No. 13074 INTHE SUPREME COURT OF THE STATE OF MONTANA 1975

CU)VERDALE FOODS COMPANY, a North Dakota Corporation, Plaintiff and Appellant,

THE STATE OF MONTANA, and the DEPARTMENT OF BUSINESS REGULATION, an administrative agency of the Stateof Montana, Defendants and Respondents.

Appeal from: District Court of the First JudicialDistrict Honorable Peter G. Meloy, Judge presiding. Counsel of Record: For Plaintiff: Small, Cummins and Hatch, Helena, Montana Gregory Jackson argued, Helena, Montana For Respondents: James H McFarland argued, Helena, Montana James Wood, Helena, Montana

Submitted: September 30, 1975Mr. Justice Gene B. Daly delivered the Opinion of the Court.

This isan appeal by Cloverdale Foods Company from an adverse decision in a declaratoryjudgment action tried to the district court, Lewis and Clark County. In the fall 1974, Cloverdale Foods Company (hereinafter called Cloverdale), a North Dakota corporation licensed todo business in the stateof Montana, began sellingand offering for sale in this statemilk in three quart containers. On November 14, 1974, the Stateof Montana, acting through the Department of Business Regulation, Division of Weights and Measures, hereinafter called State, notified Cloverdale that in so sellingand offering for sale itsmilk in three quart containers it was in violation of section 90-180, R.C.M. 1947, which provides:"Fluid dairy products. Allfluid dairyproducts, including but not limited towhole milk, skimmed milk, cultured milk, sweet cream, sour cream, and buttermilk, shallbe packaged forretail saleonly in units of one (1) gill, one-half (112) liquid pint, ten (10) fluid ounces, one (1) liquid pint, one (1) liquid quart, onehalf (112) gallon, one (1) gallon, one and one-half (1-112) gallons, two (2) gallons, two and one-half (2-112) gallons, or multiples of one (1) gallon; provided, that packages inunits of less than one (1) gill shallbe permitted." (Emphasis supplied). It thus ordered Cloverdale to cease the saleof milk sopackaged. Cloverdale brought a declaratoryjudgment action against the State. Atthe time the complaint was filed, an order to show

cause and a temporary restraining order issued from the district court. The State filed a motion toquash the temporary restraining order and a brief in support. Subsequent thereto, the matter was tried to the district court. The court filed findings of fact and conclusions of law in favor of the State. Those findings of fact and conclusions of law, inpertinent part, provided: "FINDINGS OF FACT 

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"a. That allmilk which plaintiff sellsin Montana complies with allstateand federal health or sanitationrequirements; "b. That the sizeof container used inpackaging does not affect the quality or standard of the milk contained therein;"c. That in the manufacture of three (3) quart containers ascompared to smaller containers less oil and wood products would be used; "d. That Section 90-180, R.C.M. 1947, provides reasonable sizes or classifications (and numbers) for the containers of milk as follows:

one (1) gill one-half (1/2) liquid pint ten (10) fluid ounces one (1) liquid pint one (1) liquid quart one-half (1/2) gallon one (1) gallon one and one-half (1-1/2) gallons two

### '(2) gallons two and one-half (2-1/2) gallons multiples of one (1) gallon

1Ie. The three (3) quart container 

### isnot a size generally recognized by the public and 

### is of such size and appearance that it

### willbe mistaken for thewellknown one (1) gallon container by the public and accordingly creates the potential of deception; "f. That the presently existing sizes (and number of sizes) of milk containers adequately and reasonably meet the need and demands of the public; "g. That the addition of yet another container size willrequire substantial investment by milk processors and those investment costswillbe ultimatelyborne by the public, to its detriment; "h. That the entire system of weights and measures 

### willapparently soon be switched tothemetric system which willrequire substantial investment of capital by milk processors tocomply therewith; "i. That it isin the public interest because of the potential for fraud, deception and misunderstanding that the number (and size) of milk containersbe reasonably limited under the police power. 11 "CONCLUSIONS OF 

### LAW "3. That Section 90-180, R.C.M. 1947, provides reasonable sizes and numbers of sizes formilk containers and they bear a real and substantial relationship to the exercise of the police power and for the purpose of preserving public health, safety, morals or general welfare and preventing fraud; that, therefore, it isconstitutional. "4. That Section 90-180, R.C.M. 1947 does not discriminate against plaintiff nor deprive plaintiff of the equal protection of the laws, asprovided under the Constitution of Montana or the Constitution of the United States."5. That the language of Section 90-180, R.C.M. 1947, clearly and reasonably prohibits the packaging of dairy products in three (3) quart containers. "6. That the use of the three (3) quart containers 

### is prohibited for the retailpackaging, sale, marketing and distribution of dairy products inMontana. "7. That the temporary restraining order heretofore issued isdissolved.

1ILet Judgment be entered accordingly. Cloverdale objected tothe findings and moved the court for a new trial. Thereafter the court denied the motion fora new trial, overruled 

### c lover dale's objections and dissolved the restraining order. Judgment was then entered in favor of the State. Cloverdale then petitioned this Court to stay execution of thejudgment pending appeal. The staypending appeal was granted and the appeal perfected. On appeal, Cloverdale presents these issues: 1) Whether section 90-180, R.C.M. 1947, 

### isunconstitutional in light of the United States and Montana Constitutions. 2) Whether a proper reading of section 90-180, R.C.M. 1947, permits themarketing of milk inthree quart packages. 3) Whether section 90-180, R.C.M. 1947, can be amended by adding "three (3) quart" language. 

### 4) Whether the district court erred in: (a) concluding that the three 

### (3) quart container has the potential of deceiving the public and (b) denying Cloverdale a new trial. Inasmuch as theremaining issues forreview aredependent

on Issue No. 

### 2, we willexamine the statuteand the finding related thereto. In Cherry Lane Farms v. Gilbert Carter, asTreasurer of Gallatin County, 153Mont. 240, 249, 456 P.2d 296, this Court said: "The case law of this state long ago established that in construing statutes the intention of the legislature is tobe followed, ifpossible, andthey must be construed inreference tothe subject matter and objectswhich prompted and induced the legislature to act." (Emphasis supplied) First,it should be understood that code sections 27- 401 through 27-429, R.C.M. 1947, regulate and control the milk industry as it relates toproduction, transport, processing, storage, distribution and price control, - etc., under the authority of the Montana Milk Control Board. The quality of manufactured dairy products, including milk, in the area of sanitaryproduction, transportation, storage, standards of quality, purity, licensing, -.etc., arecontrolledby the Commission of Agriculture in sections 3-2404 through 3-24-139, R.C.M. 1947. Although the above areas of control are frequently alluded to in the casebefore us, they areof no concern here and have no bearing on our considerations. In otherwords we arenot here concerned with price control or related matters. This case involves the interpretation of a statute, section 90-180, R.C.M. 1947, contained inTitle 90-Weights-Measures and Grades

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# - Money. Section 90-180, R.C.M. 1947, has inone form or another been Montana law since itsoriginal enactment inChapter 34, Sections 19and 20, Sessions Laws of 1911. In 1911theAct was entitled:"An Act to create the Office of State Sealer of Weights and Measures and Providing the Duties and Powers relative to the Inspection and Sealing of Weights and Measures, and Providing Penalties for theViolation thereof." The subject matter and object of this legislationwhich induced the legislature to actwas toestablish a state sealer of weights and measures and toprovide forhis deputies throughout the state; toestablish standards of weights, liquid measures, etc., and to enable the fieldtobe policed toprevent fraud upon the consumer by mislabeling, short weight or measure.Section 19provides the standard of liquid measure for milk products tobe "sold onlyby standard wine measure." Wine

measure being a measure formerly used forwine and spirits in which the gallon was equal to the present United States gallon. A reading of theAct as a whole clearlypermits the saleof milk products in multiples of a gallon, as long asthe container isclearlymarked as to the capacity. The amendment to the originalAct of 1911that offers clarification of legislative intent iscontained inChapter 146, Session Laws of 1939, Section 21. This amendment establishes the standard measure as the gallon, the 112 gallon which contains 112 asmuch as a gallon etc, down tothe pint. The statute further provided:"Any purchaser of milk, cream or skimmed milk, having reason tobelieve that any measure, can, jar, bottle or other vessel or receptacle, inwhich milk, cream, or skimmed milk is sold and delivered tohim. 

### isnot of sufficient sizeor capacity tocontain, b$ standard wine measure, the amount thereof purchased, may apply tothe sealer of weights +: :k +:." (Emphasis supplied.) With each amendment it became clearer that the legislature

intended toestablisha "control unitfftowhich multiples could be compared in the enforcement process toprevent fraud. Fraud has been discussed in terms of mislabeling as tocapacity of the container and short measure. Thereafter the term "unit" was introduced into the descriptive language of the law as found inTitle 90, R.C.M. 1947, sections 90-101 through 90-129 [sincerepealed]. For example, section 90-102-Unit of extension- "The standard yard is the unit or standard measure of length JiJi. " ; 90-106- Unit of weights -"The standard avoirdupois and troyweights are the units of standard of weights fromwhich allother weights are derived and ascertained."; 90-108 

# - Unit of liquid measure

# - he standard gallon and 

### its parts are theunits or standards of measure of capacity for liquids, fromwhich allother measures of liquids arederived and ascertained.IIThe ?egisiacuue i-n tne Laws ar 1969, Chapter 99, erlacceil he presenr law: "An Act Relating toWeights and Pleasures, Providing for a State Sealer of Weights and Measures, Providing for a System of Weights and Measures, Regulating the Sale of Commoditiesby Weight and Measure, Providing for Enforcement [and repealer clause].11 This icc effectively revamped and modernized the entireAct. Ihe term "unit" isused but not redefined. Section 

### 2 of the Act provided:"Systems of Weights and Measures. The system of weights and measures in customary use in the United States and the metric system of weights and measures arejointly recognized, and either one or both of these systems shallbe used for allcommercial

purposes in the Stateof Montana. The definitions of basic units of weight and measure, the tables of weight and measure, and weights and measures equivalents as published by the National Bureau of Standards are recognized and shallgovern weighing and measuring equipment and transactions in the state." (Emphasis supplied.) The federal standards adopted recognize the gill, pint, quart, gallon, barrel and hogshead. Another section redefines as !'special Units of ~easure" the barrel as 31 gallons, as opposed to the federal standard of 31 1/2 gallons and several other units not relevant to our consideration here. It isthe opinion of this Court that the term "unit" or "units" asused in this Act 

### is intended by the legislature to mean

an absolute standard of measure of capacity from which other measures

Il I I are derived and ascertained. Therefore, the term unit" or units" could not, asused in the section under consideration, be construed

tobe restrictive to the absolute unit itself but only to divisible parts or multiples thereof. The fraud the legislature intended tocontrol or the inducement that prompted the legislature to actwas principally

so control actual fraud as it related to false or misleading packages or containers so as to mislead the consumer as to quantity of

contents or the contents of the container fallingbelow the adver- ~:isedfilli.e., short weight or fill. A close examination of therecord discloses no evidence to support an allegation or proof of this kind of fraud. We reverse the trialcourt's sub-paragraphs of its finding of fact No. 

### 7 and its conclusions of law No. 

### 5 and No.6 relating tothe construction of section 90-180, R.C.M. 1947, as it relates to containers containingunits of three quarts. We find, as our discussion points out, the language of section 90-180, 

### R.C.M. 1947, does not prohibit the use of a single container of the capacity of three 

### (3)one (1) quart units for retail packaging, sale, marketing and distribution of fluid dairy products inMontana

# . The cause isremanded to the trialcourt to enter the proper judgment not inconsistent with this opinion.

Justices.