United States v. Beaty Chevrolet Co., Civ. A. No. 1850.

• Decision Date: 16 November 1953
• Docket Number: Civ. A. No. 1850.
• Citation: 116 F. Supp. 810
• Parties: UNITED STATES v. BEATY CHEVROLET CO., Inc., et al.
• Court: U.S. District Court — Eastern District of Tennessee

116 F. Supp. 810

UNITED STATES v. BEATY CHEVROLET CO., Inc., et al.

Civ. A. No. 1850.

United States District Court E. D. Tennessee, N. D.

November 16, 1953.

John C. Crawford, Jr., U. S. Dist. Atty., John F. Dugger, Asst. U. S. Dist. Atty., Knoxville, Tenn., for plaintiff.

J. W. Baker, Poore, Cox, Baker & McAuley, Knoxville, Tenn., for defendants.

ROBERT L. TAYLOR, District Judge.

This is a suit by the Government against the defendants, Beaty Chevrolet Company, Inc., and S. B. Beaty, to recover a forfeiture of $2,000 and damages in double the amount of $1,589.10 accruing under Title 31 U.S.C.A. § 231, as amended, commonly referred to as the False Claims Statute. Jurisdiction is conferred by 28 U.S.C., secs. 1345 and 1355, and 31 U.S.C.A. § 232.

Recovery is sought on the grounds that the defendants submitted to the Veterans' Administration a claim for payment for an automobile that included charges for a radio in the amount of $93 and seat covers in the amount of $42.50; that the Government paid for the automobile which was sold by the defendants to William P. Eubanks, a war veteran, under authority of Public Law 663, 79th Congress, 60 Stat. 910, that these two items were not received by the veteran; that the defendants executed a certificate including the named items and presented the same to the Veterans' Administration, knowing that the certificate was false, and that they thereby rendered themselves liable for the penalties provided for in the False Claims Statute.

Although the defendants admit that the invoice submitted to the Veterans' Administration included the above named items and that the veteran did not get them as a part of the purchase price that the Government paid for the automobile, they say that neither the Government nor the veteran was cheated. Their explanation is that the purchase price of the car was increased by the factory with O. P. A. approval, after the purchase order was signed by the veteran; that under the specific wording of the purchase order the veteran had the right to rescind the order or to pay the increased price; that the veteran elected not to rescind, but to take the car at the increased price and without the radio and seat covers, and that the Government by paying the $1,589.10 paid no more than the Veterans' Administration had approved and the law authorized.

The veteran signed the application for the car on September 20, 1946, and his eligibility certificate therefor was issued on July 2, 1948. On July 3, 1948, he signed the purchase order that was accepted by the defendants on the same date and which provides among other things as follows:

"It is further understood and agreed: The order on the reverse side hereof is subject to the following terms and conditions which have been mutually agreed upon:

"1. Chevrolet motor division— General Motors Sales Corporation has reserved the right to change the list price of new Chevrolet motor vehicles without notice and in the event that the list price of the new car ordered hereunder is so changed, the cash delivered price, which is based on list price effective on the day of delivery, will govern in this transaction, but if such cash delivered price is increased the purchaser may, if dissatisfied with such increased price, cancel this order. * * *"

The purchase order contract included the following:

                "1948 Chevrolet Fleetline Aerosedan
                    (2-door)
                F.O.B.                               $1225.00
                Freight                                 77.00
                Factory Delivery & Handling             73.00
                Radio installed                         93.00
                Seat Covers installed                   42.50
                15" wheels and tires installed          15.75
                Two Tone Paint                           9.85
                Heater and defroster                    53.00
                                                     ________
                      Net total                      $1589.10"
                

The purchase order contract was sent to the Veterans' Administration and approved and the automobile ordered from the factory. The veteran's need for an automobile was urgent, due to the difficulty he was experiencing in getting to his work at Oak Ridge from his home in Knoxville. The veteran visited the defendants from time to time at their place of business between the time of the purchase order contract and the time of delivery, urging as quick delivery of the car as possible.

A few days before the automobile arrived from the factory the O. P. A.-approved retail price was increased by the factory in the sum of $115, plus $6 additional Federal excise tax. Upon arrival of the automobile Eubanks was notified and immediately came to the defendants' place of business. He was advised by Pless, the salesman who handled the transaction for the defendants, of the price increase and was told that due to the increase the automobile could not be delivered for the original price of $1,589.10 with the radio and seat covers included. He was likewise advised that it was defendants' understanding that the total delivery price of the automobile could not exceed $1,600 under the Veterans' Administration regulations. Eubanks wanted the car in any event and was willing to take it without radio and seat covers. The radio and the seat covers, listed to cost $135.50, were omitted. This left the company owing $14.50, or the difference between the cost of those accessories and the factory increase of $121. Eubanks was allowed to choose another accessory—wheel rings—which carried a retail price of $15. This caused the total price of the automobile to equal $1,589.60, or 50 cents more than the expenditure approved by the Veterans' Administration. The wheel rings were reduced to $14.75 and the price of the 15-inch wheel tires which were charged at $15.75 on the original purchase order, were reduced to $15.50. This made the total bill $1,589.10, or the exact amount of the expenditure approved by the Veterans' Administration. An invoice was sent to the Veterans' Administration which conformed to the original purchase order, including radio and seat covers at $93 and $43.50, and called for the payment of $1,589.10. The invoice did not include the wheel rings or the increased purchase price of the automobile. The date of the invoice is August 27, 1948. The defendants gave Eubanks an invoice on the same date...