Rufenacht v. Iowa Beef Processors, Inc.

656 F.2d 198, 1981 U.S. App. LEXIS 17617
CourtCourt of Appeals for the Fifth Circuit
DecidedSeptember 17, 1981
DocketNo. 80-1818
StatusPublished
Cited by26 cases

This text of 656 F.2d 198 (Rufenacht v. Iowa Beef Processors, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rufenacht v. Iowa Beef Processors, Inc., 656 F.2d 198, 1981 U.S. App. LEXIS 17617 (5th Cir. 1981).

Opinion

CHARLES SCHWARTZ, Jr., District Judge:

Plaintiffs in these consolidated diversity actions, Robert D. Rufenacht and Robert Lewis d/b/a R&L Cattle Company, Pro-chemco Cattle Partners, Ltd., and Prochem-co, Inc., brought suit against defendant, Iowa Beef Processors, Inc., seeking recovery of losses sustained as the result of cattle transactions involving one James Louie Heller, alleged by plaintiffs to have been acting as agent of defendant. Following non-jury trial the District Court, 492 F.Supp. 877, rejected plaintiffs’ claims, and they now appeal from that adverse ruling. Appellants urge that the trial court erred in refusing to apply the doctrine of collateral estoppel with respect to the agency issue and in failing to find that Heller was defendant’s agent in the subject transactions. Finding no error in the trial court’s judgment, we affirm.

THE PARTIES

Prochemco, Inc. (Prochemco) was a corporation engaged in the cattle feeding business. Prochemco owned and operated (either directly or through wholly own subsidiaries) four feed yards including Hereford Feed Yards at Hereford, Texas. These feed yards were all predominantly “custom” feed yards which, as agent or bailee-for-hire, fed and marketed slaughter cattle owned by ranchers or investors in return for a fee based on the cost of feed consumed plus overhead and profit.

[200]*200Prochemco Cattle Partners, Ltd. (Pro-chemco Cattle Partners) was one of several syndicated and publicly offered limited partnerships formed by Prochemco to feed cattle as a tax-sheltered investment. Pro-chemco was the general partner and managed the entire operation of the partnership which consisted of purchasing feeder cattle, placing them on feed at Prochemco’s feed yards on the same terms as ordinary custom feeders, and marketing the finished cattle.

R&L Cattle Company (R&L) was a private cattle feeding partnership consisting of Robert L. Rufenacht and Robert Lewis which fed pens of cattle at various custom feed yards, sharing profits and losses equally. Rufenacht was an owner and principal in the Chicago commodities brokerage firm of Rufenacht, Bromagen & Hertz (RB&H) which had a number of branch offices. Lewis was manager of RB&H’s office at Larned, Kansas.

Iowa Beef Processors, Inc. (IBP) was a meat packer purchasing, slaughtering, processing and marketing beef. At all times pertinent the IBP plant closest to the Hereford, Texas cattle feeding area was at Em-poria, Kansas almost 500 miles away.

James Louie Heller (Heller) was a cattle buyer whose status is at issue herein.

THE FACTS

Heller’s dealings with IBP began in 1964 or 1965 when he contacted IBP’s head cattle buyer, Russell Walker, about order buying cattle for IBP. Walker refused Heller’s offer to order buy, i. e., to purchase upon specific order of the packing firm with compensation on a commission basis. However, he indicated that he would buy from Heller at “dressed beef” prices, i. e. the price per pound after slaughter based upon the carcass weight.

In 1968 Heller registered with the Packers & Stockyards Administration of the United States Department of Agriculture and posted the requisite cash bond as security for the payment of the cattle that he bought.

Although IBP procured most of its cattle through salaried cattle buyers (covered by IBP’s blanket Packers & Stockyards bond) and paid the seller with its own checks, IBP also bought cattle from independent dealers and through order buyers.

In 1968, IBP, having no salaried cattle buyer on the South Plains (Eastern New Mexico and the Panhandle of Texas) where Heller operated, entered into a course of dealing with Heller whereby Russell Walker regularly offered to purchase cattle from him. Walker provided Heller with information concerning the maximum number of cattle of the type and weights desired by IBP, the price IBP would pay per pound for dressed beef, the date the cattle were to be delivered and the length of time the offer would remain open. Heller usually accepted all or a portion of the offer, either at that time or at a later time before the offer lapsed.

Heller bought cattle on a live weight basis. He paid for the cattle with his personal checks. He normally dealt with the custom feed yard manager, or in some instances directly with the owner of the cattle on feed. Once an agreement was reached, Heller had ten days to take delivery or the cattle would be placed back on feed for his account.

Heller sold cattle to IBP on a dressed weight basis. Once the dressed weight was determined, IBP paid Heller by check. If requested, IBP would advance Heller a portion of the estimated dressed weight of the cattle after they were in its possession. The partial payments were made by wire transfer from IBP’s bank to Heller’s bank.

The cattle which Heller sold to IBP were ordinarily transported by railcars leased by Heller and loaded at special sidings located at Amarillo and at the Hereford Feed Yard. Heller paid all freight charges stemming from these shipments and bore the risk of loss resulting from the death of cattle prior to delivery.

Heller was free to — and did — sell cattle to packers other than IBP at whatever prices he could negotiate. As time passed, the volume of cattle supplied by Heller to [201]*201IBP increased until, in late 1973 and January, 1974, Heller was shipping as many of 500 head to Emporia on some days.

On January 29, 1974, Heller agreed to buy 720 head of cattle owned by R&L and on feed at United Beef Producers’ feed yard near Hereford, Texas. The sale was approved by R&L partners Rufenacht and Lewis.

Heller took delivery of the cattle on four separate days beginning on January 30, 1974 and concluding on February 8, 1974. On each occasion United Beef Producers prepared an invoice showing Heller as the buyer and R&L as the owner. No reference was made to IBP.

Heller had the cattle transported by truck from the feed yard to a railroad siding, where the cattle were loaded onto rail-cars and shipped to IBP at Emporia. Upon receiving each of the first three shipments, IBP wired partial payment to Heller’s bank. Once IBP determined the dressed weight of the cattle in each shipment, checks were forwarded to Heller’s account. With regard to the fourth shipment, IBP made no partial payment, but made payment in full to Heller’s trustee in bankruptcy.

Both United Beef Producers and R&L expected Heller to pay for the cattle with his personal checks. When no checks were received after Heller took delivery of the final shipment of cattle Lewis of R&L asked the feed yard manager to investigate the matter. Following a meeting between the manager and Heller, payment for the first two shipments of cattle was received on February 9, 1974, in the form of two checks made payable to United Beef Producers.

On February 11, 1974, at the feed yard manager’s request, Heller voided the two checks payable to United Beef Producers and reissued them in the names of the owners. Heller also issued checks for the last two deliveries of cattle. The feed lot manager transmitted these four checks to R&L, however, none were paid.

Shortly before Sunday, January 27, 1974, Heller purchased 137 head of cattle owned by Prochemco Cattle Partners. These cattle were on feed at Prochemeo’s Hereford Feed Yard. The transaction was negotiated between Heller and the feed yard manager Richard Crider.

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Bluebook (online)
656 F.2d 198, 1981 U.S. App. LEXIS 17617, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rufenacht-v-iowa-beef-processors-inc-ca5-1981.