Speicher v. Sowell, 53

• Citation: 14 N.W.2d 651,309 Mich. 54
• Decision Date: 17 May 1944
• Docket Number: No. 53,Jan. Term, 1944.,53
• Parties: SPEICHER v. SOWELL et al. (BOWLES, Adm'r of Office of Price Administration, Intervener).
• Court: Supreme Court of Michigan

309 Mich. 54

14 N.W.2d 651

SPEICHER

v.SOWELL et al. (BOWLES, Adm'r of Office of Price Administration, Intervener).

No. 53, Jan. Term, 1944.

Supreme Court of Michigan.

May 17, 1944.

Action by Walter D. Speicher against Nina Sowell and William C. Sowell and Ona Dunlop, receiver of Liesner Engineering Company, wherein Chester Bowles, Administrator of the Office of Price Administration, intervened as a defendant. From an order and decree affirming a report of the receiver of sale of assets and the winding up of the affairs of the partnership, which report showed the sale of a certain article for prices in excess of prices fixed by the Administrator under the Emergency Price Control Act, the Administrator appeals.

Affirmed by divided court.

Appeal from the Circuit Court for the County of Wayne, in Chancery; Honorable Guy A. Miller, Circuit Judge.

Before the Entire Bench.

Thomas I. Emerson, Deputy Adm'r in Charge of Enforcement, Fleming James, Jr., Director, Litigation Division, David London, Chief, Appellate Branch, and Morton Abrahams, Sr. Atty., all of Washington, D. C. (James C. Gruener and A. D. Ruegsegger, both of Cleveland, Ohio, and Albert E. Smith, of Detroit, of counsel), for intervening defendant-appellant.

Arnold F. Zeleznik, of Detroit, for appellee, Ona Dunlop, receiver.

BUSHNELL, Justice.

I am unable to concur in the affirmance of the order of the trial court.

The record contains supplementary order No. 10 of the office of price administration issued July 15, 1942, and the amendment thereto issued December 11, 1942. These orders expressly exclude judicial sales from the operation of price schedules except when ‘machinery products' are involved such as in the instant case.

The precise question involved here was not in issue in Yakus v. United States of America (Rottenberg v. United States), 64 S.Ct. 660, 88 L.Ed. 834, but the Emergency Price Control Act of January 30, 1942, 56 Stat. 23, chap. 26, 50 U.S.C.Appendix Supp. 11, § 901 et seq., 50 U.S.C.A. § 901 et seq., as amended by the inflation control act of October 2, 1942, 56 Stat. 765, chap. 578, 50 U.S.C.Appendix Supp. 11, § 961 et seq., 50 U.S.C.A.Appendix § 961 et seq., was fully discussed. See also Bowles v. Willingham, 64 S.Ct. 641, 88 L.Ed. 892, decided the same day.

Among other matters decided in the Yakus and Rottenberg cases [64 S.Ct. 664, 88 L.Ed. 834] was the proposition whether the act ‘if construed to preclude consideration of the validity of the regulation as a defense to a prosecution for violating it, contravenes the Sixth Amendment, or works an unconstitutional legislative interference with the judicial power.’ This question is at least analogous to the one determined by the trial judge in the instant case.

The opinion of the court in the Yakus and Rottenberg cases directed attention to section 204(d) of the act, 50 U.S.C.A. Appendix § 924(d), which gives the emergency court of appeals ‘exclusive jurisdiction to determine the validity of any regulation or order issued’ et cetera and the prohibition therein that:

‘Except as provided in this section, no court, Federal, State, or Territorial, shall have jurisdiction or power to consider the validity of any such regulation, order,’ et cetera.

Our court has recently said in Book Tower Garage, Inc. v. Local No. 415, International Union, U.A.W.A.(C.I.O.), 295 Mich. 580, 587, 295 N.W. 320, 323, that: ‘Controlling interpretation of Federal law rests with the Supreme Court of the United States,’ citing Michigan authorities and that: ‘It is the duty of the State courts as well as the courts of the Nation to guard and enforce every right secured by the Federal Constitution,’ citing authorities. We are ‘bound thereby’ because of the requirement of Article 6 of the Constitution.

We said in McPherson v. Secretary of Staste, 92 Mich. 377, 393, 52 N.W. 469, 474,16 L.R.A. 475, 31 Am.St.Rep. 587:

‘There is no doubt of the rule that where a law of a state conflicts with a law of Congress in a matter in reference to which congree has the right to legislate the state law must give way to the extent of such conflict. Robinson v. Rice, 3 Mich. [235], 242.’

The district court of the eleventh judicial district of the State of Idaho, in and for the county of Twin Falls, in the unreported case of Twin Falls County v. Hulbert, decided March 13, 1944, in reply to the argument that the Emergency Price Control Act does not by its terms apply to a State, its political subdivisions and agencies, said:

‘The cases where State statutes have come in conflict with Federal enactments have been numerous and the courts have uniformly held that under such circumstances the State Statute must be construed as either void, modified or amended as the circumstances require. The mere fact that the emergency price control act and the regulations promulgated thereunder are in conflict with the State statute, I.C.A. § 30708, requiring the county commissioners to sell to the highest bidder does not make that part of the act unconstitutional. The Federal enactment is paramount and has the effect of modifying the State statute. The sale must be made to the highest bidder as provided by the State statutes but not for a price in excess of the ceiling price fixed under the emergency price control act. In case of several bids at the ceiling price the county commissioners have the right to determine the bid to be accepted and the fairest way to make such determination would appear to be by lot. The county commissioners and this court are just as much bound by the Federal enactment as by a State statute and in case of conflict must recognize that the Federal enactment is paramount.’

In Lockerty v. Phillips, 319 U.S. 182, 63 S.Ct. 1019, 87 L.Ed. 1339, the court held that Congress has the power to provide that equity jurisdiction to restrain enforcement of the emergency price control act, so far as Federal courts are concerned, is restricted to the emergency court of appeals, but it did not pass upon the prohibition in the act against the exercise of jurisdiction by State courts in the premises, that question not being in issue. In Bowles v. Willingham, supra [64 S.Ct. 646, 88 L.Ed. 892], it met the Staste question and held such jurisdiction could be withheld in controversies arising ‘under the Constitution and laws of the United States.’

In the Yakus and Rottenberg cases the rule in the Lockerty case was followed and applied. The minority, like the trial judge in the instant case, made much of the threat of suspension of judicial duty ‘to guard whatever liberties will not imperil the paramount national interest.’ See dissent of Mr. Justice Rutledge and Mr. Justice Murphy.

I cannot conceive that the foundation stones of constitutional liberty are in danger merely because the creditors of a partnership in the process of dissolution are denied the benefit of an excessive price on the receiver's sale of used machinery when all other sellers, because of the exigencies of war, may not obtain a like benefit. Nor can I believe that the integrity of the judicial power of sovereign States is thereatened by compliance with a temporary wartime act of congress and the rules and regulations of the Federal agency charged under that act with the duty and responsibility of maintaining ‘in the interest of the national defense and security and necessary to the effective prosecution of the present war,’ those price controls which are designed to prevent inflation.

We have long been accustomed to the doctrine of comity between State and Federal courts and that of comity between sovereign States and the Federal government. No fundamental liberties will be endangered by the judicial application of this doctrine to problems affecting the national economic good.

The order of the trial judge in the instant case is in direct conflict with the reasoning and intendment of the court in the Lockerty, Yakus and Rottenberg cases, supra, and being in contravention of the ‘supreme Law of the Land,’ Constitution of the United States, Art. 6, should be vacated and the cause remanded for further proceedings in conformity to this opinion.

It is so ordered but without costs.

STARR, BUTZEL, and SHARPE, JJ., concurred with BUSHNELL, J.

REID, Justice.

This is an appeal from the order and decree of the chancery court confirming reportof receiver Ona Dunlop of sale of assets in the winding up of the affairs of a partnership which had engaged in manufacture. We quote from the opinion of the trial judge:

‘The exact question involved is this: Does the act of congress creating the office of price administration give to that office power to fix maximum or ceiling prices which may be realized upon liquidation sales in state courts which are carried out in every particular lawfully under state laws?

‘The carrying on of a continuing business by a receiver appointed by a state court is not involved here. Nor does this case require the examination of the rules and regulations adopted by the price administrator. Those regulations can rise no higher than their source. The act of congress is that source. Congress may by its acts, within its delegated powers, create administrative bodies. It may delegate the power to those bodies to adopt administrative rules and regulations, but those rules and regulations must be within bounds and rules laid down by congress in its enabling acts. To allow such bureasus and administrative bodies to go beyond the carrying out of the orders of congress would be to permit the former to legislate and the latter to delegate the power to legislate. * * *

‘This court takes judicial notice of acts of congress, treaties, and presidential proclamations. These are the law of the land. It does not take notice of administrative rules and regulations. They are not the law of the land. They are merely...