Farmers Feed and Supply Co. v. United States

• Decision Date: 02 May 1967
• Docket Number: Civ. No. 65-C-3009-W.
• Citation: 267 F. Supp. 72
• Parties: FARMERS FEED AND SUPPLY CO., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.
• Court: U.S. District Court — Northern District of Iowa

267 F. Supp. 72

FARMERS FEED AND SUPPLY CO., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.

Civ. No. 65-C-3009-W.

United States District Court N. D. Iowa, W. D.

May 2, 1967.

W. J. Giles, III, Sioux City, Iowa, Nelson, Harding, Acklie, Leonard & Tate, Lincoln, Neb., for plaintiff.

John H. D. Wigger, Department of Justice, Nahum Litt, Interstate Commerce Commission, Washington, D. C., for defendants.

Before VAN OOSTERHOUT, Circuit Judge, and McMANUS and HANSON, District Judges.

MEMORANDUM

HANSON, District Judge.

This is a ruling on a complaint brought to review certain Orders entered by the Interstate Commerce Commission.

This case was heard by a three judge court upon the record as developed in the Interstate Commerce Commission proceedings.

By Orders entered February 4, 1963 and June 4, 1963, the Commission instituted an investigation into the operations of the respondents with a view to determining whether they had been or were engaging in the transportation of property in interstate commerce as common or contract carriers by motor vehicle in violation of Title 49, Sections 303(c), 306(a) and 309(a) of U.S.C.A.

The hearing examiner concluded that the trucking operations were not conducted as an incident to the primary business of dealing in grain, feed, feed ingredients, and mixing of feed ingredients but rather constituted for hire carriage. The Commission adopted the hearing examiner's statement of facts which said in part that:

"The investigation of the activities of Farmers by the Commission's field staff commenced in February 1962. At that time the business of the respondent was conducted as a partnership, but later, from April 1, 1962, to January 1, 1963, it was operated by Mr. Heusinkveld as a sole proprietor. On the latter date Farmers was incorporated, but continued to be controlled and managed by Mr. Heusinkveld as its president and majority stockholder. Farmers has not held, nor does it now possess, any authority from the Commission to transport property in interstate or foreign commerce."

"Farmers is engaged in the purchase and sale of grains and, to some extent, the for-hire transportation of Government corn. It also buys and sells feed ingredients and conducts a business operation involving the custom mixing of mineral supplements. (There is no claim that any transportation of grain is illegal.) * * * Farmers operates 9 tractors and 15 semitrailers. All of the trailers are owned by Farmers, whereas the tractors are permanently leased from other concerns or individuals."

"Its customers generally contact Farmers to seek information regarding the availability, cost, and possible delivery date of material. Calls may be the result of previous transactions or the distribution of postal cards listing particular products, especially salt, and their prices."

"In 1963 the respondent advised that it had lost no money due to bad debts. Its sales have been confined to retailers, merchants, dealers and manufacturers of feed. No warehouse records are maintained. It estimated that about 40 percent of all purchases move through the warehouse and 60 percent is transported directly from supplier to customer. In 1963 the corresponding figures for salt were 30 percent through the warehouse and 70 percent direct."

"Since May 1963, Farmers has been handling Hardy salt which is moved by rail from Michigan to Boyden. This salt is stored in Farmers' warehouse and then peddled out by respondent to customers to whom it is sold by salesmen of the manufacturer. Farmers, however, still deals in Kansas salt produced by the respondent salt companies."

"All shipments of salt from Carey to Consumers of Storm Lake and at Sioux City were by authorized carriers. * * * Carey's salesmen have been instructed not to solicit orders for salt to be turned over to a private carrier for pickup and delivery, nor to advise any salt purchaser where he can place an order for delivery by a private carrier."

"Substantially similar directives (similar to the Carey directive) for the guidance of all salesmen were also issued at various times between 1958 and 1962 by Barton, American, and Morton (salt companies). * * *"

"The evidence submitted by the Bureau (of Inquiry and Compliance) concerning specific shipments to Farmers from its suppliers and from the respondent to its customers, and the invoices, purchase orders, or other documents covering such shipments, were generally confined to transactions occurring during the latter part of 1961 or early 1962."

The Commission also abstracted in some detail the evidence concerning the transactions between the respondents and their customers. Typical of some of the transactions prior to 1962 was the way in which Farmers' Cooperative of Cherokee, Iowa, purchased salt. A salesman of the Morton Salt Co. would solicit the business. Indications as to the need of salt would be given without any advice as to who should deliver it. The salt would be delivered by Farmers Feed and Supply Co. generally within one week. The invoice was rendered by Farmers' driver and the salt paid for at time of delivery. The Commission admitted that the transactions changed after 1963 and the nature of the transactions will be discussed more in relation to the allegation that the evidence was insufficient as to Farmers Feed and Supply Co., a corporation.

The Commission ordered:

"It is ordered, That respondents H. G. Heusinkveld, an individual, doing business as Farmers Feed & Supply Co., and Farmers Feed & Supply Co., a corporation, of Boyden, Iowa, be, and they are hereby ordered and required to cease and desist, and thereafter to refrain and abstain from operations, in interstate or foreign commerce, of the character found in said report to be unlawful, unless and until appropriate authority therefor is obtained;

It is further ordered, That this proceeding, as to respondents Howard N. Verrips as a partner with H. G. Heusinkveld; The American Salt Corporation, the Barton Salt Company, The Carey Salt Company, Morton Salt Company, Iowa Public Service Company, Consumers Supply Corporation, Carroll Swanson Sales Company, Iowa Limestone Company, Cargill, Incorporated, and Farmers Elevator Company, be and it is hereby, discontinued."

The present action to review the Order of the Interstate Commerce Commission was instituted by Farmers Feed and Supply Co., Inc. alone. H. G. Heusinkveld, individually, is not a party to this action and as to him the Order of the Commission is final.

The complaint in this case alleges in substance as follows:

1. That plaintiff's operations are clearly bone fide private carriage and are exempt under Section 303 (b) (9) of Title 49, U.S.C.A.

2. That the refusal of the Commission as a whole to consider the case denied plaintiff due process.

3. That the requested continuance should have been granted and the Commission erred in not so ordering.

4. That there is no evidence to show that any of the operations of the Corporation were unlawful in that all of the evidence relating to unlawful transactions relate to operations

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