36

the commissioner of agriculture that milk is being produced or handled in a sanitary way and comes from cows free from disease, and any person operating a milk-gathering station must "satisfy" the commissioner as to his character, financial responsibility, and good faith. In Minnesota 35 the dairy and food commissioner may refuse to issue a license for the sale of milk or cream if he "deems" the applicant to be "unworthy", and a wholesale produce dealer in that State may procure a license upon complying with the conditions of the statute and satisfying the commissioner that he is a "reputable" person. An applicant for a license to act as foreman of a milkgathering station in New York 37 must furnish the commissioner of farms and markets satisfactory evidence of "good moral character" as well as give proof of his ability to perform the necessary functions of a foreman. The State board of health of New Hampshire 38 licenses producers of standardized milk in its “discretion." Every person in Tennessee 39 desiring to procure a license to deal in milk or dairy products must apply to the State dairy commissioner who shall refuse to issue the license if for any reason, "in his opinion," the location is unsatisfactory or the person is unqualified. The department of agriculture and markets in Wisconsin 40 must investigate to determine that the makers of limburger cheese are persons of "good character" before a license will issue.

Irrespective of the merits of allowing a wide range of latitude in administrative control, it is apparent that discretionary power as vague as the examples illustrated above is potentially open to abuse. It is important, therefore, to examine any remedies available to an aggrieved applicant. A few States " provide for review by certiorari of a refusal by an administrative authority to license an applicant. Occasionally, a statute will merely provide for judicial

41

"L. 1933, c. 210, sec. 2, as amended by L. 1st. Ex. 1933, c. 283.

Mass. Ann. Laws (Supp. 1939), c. 94. secs. 65H, 65K (manufacturers of frozen desserts); N. Y. Agriculture and Markets Law (McKinney), sec. 71-f (manufacturers of frozen desserts); R. I. Rev. Gen. Laws (1938), c. 218, sec. 10 (operators of milk gathering stations).

Conn. Gen. Stat. (Supp. 1935), sec. 959c, subsecs. (G), (H) (manufacturers of frozen desserts); N. J. Rev. Stat. (1937), sec. 4:12-18 (purchasers of milk and cream); S. C. Code (Supp. 1934), sec. 5129-1 (manufacturers of frozen desserts); S. D. Code Ann. (1939), sec. 4, 1907 (manufacturers of dairy products); Wis. Rev. Stat. (1939), sec. 97.04 (operators of dairy plants and receiving stations).

review or appeal without indicating the precise remedy. A Virginia statute 43 provides that no application for a license to manufacture and sell ice cream and frozen desserts shall be denied without a hearing on the merits and notice in writing at least 10 days before the hearing, but no provision is made for judicial review or appeal.

Remedies of applicants in other States would seem to depend largely upon whether the power of the issuing authority is ministerial, or discretionary, and to make such determination, consideration must be given to the terms used in granting the authority. Where inspection is required to determine whether or not certain standards are met as a condition precedent to issuance, qualifying terms such as "safe," "wholesome," "sufficient," "necessary" are apt to be used. The degree to which the requirements are technically standardized may make the licensing power nondiscretionary or ministerial and mandamus, therefore, becomes available for the purpose of controlling the exercise of the administrative power." But where the duty seems to be discretionary as, perhaps, in determining who are persons of "good moral character," who are "reputable” persons, or who are "unworthy" persons, mandamus would be more difficult of application. These are elastic terms, subject to a variety of interpretations and mandamus will not lie where the duty is clearly discretionary and the party upon whom the duty rests has exercised his discretion reasonably and within his jurisdiction.45 Certiorari will, of course, lie to control discretionary power by bringing up the record.16 Certiorari, however, presupposes a hearing and operates in a rather restricted manner to review the record to determine that no error was committed. But what of a situation where the act is discretionary and no hearing is provided? An act of free discretion is not ordinarily subject to review and such review might be challenged on constitutional grounds. It has been suggested 48 that if control of discretion is desired, it should be accomplished by administrative appeal. Seldom do States provide for administrative

Code Ann. (Michie, Supp. 1938), sec. 1215.

See Silverman v. Department of Health of City of New York, 25 App. Div. 678, 300 N. Y. Supp. 979 (1937) (where there is a trial in a proceeding for a mandamus order directing a board or commission to rescind its action in refusing a license, the jury may review only the information on which the board or commission acted. If the jury finds that the facts are true, the court alone may decide whether such facts warranted the refusal of the license, i. e., whether the action was unreasonable or arbitrary).

High, James L., Extraordinary Legal Remedies (3d ed.), sec. 25. Ferris, F. G., Extraordinary Legal Remedies (1926), secs. 157, 158. "Freund, Ernst, Administrative Powers Over Persons and Property (1928) p. 278.

"Freund, Ernst, Legislative Regulation (1932), p. 290.

appeal from decisions of officials controlling milk and dairy licenses 49 and it is not always clear whether such appeal is available to applicants for licenses or only to licensees seeking to test the validity of an order of revocation or suspension. Presumably, State legislatures have considered adequate such remedies as mandamus and certiorari without further special provisions. The courts have given emphasis to this view by holding that a statute or a municipal ordinance is not unconstitutional because it does not provide for an appeal from the action of the administrative officer or board in refusing or revoking a license.50

Duration of Licenses

The duration of licenses is largely a question of legislative policy. The statutes ordinarily provide for the issuance of licenses on a year-to-year basis and frequently provide for renewals.51 In statutes making renewal a ministerial act, the difference between an annual and a permanent license is not very significant and there is little basis for the contention that insecure tenure resulting from year-to-year licensing is bad for the morale of the industry. Without renewal facilities, an annual license may be more precarious than a permanent license with severe revocation provisions, since the burden of establishing qualification must be met yearly by the licensee. This argument may not be particularly effective, however, as applied to the milk and dairy business since the nature of the business calls for continuous inspection in the interest of public health. The business would undoubtedly be subject to frequent inspection regardless of the duration of licenses and the qualifications would have to be met at each inspection. It has been contended that annual occupational licenses create an interest of solidarity on the part of license holders in resisting excessive administrative powers.

52

People ex rel. Lodes v. Department of Health of City of New York, 189 N. Y. 187, 82 N. E. 187 (1907); Cofman v. Ousterhous, 40 N. D. 390, 168 N. W. $26 (1918); State v. Kirkpatrick, note 31, supra.

But see Mass. Ann. Laws ,1933) c. 94, sec. 16c permitting milk regulation board to fix expiration date for licenses of dairy farms outside the State not before one year from date of issue; N. Y. Agriculture and Markets Law (McKinney), sec. 57 authorizing licenses to operators of milk-gathering stations, manufactories, or plants for 5-year periods; Pa. Stat. Ann. (Purdon, Supp. 1939), tit. 31, sec. 646 providing for annual application for renewal of licenses by distributors of milk or milk products but continuing in force the license of the preceding year if no violation has been noted.

Freund, Ernst, Administrative Powers Over Persons and Property (1928),

p. 111.

License Fees

It is the common practice to fix fees for licenses directly by legislative authority and it is not always easy to distinguish an annual license from an annual tax. Most license fees are apparently levied with a view to defraying costs of inspection, administration, etc. Delaware 53 is the only State which levies an occupation tax in addition to a license fee as applied to the milk and dairy business.

Fees vary in amount according to the type of business. Where fees are levied on retailers, hotels, restaurants, and similar types of businesses, they are very small in amount. The amount has a tendency to increase progressively upward through wholesalers to manufacturers and processors, so that it more closely resembles a tax. Furthermore, as the amount of a manufacturer's or processor's business increases, the amount of his license fee often increases. This tends to accentuate the taxing aspect.

Frequently those engaged in the dairy business are required to pay license fees on the basis of the number of cows owned, or differences in methods of operation or manner of sale. These levies have been upheld as reasonable and nondiscriminatory, and the courts have indicated that such fees are not property taxes but license fees levied for regulatory purposes to cover the expense of inspection or regulation, and that differences in the size of dairies reasonably justifies differences in classification of fees.54

Even in the absence of express statutory authority to levy a license fee, it has been held that where a State or municipality has been given the power to regulate or inspect the milk business, it has the power to levy a license or inspection fee to cover expenses of issuing the license or making the inspection."

Note 12. supra.

55

Birmingham v. Goldstein, 151 Ala. 473, 44 So. 113 (1907); Belzung v. State 183 Ark. 472, 36 S. W. (2d) 397 (1931); Coleman v. City of Little Rock, 191 Ark. 844. 88 S. W. (24) 58 (1935): City of Lawrence v. Kagi, 105 Kan. 520, 185 Pac. 60 (1919); State v. Board of Health of Citu of Hoboken, 64 N. J. L. 42, 44 Atl. 847 (1899); City of Asheville v. Nettles, 164 N. C. 315, 80 S. E. 236 (1913); Korth v. City of Portland, note 6, supra.

Belzung v. State, note 54, supra (a district health board operating under the power of a special act which did not grant it express power to levy an inspection fee, but gave it the power to promulgate reasonable rules and regulations, was held empowered to levy an inspection fee upon all dairymen selling milk within its district); City of St. Louis v. Grafeman Dairy Co., 190 Mo. 492, 89 S. W. 617 (1905) (where a city has been given the power, by its charter, to inspect milk, an ordinance requiring a vendor of milk and cream to register and pay $1 as a fee, is a valid police regulation); State v. Board of Health of City of Hoboken, note 54, supra (in the absence of expressed statutory power to impose license fees, such fees may still be imposed sufficient in amount to pay the expense of inspecting the milk and issuing the license.)

Bonding of Licensees

Nine States 56 require that bonds in varying amounts be filed with the licensing authority as a condition precedent to the issuance of certain types of licenses. Such bonds are required from those who engage in the purchase of milk from producers, and are designed for the benefit of the latter. Bonds must usually be in an amount substantially equivalent to the total purchase price of milk and cream. Certain exemptions are sometimes allowed.57

The courts of two States, Maine and Connecticut, have invalidated statutory requirements that persons purchasing milk or cream from producers must file a bond as a condition precedent to obtaining a license.58 The statutes were held unconstitutional on the ground that to impose such a requirement upon milk gatherers only, and not upon those purchasing other types of products from producers, constituted an unreasonable discrimination against milk purchasers. The Maine court relied upon an earlier case 59 which invalidated as class legislation not justifiable under the police power a 1915 statute 6o requiring persons purchasing milk or cream for resale or manufacture to pay the producer semimonthly unless otherwise provided by written contract.

Me. L. 1933, c. 210, sec. 2, as amended by L. 1st, Ex. 1933, c. 283, sec. 2 (milk gathering stations); Mass. Ann. Laws (Supp. 1939), c. 94, sec. 42A (out-ofState manufacturing plants); Minn. Stat. (Mason, Supp. 1940), sec. 6240–181⁄2c (wholesale produce dealers); Neb. Comp. Stat. (1929), sec. 81-1202 (commission merchants); N. H. Pub. Laws (1926), c. 164, sec. 5 (milk plants and manufacturing-plants); N. J. Rev. Stat. (1937), secs. 4:12-4, 4:12-11 (milk plants and manufacturing plants); R. I. Rev. Gen. Laws (1938), c. 218, sec. 3 (milk gathering stations, if financial statement deemed inadequate); Vt. Rev. Pub. Laws (1933), sec. 4608, as amended by L. 1937, act 97, sec. 2 (creamery companies); Wis. Rev. Stat. (1939), sec. 100.06 (dairy plants and receiving plants).

"See Wis. Rev. Stat. (1939), sec. 100.06 permitting the department of agriculture and markets to accept the financial statement of a reliable certified public accountant reasonably assuring prompt payment in lieu of a bond from operators of dairy plants, ice cream plants, and butter factories, and N. H. Pub. Laws (1926), c. 164, sec. 5a, as amended by L. 1929, c. 35, sec. 1, authorizing the commissioner of agriculture to waive the furnishing of bond by milk or cream purchasers, provided all producers selling to such persons declare in writing that such bond need not be given; see also N. H. Pub. Laws (1926), c. 164, sec. 4, as amended by L. 1931, c. 4, sec. 2, providing that an applicant may be licensed without filing a bond if it is found that he has sufficient real estate within the State to afford ample security to producers, and N. J. Rev. Stat. (1937), sec. 4:12-4 permitting the deposit of money or United States securities in lieu of bond.

State v. Porter, 94 Conn. 639, 110 Atl. 59 (1920); State v. Old Tavern Farm, Inc., 133 Me. 468, 180 Atl. 473 (1935).

State v. Latham, 115 Me. 176, 98 Atl. 578 (1916).

"L. 1915, c. 32; cf. Vt. Rev. Pub. Laws (1933), sec. 4610, imposing a similar requirement in force today.