Number 6. September 12, 1968

Number 6. September 12, 1968 HONORABLE CHARLES H. McNAMARA Commissioner ofAgriculture State Office Building 100 Cambridge Street Boston, Massachusetts 02202 Dear Sir: You have requested my opinion as to whether a certain milk cooperative marketing corporation (the "Association") which operates a milk processing plant in the Fall River area is required to comply with the provisions of G.L. c. 94 § § 42A-42K relative to the licensing and bonding of operators of milk plants. The Association enters into a "Producer Membership and Marketing Contract" with its producer members by which a member agrees to sell to the Association and the Association agrees to buy all the member's milk and dairy products. Paragraph 5 of the contract provides: P.D. 12 39 "Producer Member agrees that title to the milk or dairy products sold by the Producer Member to the Association shall pass to the Association in the case of bulk farm cooled milk when the milk is pumped into the tank truck designated by the Association, without right or rejection thereafter. Producer Member further agrees that in the case of milk cooled in cans, title to the said milk shall pass to the Association upon the loading of the cans of milk into a truck designated by the Association, except that the Association shall have the right to reject and send back to the Producer Member any can cooled milk which, upon arrival at the truck destination, does not meet the quality requirements as provided in Paragraph 4 of this agreement." Paragraph 6 of the contract provides that "subject to adjustments for differentials . . ., it [the Association] will pay the Producer Member the price received for . . . milk and dairy products, less costs of handling, operation, supervision [and certain other costs] ." You ask: "Does the . . . Association, acting as a marketing cooperative for Massachusetts Producers, need [to] be licensed and bonded under the provisions of General Laws, Chapter 94, Sections 42A through K?" General Laws c. 94, § 42A provides, in pertinent part: "No person buying milk or cream from Massachusetts producers, in this section and in sections forty-two B to forty-two K, inclusive, called producers, shall operate any milk plant or manufactory unless licensed to operate such plants and manufactories by the commissioner of agriculture . . . Such application shall be made upon a form prescribed by the commissioner, and shall contain a statement of such information as he may require to aid him in fixing the amount of bond hereinafter required. Such statement shall be made under penalties of perjury by the applicant, if an individual, and, if the applicant is a corporation, by its president and treasurer. A license shall not be issued unless the applicant shall execute and file at the time of filing the application ... a bond or other security satisfactory to the commissioner or shall be relieved therefrom as provided in section forty-two E."* General Laws c. 94, § 42B provides that the bond shall be a surety company bond and that its penal sum "shall be substantially equivalent to the total purchase price, as determined by the commissioner [of agriculture] , of milk and cream purchased by the applicant from Massachusetts producers in the average period between payments by him to producers during the three months immediately preceding the date of application for a license, plus ten per cent of such total purchase price " *Certain producers of small quantities of milk and cream are exempted by G. L. c. 94, § 42E from the requirement of filing a bond. We assume that the Association does not come within this exemption. 40 P.D. 12 I find no provision in the statute that exempts cooperative marketing corporations from being licensed and bonded. The fact that the Association in the present situation buys its milk from its own producer members does not put it in a position different from that of other buyers of milk who operate milk plants. Nor may a different position be implied. The Association is a separate legal entity, distinct from its members and cannot be regarded as identical with them. See Galdi v. Caribbean Sugar Co., 327 Mass. 402, 407-408; My Bread Baking Co. v. Cumberland Farms, Inc., 1968 Mass. Adv. Sh. 217, 220-222. I therefore conclude that even though the Association buys its milk from its own producer members, it must be licensed and bonded under G.L. c. 94, § 42A. You have also asked: "If [a] bond is required, would there be a change of opinion if the title of the milk did not pass to the Cooperative?" This question assumes a hypothetical set of facts and is not susceptible of an answer in its present form. Although the passage of title is a distinctive characteristic of a sale (G.L. c. 106, 2-106(1) ), the mere passage of title may not necessarily be determinative of the application of G.L. c. 94, § 42A. Lacking a full statement of a given set of circumstances where title might not pass, I do not express — nor do I intimate — any opinion on your second question. Very truly yours, ELLIOT L. RICHARDSON Attorney General