State v. Old Tavern Farm, Inc. , 133 Me. 468 ( 1935 )

Dunn, J.

A statute of this State, enacted in 1933, entitled: “An Act Requiring the Licensing of Operators of Milk Gathering Stations,” declares that persons, firms, associations or corporations shall not engage or continue in the business of buying milk or cream within the State from producers, for sale, resale, manufacture or shipment to cities for consumption, without annually procuring licenses from the Commissioner of Agriculture, and posting bonds to that official in penalty riot less than five hundred, nor more than one hundred thousand dollars, conditioned, among other things, that the licensees will meet obligations arising from the purchase of such dairy products. Deposit with the Commissioner of money, or securities legalized for savings banks, would obviate giving bond. P. L. 1933, Chap. 210, Sec. 2, as amended by Chap. 283 (Special Session). The act exempts any “person” engaged in dairying who purchases not exceeding two hundred and fifty quarts daily “as a supplement to his own supply.” The Commissioner may grant or decline a license, or revoke one already granted after due notice and a hearing, action being subject to review on certiorari.

The license fee is five dollars; violation of any provision of the act is punishable, upon conviction, as a misdemeanor.

The respondent, a domestic corporation, dealt, within State limits, in milk and cream, as a business, without having secured a license, and without having filed any surety bond. The agreed facts are not more specific in recital. If maintainable, the case shall be remanded for trial; otherwise, direction of dismissal.

The primary and important controversy is the constitutionality of the statute.

Counsel for respondent, in opposition to every presumption of validity, contends that, in exacting milk station operators, and no others, as a prerequisite to license, to file bonds or tangibly demonstrate pecuniary ability to pay producers, the enactment is unreasonably discriminatory, and constitutes an unwarranted interference with private rights.

The attorney for the State rejoins that the act is, as a police regulation, expedient and fairly suited to purpose in bona fide exercise of the discretion of the legislative department of government.

Statutes of this kind, to be sustained, must find a reason for their existence, in that inherent, original sovereignty called the police power of the state. Boston & Maine R. R. Co. v. County Commissioners, 79 Me., 386, 10 A., 113. Police power, in its broadest acceptation, means the general power of a government to preserve and promote the public health, safety, morals, comfort or welfare, even at the expense of private rights. Cooley, Const. Lim., (6th ed.) p. 704. Speaking generally, police power is a power not granted in the Federal Constitution, but “reserved to, the States respectively.” Const. of U. S., Art. X; Keller v. United States, 213 U. S., 138, 53 Law ed., 737; House v. Mayes, 219 U. S., 270, 281, 282, 55 Law ed., 213, 218. Such power should, however, observe its bounds; it cannot go beyond the State and Federal constitutions. New Orleans Gas, etc., Company v. Louisiana Light, etc., Company, 115 U. S., 650, 661, 29 Law ed., 516.

Health being the necessity of all personal enjoyment, and hence a special ward of the police power of the State, it is not only the right, but the duty, of the Legislature to pass such laws as may be reasonably necessary for the preservation of the public health. Com. v. Waite, 11 Allen, 264; Johnson v. Simonton, 43 Cal., 224.

Still, the Legislature cannot, under pretense of exercising the police power, enact a statute which does not concern the welfare of society. To illustrate, it is not enough that sanitation be merely' incidental; it must have been intended to be effected. When, from perusal, there is no fair, just and reasonable connection between a statute and the common good, and it is manifest that such was not the object of the statute, it will not be sustained. Austin v. Murray, 16 Pick., 121, 126.

“What is called ‘class legislation’ would belong to this category, and would be obnoxious to the prohibitions of the Fourteenth Amendment.” Civil Rights Cases, 109 U. S., 3, 24, 27 Law ed., 836, 843. It is true that this remark was made in regard to a different question than this case involves, but it applies here.

The Constitution of the State of Maine affirmatively secures to all persons an equality of right to pursue any lawful occupation under equal regulation and protection by law. Its words are these:

“All men are born equally free and independent, and have certain natural, inherent and unalienable rights, among which are those of enjoying and defending life and liberty, acquiring, possessing and protecting property, and of pursuing and obtaining safety and happiness.” Const. of Maine, Art. 1, Sec. 1.

Pertinent provisions of the Fourteenth Amendment to the Constitution of the United States are:

“. . . nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

The Constitution of the United States is, within its province, through all times and events, as a governmental chart, supreme throughout the Union. It invalidates all conflicting laws. National Prohibition Cases, 253 U. S., 350, 64 Law ed., 946. One of the greatest steps the Federal Constitution ever took was when Chief Justice Marshall gave distinct notice that it was the ultimate law against which nothing could prevail. Marbury v. Madison, 1 Cranch, 137, 2 Law ed., 60.

The civil “liberty” safeguarded is not merely freedom of the person from unjust or unlawful imprisonment. Liberty is freedom from all restraints except such as are justly imposed by law to secure the common welfare. The principle upon which liberty is based is equality under the law of the land. Allgeyer v. Louisiana, 165 U. S., 578, 589, 41 Law ed., 832; Meyer v. Nebraska, 262 U. S., 390, 67 Law ed., 1042.

The Fourteenth Amendment does not prevent reasonable classification as long as all within a class are treated alike. The liberty guaranteed is- not freedom from all restraints, but from restrictions which are without reasonable relation to a proper purpose, and are unjustly arbitrary and discriminatory. Miller v. Wilson, 236 U. S., 373, 59 Law ed., 628. What is reasonable depends upon a variety of considerations. It is an elastic term of uncertain value in a definition. Sussex Land, etc., Co. v. Midwest Refining Co., 294 Fed., 597.

The guaranties and assurances of the Constitution of Maine, and of the Constitution of the United States, are positive, direct, unchanged and unrelaxed by circumstances.

“Subject, however, to the limitation that the real object of the statute must appear, upon inspection, to have a reasonable connection with the welfare of the public, the exercise of the police power by the legislature is well established as not in conflict with the Constitution.” People v. Havnor, 149 N. Y., 195.

The Fourteenth Amendment was not designed to interfere with due exercise of the police power by the State. Barbier v. Connolly, 113 U. S., 27, 28 Law. ed., 923.

In the case at bar, the defense is rested mainly on State v. Latham, 115 Me., 176, 98 A., 578.

That was a criminal proceeding against an individual. A statute (1915 Laws, Chap. 32,) undertook to lay down that certain purchasers of milk or cream should (except where a written contract stipulated differently,) pay producers semi-monthly; and to prescribe a fine for non-observance.

The statute was of no legal force. It was held to afford milk producers, and no other creditors, the use of the criminal law in collecting mere civil obligations, and to contravene the Fourteenth Amendment.

The instant act is, in many respects, a literal copy of one in New York, there adjudged valid, first on the ground that, being severable, it was applicable, in view of power antecedently reserved to the Legislature of that State to amend, alter or repeal corporate charters, to corporations of local creation. People v. Beakes Dairy Company, 222 N. Y., 416, 119 N. E., 115. More recently, the law was held to apply to natural persons. People v. Perretta, 253 N. Y., 305, 171 N. E., 72.

There had been reserved to the Maine Legislature power to amend, alter or repeal corporate franchises, (R. S., Chap. 56, Sec. 2,) but its present enactment seems incapable, on .first reading, of being separated or divided into component parts, so as to be incumbent by way of franchise alteration or amendment, on corporations, regardless of the inclusion of persons, firms and associations.

The language of Section 2, (Chap. 210, 1933 Laws,) so far as now material, is as follows:

“No person, firm, association or corporation, shall buy milk or cream within the state from producers for the purpose of sale or resale, or for manufacture, or for shipping the same into any city for consumption . . .” (unless annually licensed). “A license shall not be issued . . . , unless the applicant for such license shall file with the application a good and sufficient surety bond. . . . Such .applicant may in lieu of such bond deposit . . . money or securities ... , in an amount equal to the sum secured by the bond. . . .”

Use of the term “person” alone, would likely have been sufficient.

A corporation is a “person” within the meaning of constitutional clauses, and may invoke the benefit of civil rights and their guaranties. Hammond Beef, etc., Co. v. Best, 91 Me., 431, 40 A., 338.

In determining whether a statute “amends” or “alters” a corporate franchise, it is essential to ascertain the intent and object of the statute. On more careful examination, intent and object of the .statute in judgment may be said to be, not the alteration or amendment of the franchise of the respondent corporation, or franchises of that class of corporations to which it belongs, but subjugation to legislation which arbitrarily denies to them, and certain individuals, as well, what is accorded to others, in like case.

There is no food in more general use than milk; it is not only an important article of diet, but peculiarly liable to contamination and adulteration; if not properly supervised and cared for, it offers opportunity for the spread of disease.

The State, having authority to control foods, in intrastate aspects of the public health, may make rules on the subject. Statutes forbidding the sale of unwholesome articles of food and drink exist in many of the States. Our own statutes are expressly regulatory of the production and sale of milk. R. S., Chap. 42. Such legislation is within the police power. State v. Smyth, 14 R. I., 100.

The uniformity with which regulations of the kind have been upheld is shown in divers decisions, some being: People v. Van de Carr, 199 U. S., 552, 50 Law ed., 305; Birmingham v. Goldstein, 151 Ala., 473, 44 So., 113; Koy v. Chicago, 263 Ill., 222, 104 N. E., 1104; State v. Schlenker, 112 Iowa, 642, 84 N. W., 698; Sanders v. Com., 117 Ky., 1, 77 S. W., 358; State v. Broadbelt, 89 Md., 565, 43 A., 771; Com. v. Waite, supra; Com. v. Wheeler, 205 Mass., 384, 91 N. E., 415; Black v. Powell, 248 Mich., 150, 226 N. W., 910; State v. Campbell, 64 N. H., 402, 13 A., 585; State v. Smyth, supra; Norfolk v. Flynn, 101 Va., 473, 44 S. E., 717; Adams v. Milwaukee, 144 Wis., 371, 129 N. W., 518, affirmed 228 U. S., 572, 57 Law ed., 971.

Munn v. Illinois, 94 U. S., 113, 24 Law ed., 77, and German Alliance Insurance Company v. Lewis, 233 U. S., 389, 58 Law ed., 1011, sustain the right of a State to control private business when clothed with a public use. These two cases, however, go only to fixing prices.

“All businesses are subject to some measure of public regulation, . .. that the business of . . . the dairyman may be subjected to appropriate regulation in the interest of public health, cannot be doubted.” New State Ice Company v. Liebmann, 285 U. S., 262, 76 Law ed., 747.

Nebbia v. People, 291 U. S., 502, 78 Law ed., 940, holds that, as to prices of milk produced within the State, the industry may be regulated, within reason, if the public interest demands.

Not price fixing, but the requirement of bond to pay the price, is now the test.

The proprietary plan of dealing in and with dairy products is much like any other business. The proprietor buys, is liable for purchases, and assumes risks and profits. There are, as is true of many concerns, some which result in failure. Injudicious locations, excessive capitalizations, have contributed, now and again, to brief careers. Mismanagement, fires, rivalry, add to the causes. Businesses come and go, and losses are inevitable. A business is without constitutional protection against the hazards of competition. Hegeman Farms Corporation v. Baldwin, 293 U. S., —, 79 Law ed, —.

Price security, counsel for the State contends, is vital to sanitary security. Producers, there is stress, needs must have assurance of pay, that they may be in situation to maintain sanitary conditions requisite to the purity of milk.

The rights of every person must stand or fall by the same rule of law that governs every other member of the body politic under similar circumstances, and every partial or private law which directly proposes to destroy or modify personal rights, or does the same thing by restricting the privileges of certain classes, and not of others, where there is no public necessity therefor, is unconstitutional and void. State v. Goodwill, 33 W. Va., 179, 25 A. S. R., 863.

What reasonable ground of discrimination, as pertains to public health or hygiene, is there between milk producers selling to gathering stations (who may be described as buying at wholesale,) and producers of perishable fruits and vegetables selling to wholesalers, and payment for what these producers sell? Such foods are liable to contamination, and are capable of transmitting infection. Why is the statute selective in its application? What, as a practical matter of cold fact, with respect to security for pay, is the real difference between the vendor supplying gathering stations, and any other vendor of milk? Why not equal rights among milk vendors? Why may milk producers sell to whom they will, except to gathering stations, without buyers having to put up bonds? Shall it not be lawful for the producer as seller, and the gathering station as buyer, to sell and buy milk or cream, as other sellers and buyers are at liberty to do? Why, only, of purchasers, are those operating stations liable to punishment for not filing bonds or depositing money or securities ?

The Legislature, to be sure, is not to be barred from classifying according to general considerations and prevailing conditions; it is not bound to extend regulation as far as it might be made to reach; but why the distinction as to operators of milk gathering stations ? What evil was specially experienced in the general nature of that particular branch of business? What differences were recognized to exist? The answer is not evident in the statute.

Looking through form to substance, State v. Latham, cited before, decided that the exaction of semi-monthly payments for milk and cream, but not for any other product bought of a producer, lacked valid reason for differentiation, determined without method, was not reasonable as to classes and conditions, and infringed fundamental rights which organic laws protect.

The legislation was denominated class legislation, transgressing permissible discretion, in violation of the Fourteenth Amendment. The equality clause was selected for special comment. The opinion is based on the doctrine of liberty of personal contract. State v. Latham, supra.

The Latham Case is of controlling analogy.

Without attempting to define the limits of the power of the Legislature of Maine to control the right to make contracts, conclusion reached is that it had no right to require, as a condition precedent to obtaining a license, that a gathering station proprietor give bond, or deposit money or securities, to secure the payment of them from whom he might buy milk and cream. The legislation is not within the scope of the police power; it trenches upon the State and Federal constitutions. State v. Latham, supra; Const. of Maine, supra; Const. of U. S. (Fourteenth Amendment), supra.

The complaint should be dismissed.

So ordered.