Bowles v. Seminole Rock & Sand Co.
| Decision Date | 14 November 1944 |
| Docket Number | No. 11032.,11032. |
| Citation | 145 F.2d 482 |
| Court | U.S. Court of Appeals — Fifth Circuit |
| Parties | BOWLES, Administrator, O. P. A., v. SEMINOLE ROCK & SAND CO. |
Fleming James, Jr., Dr., Litigation Division, Office of Price Administration, and David London, Chief, Appellate Branch, OPA, both of Washington, D. C., for appellant.
Robert Ruark and S. W. Ruark, both of Raleigh, N. C., and J. M. Hemphill, of Chester, S. C., for appellee.
Before HUTCHESON, HOLMES, and WALLER, Circuit Judges.
This appeal is from a final judgment dismissing an action by the Price Administrator under Section 205 (a) and (e) of the Emergency Price Control Act of 1942, 56 Stat. 23, 50 U.S.C.A. 11, §§ 901 et seq., 925 (a) and 925 (e), hereinafter referred to as the Act. The action was brought to restrain the defendant from continuing to violate the Act and Maximum Price Regulation 188 (7 F. R. 3872) issued thereunder, and to recover from defendant-appellee three times the amount by which the sales prices of certain ballast (crushed stone) sold by the defendant to the Seaboard Air Line Railway were alleged to have exceeded the maximum price permitted by the regulation.
In the fall of 1942 the Seminole Rock & Sand Company sold and delivered 25,239.25 tons of crushed stone to the Seaboard Air Line Railway at 85¢ per ton. Between December, 1942, and May, 1943, the company sold and delivered 92,316.15 tons of the same stone to the same purchaser at $1 per ton. The stone was delivered for use by the purchaser in maintaining the roadbed of the main line of its railroad.
Alleging that the highest price permitted by said Maximum Price Regulation 188 was 60¢ per ton for the material, the Price Administrator brought this suit, which the court below dismissed on the grounds (1) that whatever cause of action existed to recover a money judgment was in the purchaser of the stone, not the Price Administrator, and (2) that the evidence did not show any violation of Price Regulation 188.
Section 205 (e) of the Emergency Price Control Act of 1942, as amended by the Stabilization Extension Act of 1944, provides that if a person selling a commodity violates a regulation prescribing a maximum price, the person who buys the commodity "for use or consumption other than in the course of trade or business" may bring an action against the seller on account of the overcharge; but if the purchaser for any reason is not entitled to bring the action, the Administrator may institute such action in behalf of the United States.
The validity of this regulation is not questioned, and its language is so free from ambiguity that we have no need to explore its origin and purpose to determine its meaning. The effect of its application to the situation found in this case is also clear. The stone was delivered to the railroad for use in maintaining its roadbed, and it was consumed for that purpose. The fact that the purchaser was the ultimate consumer of the material is of no significance, for the statute impliedly excludes not only purchasers for use in the course of trade, but also purchasers for consumption in the course of business.1 The maintenance of its tracks, roadbeds, and rights-of-way is an essential part of the business of any railroad. These purchases, therefore, were of a commodity consumed in the course of business of the purchaser, and if the price charged exceeded the maximum provided by the regulation, the cause of action arising from such unlawful act was vested by the statute in the Price Administrator only.
Upon the merits the issue turns upon whether the seller's ceiling price for the stone sold was 60¢ per ton, as contended by the Administrator, or $1.50 per ton, as claimed by the seller and as found by the court below.
These are the relevant facts: During the fall months of 1941, the Seaboard Air Line Railway placed with the appellee two orders for 5,000 tons each of crushed stone. These orders promptly were accepted for delivery upon demand at 60¢ per ton. During the month of January, 1942, a Government contractor placed an order with appellee for 7,000 cubic yards of crushed stone (meeting certain specifications) for delivery upon demand at $1.50 a cubic yard, and appellee promptly began its preparations for delivery, crushing the stone in accordance with the specifications and piling it at loading points. The railway company called for delivery of its orders during the month of March, 1942, and delivery was then effected in accordance with the agreements reached during the preceding fall. The government contractor, after accepting delivery of a part of his order in January, 1942, did not request any further deliveries until after March, 1942.
It appears that there is no appreciable difference between a cubic yard of crushed stone and a ton of the same material. There is also ample evidence to support the findings of fact by the trial court that the Government contractor and the railroad were purchasers of the same class, and that the stone delivered to the contractor and that delivered to the railroad were composed substantially of the same material. Indeed, the evidence shows that deliveries to each were filled from the same piles of stone.
On April 28, 1942, the Administrator promulgated a General Maximum Price Regulation by which the prices of all commodities were frozen at the highest price charged therefor in March, 1942. Shortly thereafter, the maximum price chargeable for the specific commodity here sold was fixed by Maximum Price Regulation 188. Section 1499.153 (a) thereof provided that the "maximum price for any article which was delivered or offered for delivery in March, 1942, by the manufacturer, shall be the highest price charged by the manufacturer during March, 1942 (as defined in Section 1499.163), for the article." Section 1499.163 (a) (2) provides that the highest price charged during March, 1942, means (i) the highest price which the seller charged to a purchaser of the same class for delivery of the article or material during March, 1942; or (ii) if the seller made no such delivery during March, 1942, such seller's highest offering price to a purchaser of the same class for delivery of the article or material during that month.
The appellee contends that its arrangement with the Government contractor bound it to offer the...
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