Tuskegee Homes Co. v. Oswalt

• Decision Date: 13 June 1946
• Docket Number: 5 Div. 411.
• Citation: 248 Ala. 64,26 So.2d 865
• Parties: TUSKEGEE HOMES CO. v. OSWALT.
• Court: Alabama Supreme Court

26 So.2d 865

248 Ala. 64

TUSKEGEE HOMES CO. v. OSWALT.

5 Div. 411.

Supreme Court of Alabama

June 13, 1946

Jack Crenshaw, of Montgomery, and Wm. M. Russell, of Tuskegee, for appellant.

Wm. C. Hare, of Tuskegee, and Richard H. Cocke, of Alexander City, for appellee.

FOSTER Justice.

This is an appeal from a decree sustaining a demurrer to a bill in equity as last amended, and dismissing the cause. The bill alleges in substance that complainant constructed a number of houses owned by it and rented to defense workers, and in doing so purchased from respondent 830,000 feet of yellow pine lumber; that respondent was engaged in the business of manufacturing and producing such lumber under authority of the War Production Board for sale to complainant for that purpose; that their agreement was that the sale price to complainant should be the maximum legal prices under applicable price regulation; that complainant was not in the lumber business and relied on respondent to calculate properly such prices for each invoice rendered to complainant for such lumber as sold; and that complainant assumed that this had been done and paid such invoices as rendered; that respondent had sole charge of the records showing the grade of lumber and had sole knowledge of the facts necessary to determine which price regulation was applicable so as to fix the price; that there were two such regulations here material, No. 19 applicable 'for direct mill sales of Southern pine lumber,' and No. 215 applicable 'for distribution yard sales of lumber,' that No. 19 is extremely complicated and the calculation required numerous mathematical computations, based upon separate tables, one as to its species and another as to its dimensions and finish. The bill analyzes the nature of the computations showing that they were numerous and complicated. That regulation No. 19 provided for retail sales by mill producers calculated on the wholesale price as outlined, plus an addition for the retail sale. Regulation No. 215 'established maximum prices for sales by retail distribution yards,' that is by those who buy from producers rather than those who produce and retail their own lumber. The price by the yard distributor was based upon the price he had to pay under regulation No. 19, plus an addition for handling charge and a percentage for profit; that complainant left the calculation of the maximum legal price entirely to respondent, and relied upon his using the proper price regulation, and was without knowledge as to the details of respondent's operations necessary to determine which price regulation was applicable, and relied upon respondent and assumed that he would use the proper price regulation that though he was required by law to show on the invoices the grade and species of all the lumber, he did not comply with that requirement and did not show on the invoices the grade of the lumber; that without that knowledge complainant could not calculate the proper legal maximum prices; that the lumber was on some three hundred separate invoices, some including many different items; that the calculation is extremely complicated, embracing over three thousand different items, with the prices varying according to grade size, kind, length, dimension and condition of the lumber: each such item must be separated, considered and computed upon the appropriate price regulation plus required additions or deductions: that this account should be stated in equity by a trained master and it would be impossible for a jury to do so. That complainant has learned since paying its invoices that respondent has calculated said prices on the wrong maximum regulation in using regulation No. 215 applicable to yard distribution, while actually respondent was a mill producer and entitled only to the maximum legal price under regulation No. 19, applicable to direct mill sales, plus an amount for the retail sales. That such course of dealing amounted to a constructive fraud upon complainant by which he collected much more than was due him under the contract. That an accounting is necessary to determine the amount of such excess since the records as to the grade and condition of the lumber are exclusively in possession of respondent and not shown on the invoices.

In the alternative, that the Emergency Price Control Act of Congress as amended provided that if a seller violated the applicable price regulations he should be liable to suit for three times the amount by which the amount collected exceeded the applicable legal maximum prices at the suit of the purchaser when the sales were for use or consumption other than in the course of trade or business; and when the sales were for use and consumption in the course of trade or business, at the suit of the price administrator for the benefit of the United States; that complainant purchased the lumber as a consumer and not for resale, and he did not resell it but consumed it in building houses which he owned; that a discovery is necessary to obtain the required information, and that it requires an extremely complicated computation of some three thousand items separately, which can only be done by a trained accountant.

The bill prays for a discovery, and a reference to a trained accountant to make the legal calculations and for a decree for the overcharges; or, in the alternative, for a true and accurate accounting of all sales showing the grades and the proper maximum prices calculated under regulation No. 19, and for an order of reference to a trained accountant to determine such overcharges, and for a personal judgment against respondent for treble damages plus court costs and attorneys' fees as provided by the Emergency Price Control Act, as amended or extended, 50 U.S.C.A.Appendix, § 909 et seq.

The grounds of demurrer which need be considered are that complainant has a plain and adequate remedy at law; that the bill does not show that respondent did not have a right to charge retail prices; that complainant was in pari delicto; that the allegations of fraud are insufficient and an accounting and discovery are not available under the facts alleged; and to the second aspect, an additional ground that it shows that the purchases were for use or consumption in the course of trade or business.

The decree of the court sustained the demurrer without specification or opinion, and dismissed the cause out of court.

Discovery.

The equity of the bill cannot rest on the principle of discovery in aid of a common-law right of action. It does not allege or show that 'essential and material facts are within the exclusive keeping of the defendant and can be proved in no other way except 'by the defendant's answer." Pate v. Bruner, 243 Ala. 648, 11 So.2d 356, 358; 8 Ala.Dig., Discovery, k19; Employers Ins. Co. v. Rhodes, 240 Ala. 226, 198 So. 616; Cleveland Storage Co. v. Guardian Trust Co., 222 Ala. 210, 131 So. 634.

But the allegations necessary to support an independent bill for discovery are not required when the discovery is sought in aid of another and primary equity. Shelton v. Timmons, 189 Ala. 289, 66 So. 9; Hale v. Cox, 233 Ala. 573, 173 So. 82; Cleveland Storage Co. v. Guardian Trust Co., supra.

Accounting.

The allegations are sufficient to invoke jurisdiction for an accounting on account of the claim for overcharges as a primary equity. A case for equitable relief on that claim is made though the demand is such as to support an action at law, and though no discovery is necessary, 'on facts showing a complicated nature of the account' and that the complication is so great that the remedy at law is inadequate, though the accounts to be examined are on one side only. First National Bank v. Lowery, 234 Ala. 56, 173 So. 382; Comer v. Birmingham News Co., 218 Ala. 360, 118 So. 806; Beggs v. Edison Electric Illuminating Co., 96 Ala. 295, 11 So. 381, 38 Am.St.Rep. 94; Pollak v. Claflin, 138 Ala. 644, 35 So. 645; Virginia & Ala. M. & M. Co. v. Hale, 93 Ala. 542, 9 So. 256.

The bill sufficiently alleges the necessity for an equitable accounting by a trained accountant. Comer v. Birmingham News Co., supra.

The claim for overcharges.

It is provided by section 205(e) of the Act, 50 U.S.C.A.Appendix, § 925(e), in substance that for an overcharge a person who buys 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, for an attorney's fee and in addition, whichever of the following sums is the greater--(1) three times the amount of the overcharge or (2) an amount not less than $25 nor more than $50 as the court may determine. But 'that such amount shall be the amount of the overcharge or overcharges or $25, whichever is greater, if the defendant proves that the violation of the regulation, order, or price schedule in question was neither wilfull nor the result of failure to take practicable precautions against the occurrence of the violation.' It is also provided that if the buyer is not entitled to bring the action, the administrator may institute such action on behalf of the United States. This has been held in two cases by the same judge in New York to mean that any action for an overcharge must be brought by the administrator if the buyer purchased for use or consumption in the course of trade or business,--Alba Trading Co. v. Constants, 181 Misc. 778, 47 N.Y.S.2d 138; Marrow Mfg. Co. v. Eightinger, 185 Misc. 900, 58 N.Y.S.2d 11,--and cannot base his claim on fraud.

But in another case by another judge in the same court--Compania Importadora v. Caldwell, 185 Misc. 902, 58 N.Y.S.2d 745,--it was held that a buyer for use or consumption in the course of trade or business, although the statute does not so provide, may recover of defendant his actual loss...