In re Footville Condensed Milk Co.

• Decision Date: 18 April 1916
• Citation: 237 F. 136
• Parties: In re FOOTVILLE CONDENSED MILK CO. In re VALECIA CONDENSED MILK CO.
• Court: U.S. District Court — Western District of Wisconsin

237 F. 136

In re FOOTVILLE CONDENSED MILK CO. In re VALECIA CONDENSED MILK CO.

United States District Court, W.D. Wisconsin.

April 18, 1916

These matters were argued together, Demerow filing a claim against the bankrupt Footville Condensed Milk Company for $144 Meister against the bankrupt Valecia Condensed Milk Company for $149.39. Each alleged the sum to be due from his debtor for services rendered during February and the first 26 days of March, 1915.

The cases present a question arising upon many other claims against each estate, aggregating something like $7,000 or $8,000, filed in the two proceedings. That general question is, Are or were such claimants, who were engaged by the respective bankrupts to haul milk to the condenseries workmen, clerks, or servants, and as such entitled to priority of payment of their claims under section 64b (4) of the Bankruptcy Act? It is assumed that the facts adduced upon the hearing of these two claims disclose fairly the situation in general, and therefore they will be summarized.

The claims are for the compensation alleged to be due for hauling to the factory the milk bought by the company from farmers or dairymen. The price per hundred pounds of raw milk was fixed by the company from time to time by quotations or offers, and upon a basis at 'receiving room,' 'plant,' or factory, as the case may be. The price was based upon a specification of a milk test showing 3.5 butter fat. For each 1/10 per cent. increase of butter fat the price per hundred pounds of milk increased 1 cent. Thus, if the quoted price were $1.20 per hundred pounds testing 3.5, the price on a test of 3.6 would be $1.21. Now, if the farmer delivered the milk himself, he received the full quoted price per hundred pounds upon the test which developed. As a matter of fact many farmers did not produce enough to warrant the expenditure of time and for hauling equipment necessary to make their own deliveries. This circumstance, together with the natural desire on the part of the factory to stimulate the production of a maximum supply of milk, led to the development and establishment in the localities where factories existed of s/-called 'milk routes.' Their development naturally depended upon the quantity of milk deliverable, and this was ascertained through the investigations and solicitation of the condensery's so-called field man, whose functions consisted in solicitation of milk supply from farmers, the making of suggestions, and, as the name indicates, acting as a representative in the field of milk production in the vicinity of the factory. The routes, of course, were established when and where the supply justified. It was thereupon traveled each day by the hauler, whose duties consisted in taking the raw milk from farmers, hauling it to the factory, and returning to the farmers or dairymen the cans which they owned. Each can was designated by number corresponding to the number given to the particular farmer. The haulers supplied the equipment, such as horses, wagons and canvas covers for the wagons. The milk company owned no teams or wagons used in hauling.

The general, and in particular, the compensation features of these hauling arrangements may be thus summarized: Written contracts with haulers were not entered into. The individual apparently made application to be assigned to the service, to have a 'route.' Doubtless in instances the formality of engagement was much like that attending engagements for ordinary service, or the initiation of the ordinary relation of master and servant; that is, the individual sought a 'job.' But, probably, the nature of the work and the customs attending it were such that the individual would regard the 'getting of a milk route' as quite accurately descriptive of the relation.

The proof shows that since January, 1915, these companies paid the hauling charge, 15 cents per hundred, but that the provision for its payment was made in this way: The total deliveries were computed on the test basis, as that may be disclosed from day to day. A settlement slip carried these totals and computation, and there was a deduction of 15 cents per hundred pounds made against the particular farmer, and the balance covered by check. The deduction thus made was known as the hauler's charge, and obviously was the fund out of which the companies paid the hauler. If the farmer himself delivered the milk, no such deduction was made. The factory kept a record of the quantities delivered by each hauler, and the latter received monthly payment of the aggregate, based on the...