WAREHOUSE CHARGES IN CASES OF A GOVERNMENT LOAN OR PURCHASE AGREEMENT -- TARIFF TO BE FILED WITH THE STATE DEPARTMENT OF AGRICULTURE

WAREHOUSE CHARGES IN CASES OF A GOVERNMENT LOAN OR PURCHASE AGREEMENT --TARIFF TO BE FILED WITH THE STATE DEPARTMENT OF AGRICULTURE

1. A warehouseman may charge a producer storage on the basis of the schedule of rates of the Uniform Grain Storage Agreement, where the producer, taking a government loan or a purchase agreement, prepays the storage, and the rate is approved by the Director of Agriculture.

2. It is discretionary with the Director of Agriculture as to whether the dual tariff may be filed.

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                                                                 January 12, 1951

Honorable Sverre N. Omdahl, Director
Department of Agriculture
Olympia, Washington                                                                                                              Cite as:  AGO 49-51 No. 425

Dear Sir:

            We have received your letter of December 22, 1950, in which you asked the two following questions:

            1.         May a warehouseman charge his producer storage on the basis of the schedule of rates of the Uniform Grain Storage Agreement rather than his commercial tariff in cases where the producer is taking a government loan or purchase agreement and prepays the storage?

            2.         May a warehouseman file with the State Department of Agriculture a dual tariff, the first part, a commercial tariff, the second, pertaining to grain under a loan or purchase agreement?

            The conclusions reached may be summarized as follows:

             [[Orig. Op. Page 2]]

            1. A warehouseman may charge a producer storage on the basis of the schedule of rates of the Uniform Grain Storage Agreement, where the producer, taking a government loan or purchase agreement, prepays the storage, and the rate is approved by the Director of Agriculture.

            2. It is discretionary with the Director of Agriculture as to whether a dual tariff may be filed.

                                                                     ANALYSIS

            1. Under Rem. Rev. Stat. 11554, the public warehouseman is required to issue a receipt in compliance with the Uniform Warehouse Receipts Act.  That act provides under Rem. Rev. Stat. 3588, that the receipt must contain the rate of storage charges.  In other words, when the grain is received the warehouseman and the producer enter into a contract as to the storage rates.  What that rate is depends upon the agreement of the parties, subject to regulation by the Department of Agriculture.  Since your facts state that the warehouseman has ample notice at that time as to whether the producer is contemplating a loan or purchase agreement, he should be so governed as to the agreement he makes regarding rates.

            It is apparent, that in the producer's dealings with the U. S. Department of Agriculture, it is contemplated that he pay storage charges as per the Uniform Grain Storage Agreement, by virtue of the ruling of commodity credit, that they are entitled to free time if 210 days charges have been paid.  The fact that the charges, as per the Uniform Grain Storage Agreement, are deducted if charges are not prepaid, is also a showing that the producer negotiated his loan or purchase agreement with that rate in mind.

            The amount of the storage rate is a part of the contract of the producer and warehouseman.  Since the rate established at the time of the making the storage agreement is to be the prevailing rate, the warehouseman may at that time charge storage on the basis of the Uniform Grain Storage Agreement in cases where the producer is taking a loan or purchase agreement.  The warehouseman should not be required to take a lesser sum because of the fact that the charge is prepaid.  The foregoing is all subject to the reasonableness of the charge, as determined by the Department of Agriculture (discussed below).

            2. By Legislative enactment the Department of Agriculture is granted regulative jurisdiction over grain warehouses.  Originally, (1919), The Public Service Commission of the state was granted the jurisdiction over  [[Orig. Op. Page 3]] the regulation of grain warehouses and elevators, Rem. Rev. Stat. 6979.  Later, (1921), by Rem. Rev. Stat. 7008, the Director of Agriculture was granted the regulatory power formerly held by the Public Service Commission, pertaining to grain warehouses.  Although in that same year, (1921), the Director of Public Works was granted supervisory power over the rates of public warehouses, Rem. Rev. Stat. 7014, from later legislation, and the abolition of the Department of Public Works, it is clear that the Department of Agriculture has jurisdiction over rates.  In 1935, by Rem. Rev. Stat. 6991-Supp., the Director of Agriculture was given power to fix fees and charges.  By Rem. Rev. Stat. 7000-5-Supp., every warehouseman was required to report to the Director such information as the Director may require.

            By virtue of Rem. Rev. Stat. 6987, the Public Service Commission, (now Department of Agriculture), was given the power to determine just, fair, and reasonable rates.  That is the only limitation placed by Statute as to rates.

            The general effect, thus, is that it is within the discretion of the Director as to the tariff he will permit to be filed, he having the rate fixing power.

Very truly yours,

SMITH TROY
Attorney General

LEO H. FREDRICKSON
Assistant Attorney General