OFFICES AND OFFICERS ‑- STATE ‑- DEPARTMENT OF AGRICULTURE ‑- CASH BUYER ‑- LICENSE AND BONDING REQUIREMENTS

OFFICES AND OFFICERS ‑- STATE ‑- DEPARTMENT OF AGRICULTURE ‑- CASH BUYER ‑- LICENSE AND BONDING REQUIREMENTS.

A cash buyer (as well as a commission merchant and/or dealer) of livestock is required to post a $7,500 surety bond required by RCW 20.01.210 as a condition precedent to obtaining a license to engage in business under the provisions of chapter 20.01 RCW.

                                                              - - - - - - - - - - - - -

                                                                 January 23, 1964

Honorable Joe Dwyer
Director, Department of Agriculture
General Administration Building
Olympia, Washington

                                                                                                                Cite as:  AGO 63-64 No. 80

Dear Sir:

            By letter previously acknowledged you requested an opinion of this office on a question which we paraphrase as follows:

            Is a cash buyer of livestock required to post the $7,500 surety bond required by RCW 20.01.210 as a condition precedent to obtaining a license to engage in business under the provisions of chapter 20.01 RCW?

            We answer your question in the affirmative for the reasons set forth in our analysis.

                                                                     ANALYSIS

            RCW 20.01.210, as amended by § 5, chapter 232, Laws of 1963, provides that:

            "Before the license is issued to any commission merchant and/or dealer the applicant shall execute and deliver to the director a surety bond executed by the applicant as principal and by a surety company qualified and authorized to do business in this state as surety.  Such bond shall be in the sum of seven thousand five hundred dollars for a commission merchant or any dealer handling livestock, hay, grain, or straw and a bond in the sum of three thousand dollars for any other dealer. . . ."  (Emphasis supplied.)

            The terms "commission merchant," "dealer," and "cash buyer," as defined in subsections (6), (7), and (9) of RCW 20.01.010 (§ 1,  [[Orig. Op. Page 2]] chapter 232, Laws of 1963), are mutually exclusive.  "Cash buyer" is defined by subsection (9), as follows:

            "'Cash buyer' means any person other than a commission merchant, dealer, or broker, who obtains from the consignor thereof for the purpose of resale or processing, title, possession or control of any agricultural product or who contracts for the title, possession or control of any agricultural product, or who buys or agrees to buy any agricultural product by paying to the consignor at the time of obtaining possession or control of any agricultural product the full agreed price of such agricultural product, in coin or currency, lawful money of the United States.  However, a cashier's check, certified check or bank-draft [[bank draft]]may be used for such payment."

            Furthermore, under RCW 20.01.040, which was not expressly amended by chapter 232, Laws of 1963, different license fees are payable by persons licensed as commission merchants or dealers ($50.00), and persons licensed as cash buyers ($25.00).  From this statute as well as from the other sections thus far noted it would therefore seem logical to conclude that a "cash buyer" is not a "commission merchant" or a "dealer" and accordingly is not required to post the surety bond prescribed by RCW 20.01.210,supra.

            However, careful scrutiny of chapter 232, Laws of 1963, both as enacted and as originally introduced in the form of House Bill No. 264, leads us to a contrary conclusion in the case of a "cash buyer" dealing in livestock (and, as well, hay, grain or straw).  First, it is to be noted that subsection (9) of § 1, of House Bill No. 264 defining "cash buyer," initially read as follows:

            "'Cash buyer' means any person other than a commission merchant, dealer, or broker,who does not deal in livestock, hay, grain, or straw, and who obtains from the consignor thereof for the purpose of resale or processing, title, possession or control of any other agricultural product, or who contracts for the title, possession or control of anyother agricultural product, or who buys or agrees to buy anyother agricultural product by paying to the consignor at the time of obtaining possession  [[Orig. Op. Page 3]] or control of ((any)) such agricultural product the full agreed price of such agricultural product, in coin or currency, lawful money of the United States.  However, a cashier's check, certified check or bank draft may be used for such payment."

            The language underlined was intended to be new language and the word "any" lined out and enclosed in double parentheses was intended to be deleted.  However, when House Bill 264 reached the House Committee on Agriculture and Livestock, a committee amendment was adopted restoring subsection (9) of § 1, to the original language of RCW 20.01.010 (9) (which then codified § 1, chapter 139, Laws of 1959).  In other words, this committee amendment‑-which was then adopted by both the House and Senate and became the law‑-deleted the initially proposed exclusion of livestock, hay, grain or straw dealers from the category of "cash buyer."

            At the same time, this same house committee added a new section 9 to the bill.  See House Journal, 38th Legislative Session, p. 421.  This new section, ultimately enacted as § 9, chapter 232, Laws of 1963, provides as follows:

            "Any person who deals in livestock, hay, grain or straw, other than the producer or grower thereof, shall license as a dealer or commission merchant and shall be subject to all the provisions of this chapter regulating such a licensee."

            The material which you have enclosed with your letter requesting this opinion directs our attention to the first of these house committee amendments but fails to note the second.  The argument made on the basis of the first amendment alone is that had subsection (9) of House Bill 264in its original form been enacted a person dealing in livestock, hay, grain or straw would not qualify as a "cash buyer" (rather than a "commission merchant" or "dealer") regardless of whether he purchased for cash or on credit; but that with the deletion of the qualification "who does not deal in livestock, hay, grain, or straw" from the definition of "cash buyer" by said amendment it is to be concluded that a person buying even livestock, hay, grain or straw for cash is a "cash buyer" and, therefore, not a "commission merchant" or "dealer" for licensing and bonding purposes.

            Were we able to view this matter without also considering the second house committee amendment, § 9, chapter 232, Laws of 1963, supra, we would be inclined to agree with this conclusion.  However this  [[Orig. Op. Page 4]] second house committee amendment, requiring any person dealing in livestock, hay, grain or straw (other than the producer or grower thereof) to "license as a dealer or commission merchant" has, in our opinion, countered the effect of the first house amendment to a certain extent; namely, to the extent of requiring "any person" including not only a "dealer" or "commission merchant" but also a "cash buyer" of livestock, hay, grain or straw to license as a "dealer" or "commission merchant" and thus, to post the bond specified in RCW 20.01.210, supra.

            Accordingly, we answer your question in the affirmative.  A cash buyer (as well as a commission merchant and/or dealer) of livestock is required to post the $7,500 surety bond required by RCW 20.01.210 as a condition precedent to obtaining a license to engage in business under the provisions of chapter 20.01 RCW.

            We trust the foregoing will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

PHILIP H. AUSTIN
Assistant Attorney General