Pownall v. United States, 11340.
| Decision Date | 27 February 1947 |
| Docket Number | No. 11340.,11340. |
| Citation | 159 F.2d 73 |
| Parties | POWNALL et al. v. UNITED STATES. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Leo R. Friedman and Jos. I. McMullen, both of San Francisco, Cal., for appellants.
James M. Carter, U. S. Atty., Ronald Walker and Robert E. Wright, Asst. U. S. Attys., all of Los Angeles, Cal., for appellee.
Before DENMAN, BONE and ORR, Circuit Judges.
This is an appeal from a judgment rendered in favor of the United States in an action wherein the United States sought to recover the sum of $113,709.19, claimed to be due and owing by virtue of an order made by the Under-Secretary of War under the authority of the Federal Renegotiation Act determining that appellants had made excess profits in such amount during the fiscal year ending December 31, 1943.
The United States instituted an action at law to recover from appellants $113,709.19 allegedly due under an order made by the Under-Secretary of War on December 27, 1944, which order was made under the authority of the Federal Renegotiation Act, as contained in the Revenue Act of 1943, 50 U.S.C.A.Appendix § 1191. The order of the Under-Secretary of War (eventually the order of the War Contracts Price Adjustment Board) determined that appellants had made "excessive profits," during the fiscal year ending December 31, 1943, in the amount of $628,373.14. The complaint was based upon the last mentioned amount less a tax credit which reduced the sum claimed to be due to the amount for which the judgment was rendered.
Appellants' answer raised, among others, the question of the constitutionality of the Renegotiation Act and seeks an overruling of our decision in Spaulding v. Douglas Aircraft Co., 9 Cir., 154 F.2d 419. They contend that we have not considered the fact that the Under-Secretary of War and War Contracts Price Adjustment Board determined the amount of excess profits upon secret data, and hence the determination is without the due process required in a proceeding fixing a legal liability upon them. Assuming, but not deciding, that the Board may not consider such evidence, this contention ignores the provision of Sec. 403(e) (1) of the Act that appellants may petition the Tax Court, which court may
Section 403 (e) (1) further provides that the Tax Court shall act under the provision of § 1111 of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 1111, which provides "The proceedings of the Board now Tax Court and its divisions shall be conducted in accordance with such rules of practice and procedure (other than rules of evidence) as the Board may prescribe and in accordance with the rules of evidence applicable in the courts of the District of Columbia in the type of proceedings which prior to September 16, 1938, were within the jurisdiction of the courts of equity of said District."
Under such rules of evidence, the...
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