products can be and are imported into Pennsylvania from other States which are competitively low cost production areas. Where a milk dealer uses milk both for resale in fluid form and for manufacturing, the producer receives a minimum blended price for his milk, dependent upon what percentage of his milk was utilized on distribution in either or all of said classes. The blended price thus obtained, made up in part of the higher price of the milk resold as fluid and in part of the lower prices of milk used in the manufacture of various dairy products is higher in direct proportion . as milk of thé producer is utilized in the higher price classes.

Official General Order B-l, sec. 11, of the Milk Control Commission provides, inter alia, as follows:

“Method of Determining Payment to Producers. Dealers shall be responsible to producers for payment on a weight and butterfat basis and as determined by the utilization of the aggregate of milk received at each plant or receiving station during the period covered by the payment . . .”

The commission found that appellant underpaid producers with respect to grade B, class 1-A, and grade B, class 3 products in a total sum of $414.29 because the proper minimum prices were not paid. $3,717.92 of the alleged underpayment to producers from whom appellant bought milk arises by reason of the fact that this producer-milk dealer places milk produced by himself in a preferred status for utilization purposes, as compared to milk purchased from other producers, in that he places the surplus milk, not used as raw or grade A milk, produced by his own herd 100 percent in grade B, class 1, when he computes the amounts due to producers for milk supplied by them. After preferring himself, the remainder of the grade B milk sold and distributed by him as fluid milk and milk products he classifies on a utilization basis equal for all such remaining producers whose milk also had become a part of the entire pool of grade B milk. The [254]*254witness Hautz testified: “In my examination of the records I found two sets of utilization every month on Mr. Rau’s records, and when I asked Mr. Rau what they represented, he said 'The one is the actual utilization and the other is the one I pay on’ ”. For the month of August 1940 it was testified that the actual utilization of all milk marketed among consumers as grade B milk and milk products was 70.29 percent in class 1; 11.94 percent in class 1-A and 17.77 percent in class 3. After taking 100 percent credit for milk contributed by himself to the pool of grade B milk, appellant paid the other producers from whom he purchased milk on the basis that 48 percent of their milk instead of 70.29 percent was utilized in class 1, with differences also as to class 1-A and class 3, to the detriment of producers other than appellant. For the month of August 1940 on the basis of actual utilization, according to the commission, the producers other than appellant should have received $3,101.47 instead of $2,739.04 actually paid to them, so that there would be an underpayment to them of $362.43 for the month. For the other months there is a parallel situation with the result that on this phase of the case the commission alleges an underpayment of $3,717.92 to producers other than appellant for the period of time involved in this proceeding.

Appellant’s written brief points out that the statement of the sole question stipulated to be decided by us on this appeal is “admittedly somewhat confusing”. To clarify the question before us, appellant says in his written brief that with reference to milk contributed by him to the grade B pool of milk marketed by him the sole question is “whether a producer-dealer is permitted to classify all the milk produced by his own herd in the highest classification, and to distribute the classification of the remainder of the milk sold by him among the producers from whom he purchases milk, giving to each producer the same percentage of [255]*255each classification of milk sold to the public”. Appellant joins legal issue with the commission when it asserts that one occupying the dual position of milk dealer and producer must treat milk from his own herd in the same way as he treats milk from other producers, without preference or discrimination and that he may not place all milk produced by his own herd in the utilization class commanding the highest price, so as to reduce the percentage of utilization of milk in the class commanding the highest price which is received from other producers.

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Cite This Page — Counsel Stack

Bluebook (online)
64 Pa. D. & C. 251, 1946 Pa. Dist. & Cnty. Dec. LEXIS 91, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rau-v-milk-control-commission-pactcomplnortha-1946.