Merrick Dairy 22 Oct 1946
Milk Producers Get Pay First, Court Concludes Ruling in Merrick Co. Case Gives Farmers Preferred Claim Milk producers were assured by a state supreme court.decision today that claims they may have against a defunct dairy company for milk deliveries' will be paid as preferred claims. The court, over-ruling a circuit court decision of Judge Jesse Earle rendered Here several months ago in cases of the Pure Milk Association, Chicago marketing co-operative, and the Brookhill Dairy of Genesee Depot, against the Merrick Dairy Co., of Beloit, means payments on milk claims of about $10,000, against a total of ?1,200 which had been allowed "by the circuit court. The test, filed by. the Pure milk association, of which most fluid milk producers of this area are members, was the first taken under Section 100.08 (6) of the Wisconsin statutes as to liquidation of dairy companies. The Pure Milk, association claim, in behalf of 41 farmers, was for a total of about $9,000; and the Brookhill claim was for $1,100. "Whole Claim" Preferred The supreme court decision, according to George S. Geffs, one of the lawyers far the claimants, clarifies the meaning of the statute, which says that claims of farmers for milk sold to a dairy are t,o be classified as claims of labor. Claims of labor, however, are limited to collections for a 90-day period and a total of $600. Reading this into the law, Judge Earle held that not more than $600 per claim might be allowed. The supreme court, however, construed the law to mean that the "whole claim" meant that all was to be allowed as a perferred claim without limitations applied on labor claims. The view taken by .the court here, Mr. Geffs said, if sustained would have forced a change in the handling of such matters by milk co-operatives. The PMA according to contract paid the 41 farmers for milk delivered to Merricks when the company could not pay, and then filed i single claim against the assets of the Beloit concern. Had it been held that single claims were limited to $600, then the. co-operative would have brought suit in the name of each individual farmer in the future, a situation which it was argued would result in increasing volume of litigation; Personal Claims Last . The law as now interpreted calls for payment out of assets of a defunct dairy company, first the expenses of liquidation,- secondly, administration expenses, and then claims of labor up to $600 per person and of all claims for milk. Thereafter, claims are classified as "general" and share pro rata in any assets which may be left. Judge Earle was upheld in his ruling in another point in the involved litigation centering in the Beloit Merrick/failure. The supreme court upheld him in a decision holding that loans made by the Merricks as individuals to the'Mer- rick corporation were to be subordinated to the general claims. McGowan and Geffs law firm here represented the Pure Milk association and Brookhill Farms; the Jeffris law firm, the receiver for the Merrick company, and Dougherty, Grubb and Ryan the Merrick family.