Highland v. Russell Car Snowplow Co

• Decision Date: 08 April 1929
• Docket Number: No. 8,8
• Citation: 73 L.Ed. 688,279 U.S. 253,49 S.Ct. 314
• Parties: HIGHLAND v. RUSSELL CAR & SNOWPLOW CO
• Court: U.S. Supreme Court

279 U.S. 253

49 S.Ct. 314

73 L.Ed. 688

HIGHLAND

v RUSSELL CAR & SNOWPLOW CO.

No. 8.

Argued Feb. 23 and 24, 1928.

Decided April 8, 1929.

Mr. Ira Jewell Williams, of Philadelphia, Pa., for petitioner.

[Argument of Counsel from pages 254-255 intentionally omitted] Mr. A. M. Liveright, of Clearfield, Pa., for respondent.

[Argument of Counsel from page 256 intentionally omitted] Mr. Justice BUTLER delivered the opinion of the Court.

Petitioner sued respondent in the court of common pleas of Clearfield county, Pennsylvania, to recover a balance of $830.80 alleged to be due on account of coal sold between October 17, 1917, and February 15, 1918.

The complaint shows the following facts: October 2, 1917, plaintiff wrote defendant that he had purchased the output of certain mines and offered coal at $3.60 per ton. Defendant answered that it wanted a carload per week until further notice. Plaintiff replied that he had entered defendant's order for that amount. November 14, after plaintiff had shipped some of the coal, he wrote defendant that, owing to a recent wage agreement made between the miners and operators, the cost of mining had been increased 45 cents per ton; that plaintiff was obliged to pay the additional cost to the producer; and that he was making a price until further notice of $4.05 per ton. He added: 'Unless I hear from you to the contrary I shall take if for granted that you wish me to continue shipments on your order at this new price.' The amount sued for was based on $3.60 per ton for coal shipped in October and $4.05 per ton for that delivered later. Defendant had paid $1,531.84.

The affidavit of defense admitted the sale and delivery of the coal, denied any agreement as to price, and, among other averments not here material, alleged that the United States had fixed the prices of the coal and that its value on that basis was $1,322.74.

The trial court held that the plaintiff was bound by the prices fixed by the government, and, notwithstanding a verdict for the plaintiff, gave defendant judgment, which was affirmed by the Superior Court and also in the Supreme Court of the state.

The prices so held applicable were fixed by the President pursuant to section 25 of the Lever Act approved August 10, 1917, c. 53, 40 Stat. 276, 284. An executive order of August 21 specified $2 per ton on board cars at the mine; and an order made October 27 added 45 cents per ton.

Plaintiff here insists, as he maintained in the state courts, that Congress had no power to establish or to authorize the President to prescribe prices for coal without providing just compensation for those who, in the absence of such regulation, might have sold their coal for more. And he contends that, in violation of the due process clause of the Fifth Amendment, the act and orders operate to deprive him of liberty of contract. His coal was not requisitioned for public use. He does not claim that the amount paid by defendant was not compensatory or that it did not give him a reasonable profit or that the value of the coal was greater than the prices fixed by the President. The sole question is whether plaintiff's constitutional rights were infringed by the enforcement of the act and orders to prevent him from selling his coal for prices in excess of the just compensation he would have been entitled to receive if it had been taken under the sovereign power of eminent domain.

Long before this country became involved in the war, Congress adopted measures for the national defense, and promptly after it entered the conflict there were developed comprehensive plans for immediate and effective use of military force. An Act of June 3, 1916, 39 Stat. 166, authorized the enlargement, equipment, and training of the army. An Act of August 29 following, 39 Stat. 619, 645 (10 USCA § 1361), empowered the President in time of war to take and utilize systems of transportation for the movement of troops, war material and other purposes, and, December 26, 1917, the President did take over the railroads of the country. 40 Stat. 1733. The Joint Resolution of April 6, 1917, 40 Stat. 1, declaring war with Germany, directed the President to employ the entire naval and military forces and pledged all the resources of the country to bring the conflict to a successful termination. An Act of June 15, 1917, 40 Stat. 182, authorized the President extensively to exert the power of eminent domain in aid of construction and acquisition of ships.

The Lever Act was broader than its predecessors. It was passed to encourage production, conserve supply, and control distribution of foods, fuel, and many other things deemed necessary to carry on the war. Hoarding, waste, and manipulations for the enhancement of prices were condemned. The President was empowered to license and regulate production, prices and sales, to requisition coal and other necessaries, to purchase and sell wheat, flour, and other staple articles of food, and to take over and operate factories and mines. Section 25 empowered the President to fix the price of coal, to regulate distribution among dealers and consumers, domestic or foreign, and to require producers to sell only to the United States through a designated agency empowered to regulate resale prices. The basis prescribed for the determination of prices to be charged by producers of coal was the cost of production, including the expense of operation, maintenance, depreciation, and depletion, plus a just and reasonable profit. And prices to be charged by dealers were to be made by adding to their cost a just and reasonable sum for profit. The act did not require producers or dealers to sell their coal. It provided for the ascertainment and contemplated the payment of just compensation for all property that it authorized the President to take.

During 1916 and the early months of 1917, the mining and distribution of coal had been greatly disturbed by conditions resulting from the war abroad and the preparations for national defense being made in this country. There was panic among consumers, and, in order to secure adequate supply, they offered prices higher than any theretofore prevailing. The prices of coal for immediate delivery which previously had been from $1.50 to $2, were bid up to $5, $6, and in exceptional cases as high as $7.50 per ton. In April contracts for the year's delivery could be made only at prices ranging from $3 up to $5 or $6 per ton. In May of that year the ...