Milk Con. Bd. v. Eisenberg Farm Prod. , 332 Pa. 34 ( 1938 )

Before passing on the questions presented to the court below as to whether the legislature may, through the Milk Control Law, prescribe certain regulations such as licensing, bonding and minimum prices for producers or dealers in the milk industry, effective where the product is purchased and destined for interstate commerce, we must first decide whether these provisions are valid police regulations under our Constitution. If they are not, then the questions under the commerce clause of the Federal Constitution need not be considered.

We have held in Colteryahn Sanitary Dairy v. Milk ControlCommission, and Keystone Dairy Co. v. Milk Control Commission,332 Pa. 15, that the Act of January 2, 1934, P. L. 174, and the Acts of April 30, 1935, P. L. 96, and April 28, 1937, P. L. 417, amending and reënacting its provisions, are constitutional. See Rohrer v. Milk Control Board, 322 Pa. 257, where it was held that licensing and price-fixing had a direct and substantial relation to sanitation, public health and public welfare. While bonding was not specifically mentioned, it was listed and necessarily included as it was one of the questions in the case. It was conceded at the argument in the present case that the Court could take judicial notice of the fact that licensing and bonding do bear a necessary relation to the preservation and continuation of an adequate supply of pure milk, a necessary article of food in the State, and are in the interest of sanitation and public health.

These provisions are also a protection against the danger of fraud to the producer and public so well described by President Judge KELLER in Rohrer v. Milk Control Board, supra. Such regulations, tending to prevent strikes and the dumping of the product on the market, harmful to the public; to provide a fair price and secure its payment, are necessary to prevent cutting off the supply to the public and to assure its purity and necessary quality. With this end in view the bonds are required as securities for the extension of credit by producers, to prevent fraud and imposition on them, and to eliminate irresponsible and dishonest dealers who are a constant menace to the consuming public. Bonding is therefore related to this legitimate purpose, which is a proper exercise of the police power. Moreover, this Court has held that the legislature may constitutionally require bonds in other industries affected with a public interest to secure payment to subcontractors, mechanics, laborers and materialmen, because of the very elements of fraud prevention, and the inability, otherwise, of those to be benefited to procure payment or credit. See the opinion of Justice SIMPSON, in Commonwealth v. Great AmericanIndemnity Co., 312 Pa. 183, at 196.

The court below has adequately covered in its opinion all questions involved, and has passed on the federal issues under the decisions of the Supreme Court of the United States. The portion of the opinion relating thereto is printed in the Reporter's Note. While we have felt, and still feel, that state laws regulating transactions incidental to interstate commerce, but designed to protect the health, safety, or welfare of the public, are proper state regulation where the transaction which is the origin and beginning of the commerce, is peculiarly within the state's domain, the Supreme Court of the United States in the case of DiSanto v. Pennsylvania, 273 U.S. 34, and other cases, has held that such regulations are a burden on interstate commerce and that the states are forbidden to legislate thereon even though the Federal Government has taken no steps to protect the public from the danger of fraud. The Commonwealth earnestly argues that the effect of these decisions should be changed. We are controlled by them on matters affecting interstate commerce.

Decree affirmed at appellant's cost.