His expressly stated purpose in making the request being 'to make Schiano feel responsible'. Rubin further instructed that a bill be made out to both Schiano and to him to be sent to his office at Second and Dock Streets, Philadelphia, Pennsylvania, stating that he would pay the bill.
11. On the same date, June 6, 1949, bills for the potatoes were sent by Shermann to both Rubin and Schiano in the amount of $ 1,088.75.
12. Shermann did not and would not have sold the potatoes to Schiano in reliance on Schiano's credit.
13. Shermann did sell the potatoes to Rubin relying upon Rubin's credit and the delivery to Schiano was at the specific direction of Rubin.
14. Shermann telephoned Rubin on June 15, 1949, and informed him that payment had not been received. Rubin then stated that payment would be forthcoming.
15. Shermann again telephoned Rubin on June 17, 1949, and Rubin stated that he had not received a bill and requested that a duplicate be sent. Bills were sent Rubin marked 'duplicate bill'.
16. Shermann has never received payment of $ 1,088.75 or any part thereof for the potatoes sold to Rubin and delivered livered to Schiano.
Petitioner-respondent's most strenuously argued contention in this case stems from the treatment accorded the facts by the Examiner for the Secretary of Agriculture. He concluded the transaction to be a guarantee by Rubin of the purchase price of the potatoes sold and delivered to Schiano. I have found that there was an actual sale by Shermann to Rubin which eliminates the question of guarantee. While the value of the goods exceeds $ 500, the Pennsylvania Sales Act, 69 P.S. § 42, was fully complied with, since the buyer accepted, at the time the contract was entered into, all of the goods contracted to be sold.
The defendant's contentions in relief of his own liability are (1) that his only connection with the transaction was that he merely stated as a fact that Schiano's credit was good, (2) that even assuming he did undertake to pay for goods sold to Schiano, the guarantee was not in writing, hence, is unenforceable under the Pennsylvania Statute of Frauds, 33 P.S. § 2, (3) the potatoes were not in interstate commerce within contemplation of the Act. The strongly urged contention and the one initially adverted to is that the Secretary of Agriculture under Section 499b of the P.A.C.A., which defines unfair conduct, has no power to make a reparation order based on a finding of a guarantee since a guarantee is not there specifically mentioned, hence it does not come within the terms of the Act and cannot constitute an unfair practice.
I would have no difficulty in holding that the Secretary of Agriculture did have authority to issue his reparation order under Section 499b(4) even if the transaction were to be treated as a guarantee of the account by Rubin, rather than a direct sale, which I have found it to be. Section 499b(4) provides that a reparation order may be made against any commission merchant, dealer, or broker, who makes any false or misleading statement in connection with any transaction under the Act or who fails without reasonable cause to perform any specification or duty, express or implied, arising out of any undertaking inconnection with any such transaction. That section of the Act appears clearly broad enough to include a contract of guarantee even though it be parol in form. The Secretary of Agriculture has the power under Section 499o of the Act, if he did not here have it directly from the express language of the Act itself, to make such orders as may be necessary to carry out the provisions of the Act, L. Gillarde Co. v. Joseph Martinelli & Co., Inc., 1 Cir., 169 F.2d 60, 61. To hold that a breach of parol contract of guarantee falls within the purview of unfair conduct as is proscribed in Section 499b(4) is certainly not transgressing that authority.
The facts as here found constitute a complete contractual obligation between Shermann and Rubin in respect of the subject matter of the contract, viz. the potatoes. The testimony of Shermann is supported by the testimony of independent witnesses. The preponderance of the evidence weighs heavily in the complainant's favor. Under Section 499b(4) of the Act, the Secretary of Agriculture has express authority to make the order complained of for failure of Rubin to make payment promptly. Therefore, the order must be affirmed.
Conclusions of Law.
1. The Court has jurisdiction of the parties and the subject matter of the transaction. The potatoes involved in the transaction were in interstate commerce within the purview of the P.A.C.A.
2. The Secretary of Agriculture acting under the provisions of P.A.C.A. had jurisdiction to hear Shermann's complaint and to enter an appropriate reparation order.
3. Shermann sold and Rubin purchased from Shermann on June 6, 1949, 325 one hundred pound bags of North Carolina potatoes at $ 3.35 per bag, or a total of $ 1,088.75.
4. Rubin thereupon became indebted to Shermann in the sum of $ 1,088.75 and under the credit terms of the transaction, payment was due on June 15, 1949. Said obligation has not been satisfied in whole or in part.
5. Rubin is indebted to Shermann in the sum of $ 1,088.75 with interest thereon at the rate of 5% from June 15, 1949 to date.
6. Shermann is entitled to judgment in the amount set forth in the preceding finding, along with the costs of this action and a reasonable attorney's fee under 7 U.S.C.A. § 499g(c).
7. Judgment will be entered in Shermann's favor with costs.
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