Opinion ID: 1640458
Heading Depth: 2
Heading Rank: 2

Heading: Deliveries to Other Warehouses

Text: Millers asserts that the claims filed by persons who delivered their beans to a location other than VFBA's warehouses are not valid claims against the trust fund. As noted earlier herein, VFBA operated three elevators located at Buxton, Gilby and Portland. Each warehouse was covered by a separate bond. VFBA also accepted deliveries in Reynolds and Fessenden. Producers making deliveries to these latter locations received scale tickets having a printed warehouse designation of Portland or a joint designation of Portland and Buxton. Millers relies on authorities stating that policies of insurance specifying the location of the insured property extend no coverage to the insured's operations at other locations. See 1 G. Couch, Couch on Insurance 2d § 5:15 (rev. 2d ed. 1984); Pruser v. State Farm Fire & Cas. Co., 286 Pa.Super. 126, 428 A.2d 604 (1981). However, a warehouseman's bond, unlike an insurance policy, secures the obligations of the warehouseman and is conditioned on the warehouseman's faithful performance of his duties and compliance with the provisions of law and the rules and regulations relating to the storage and purchase of grain. § 60-02-09(4), N.D.C.C. The PSC has construed Chapter 60-02, N.D.C.C., to allow a warehouseman to accept grain at points other than the physical location of the warehouse, and upon acceptance the grain is protected by the bond coverage for the warehouse for which a scale ticket is issued. That construction is entitled to some weight where the agency interpretation does not contradict clear and unambiguous statutory language. E.g., Application of Skjonsby Truck Line, Inc., 357 N.W.2d 227 (N.D.1984). We believe the PSC's interpretation is reasonable and consistent with the statutory scheme, and we conclude that a surety is responsible for the obligations of the warehouseman incurred through the operation of its warehouse regardless of where the physical acceptance and control of the grain took place. Therefore, persons who delivered beans to locations other than VFBA's bonded warehouses, but who received scale tickets with a warehouse designation of Portland or Buxton, have valid claims against the trust fund and the warehouseman's bonds.