Cite as 24 A.D. 571 Mr. Samuel J. Harris for complainant. Respondent pro se. Decision by Thomas J. Flavin, Judicial Officer PRELIMINARY STATEMENT This is a disciplinary proceeding under the Packers and Stockyards Act, 1921, as amended and supplemented (7 U.S.C. 181 et seq.), hereinafter referred to as the Act, instituted by a complaint filed March 8, 1965, by the Director, Packers and Stockyards Division, Consumer and Marketing Service, United States Department of Agriculture, charging that respondent's financial condition does not meet the requirements of the Act and that respondent violated certain provisions of the Act and the regulations thereunder (9 CFR 201.1 et seq.). On April 12, 1965, respondent filed an answer in which it admits the jurisdictional allegations of the complaint, neither admits nor denies the remaining allegations, waives oral hearing and the report of the Hearing Examiner, and consents to the issuance of a specified order with findings of fact and conclusions based on the allegations of the complaint. Complainant has recommended that the order consented to by respondent be issued. FINDINGS OF FACT 1. Respondent, a corporation having a place of business at Pueblo, Colorado, is now, and was at all times material herein, registered with the Secretary of Agriculture as a market agency and dealer under the Act. Respondent was at all times material herein engaged in business as a market agency, buying and selling livestock in commerce on a commission basis. 2. Southern Colorado Livestock Commission Company, Inc. stockyard, Pueblo, Colorado, hereinafter referred to as the stockyard, is now, and was at all times material herein, a posted stockyard subject to the provisions of the Act. 3. Respondent's current liabilities exceed its current assets. As of December 28, 1964, respondent's current liabilities exceeded its current assets by approximately $16,754.77. 4. During the month of December 1964, respondent used funds received as proceeds from the sale of livestock consigned to it for sale on a commission basis for purposes of its own and purposes other than the payment of lawful marketing charges and remittance of net proceeds to shippers, thereby endangering or Cite as 24 A.D. 571 impairing the faithful and prompt accounting therefor and payment of the portions thereof due to owners or consignors of livestock. As of December 28, 1964, respondent had a shortage in shippers' proceeds in the approximate amount of $6,968.65. 5. Respondent, at the stockyard, on or about the dates and in the transactions set forth below, sold livestock consigned to it for sale on a commission basis and in purported payment of the net proceeds due the consignors thereof, issued checks which were returned by the bank upon which they were drawn because of insufficient funds in respondent's account. 6. Respondent, during the period from on or about June 1, 1964, through December 28, 1964, in connection with its market agency operations subject to the Act, failed to keep accounts, records and memoranda which fully and correctly disclosed all transactions involved in its business. Respondent, during such period, failed to keep: (1) a general ledger of accounts showing assets, liabilities, income, expenses and net worth or capital; (2) a cash receipts and disbursements journal; and (3) periodic reconciliations of its bank accounts. CONCLUSIONS By reason of the facts set forth in Finding of Fact 3, it is concluded that respondent is insolvent within the meaning of the Act (7 U.S.C. 204), and by reason of the facts set forth in Findings of Fact 4, 5, and 6, it is concluded that respondent has wilfully violated sections 307, 312 (a) and 401 of the Act (7 U.S.C. 208, 213 (a) and 221) and sections 201.40, 201.41, 201.42 and 201.43 of the regulations thereunder (9 CFR 201.40 and 201.41, 201.42, and 201.43). Complainant has recommended that the order consented to by respondents be issued. The order will be issued. Cite as 24 A.D. 571 ORDER Respondent shall cease and desist from: (1) using shippers' proceeds for purposes of its own and purposes other than the payment of lawful marketing charges and the remittance of net proceeds to shippers; (2) issuing checks to consignors in purported payment of net proceeds from the sale of livestock in commerce on a commission basis without maintaining sufficient funds on deposit in the bank on which they are drawn to pay such checks. Respondent shall deposit the gross proceeds received from the sale of livestock handled on a commission or agency basis in a separate bank account designated as "Custodial Account for Shippers' Proceeds" or by a similar designation and shall maintain such account in conformity with the provisions of section 201.42 of the regulations promulgated under the Act (9 CFR 201.42). Respondent shall keep accounts, records and memoranda which fully and correctly disclose all transactions involved in its business as a market agency subject to the act, including among other things: (a) a general ledger of accounts showing assets, liabilities, income, expenses and capital or net worth; (b) a cash receipts and disbursements journal; and (c) monthly reconciliations of all bank accounts. Respondent is suspended as a registrant under the Act for a period of 30 days and thereafter until it demonstrates that it is no longer insolvent. When respondent demonstrates that it is no longer insolvent, a supplemental order will be issued in this proceeding terminating the suspension after the 30-day period. This order shall become effective on the sixth day after service thereof upon respondent and copies hereof shall be served upon the parties. Cite as 24 A.D. 575 (No. 9809) In re WILFORD LYNN AND DALE G. LYNN, d/b/a WILFORD LYNN LIVESTOCK BUYING STATION. P&S Docket No. 3458. Decided May 10, 1965. Bonding requirements-Cease and desist-Consent Respondents are ordered to cease and desist from engaging in business under the act without filing and maintaining a reasonable bond or its equivalent as required by the act and the regulations issued thereunder. Mr. Samuel J. Harris for complainant. Dalton, Treasure and Bullard, Kennett, Missouri, for respondents. Decision by Thomas J. Flavin, Judicial Officer PRELIMINARY STATEMENT This is a disciplinary proceeding under the Packers and Stockyards Act, 1921, as amended and supplemented (7 U.S.C. 181 et seq.), hereinafter referred to as the Act, instituted by a complaint filed January 22, 1965, by the Director, Packers and Stockyards Division, Agricultural Marketing Service, United States Department of Agriculture, charging that respondents violated the bonding provisions of the Act and the regulations thereunder (9 CFR 201.1 et seq.). On March 18, 1965, respondents filed an amended answer in which they admit the jurisdictional allegations of the complaint, neither admit nor deny the remaining allegations, waive oral hearing and the report of the Hearing Examiner, and consent to the issuance of a specified order with findings of fact and conclusions based on the allegations of the complaint. Complainant has recommended that the order consented to by respondents be issued. FINDINGS OF FACT 1. Respondents, whose business address is Kennett, Missouri, are now, and were at all times material herein, engaged in the business of a dealer within the meaning of the Act, buying and selling livestock in commerce for their own account, and are now, and were at all times material herein, so registered with the Secretary of Agriculture. Cite as 24 A.D. 575 2. Kennett Sales Co., Inc. stockyard, Kennett, Missouri, hereinafter referred to as the stockyard, is now, and was at all times material herein, a posted stockyard subject to the provisions of the Act. 3. During the period from October 10, 1962, to the date of the execution of the Complaint, respondents maintained a surety bond in the amount of $9,000 to secure performance of their dealer obligations. 4. Based upon their volume of business transacted as a dealer during 1963, respondents were required, under the Act and the regulations, to increase from $9,000 to $11,000, the amount of the bond maintained by them to secure performance of their dealer obligations. By letters dated July 29, 1964, and October 1, 1964, the Area Supervisor, Packers and Stockyards Division, Agricultural Marketing Service, United States Department of Agriculture, for the Area that includes the State of Missouri, notified respondents of the required increase in their bond coverage. Notwithstanding said notices, respondents continued to engage in the business of a dealer, buying and selling livestock at the stockyard for their own account, without furnishing the required additional bond coverage. CONCLUSIONS By reason of the facts set forth in Finding of Fact 4, it is concluded that respondents have wilfully violated section 312(a) of the Act (7 U.S.C. 213 (a)) and sections 201.29 and 201.30 of the regulations (9 CFR 201.29 and 201.30). Complainant has recommended that the order consented to by respondents be issued. The order will be issued. ORDER Respondents shall cease and desist from engaging in business in any capacity for which bonding is required under the Act and the regulations without filing and maintaining a reasonable bond or its equivalent as required by the Act and regulations thereunder. This order shall become effective on the sixth day after service thereof upon the respondents and copies hereof shall be served upon the parties. |