Court Opinion

ID: 6911493
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:23:57.307031+00
Date Added: 2024-06-11T16:06:31.441598
License: Public Domain

LUSK, J.,
concurring..
In. this opinion the defendant Tillamook Cheese and Dairy Association will be referred to as the defendant and the other cooperative, Tillamook County Creamery Association, as Creamery.
The procedure pursuant to which the action was brought is, in some, respects, unusual. A person or association which has been found to be in default as a result of an audit by the Department is entitled to a hearing before the Department and, if the Department adheres to the finding, to judicial review by taking an appeal to the circuit court. On such review the pertinent records of the Department are required to be transmitted to the circuit court, though additional evidence may be presehted if' material and there was *398good reason for failure to present it at the proceeding before the Department. In this case the defendant did not seek judicial review. In such a situation and where the order has not been complied with the Department is required by the statute to file what is called an “injunction action” “based upon the findings of the department against a handler or other person whose accounts have been audited.” OES 583.106 (1) (b). In that proceeding “the findings of the department as to the facts if supported by substantial evidence, in the absence of fraud, are conclusive and the jurisdiction of the court shall be confined to questions of law.” OES 583.106 (2). It is not provided that the hearing shall be upon the record made before the Department, but it is provided that “such action shall be heard in a summary manner without a jury.” OES 583.106 (2). An appeal to the Supreme Court from the “order or decree of the circuit court” is authorized but the scope of review by this court is not prescribed. OES 583.106 (5). The failure of the defendant to seek judicial review of the order does not, it would seem, preclude it from making whatever defense it may have to the so-called “injunction action.”
It may be observed in passing that it is difficult to understand how a case like this, with its complicated issues—135 pages of testimony and 23 exhibits —can be expected to be heard “in a summary manner.” The fact is, it proceeded as any other lawsuit and both the parties and the court assumed that it was to be tried as a suit in equity as, when objection to a question was sustained, the testimony was taken under the rule.
Nevertheless, in this court it appears to be conceded that if the findings of the circuit court are sus*399tabled by substantial evidence they cannot be disturbed and this, I think, is the proper construction of the statute. The circuit court’s only function is to determine whether the evidence before it is sufficient to sustain the Department’s order and this court’s review of the circuit court’s decision, it would seem, was intended to be limited in the same fashion.
Substantially, two issues were raised by the defendant’s answer: The first, that the producers (referred to at times in the testimony as the patrons of the defendant) had been paid by Creamery and, second, that Creamery had never paid the defendant for the milk involved and, therefore, as a legal proposition, the defendant was under no obligation to pay the producers.
On the first issue the court found that Creamery had advanced to the producers the amounts of their claims against the defendant as loans and had taken assignments of such claims as security. I think that not only substantial, but clearly preponderating evidence, supports this finding.
The only testimony relative to this question was given by Donald E. Sutton, office manager, and Beale Dixon, manager, of Creamery, both called as witnesses by the defendant. Their evidence is to the effect that Creamery had customarily made advances to producers when asked to do so by them, though it had never before experienced a situation like that it faced in September, 1963, when some of the producers had been paid by the cooperative to whom they delivered milk and the others—approximately 100 in number—had not. The decision to make the advances was taken late in September at a meeting attended by most of the unpaid producers. Under date of September 30 Cream*400ery mailed to each of them a letter reading in part as follows:
“We understand that Tillamook Cheese & Dairy Association is holding up the check that they owe you for milk deliveries made by you to them during August. We know that you have obligations to meet, and we are enclosing an advance check rounded out to the nearest hundred. This is being done in accordance with the policies of Tillamook County Creamery Association to issue advances, as we know you have obligations to meet. There will be a charge of y%% made for this advance and if it is needed beyond the 1st of November, you will need to make arrangements for it again.
“Tillamook County Creamery Association is doing this as an accomodation [sic] to you: If you do-not need this, please return it and no charge will be made.” (Italics added.)
Checks were enclosed as stated , in the letter. The reason for not sending the producers the precise amount owing them by the defendant was that at-'the time amounts to be properly' deducted from their claims, such, for example, as hauling charges, had not been computed. Later, after these amounts- had been ascertained, checks for the balances were remitted to the producers. Also, under date of October 14, Creamery mailed to the producers forms of assignment to Creamery of their claims against the defendant and these assignments were executed and returned -to Creamery. A letter from’ Creamery to the producers dated October 14, 1963, reads in part: '
“Enclosed is an assignment form' for your use in transferring your claim against : Tillamook .Cheese & Dairy Association for the milk; which ■ you shipped to them in the first 26 days of August to the .Tillamook' County Creamery Association for collection.”
*401It will be noticed that the word “advances” was used-by Creamery in its letter of September 30 enclosing the first cheeks. The word may mean payment before the proper time of payment or it may mean a loan, Black’s Law Dictionary (4th ed). In this case there was uncontradicted testimony related to the milk industry that payments are not “customarily referred to as an advance.” Beyond that the italicized portions of Creamery’s letter of September 30, from which I have quoted, demonstrate that the sums sent to the producers were loans for a period of one month, carrying an interest charge of one-half of one per cent per month. The patrons were told that if the money was needed for a longer period further arrangements must be made. There would have been no occasion for “further arrangements” if the advances were intended as payment. Nothing to the contrary is found in the letter of October fourteenth enclosing the assignments. At least a prima facie case was thus made out supporting the plaintiff’s position. To rebut this evidence, if it could be rebutted, the unpaid producers were certainly available to give material testimony, but none were called by the defendant.
I cannot agree with the view expressed in the dissenting opinion of the Chief Justice that Creamery, as a subagent, was obligated to pay the producers. No such contention is made by the defendant. The following from 3 Am Jur 2d 545, Agency § 154, I take to be a correct statement of the law:
“* * * [W]here an agent has authority to employ a subagent to receive money for the principal, the principal may treat the subagent as his agent, and, when the subagent has received the money, may recover it in an action for money had and received; * *
*402But there is no evidence that any producer has ever elected thus to treat Creamery and certainly the Department, which has brought this action pursuant to statute on behalf of the producers, has not done so. Moreover, any such attempt by producers would seem to be contrary to the legislative scheme. Defendant is a handler. Under the statute the Department is authorized to fix the minimum price for the sale of Class I milk by producers to handlers, ORS 583.505, and no handler shall purchase milk from a producer for less than the minimum price, ORS 583.525. The Department, pursuant to legislative authority, has adopted the following regulation:
Oregon Administrative Rules, Chapter 603,
“§ 06-015 [Market Pool]
* * # # *
“(7) Payments to Producers.
“(a) On or before the 17th day of the month following the month in which milk is received, a handler shall pay to another handler from whom he has purchased milk not less than the value of milk received at the appropriate classes to which such receipts of milk have been assigned pursuant to reports as referred to in subsection (1) of this section.
“ (b) First handlers shall make payment to producers on or before the 24th day of the month following the month in which milk is received for quota milk at not less than the uniform pool price per hundredweight and butterfat values as determined under subsection (5) of this section and for surplus over quota milk at not less than the minimum price established by the department pursuant to ORS 583.505.”
Thus Creamery was required to pay the defendant and the defendant was required to pay the producers. *403There was no relation of debtor and creditor between Creamery and the producers.
The other question, whether the defendant is absolved from paying its producers because it has not received payment from Creamery, is more difficult, but I agree with the conclusion of Mr. Justice Sloan that this fact does not constitute a defense to the action. The two cooperatives had many business dealings with each other in addition to Creamery acting as agent in the marketing of fluid milk for the defendant. They borrowed money from each other and recently, before the commencement of this litigation, Creamery had loaned the defendant $300,000. In the course of their dealings a dispute arose which culminated in an accounting suit brought by the defendant against Creamery and which is still pending. When the proceeds of the June milk were received by Creamery, instead of remitting the money to the defendant, as had been its custom, Creamery credited the amount to the defendant on its books. The producers took sides in the controversy and the defendant borrowed money and paid its members who remained “loyal” to it. With the merits of the dispute between the two cooperatives this court now, of course, has no concern, but I think that the purpose of the Milk Audit and Stabilization Act, as it is called, is not to be frustrated by the refusal of a cooperative in these circumstances to pay its producers. That purpose is declared to be “to provide the assistance of the State of Oregon in maintaining an adequate supply of healthful milk through the state auditing of the records of handlers as they pertain to the pooling and -Usage of milk and the payment therefor.” OES 583.016 (1). Certainly, not the least important of the means for achieving this end is the prompt payment, in accordance with the *404regulation of the Department, of the minimum price to the producers. They should not be compelled to await the outcome of extended litigation between two handlers. In such a posture of affairs the concept of a cooperative so much insisted on by the defendant—“the association is the members and the members are the association”—has no place. The statute itself then makes the cooperative a distinct and separate entity from its members.
' I concur.
I am authorized to say that McAllister, J., and Denecke, J., concur in this opinion.