Cofman v. Ousterhous

Bruce, Ch. J. This is an appeal from an order of the district court of the sixth judicial district denying the petition of the appellant for a writ of certiorari to review the action of the dairy commissioner, J. J. Ousterhous, in revoking a license of the appellant to conduct a cream station at Iiazen, North Dakota, and to review the action of the commissioner of agriculture and labor, J. N. Hagen, in sustaining the said revocation. The statutes under which the action sought to be reviewed was taken are as follows: Section 2835, Compiled Laws 1913: “There is hereby created a bureau of the department of agriculture and labor to be known as the dairy department, which is hereby created for the purpose of promoting, improving and regulating the dairy products of the state and to establish and enforce proper rules and regulations pertaining thereto.” Section 2836, Compiled Laws 1913: “The commissioner of agriculture and labor is hereby authorized and directed to appoint a deputy in his department -who shall be known as the dairy commissioner, and shall be the official head of the dairy department.” Chapter 103, Laws 1917: Sec. 1. “It shall be unlawful for any person to sample or test milk, cream, or any other dairy product excepting merchants dealing in manufactured butter for the purpose of determining the commercial value of such product when bought or sold, without first having secured a license from the state dairy department and such license shall be conspicuously displayed in his place of business. Provided that in caso of sickness or necessary absence, said person may appoint a substitute for six days and for a longer period subject to approval of the dairy commissioner, but said person shall be responsible for the acts of said substitute. This license shall be granted to those who shall have completed a course in milk and cream testing in any recognized college or — 395 — dairy school, or to those who shall pass an examination under the direction of the state dairy department and satisfactorily demonstrate that they are properly qualified and competent to use such test. “The dairy commissioner shall have the authority to revoke any license issued under the provisions of this act if' the holder is convicted of a failure to comply with the State Dairy Laws. Said license shall be granted for a period of one year by the dairy department upon payment of a fee of two dollars ($2) of which shall be returned in case of failure to pass said examination. In the ease of renewal of a license, a fee of one dollar ($1) shall be paid. “The fees collected under the provisions of this act shall be paid into the state treasury, monthly, by the daily commissioner to be credited to the dairy department and to be used for conducting said examinations.” Section 2854, Compiled Laws 1913: “It shall be unlawful for the owner, manager, agent or employee of any creamery or cheese factory to manipulate, underread or overread the Babcock test, or any other contrivance used for determining the quality or value of milk.” Chapter 105, Laws of 1917: “Section 284 of the Compiled Laws of 1913 is hereby amended and re-enacted so as to read as follows: “Every person, firm or corporation owning or operating a creamery, cheese factory, renovating or process butter factoiy, or cream station in this state, shall be required before beginning business, or within thirty days thereafter, to obtain from the dairy commissioner a license for each and every ereameiy, cheese factory, renovating or process butter factory or cream station owned or operated by said person, firm or corporation, which shall be good for one year. The fee for such license shall be ten dollars, and no license shall be transferable. Each license shall record the name of the person, firm or corporation owning or operating the creamery, cheese factory, renovating or process butter factory, or cream station license, its place of business, the location thereof, the name of the manager thereof and the number of the same. Each license so issued shall constitute a license to the manager or agent of the place of business named therein. “It shall be the duty of every person, partnership, firm or corporation, or association holding a license to operate in any plant which dairy products are handled commercially, to post in a conspicuous place such — 396 — license under which they are operating, together with a summary of the dairy laws which shall be prepared and sent out from the office of the dairy commissioner. “The dairy commissioner may withhold a license from any applicant who has previously violated or refused to comply with any of the existing daily laws or lawful requests issued by said dairy commissioner, or his authorized assistants. The dairy commissioner, may, at any time, revoke a license on evidence that licensee has violated any of the existing dairy statutes, or has refused to comply with all lawful requests of the dairy commissioner or his authorized agents.” The first order canceling the license was in the form of a letter and was as follows: Bismarck, N. Dak., August 3d, 1918. Mr. B. Cofman, Ifazen, North Dakota. Dear Sir: Sometime ago one of our deputy inspectors spent several days in your community with the intention of determining the truth of some of the reports that have been coming into this office. After making quite thorough examination from the evidence which our inspector obtained, we find that it becomes the duty of this department to revoke your license. Our inspector weighed, sampled and tested several cans of cream which were delivered to you at your station, and we hold the cheek which you issued in payment of same, as evidence, that you overread the test on one can of cream as much as -1- per cent and that on another can you credited the producer with 21 lbs less than he had delivered. You have been long enough in this business to know how to test the cream correctly and no doubt you are also aware that to overread and underread the Babcock test is a violation of our State Dairy Laws. You will also note that the last legislative session made it the duty of this department to revoke the license of parties who violate our dairy laws and who do not comply with the requirements of this department. You will kindly give proper attention to this notice and make all the necessary arrangements to have your cream station closed by August 15, 1917. We are sorry that such an action as this has been necessary. We — 397 — are also convinced that a firm stand must be taken in enforcing the ■dairy laws. .Very truly yours, [Signed] J. J. Ousterhous, Dairy Commissioner. Although it is clear from the provisions of §§ 2835 and 2836 of the Compiled Laws of 1913, that no appeal to the commissioner of agriculture and labor is provided for, and the dairy commissioner is an independent officer, the appellant and relator, Bernard Cofman, after the sending of the order in question, made an application to the commissioner of agriculture and labor for a hearing, and in response to this application the dairy commissioner, J. J. Ousterhous, to whom the application must have been referred, telegraphed said Cofman: “Your license will be extended for a period of ten days for arranging a hearing within that time. Will see your attorney to-morrow.” Thereafter and on the 21st day of August, 1917, with the consent of all parties a hearing was had before the said commissioner of agriculture and labor, John T. Hagan, the relator personally appearing and offering testimony and the daily commissioner being represented by Assistant Attorney General Edward B. Cox. After this hearing the following order was issued by the said commissioner of agriculture and labor: State of North Dakota Before Commissioner of Agriculture and Labor In the Matter of the License of Bernard Cofman To Buy Cream at Hazen, North Dak. Order Sustaining Revocation of License. The above-entitled matter coming on to be heard on the 21st day of August, 1917, on petition of Bernard Cofman of Hazen, North Dakota, the petitioner herein being present in person and by his attorney, E. E. McCurdy, and the state dairy commissioner, J. J. Ousterhous, being present in person and represented by Edward B. Cox, Assistant Attorney General. The Commissioner having heard the testimony, the argument of counsel, and being fully advised in the premises. It is ordered and decreed by the commissioner that the order of the — 398 — dairy commissioner revoking tbe license of Bernard Cofman, petitioner herein, to conduct a creamery station at Iiazen, North Dakota, be in all things sustained and upheld. Dated this 15th day of Sept. 1917. J. N. Hagen, Commissioner of Agriculture and Labor. Although the petition does not allege that this order was recognized and reaffirmed by the dairy commissioner, it seems to proceed on the assumption that this was done, and the certiorari is asked on the grounds that: “The evidence in this case shows that on the particular cream which the dairy commissioner charges was overread in the test for butter fat, it appears that three tests were made, — one by the Hazen creamery, which test was 39 per cent, one by the public health laboratory at Bismarck, North Dakota, which tested 41 per cent, and the one by the relator at 43 per cent. It further appears from the evidence that the Hazen creamery is in direct business competition with the relator, and that the inspector worked with the Hazen creamery in attempting to catch Mr. Cofman, and that at that time he made no effort to catch the Hazen creamery. That the evidence shows that the cream had been hauled over rough country roads, and that it is possible for a partial churning to have taken place and small particles of the butter fat to have become joined together in small lumps, and that the amount of cream selected for making this test is a very small amount, 18 grams, and that should one of these small particles of butter fat have been found in the 18 grams that the test would be greater and there might be a variation in the test, after being subject to such process. Furthermore, it appears it would be possible for high variation of the reading of the test because of the fact that cream is placed in a tube of a small diameter for test reading, and that due to the capillary attraction the cream has a tendency to be uneven, leaving a depression in the center and that the test would be difficult to read without using what is known to the trade as a red reader. “Referring to the weight proposition, there appeal's from the evidence that, instead of there being one can of cream there were two cans of cream in the single test, and the two cans were weighed back and — 399 — considered as one can of cream. These cans of cream were weighed at the same old Hazen creamery, and taken to Cofman’s cream station and sold to him, and the empty cans taken back to the general merchandise store and weighed. The evidence doesn’t show whether the scales were tested or not, and there is no evidence that the Hazen creamery scales had been tested, and it is correct; that since the hearing a test has been made of the scales of the general merchandise.store, and it has been found defective. That the plaintiff and the merchant, one named Jake Krause, weighed this particular can on the same scale and also on another scale, and found the scale of the general merchandise store defective. This was done since the hearings, ás the matter only developed in evidence at the hearing because no information whatever had been furnished to the plaintiff as to what cans of cream were tested, or any particulars concerning the matter. That the state dairy commissioner-having made a ruling as stated in the letter dated August 3d, 1917, and set out in this petition, it appears that this was not a regular cream can from the evidence submitted, and that it had been covered with a cloth tied over the top and when weighed back the cloth was weighed with it, but it appears from the evidence that the cloth was not weighed back with it at the time it was weighed in the store. That a transcript of the evidence taken at the hearing is hereto annexed and referred to and made a part of this application. That no opportunity was given the plaintiff to offer rebuttal testimony on this particular question, and for that reason these statements are incorporated in this petition. “There is no competent evidence in the record to show that any false reading was made. In other words, there must be a false reading or manipulation of the Babcock test to be a violation of the law. There is absolutely no evidence of any false reading or manipulation. In other words, as far as the evidence shows this may have been an exact record of the test which this man read. It may have been an exact reading of the Babcock test, also it may have been an exact reading of a correctly balanced scale which this man read, and in canceling this-license the dairy, commissioner presumed and the commissioner of agriculture and labor presumed things not in evidence, and arbitrarily without jurisdiction canceled this man’s license. “Further that the dairy commissioner and the commissioner of agriculture and labor had no jurisdiction to revoke the license of this man, — 400 — for the reason that, that portion of the amendment above set out is unconstitutional and void in violation of § 13 of the Constitution of the state of North Dakota, which provision provides that no man shall be deprived of his property without due process of law, and also article 5 of the Amendment of the Constitution of the United States reads to the same effect. “There being no provision on the Constitution for any hearing or for any trial by any tribunal, and no opportunity for a day in court by which the licensee may protect his rights to pursue a lawful business, if this license is revoked it will have the effect of depriving him of his means of livelihood, absolutely ruining his business, and rendering a considerable investment in property valueless; destroy the good will of the business he has worked up in that community, and inflict upon him irreparable financial loss. That the relator has no other adequate means at law or otherwise, and that the said state dairy commissioner and the commissioner of agriculture and labor had exceeded their jurisdiction in canceling the license.” There is no merit in these contentions. The creamery business is essentially a business which is affected with a public interest, and as such is generally subject to governmental regulation. The police power of the state is not limited to regulations necessary “for the preservation of good order or the public health or safety. The prevention of fraud and deceit, cheating and imposition, is equally within the power, and a state may prescribe all such regulations as in its judgment will secure or tend to secure the people against the consequences of fraud.” 6 R. C. L. p. 208; State v. Armour & Co. 27 N. D. 177, L.R.A.1916E, 381, 145 N. W. 1033, Ann. Cas. 1916B, 1149, 240 U. S. 510, 60 L. ed. 771, 36 Sup. Ct. Rep. 440, Ann. Cas. 1916D, 548; State ex rel. Gaulke v. Turner, 37 N. D. 635, 164 N. W. 924; Munn v. Illinois, 94 U. S. 124, 24 L. ed. 83. The purpose of the statute, indeed, is well known, and is to build and to develop the dairying and stock raising industries, of the state. It is to prevent the unfair competition by which the financially stronger foreign creameries and butter and cheese and ice cream factories may destroy those of this state by overgrading or overmeasuring until the local creameries are driven to bankruptcy, and then control the grades and the prices. It is in line with the general laws of the state against unfair — 401 — competition. Though the state may not interfere with interstate commerce, it may prevent fraud of this kind. It is not historically true, as contended by counsel for appellant, that-a person has a natural right to engage in any useful and lawful business, free from legislative interference and control, and that such a business cannot be the subject of a legislative license. A business may be useful, yet the method of conducting it may, unless regulated, be conducive of harm, and in the same way there may be inducements to and avenues of fraud in a perfectly legitimate business, or cases in which danger of fraud should be minimized, even though the business may be useful and harmless, and even a useful business may be so affected with a public interest that it may be properly regulated. Licenses, indeed, may be imposed not merely for the purpose of acting as temporary permissions to engage in harmful occupations, but in order to so control those that are useful that their operation may be harmless, and that they may really subserve the public good, which after all is the basis of all property rights. It has never been the law that the state may not exact a license for the purpose of regulation, so that a business which- intimately affects the public welfare may be brought within tho supervision of the authorities, and that the regulations which are made concerning it may be more easily and certainly enforced. Parker & Worthington, Public Health & Safety, § 276; People ex rel. Lodes v. Health Dept. 189 N. Y. 187, 13 L.R.A.(N.S.) 894, 82 N. E. 187; 17 R. C. L. 556. Nor does the fact that chapter 105 of the Laws of 1917, which authorizes the dairy commissioner to revoke the licenses in question, does not in terms provide for a hearing or for an appeal, render the statute invalid or the action of the dairy commissioner nugatory. Even if a hearing was necessary, and on this we express no opinion, such a hearing was accorded to the petitioner, and even if not before the dairy commissioner, who as we view the statute is an independent officer, and not subordinate in such cases to the secretary of agriculture and labor, yet before the very person (the secretary of agriculture and labor) whom the petitioner designated and before whom he desired it to be had. Even where a hearing is required by the Constitution to be had before an administrative officer, is authorized to cancel licenses, or is looked upon as due process of law, it is not always necessaiy that it shall be provided — 402 — for by 'the statute, but is merely a constitutional guaranty to which the authority conferred by the statute is subject. Nor does the fact that no appeal to the courts is provided for nullify the act, for, without any such provision, it is clear that mandamus will lie in such a case to redress any wrong which is suffered through any arbitrary, tyrannical, or unreasonable action on the part of the officer or which is based upon false information. People ex rel. Lodes v. Health Dept. supra. We are satisfied, indeed, that the trial court did not err in denying the writ of certiorari in the case which is before us. The writ is not a writ of right, but will be granted or denied in the discretion of the court and according to the circumstances of each particular case as justice may require. 4 Enc. Pl. & Pr. 32. In North Dakota it can only be used “when inferior courts, officers, boards or tribunals have exceeded their jurisdiction and there is no appeal, nor in the judgment of the court any other plain, speedy and adequate remedy.” See Comp. Laws 1913, § 8445. It is clear that we cannot go into the merits of the case and cannot determine whether the relator was in fact guilty of fraud in the conduct of his business, in reading of the weights or in the tests which he applied. These matters are matters of defense at bar, and do not go into the jurisdiction. St. Paul, M. & M. R. Co. v. Blakemore, 17 N. D. 67, 114 N. W. 730; State ex rel. Noggle v. Crawford, 24 N. D. 8, 138 N. W. 2, 40 Am. St. Rep. 34, note. The remedy, if any, was by mandamus, 17 R. C. L. 557; People ex rel. Lodes v. Health Dept. supra. Nor in any event can the relator question the right of the dairy commissioner to cancel the license on the ground of the unconstitutionality of the act, and that his business was such that could not be constitutionally licensed. It is clear, indeed, that a person who obtains a license under a law and seeks for a time to enjoy the benefits thereof cannot afterwards question the constitutionality of the act when the license is sought to be revoked. Minneapolis, St. P. & S. Ste. M. R. Co. v. Nester, 3 N. D. 480, 57 N. W. 510; Hart v. Folsom, 70 N. H. 213, 47 Atl. 603; State v. Seebold, 192 Mo. 720, 91 S. W. 491, Note in 19 Ann. Cas. 183. Nor, indeed, do we believe that there is any merit in the contention — 403 — that the license, when once issued, can only be revoked after a conviction in a criminal prosecution. It is true that chapter 103 of the Laws of 1917, in conferring the authority to revoke licenses issued to persons who are authorized to sample or test millc, uses the term “convicted.” It is also true that, although the word “convicted” has not always and in the case of licenses been held to imply a conviction before a court of law (see 1 Words & Phrases, 2d Series, 1045; Sawicki v. Keron, 79 N. J. L. 382, 75 Atl. 478), it seems to be generally so construed by the law dictionaries. The revocation in the case at bar, however, is not sought to be had under the provisions of chapter 103, but under those of chapter 105 of the Laws of 1917, which relate not to those who sample or test milk, but to “every person, firm, or corporation, owning or operating á creamery, cheese factory, . . . butter factory, or cream station in this state,” and which act was approved on the day after the approval of chapter 103, and contains the clause: “The dairy commissioner may withhold a license from any applicant who has previously violated, or refused to comply with any of the existing dairy laws or lawful requests issued by said dairy commissioner, or his authorized assistant. The dairy commissioner, may, at any time, revoke a license on evidence that licensee has violated any of the existing .dairy statutes, or has refused to comply with all lawful requests of the dairy commissioner or his authorized agents.” The judgment of the District Court is affirmed.