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Cite as 24 A.D. 606

issuing insufficient funds checks in payment of purchased livestock and issuing untrue or incomplete accounts of sale, are ordered to establish a separate account for shippers' proceeds and are suspended as registrants under the act for a period of 90 days and thereafter until no longer insolvent.

Mr. Jerome S. Ducrest for complainant.

Mr. Francis H. Neverett, Plattsburgh, N. Y., 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 (7 U.S.C. 181 et seq.). The Complaint filed by the Director, Packers and Stockyards Division, Consumer and Marketing Service, on April 5, 1965, charges respondents with failing to meet the financial requirements of the Act and with various violations of the Act and the regulations. Respondents, in their answer, admit the jurisdictional allegations of the Complaint and further admit that the Secretary of Agriculture has jurisdiction in this matter, waive oral hearing and the report of the Hearing Examiner, and consent to the issuance of a specified order requiring respondents to cease and desist from the practices complained of in the Complaint and suspending respondents' registration for a period of 60 days and thereafter until they demonstrate that they are no longer insolvent. Complainant has recommended that the order agreed to by respondents be issued.

FINDINGS OF FACT

Respondents, during the period from June 1 through November 30, 1964, were registered with the Secretary of Agriculture as a market agency to sell livestock on a commission basis at the H. L. Neverett and Sons stockyard, Chazy, New York, and as a dealer to buy and sell livestock for their own account in commerce. Respondents, during said period, were subject to the jurisdiction of the Secretary of Agriculture with respect to the matters covered by this order.

CONCLUSIONS

Section 202.5 (b) of the Rules of Practice Governing Proceedings under the Packers and Stockyards Act provides as follows: § 202.5 Stipulations and consent orders . . . (b) Consent order. At any time after the issuance of the moving paper

Cite as 24 A.D. 606

and prior to the hearing in any proceeding the Secretary, in his discretion, may allow the respondent to consent to an order. In so consenting, the respondent must submit, for filing in the record, a stipulation or statement in which he admits at least those facts necessary to the Secretary's jurisdiction and agrees that an order may be entered against him. Upon a record composed of the complaint and the stipulation or agreement consenting to the order, the Secretary may enter the order consented to by the respondent, which shall have the same force and effect as an order made after oral hearing.

The facts admitted by the respondents and set forth in the Findings of Fact are sufficient to subject them to the jurisdiction of the Secretary of Agriculture under the provisions of the above section.

Inasmuch as respondents have agreed to a consent disposition of this case and complainant has recommended that an order be issued requiring respondents to cease and desist from the practices complained of as set forth in respondents' answer and suspending respondents' registration under the Act, the order agreed to will be issued.

ORDER

Respondents shall cease and desist from:

(1) Operating as a market agency or as a dealer in commerce while their current liabilities exceed their current assets;

(2) Using funds received from the sale, in commerce, of livestock consigned to them for sale on a commission basis for purposes of their own and purposes other than the payment of lawful marketing charges and the remittance of net proceeds to shippers;

(3) Issuing checks in payment for livestock purchased in commerce without having and maintaining on deposit in the bank upon which such checks are drawn sufficient funds to pay such checks; and

(4) Issuing accounts of sale which fail to give a full, true, and correct accounting of sales of consigned livestock by respondents, including the correct name of the purchasers of the livestock and the sale weight and sale price per pound or per head.

Cite as 24 A.D. 609

Respondents shall deposit the gross proceeds received from the sale of livestock consigned to them on a commission or agency basis in a bank account separate from the general or private accounts in which respondents' own funds are deposited and such proceeds account shall be designated "Custodial Account for Shippers' Proceeds" or by a similar identifying designation. Such account shall be drawn upon only for the purposes for which shippers' proceeds may properly be used, as set forth in section 201.42 of the regulations.

Repondents are suspended as registrants under the Act for a period of 60 days and thereafter until they demonstrate that they are no longer insolvent. When respondents demonstrate that they are no longer insolvent, a supplemental order will be issued in this proceeding terminating this suspension after the 60-day period.

This order shall become effective six days after service.

Copies hereof shall be served upon the parties.

(No. 9820)

In re WINFIELD LIVESTOCK AUCTION, INC. P&S Docket No. 3459. Decided May 17, 1965.

Market agency-Rate schedule-Accounts of sale-Shippers' proceedsRecords-Insolvency-Suspension of registration-Consent

Respondent is ordered to cease and desist from charging a greater or less or different compensation than those specified in the rate schedule, using shippers' proceeds for unauthorized purposes and issuing untrue or incomplete accounts of sale, is ordered to keep records that fully disclose all transactions in its business under the act and to establish a separate account for shippers proceeds and is suspended as a registrant under the act for a period of 30 days and thereafter until no longer insolvent. Mr. Samuel J. Harris for complainant. Mr. C. T. 'Tad' Sanders, Kansas City, Mo., for respondent.

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 com

Cite as 24 A.D. 609

plaint filed January 22, 1965, by the Director, Packers and Stockyards Division, Agricultural Marketing Service, United States Department of Agriculture, charging respondent with being insolvent within the meaning of the Act (7 U.S.C. 204) and with violating certain provisions of the Act and the regulations thereunder (9 CFR 201.1 et seq.).

A recent investigation by the Packers and Stockyards Division disclosed that respondent is no longer engaged in business as a market agency in commerce and that respondent has leased the facilities formerly used in its market agency operations.

On April 15, 1965, respondent filed an amended 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. Winfield Livestock Auction, Inc. stockyard, Winfield, Kansas, 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.

2. Respondent, Winfield Livestock Auction, Inc., a corporation, whose business address is Winfield, Kansas, was at all times material herein, engaged in business as a market agency, selling livestock in commerce on a commission basis.

3. Respondent is registered with the Secretary of Agriculture as a market agency under the Act and at all times mentioned herein was so registered.

4. Respondent's current liabilities exceed its current assets. As of October 31, 1964, respondent's current liabilities exceeded its current assets by approximately $95,428.77.

5. Respondent, during the month of October 1964, 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 for purposes other than the payment of lawful marketing charges and the remittance of net proceeds to shippers, thereby endangering the faithful and prompt accounting therefor and payment of the portion thereof due the owners or consignors. As of October 31,

Cite as 24 A.D. 609

1964, respondent had outstanding checks in the amount of $107,252.06 which checks had been issued to consignors as payment of net proceeds from the sale of consigned livestock. Respondent had, with which to offset such oustanding checks, a bank balance of $2,173.91 and deposits in transit of $62,067.98 or a total of $64,241.81, leaving a deficit balance of $43,010.17.

6. Respondent, on or about the dates and in the transactions listed below, submitted accounts of sale to consignors of the livestock, which accounts of sale failed to show the true and correct names of the purchasers. Respondent retained copies of such accounts of sale as a part of its records.

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7. Respondent, at the stockyard, on or about the dates and in the transactions set forth below, failed to charge to and collect from the consignors or sellers of livestock, the correct and full amount of the marketing and commission charges specified in respondent's rate schedule, which it had filed with the Secretary of Agriculture pursuant to section 306 (a) of the Act (7 U.S.C. 207(a)) and which was in effect at the time of such transactions.

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By reason of the facts set forth in Finding of Fact 4, it is concluded that respondent is insolvent within the meaning of the Act

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