Opinion ID: 1243721
Heading Depth: 2
Heading Rank: 2

Heading: Persons wherever located or operating, whether within or without the State, who purchase, market or handle milk for resale as fluid milk in the State.

Text: 'Producer' means any person, irrespective of whether any such person is also a distributor, who produces milk for sale as fluid milk in the State. (Emphasis added.) 'Producer-distributor' means a distributor who handles only milk produced by himself. The Commission contends that the actions of the appellants place them within the definition of a distributor as set forth in I. (a) of the above Code section, because they are engaged in handling fluid milk for consumption in this State and pasteurize or process milk into fluid milk. They do handle and process milk for consumption in this State, but the statute reads that persons must be engaged in the business of doing these things before a distributor's license may be required. These private schools are engaged in the business of education, and incidental thereto produce and process milk solely for their own use at the institutions. There is no sale of the milk to the students. All pay the same tuition whether or not they drink milk. Can it be successfully contended that the schools are engaged in the bakery business if they bake bread for their own use? We think not. Thus, it is evident that the schools are not distributors of milk within the meaning of the Act. The appellants cannot be classified as producers under the Act, because they do not produce milk for sale. The record shows that counsel for the schools made the following statement at the hearing before the Local Milk Board: [The] disposition of surplus milk, as shown on the application, to Whitehouse Division, A & P Stores, Fork Union, Va., was handled by the schools themselves and that payment for this milk was made directly to the schools. McAllister testified that the surplus milk disposed of was not processed milk and was ungraded milk. What use is made of the surplus milk disposed of is not shown by the record. Under his contract of employment with the schools he was entitled to surplus milk produced, if any, and he could use or dispose of it in any lawful manner. The surplus milk was, therefore, his property and when the schools sold it they of necessity acted as his agent. Whether or not McAllister is required to have a license from the Commission in order to dispose of any surplus milk is another question and is not an issue before us. Our conclusion is that the appellants, Augusta Military Academy and Staunton Military Academy, are not required to obtain a license from the Commission in order to produce milk to be used exclusively in the respective schools. Such being the case, we do not reach the question of whether the action of the Commission in denying the license applied for was invalid as being arbitrary, capricious and unreasonable. The Commission asserts that in event the appellants prevail in this appeal the costs incurred should not be assessed against it. This position is based on the premise that the Commonwealth is exempt by statute from paying such costs. Section 14-178 provides: In every case in the Supreme Court of Appeals, costs shall be recovered in such court by the party substantially prevailing. We have held that the terms of this section are mandatory. McCready Lyon, 167 Va. 103, 112, 187 S.E. 442. Section 14-197 reads: In no case, civil or criminal, except when otherwise specially provided, shall there be a judgment for costs against the Commonwealth. This latter section is a specific limitation on the general provision set out in | 14-178. The operations of the Commission are not supported by general taxation. Assessments are made on the local boards based on the quantity of milk and cream handled by the distributors and sold by the producers in each market in which the Commission operates. (| 3-373, Code 1950, as amended.) These assessments are paid by the Commission into the State treasury to the credit of the Milk Commission account. (| 3-374) While the Commission has been declared by the General Assembly to be an instrumentality of the Commonwealth (| 3-352), it is not the Commonwealth within the meaning of | 14-197. Moreover, in Food Stores Milk Commission, 204 Va. 46, 129 S.E.2d 35, and in Rountree State Milk Comm., 184 Va. 777, 36 S.E.2d 613 costs were assessed against the Commission. Since we conclude that no license is required from the Commission for appellants' operations, the appellants have prevailed on this appeal. The appellants will therefore recover their costs from the Commission, and the proceedings are Dismissed.