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Branscome v. Schoneweis

May 23, 1966

GUY BRANSCOME, GUY BRANSCOME, JR., J. B. BRANSCOME AND EDWARD HAYS, ETC., PLAINTIFFS-APPELLEES,
v.
HARVEY A. SCHONEWEIS, DEFENDANT-APPELLANT



Schnackenberg, Knoch and Castle, Circuit Judges.

Author: Knoch

KNOCH, Circuit Judge.

Defendant-appellant, Harvey A. Schoneweis, has taken this appeal from a judgment of the United States District Court in favor of the plaintiffs-appellees, Guy Branscome, Guy Branscome, Jr., J. D. Branscome, and Edward Hays, d/b/a Grenada Livestock Exchange of Grenada, Mississippi, in the amount of $15,569.42, plus costs and interest, and $5,000 attorney's fees.

This suit was brought under § 309 of the Packers and Stockyards Act, Title 7, U.S.C.A. § 210, which provides:

§ 210. Proceedings before Secretary for violations generally; action to enforce orders

(a) Any person complaining of anything done or omitted to be done by any stockyard owner, market agency, or dealer (hereinafter in this section referred to as the "defendant") in violation of the provisions of sections 205-207 or 208 of this title, or of an order of the Secretary made under sections 201-203 and 205-217a of this title, may, at any time within ninety days after the cause of action accrues, apply to the Secretary by petition which shall briefly state the facts, whereupon the complaint thus made shall be forwarded by the Secretary to the defendant, who shall be called upon to satisfy the complaint, or to answer it in writing, within a reasonable time to be specified by the Secretary. If the defendant within the time specified makes reparation for the injury alleged to be done he shall be relieved of liability to the complainant only for the particular violation thus complained of. If the defendant does not satisfy the complaint within the time specified, or there appears to be any reasonable ground for investigating the complaint, it shall be the duty of the Secretary to investigate the matters complained of in such manner and by such means as he deems proper.

(b) The Secretary, at the request of the livestock commissioner, board of agriculture, or other agency of a State or Territory, having jurisdiction over stockyards in such State or Territory, shall investigate any complaint forwarded by such agency in like manner and with the same authority and powers as in the case of a complaint made under subsection (a) of this section.

(c) The Secretary may at any time institute an inquiry on his own motion, in any case and as to any matter or thing concerning which a complaint is authorized to be made to or before the Secretary, by any provision of sections 201-203 and 205-217a of this title, or concerning which any question may arise under any of the provisions of such sections, or relating to the enforcement of any of the provisions of such sections. The Secretary shall have the same power and authority to proceed with any inquiry instituted upon his own motion as though he had been appealed to by petition, including the power to make and enforce any order or orders in the case or relating to the matter or thing concerning which the inquiry is had, except orders for the payment of money.

(d) No complaint shall at any time be dismissed because of the absence of direct damage to the complainant.

(e) If after hearing on a complaint the Secretary determines that the complainant is entitled to an award of damages, the Secretary shall make an order directing the defendant to pay to the complainant the sum to which he is entitled on or before a day named.

(f) If the defendant does not comply with an order for the payment of money within the time limit in such order, the complainant, or any person for whose benefit such order was made, may within one year of the date of the order file in the district court of the United States for the district in which he resides or in which is located the principal place of business of the defendant or in any State court having general jurisdiction of the parties, a petition setting forth briefly the causes for which he claims damages, and the order of the Secretary in the premises. Such suit in the district court shall proceed in all respects like other civil suits for damages except that the findings and orders of the Secretary shall be prima facie evidence of the facts therein stated, and the petitioner shall not be liable for costs in the district court nor for costs at any subsequent stage of the proceedings unless they accrue upon his appeal. If the petitioner finally prevails, he shall be allowed a reasonable attorney's fee to be taxed and collected as a part of the costs of the suit. Aug. 15, 1921, c. 64, § 309, 42 Stat. 165.

The plaintiffs were registered with the Secretary of Agriculture as a market agency to buy and sell livestock on a commission basis, and as a dealer to buy and sell livestock for their own account. They initially filed a complaint in August, 1961, with the Secretary of Agriculture alleging sales of calves in June and July, 1961, to the defendant herein, an individual d/b/a the Tallula Cattle Company, Tallula, Illinois, and one Irvin C. Woodrum. Defendant was registered with the Secretary of Agriculture as a market agency to sell livestock on a commission basis at the Tallula Cattle Company. He was also a dealer buying and selling livestock in commerce. Both the Grenada Livestock Exchange and the Tallula Cattle Company were posted stockyards subject to the provisions of the Packers and Stockyards Act. Mr. Woodrum was an individual engaged in business as a dealer within the meaning of the Act buying and selling livestock in commerce.

In their complaint to the Secretary, the plaintiffs alleged further that checks in the amounts of $8,103.21 and $7,466.21 signed by Mr. Woodrum, given in payment for the aforesaid calves, were both dishonored by the drawee bank for lack of sufficient funds and that the purchase price remained due and owing.

Mr. Woodrum filed no answer to the complaint. Mr. Schoneweis filed an answer denying the allegations of the complaint. After a hearing at which oral and documentary evidence was adduced in the Office of the General Counsel, U.S. Department of Agriculture, the Secretary of Agriculture issued findings of fact and conclusions of law, and ordered both Mr. Schoneweis and Mr. Woodrum jointly and severally to pay the complaining plaintiffs $15,569.42 plus interest. The defendant's petition for reconsideration was denied and plaintiffs brought this suit alleging failure to comply with the Secretary's order.

As indicated above, the findings and order of the Secretary are prima facie evidence of the facts therein stated. The parties stipulated that the issues be submitted to the District Court for judgment, without further trial, on the transcript of testimony and exhibits from the hearing in the General Counsel's office plus certain additional exhibits and depositions. After his study of these documents, the District Judge entered his own findings of fact and conclusions of law pursuant to the Federal Rules of Civil Procedure, Rule 52(a).

The District Judge's findings, which are substantially supported by the record, may be summarized as follows.

Messrs. Schoneweis and Woodrum in 1957 became associated in the operation of the livestockyard known as the Tallula Cattle Company with defendant providing the initial working capital, opening a bank account in the name of the Tallula Cattle Company, and registering with the Department of Agriculture as a marketing agency. Mr. Woodrum, Mr. Schoneweis' brother-in-law, was to be yard manager. A 2% commission on the sale of all consigned cattle was to be divided equally. The two men continued in such operation until July, 1961.

In the meantime, both men evidently continued as individuals in the business of buying and selling livestock in commerce. When they consigned cattle for sale through the Tallula Cattle Company, they each paid the regular 2% commission and individually received such profit or sustained such loss as resulted from these individual sales.

In April, 1958, the plaintiffs began doing business with what they believed to be the Tallula Cattle Company.

Guy Branscome testified that in the fall or winter of 1957, one Luke Gaule who had been buying cattle to be shipped to Tallula, Illinois, called to report his sale of the auction business at Tallula to I. C. Woodrum and Harvey Schoneweis. While on the telephone, he introduced Irvin Woodrum as the active trader, said he owned the yards; that Mr. Schoneweis was the bookkeeper, and that their money was good.

Mr. Woodrum later placed an order by telephone to be shipped to the Tallula Cattle Company. The cattle were invoiced to the Tallula Cattle Company. From April, 1958, until July, 1961, he ordered in excess of 200 loads of cattle in the same manner. With a few exceptions in which the invoices were to Irvin C. Woodrum, all these loads were invoiced to the Tallula Cattle Company.

Most of the payments were by checks drawn on Mr. Woodrum's personal account, but a number of the payments were by checks drawn on the account of the Tallula Cattle Company and signed by Mr. Schoneweis.

Guy Branscome testified further that Harvey Schoneweis visited his place of business early in 1959, after the plaintiffs began doing business with Irvin Woodrum; that while visiting in the office, Mr. Branscome had asked "What is your operation?" and Mr. Schoneweis answered, "Well, Irvin has got the barn there and we own and operate Tallula Cattle Company. We have an auction every Wednesday and we buy and sell cattle through that auction," and "Irvin does all the work, looks after the feeding and the yard and I am the bookkeeper. He don't have anything to do with the books. I am the bookkeeper and that is my position and we own the Tallula Cattle Company." When asked how he was getting along with the cattle, he said "I think we would do better if we just sold them all each week, * * *" Mr. Branscome testified further that an auction was in process that day and during that auction, Mr. Schoneweis came over to Mr. Branscome ...


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