AGRICULTURE ‑- COMMISSION MERCHANTS' ACT ‑- PEDDLERS

AGRICULTURE ‑- COMMISSION MERCHANTS' ACT ‑- PEDDLERS

Truckers purchasing agricultural produce for resale from persons other than producers are required to secure license under Commission Merchant's Act.

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                                                                November 8, 1954

Honorable Sverre N. Omdahl
Director, Department of Agriculture
Olympia, Washington                                                                                                              Cite as:  AGO 53-55 No. 340

Attention:  Mr. Joseph E. McCauley

Dear Sir:

            This is in answer to your request for an opinion from this office on the question of whether or not persons who engage in the business of purchasing agricultural produce from wholesale dealers for the purpose of resale are required to be licensed under the Commission Merchants Act.

            In our opinion, the answer to your question is "yes."

                                                                     ANALYSIS

            You have advised that certain persons purchase agricultural products from wholesale dealers and sell them to consumers on truck routes.  Many of these persons hold City of Seattle Peddlers' Licenses and have for several years previously been licensed as cash buyers by your department.  They now question your authority to require a license for their business activities.

            A review of the history of the legislation relating to Commission Merchants indicates that considerable attention has been given to the matter by the legislature during the past 59 years, particularly with reference to the scope of the business activities regulated thereunder.  We enclose a copy of an opinion issued by this office August 25, 1949 addressed to the Department of Agriculture  [[Orig. Op. Page 2]] [[Opinion No. 49-51-114]]wherein is enumerated a complete recital of the legislative history of the Commission Merchants Act in this state.  For the sake of brevity, we shall refer to only a few of the enactments in this analysis.

            The Act of 1907 (chapter 139, Laws of 1907), regulating Commission Merchants, and repealing the former Act of 1895, defined a Commission Merchant as follows:

            "* * * any person, firm or corporation whose principal business is the sale of farm, dairy, orchard or garden produce on account of the shipper or consignor."  (Section 10)

            The term "consignor" was not specifically defined, although the title to the act provided that it related to "persons selling far, dairy, orchard or garden produce on commission."  The constitutionality of the 1907 Act was sustained in State v. Bowen, 86 Wash. 23.

            In the Act of 1933 (chapter 67, Laws of 1933, p. 342), the legislature for the first time defined a Commission Merchant to include all persons or corporations who received any agricultural product to be sold on commission for the account of another, or:

            "* * * who buys such product from the producer thereof for the purpose of resale * * *."  (Emphasis supplied)

            The constitutionality of this act was upheld in the case of Garretson v. Robinson, 178 Wash. 601, where the court at page 606 said:

            "We now come to the question of whether there was any reasonable basis for requiring those who purchase agricultural products from the producer to comply with the provisions of the act and not require those who purchase from those other than the producer to comply therewith.

            "It may be that, since the development of the automobile truck as a means of transportation of merchandise, there has grown up a business of considerable magnitude conducted by the operators of  [[Orig. Op. Page 3]] trucks who buy directly from the producer, load it into their trucks, take it to the populous centers and there sell it to small dealers or consumers.  In fact, it is so stated in appellants' brief.  We cannot say, as a matter of law, that the evils that may have grown up in connection with this business were not different from those that would exist where the purchase was made from other than the producer.  The legislature may have determined that the same incentive and opportunity for evil sought to be corrected did not present themselves where purchases of the products mentioned in the act were made from others than the producer."

            While the Commission Merchants Act originally applied only to persons buying on commission, the Act of 1939 (chapter 197, Laws of 1939, codified in Title 20 RCW) extended its application to Commission Merchants, Credit Buyers and Cash Buyers.

            A Commission Merchant and Credit Buyer is defined in RCW 20.04.050 to include:

            "* * * any person who receives any agricultural product to be sold on commission, or for or on behalf of another with or without compensation, or who purchases or receives any agricultural product and who fails to pay in full for it at the time of receiving it or at the time its value may be determined, or who may contract with growers in such manner that the grower accepts seed as bailee and agrees to return the crop grown from such seed, the grower to be paid for services rendered in producing the crop."

            A "cash buyer" is defined in RCW 20.04.060 to include:

            "* * *any person who purchases or offers to purchase any agricultural product for the purpose of processing or resale and who pays in full, in cash or by check that shall be paid on presentation, for such agricultural product at the time of receiving it or at the time the price of the agricultural product  [[Orig. Op. Page 4]] may be determined if the price or value is subject to determination by inspection, grade, test, or pack out."  (Emphasis supplied)

            RCW 20.08.010 provides:

            "No person without a license shall receive or purchase, sell or offer for sale, promote the sale of, or solicit consignments for sale on commission, or for the purpose of resale or processing, any agricultural product."  (Emphasis supplied)

            It must be presumed that the legislature in passing a statute had knowledge of existing statutes.  Graffell v. Honeysuckle, 30 Wn. (2d) 390, and cases cited therein.  Where the legislature changes a portion of a statute it must be assumed that the change was intended to supply some want, to fill some deficiency, or to add something to make existing legislation more complete.  Consumers Cooperative Association v. The State Commission of Revenue and Taxation, 256 P. (2d) 850 (Kan.).  Thus inGraffell v. Honeysuckle, supra, our court at page 399 of its opinion said:

            "In construing statutes which re‑enact, with certain changes, or repeal other statutes, or which contain revisions or codification of earlier laws, resort to repealed and superseded statutes may be had, and is of great importance in ascertaining the intention of the legislature, for, where a material change is made in the wording of a statute, a change in legislative purpose must be presumed.  In re Phillips' Estate, 193 Wash. 194, 74 P. (2d) 1015, and cases therein cited;Great Northern R. Co. v. Cohn, 3 Wn. (2d) 672, 101 P. (2d) 985;Longview Co. v. Lynn, 6 Wn. (2d) 507, 108 P. (2d) 365."

            The judicial interpretations indicate that generally the purpose of acts of this nature are for the protection of every person selling certain farm products to licensed Commission Merchants and Cash Buyers.  Specifically, the purpose of the acts is to protect the producers of farm products by assuring them a financially reliable market.  Bodied v. Edgerton, 58 N.W. (2d) 313 (Minn.); Leasure v. Clarkin, 8 N.W. (2d) 521 (Minn.).  Inasmuch as the legislature specifically enlarged the application of the Commission Merchants Act in 1939, it must be  [[Orig. Op. Page 5]] assumed that the legislature determined that the same incentive and opportunity for evil to be corrected existed where purchases of the commodities defined in the act were made from others than producers.  This was the situation mentioned by the court in the Garretson case.

            In addition, a review of the title to the Commission Merchants Act reveals that the act is one relating to persons engaged in buying and selling agricultural products.  Nowhere in the title of the act or the definition of the terms is the application of the act restricted only to those persons who purchase agricultural products directly from producers, nor have the judicial opinions construing this act directly decided the matter.  To the contrary, the provisions apply to the business operations of persons receiving or purchasing agricultural products, promoting the sale thereof, soliciting consignments, reselling or processing such products.

            For example, RCW 20.16.020 requires that a cash buyer render "to the consignor or vendor" a statement showing the agricultural products received.  A consignor is specifically defined in RCW 20.04.070 to mean:

            "* * * any person forwarding, delivering, consigning, shipping or selling as the producer thereof any agricultural product to any commission merchant and credit buyer or cash buyer for resale or processing."

            To follow the rule of statutory construction requiring that effect be given to each and every word in an enactment indicates that the legislature intended persons purchasing from other than producers or consignors to be included in the act.

            In view of the foregoing authority, it is the opinion of this office that persons purchasing agricultural products from wholesale dealers and selling them to consumers are required to be licensed under the Commission Merchants Act as cash buyers.

            We sincerely hope that the foregoing information will be of assistance to you in this matter.

Very truly yours,

DON EASTVOLD
Attorney General

PHYLLIS DOLVIN
Assistant Attorney General