Hall v. Chaltis.

• Decision Date: 02 March 1943
• Docket Number: No. 41.,41.
• Citation: 31 A.2d 699
• Parties: HALL (BROWN, Adm'r of Price Administration, Intervener) v. CHALTIS.
• Court: D.C. Court of Appeals

31 A.2d 699

HALL (BROWN, Adm'r of Price Administration, Intervener)

v.CHALTIS.

No. 41.

Municipal Court of Appeals for the District of Columbia.

March 2, 1943.

Appeal from the Municipal Court for the District of Columbia, Small Claims Branch.

Action by Patricia Hall against Stella Chaltis, trading as Stella's Ladies Shop, wherein Prentiss M. Brown, Administrator, Office of Price Administration, intervened. From the judgment, plaintiff appeals.

Affirmed.

David London, of Washington, D. C. (Harry W. Jones and Norma G. Zarky, both of Washington, D. C., on the brief), for intervenor.

Mark P. Friedlander, of Washington, D. C., for appellee.

Before RICHARDSON, Chief Judge, and CAYTON and HOOD, Associate Judges.

CAYTON, Associate Judge.

This was an action brought by a consumer against a shopkeeper for $50 because of an alleged violation of a price regulation promulgated by the federal Administrator of Price Control under authority of the Emergency Price Control Act of 1942. ¹ These are the facts as they appear from the record and from certain concessions made in open court upon the argument of the case: The Administrator of Price Control had in March, 1942 fixed the maximum price for nylon hose of the quality, gauge and denier here involved at $2.50 per pair. That continued to be the ceiling price for such hose until October 22, 1942. On October 20, 1942, at 5:04 p. m. the Price Administrator filed with the Division of the Federal Register a new order known as Maximum Price Regulation No. 95, reducing the maximum price on that type of hose to $1.65 effective October 22, 1942. ² Presumably the new regulation took effect at 12:01 a. m. on October 22, 1942, or for practical purposes, at the beginning of business hours that day. Plaintiff presented herself at the shop of defendant on October 22 at approximately noon. (Defendant insists it was during the forenoon.) She purchased of defendant a pair of nylon hose of the gauge and denier covered by the order of October 20, and paid therefor the sum of $2.50, or 85 cents more than the new ceiling price. She asked for and was given a receipt. On the followin day, October 23, 1942 she filed suit in the Small Claims Branch of the Municipal Court, demanding $50 for the alleged violation. Defendant testified that she had no notice whatever of the new and lower ceiling price and in fact did not receive notice of it until three days after the sale and two days after she had been served with process in the case. She also testified that shortly before that time her father had died and that at the very time she was making the sale her husband was in the shop speaking on the telephone to a doctor concerning certain papers in connection with her father's estate. Her husband corroborated this testimony. After hearing the case in part, the trial judge continued it in order to obtain testimony as to whether the stockings were actually of the grade and quality which fell within the new $1.65 price limit. After the stockings had been examined by an expert of the Office of Price Administration, testimony was offered to the effect that they were in fact of the gauge and denier which had been reduced in price to $1.65 by the order of October 20, 1942. The record is silent as to what method if any had been adopted by the Price Administrator for giving notice of price changes put into effect by his orders.

Upon that showing, the trial judge refused to adopt the plaintiff's contention that she was entitled to $50 and limited her recovery to the sum of 85 cents, representing the actual and admitted amount of the overcharge.

A petition for allowance of appeal was filed with us under the provisions of the Municipal Court Act of April 1, 1942. ³ Because of the importance of the questions involved, we allowed an appeal. We also granted the Price Administrator's application for leave to intervene in accordance with Section 205(d) of the Price Control Act. Plaintiff appeared without counsel and filed no brief. Briefs were filed and oral arguments presented for the Price Administrator and for defendant.

The contention of the Price Administrator is that the trial judge committed error in limiting plaintiff's recovery to the eighty-five cent overcharge because he was without discretion in the matter and was required under the Act to grant judgment for $50. The section (205(e) of the Act upon which he relies is, in its applicable parts, as follows: ‘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 either for $50 or for treble the amount by which the consideration exceeded the applicable maximum price, whichever is the greater, plus reasonable attorney's fees and costs as determined by the court * * *.’

It will be noted that the section authorizes a person who has been overcharged in violation of a price regulation to ‘ bring an action either for $50 or for treble the amount by which the consideration exceeded the applicable maximum price.’ (Italics supplied.) What does this language mean? Did Congress intend that every overcharge, whether intentional or otherwise, must be regarded as a violation? Can it be said that every shopkeeper who makes an overcharge whether in good faith or bad, with or without knowledge (or even an opportunity for knowledge) of a change in a price regulation, must forfeit $50 (or more when treble the overcharge amounts to more)? Does it mean that the courts are completely divested of discretion and must automatically grind out judgments for $50 in every such case? We think not. The statute merely provides that the plaintiff ‘may bring an action’, etc. An ‘action’ is merely a form of suit by which a plaintiff presents to a court for its determination his demand for money. ⁴ To ‘bring an action’ has a settled, familiar legal, as well as general meaning. It is synonymous with ‘commencing a suit’. ⁵ It is the means by which the judicial machinery is set in motion. It is but the commencement of the suit-the first step by which the judicial machinery is set in motion. It is conclusive of nothing. It constitutes notice to the defendant that he has the right and is required to defend himself against the charge. The plaintiff's claim as well as the defense are then submitted to a court or jury, the facts are weighed and the law considered and there follows a judicial determination of the rights of the parties, and whether the ‘action’ has been sufficiently proven to entitle plaintiff to judgment.

The quoted section of the Act is both remedial and punitive: remedial in that it provides the method for collecting an overcharge, merely by way of compensation; and punitive in that it authorizes a plaintiff to claim an additional sum which would not otherwise be recoverable. It is in essence a statutory sanction written into the Act to encourage consumer-actions. Thus it amounts to a penalty without reference to the actual amount of damage ⁶ and is not different from a forfeiture in money. ⁷

We think the punitive feature must be strictly construed and cannot be operative against a defendant unless the statute expressly authorizes it. ⁸ Nor can the liability be established or extended by implication. ⁹

Unquestionably Congress could have made the $50 recovery mandatory and could have prescribed that a plaintiff in a situation of this kind would be entitled to treble the amount of the overcharge or $50, whichever amount be greater. In other words Congress by appropriate language could have taken the question of the amount of recovery out of the realm of discretion and fixed it arbitrarily as the amount for which judgment would have to be rendered in every case of violation. It is significant that Congress did no such thing in framing this legislation. It is even more significant that Congress had previously prescribed such mandatory recovery in at least one comparable situation, namely, in the Fair Labor Standards Act of 1938. ¹⁰ There Congress provided that any employer violating the provisions enacted by underpaying an employee ‘ shall be liable to the employee or employees affected in the amount of [their] unpaid minimum wages, or [their] unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.’ (Italics supplied.) Section 16(b).

This was a legislative edict prescribing not only how much the plaintiff might claim but precisely what the recovery should be. Congress said that the court was to have only two functions, (1) to determine whether there had been an underpayment and if so how much and (2) to add 100 percent to that amount as the unvarying and unvariable amount of the plaintiff's judgment. The courts have several times construed such language to be mandatory and not discretionary. ¹¹ In one of the cases the rule was tersely stated as follows: ‘Right to the liquidated damages arises automatically with a finding of unpaid overtime compensation. Because of the explicit statement by Congress that ‘an additional equal amount (shall be allowed) as liquidated damages,’ the courts are given no discretion in deciding whether they should form part of the recovery.' (Italics supplied.) Abroe v. Lindsay, cited in footnote.

The language used in the statute under consideration is very different in its practical application. Unlike the Fair Labor Standards Act, this Act in authorizing the filing of consumer-actions merely formulates the manner in which a plaintiff may compute his claim, and the maximum for which he may sue. It stops short of saying that the defendant ‘shall be liable’ for the amount claimed. Viewed in a reasonable light, we think it does not mean, as the Price Administrator contends, that every shopkeeper who makes an overcharge of even a few cents must forfeit $50 to every customer who decides to sue. If that...