Armour & Co. v. Blindman, Civil Action No. 2260.

• Decision Date: 28 August 1947
• Docket Number: Civil Action No. 2260.
• Parties: ARMOUR & CO. v. BLINDMAN et al.
• Court: U.S. District Court — District of Minnesota

73 F. Supp. 609

ARMOUR & CO. v. BLINDMAN et al.

Civil Action No. 2260.

District Court, D. Minnesota, Fourth Division.

August 28, 1947.

Grannis & Grannis, of South St. Paul, Minn., for plaintiff.

Benedict Deinard, of Leonard, Street & Deinard, and Benjamin Segal, all of Minneapolis, Minn., for defendants.

NORDBYE, District Judge.

The following necessary facts are stipulated for the purposes of these motions: (1) Between December 14, 1942, and September 17, 1945, defendants made overceiling sales to plaintiff of certain industrial wooden boxes of various sizes; (2) the prices of said industrial wooden boxes were, under the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 901 et seq., to be determined by a formula, and plaintiff at the time of purchase had no reason to believe that the price it was paying was in excess of the ceiling established under the Act; (3) the defendants guaranteed that the prices which were charged were not in excess of the legal price ceiling; and (4) the boxes were not purchased by the plaintiff for use or consumption other than in the course of trade or business. Plaintiff seeks to recover the overceiling prices paid to defendants on account of the boxes sold by defendants to plaintiff between December 14, 1942, and September 17, 1945. It seeks judgment in the sum of $66,394.33, or "such other exact sum as will be determined to be due."

Plaintiff in its brief states the legal issue on defendants' motion for judgment as follows: Does Section 925(e) of the Emergency Price Control Act prohibit by implication a suit by plaintiff for the recovery of that part of the price charged which was in excess of the price represented by defendants to be the correct legal and agreed price? The posing of that question must be considered in light of the stipulated facts herein. Or, stated in another way, the issue may be framed as follows: Does Section 925(e) of the Emergency Price Control Act constitute the exclusive remedy available to purchasers of overceiling commodities?

Section 904(a), Title 50 U.S.C.A.Appendix, provides that

"It shall be unlawful, regardless of any contract, agreement, lease, or other obligation heretofore or hereafter entered into, for any person to sell or deliver any commodity, or in the course of trade or business to buy or receive any commodity, * * * in violation of any regulation or order * * * or of any price schedule * * *."

This plaintiff, therefore, having purchased these boxes in the course of trade or business at a price above ceiling, violated the clear provisions of this law. In other words, under the law both the seller and the purchaser were in delicto. Section 925(e) of the enforcement statute provides:

"If any person selling a commodity violates a regulation, order, or price schedule prescribing a maximum price or maximum prices, the person who buys such 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. * * *"

Under the same statute, the Administrator may bring an action if the buyer fails to do so within the time specified, or if the buyer "is not entitled for any reason to bring the action." A reading of these two sections—904(a) and 925(e)—impels the conclusion that a buyer in the course of trade or business who buys at overceiling prices commits an unlawful act, and that the only member of the buying public who is vested with a right to bring an action against a seller for an overcharge under the Act is one who buys for use or consumption other than in the course of trade or business; that is, "the ordinary non-commercial consumer * * *. In all other cases, the right vests in the Administrator for the use and benefit of the nation as a whole." Boyles v. Glick Bros. Lumber Co., 9 Cir., 146 F.2d 566, 568.

A consideration of the legislative history of the Act, its purposes, and the public policy indicated therein, leaves no real doubt as to the soundness of defendants' position in asking for a dismissal of plaintiff's complaint. Both parties recognize and urge in support of their respective positions that the purpose of the Price Control Act was to stem the tide of inflation. It is apparent that Congress prepared a carefully worked out statute which sought to achieve this end. The support of the ordinary noncommercial consumers was enlisted by granting them the right to sue for treble damages, and they were not declared to be violators in the event they purchased at a price above ceiling. It is fair to assume that Congress acted under the belief that the noncommercial consumer would be caught between the upper and nether millstones with little chance but to pay the price demanded and with no opportunity to pass on to anyone else the overcharge. It cannot be seriously contended that, when Congress specifically termed a purchaser at overceiling prices in the course of trade or business a law violator, it did not do so advisedly. The legislative history unmistakably indicates that Congress in furtherance of the purposes of the Act deemed it advisable or necessary to class both the seller and the buyer as violators under these circumstances. Senate Report 931, p. 8 (77th Congress, 2d Session), states that Section 905(e) "will permit private purchasers who buy for personal use or consumption rather than in the course of trade or business, to protect themselves against violations of the Act." On p. 26 of the Senate Report, the following appears: "If a buyer, whose seller has violated a maximum price regulation or price schedule is not entitled to bring such action, because he is a buyer in the course of trade or business, or for other reasons, the Administrator may bring such action against the seller on behalf of the United States." Moreover, the Conference Report (No. 1658) states on p. 26 that "noncommercial consumers might institute treble damage suits."

It may well be that Congress assumed that buyers in the course of trade or business would know, or should know as well as the seller, what the legal ceiling prices should be of the commodities in which they were dealing. Moreover, there would be the temptation on the part of such buyer to merely pay the price asked and pass along the overcharge to the ultimate consumer. To permit, therefore, such a purchaser to be clothed with the right to sue for single or treble damages might well invite an attempt on his part to obtain recoupment when no actual loss had been sustained. The noncommercial consumer, however, would have no one to whom he could pass along the overcharge. Consequently, it seems clear that Congress intended to impose upon the purchasers in the course of trade or business the responsibility of policing their own industry, and therefore...