Dowling Bros. Distilling Co. v. United States

• Citation: 153 F.2d 353
• Decision Date: 08 February 1946
• Docket Number: No. 10009,10010.,10009
• Parties: DOWLING BROS. DISTILLING CO. et al. v. UNITED STATES.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

153 F.2d 353 (1946)

DOWLING BROS. DISTILLING CO. et al. v. UNITED STATES.

Nos. 10009, 10010.

Circuit Court of Appeals, Sixth Circuit.

February 8, 1946.

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Sawyer A. Smith, of Covington, Ky. (Howell W. Vincent, of Covington, Ky., on the brief), for appellants.

Claude P. Stephens, of Lexington, Ky. (Doris W. Meenehan and Abraham Glasser, both of Washington, D. C., on the brief), for appellee.

Before HICKS, SIMONS, and ALLEN, Circuit Judges.

SIMONS, Circuit Judge.

Out of a criminal prosecution of the corporate and the individual defendant for violations of maximum price regulations under the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix, § 901 et seq., in the sale of whiskey in Kentucky, grew the two appeals. No. 10,009 is from an order of the District Court, prior to trial, denying a stay of proceedings and the right of the appellants to file suit in the Emergency Court of Appeals to test the validity of the regulations under which they were indicted. No. 10,010 is an appeal from the judgment and sentences imposed after trial to and conviction by a jury.

The first question to be considered is whether the order in No. 10,009 is appealable. Section 204(e) (1) of the Emergency Price Control Act, 50 U.S. C.A.Appendix, § 924(e) (1), provides that a defendant charged with violations may, within 30 days after arraignment and within 5 days after judgment, apply to the court in which the proceeding is pending, for leave to file in the Emergency Court of Appeals a complaint setting forth objections to the validity of any provision which he is alleged to have violated, and that the court shall grant such leave if it finds that the objection is made in good faith and that there is a reasonable and substantial excuse for failure to present it in a protest filed with the Administrator in accordance with § 203(a). Except as provided in section 129 of the Judicial Code, 28 U.S.C.A. § 227, permitting appeals from interlocutory decrees or orders granting or denying an injunction, Circuit Courts of Appeals are limited in their appellate jurisdiction, to final decisions of District Courts, 28 U.S.C.A. § 225. A judgment is final, for the purpose of appeal, only when it terminates the litigation on the merits and leaves nothing to be done but to enforce by execution what has been determined. Berman v. United States, 302 U. S. 211, 58 S.Ct. 164, 82 L.Ed. 204; Heike v. United States, 217 U.S. 423, 30 S.Ct. 539, 54 L.Ed. 821. The tests which bear upon the finality of decisions are carefully considered in Cobbledick v. United States, 309 U.S. 323, 60 S.Ct. 540, 541, 84 L.Ed. 783, where the reasons for denying separate reviews of the component elements in a unified cause are fully elucidated, leading to the conclusion that a party will not be allowed to take to the upper court a ruling where the result of review will affect the orderly progress of a cause, and wherein it was said, "the correctness of a trial court's rejection even of a constitutional claim made by the accused in the process of prosecution must await his conviction before its reconsideration by an appellate tribunal. Cozen v. United States, 278 U.S. 221, 49 S.Ct. 118, 73 L.Ed. 275." It must be concluded, therefore, that the challenged order was not reviewable prior to the trial upon the merits, unless denial of a stay of a criminal proceeding in the court where it is pending, is an order denying an injunction and so appealable under section 227.

Its characterization as an injunction is rested on Enelow v. New York Life Ins. Co., 293 U.S. 379, 55 S.Ct. 310, 79 L.Ed. 440, wherein it was held that a refusal by a court of equity to stay proceedings at law, is a grant or refusal of an injunction appealable under section 227. As pointed out, however, in United States v. Horns, 3 Cir., 147 F.2d 57, the Supreme Court made it clear in the Enelow case, that if a court of law itself grants a stay of proceedings before it, the stay is not an injunction but merely an exercise of the court's inherent power to control the progress of a cause before it, so as to maintain the orderly processes of justice. It is only when the power possessed by a court of equity is exercised to stay proceedings in another cause that such action amounts to the grant or refusal of an injunction, and this distinction was stressed in Cover v. Schwartz, 2 Cir., 112 F.2d 566. Compare Triangle Conduit & Cable Co. v. National Electric Products Corp., 6 Cir., 127 F.2d 524. With this view we are in accord. It follows that the appeal in No. 10,009 must be dismissed. The dismissal, however, in no wise affects the right of the appellants to assail the order of denial in their appeal from conviction and sentence. It is there fully pressed and will presently be considered.

The District Court denied the petition of the appellants for a stay of proceedings and for leave to file their complaint in the Emergency Court of Appeals, on the ground that it was not made in good faith, and also on the ground, implicit, if not fully expressed in its findings, that their excuses for failure to present their objections in a protest to the Administrator in accordance with section 203(a) were neither reasonable nor substantial. For the purpose of determining the validity of the court's order, and whether it was made in the exercise of a sound judicial discretion, it becomes necessary to consider the chronology of events leading to trial and conviction, and to analyze and assay the reasons presented by the appellants for their failure to pursue the statutory remedies provided by the Act.

Before doing so, however, consideration must be given to the connotation of the terms "good faith" and "reasonable and substantial excuse," as they are used in section 204(e) (1). This section was added in the June 30, 1944, renewal of the Act to aid persons who sincerely sought to pursue the exclusive statutory remedies but who might lack the opportunity to do so before being convicted and punished for violation. Prior to that time violations could be punished without regard to ultimate adjudications of invalidity in respect to the regulations. This was deemed necessary to prevent premature disruptions of war-time price controls. Section 204(e) (1) made possible the testing of the validity of a price regulation after indictment and before trial. It is clear, however, that in setting up this procedure Congress did not intend to permit its use in every case as a matter of right. It therefore required a showing of good faith and a reasonable and substantial excuse for failure to protest, and it is clear that, by the language used, the District Courts are charged with the exercise of great care in permitting an indicted defendant to stay the progress of a criminal trial. The terms used and the legislative history both so indicate. Senator Wagner, Manager of the Senate Conference on the Renewal Act, said, in presenting the Conference Report to the Senate: "The procedure provided in the amendment does not represent a regular method to be followed in enforcement cases. Rather, it is an exceptional procedure which has been made available to avoid the risk of injustice that existed under the original act. * * * The remedial procedure prescribed * * * is available only to defendants whose objections the courts find have been made in good faith, and not primarily for the purpose of delay. The committee is confident that the courts will be vigilant in administering the standards of good faith. * * *" Cong.Rec. Senate 78th Cong. 2d Sess. June 21, 1944, page 6451. In an opinion in United States v. Aronin, 57 F.Supp. 186, 192, announced by District Judge Leamy in the District Court for the Southern District of New York in September, 1944, it was said, quite persuasively, we think: "It is apparent * * * that everything points to a strict and rigidly limited use of the new stay procedure. Enforcement actions under the Price Control Act should not be subjected * * * to the constant hazard of an automatic stay upon mere application by a defendant. A stay application * * * must have more to recommend it than the natural desire of every wrongdoer to postpone legal reckoning. * * *"

The Emergency Price Control Act of 1942, 50 App.U.S.C.A. § 901 et seq., as amended by the Stabilization Extension Act of 1944, provides, in section 203(a), that at any time after the issue of any regulation or order, or at any time after the effective date of a price schedule, any person subject to the provision of such regulation, order or schedule, may file a protest with the Administrator, specifically setting forth his objections to its provisions. The regulations for the violation of which the appellants stand convicted are Maximum Price Regulation 193 issued August 1, 1942, and Maximum Price Regulation 445 issued August 9, 1943. Appellants were indicted January 8, 1945. It does not appear, and is not claimed, that during the 60-day period provided by the regulations for a protest to be lodged with the Administrator, the appellants made any protest or invoked the provision allowing protest after the original 60-day period, although it is clear from the record that the corporate appellant is a substantial industry in Kentucky, and Gould a broker of many years' experience with a large business. They seek to convey the impression that they had no knowledge of the regulations or of the price schedules fixed by the Administrator. They deny that Gould attended a meeting in Baltimore between the distilled spirits industry and representatives of the Office of Price Administration, that Gould or other distillers were there asked to make suggestions and recommendations regarding Maximum Price Regulation 193, or that they were apprised at that meeting of the proposed regulation or of its adoption by publication in the Federal Register, all as charged by the government in response to their petition. To deny that in a time when all business was being...