411.519. Insufficient inventory, procedure to correct--insolvency, director may modify, suspend or revoke license or request order to be named trustee, procedure, order--warehouseman may appeal, how.
Insufficient inventory, procedure to correct--insolvency, directormay modify, suspend or revoke license or request order to be namedtrustee, procedure, order--warehouseman may appeal, how.
411.519. 1. Whenever it appears to the satisfaction of the directorthat a warehouseman does not have in his inventory sufficient grain tocover the outstanding receipts and scale tickets issued or assumed by him,or when the warehouseman refuses to submit his records or property tolawful examination, the director may give notice to the warehouseman tocomply with any of the following requirements:
(1) Immediately cease all grain-related operations and transactionssuch as, but not limited to, shipping, receiving, handling, processing orselling of grain on his own account or the account of others;
(2) Cover the shortage by supplying the grain or evidence ofownership of the grain;
(3) Submit to such examination as the director may deem necessary;
(4) Immediately purchase and make actual payment for a sufficientquantity and quality of grain to fully cover the shortage. If thewarehouseman fails to comply with the requirements contained in the noticewithin the time period which the director may allow, the director maypetition the circuit court of the county where the warehouse is located foran ex parte order authorizing the director or his authorized agent to seizeand take possession, as trustee, of any grain located in the warehouse ofsuch warehouseman, and of all pertinent records and property, as providedin subsection 4 of this section.
2. If at any time the director has evidence that a grain warehousemanis insolvent or is unable to satisfy the claims of all depositors as theybecome due, or the warehouseman does not have in his inventory sufficientgrain to cover the outstanding receipts and scale tickets issued or assumedby him, the director may modify, suspend or revoke the warehouseman'slicense or petition the circuit court in the county where the warehouse islocated for an ex parte order authorizing the director or his authorizedagent to seize and take title possession, as trustee, of any grain andgrain-related assets in the warehouse or under the warehouseman's control,and of all pertinent records and property as provided for in subsection 4of this section.
3. Whenever the director shall modify, suspend or revoke any license,he shall prepare an order so providing which shall be signed by thedirector or some person designated by him, and the order shall state thereason or reasons for the modification, suspension or revocation of thelicense. The order shall be sent by certified mail to the licensee orapplicant at the address of the grain warehouseman licensed or applying fora license. Within thirty days after the mailing of the order, thelicensee, if aggrieved by the order of the director, may appeal as providedin chapter 536, RSMo. At the time of the filing of the appeal, the partyappealing shall give a bond for costs conditioned on his prosecuting theappeal without delay and paying all costs assessed against him. Inaddition, the licensee shall post a bond which shall remain in effectpending final disposition of all appeals, including review by the Missouricourt of appeals or Missouri supreme court, or federal review, in an amountsufficient to cover all grain storage, and other grain-related obligationsof the licensee as identified by the director. The posting of such bond isjurisdictional to the circuit court's authority to entertain the appeal.
4. Upon receipt of the director's verified petition setting forth thecircumstances of the warehouseman's failure to comply with this chapter andfurther stating reasons why immediate possession by the director or hisauthorized agent is necessary for the protection of depositors, warehousereceipt holders or sureties, the court is authorized to issue an ex parteorder and shall issue such an order authorizing the director or hisauthorized agent to take immediate possession for the purposes stated inthis section. A copy of the petition and order shall be sent to thewarehouseman. If appropriate, the court may order the director's takingpossession of only grain-related assets and not the entire business of thewarehouseman. Such order may include, but is not limited to, thefollowing:
(1) The director locking down and securing, by padlocks or otherappropriate means, the grain storage bins, scales, offices, equipment androlling stock of the warehouseman;
(2) Removing and excluding the warehouseman, or any and all of thewarehouseman's employees, from the facility;
(3) Prohibiting the warehouseman from engaging in any grain-relatedbusiness transactions whatever during the director's possession of thegrain-related assets of the warehouseman's business;
(4) Authorizing all financial institutions to place all businessaccounts of the warehouseman under the director's authority and to freezeall transactions involving such accounts except to honor outstanding checkswritten previous to the issuance of the court's order. If it appears thatthe warehouseman has conducted, in part, his grain storage business throughthe use of personal accounts as opposed to business accounts, orintermingled two or more such accounts, the court may authorize theapplicable financial institutions to place such personal accounts, as wellas the business accounts, under the authority of the director in order toallow the director to accurately determine the extent of all grain-relatedobligations incurred by the warehouseman, the correct status of same andthe warehouseman's resources to pay his grain-related obligations;
(5) Authorizing the director to redeliver or sell depositor orcompany-owned grain, as appropriate in the circumstances and setting forththe conditions for doing such;
(6) Authorizing the director to deposit all grain-related assets andproceeds therefrom in an interest-bearing escrow account to be disbursedonly upon orders of the court;
(7) Directing the warehouseman to furnish the director with allgrain-related business documents which come into his possession subsequentto the director's possession of the grain-related assets, as well as anyother grain-related documents which the warehouseman may have knowledge ofand which are not at the warehouse facility.
5. At any time within ten days after the director or his authorizedagent takes possession, the warehouseman may file with the court a responseto the petition of the director stating reasons why the director or hisauthorized agent should not be allowed to retain possession. The courtshall set the matter for hearing on a date not more than fifteen days fromthe date of the filing of the warehouseman's response. The order placingthe director or his authorized agent in possession shall not be stayed norset aside until such time as the court, after hearing, determines thatpossession should be restored to the warehouseman.
6. Upon taking possession, the director shall give written notice ofhis action to the surety on the bond of the warehouseman and may notify theholders of record, as shown by the warehouseman's records, of all receiptsand tickets issued for grain to present their receipts or tickets forexamination or to account for the same. The director may thereupon causean audit and other investigation to be made of the affairs of the warehouseto determine the amount of the shortage and compute the shortage as to eachdepositor as shown by the warehouseman's records, if practicable. Thedirector shall notify the warehouseman and the surety on his bond of theapproximate amount of the shortage and may notify each depositor therebyaffected by sending notice to the depositor's last known address as shownby the records of the warehouseman.
7. The director or his authorized agent shall retain possessionobtained under this section until such time as the warehouseman or thesurety on the bond shall have satisfied the claims of all depositors, oruntil such time as the director or his authorized agent is ordered by thecourt to surrender possession. At no time while the director or hisauthorized agent is in possession of a warehouse, as authorized by thissection, shall the director or his authorized agent be required to operatethe warehouse; nor will the director or his authorized agent be liable forany claims which have arisen or could arise from the nonoperation of thewarehouse.
8. If at any time, the director, whether or not he or his authorizedagent has possession as authorized by this section, has evidence that awarehouseman is insolvent or is unable to satisfy the claims of alldepositors, the director may petition the circuit court for the appointmentof a receiver to operate or liquidate the business of the warehouseman inaccordance with law.
9. All necessary expenses incurred by the director, his authorizedagents or any receiver appointed under this section, in carrying out theprovisions of this section may be recovered from the warehouseman in aseparate civil action brought by the director in the circuit court or aspart of the seizure or receivership action filed under this section. Ifthe director or any of his authorized agents seize and take possession ofthe grain, records or property at the warehouse facility, the warehousemanshall be assessed and shall pay as part of the necessary expenses incurreda fee of fifty dollars per person for each day or part thereof that eachsuch person performs such activities. The cost of liability insurancenecessary to protect the director, the receiver and others engaged incarrying out the provisions of this section may be recovered as part of thenecessary expenses.
(L. 1977 S.B. 75 § 7, A.L. 1986 H.B. 1578, A.L. 1997 H.B. 211)Effective 4-2-97