United States v. Hougham
| Decision Date | 29 March 1962 |
| Docket Number | No. 17467.,17467. |
| Parties | UNITED STATES of America, Appellant, v. E. B. HOUGHAM et al., Appellees. E. B. HOUGHAM et al., Appellants, v. UNITED STATES of America, Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
William H. Orrick, Jr., Asst. Atty. Gen., Morton Hollander, Herbert E. Morris and Anthony L. Mondello, Attys., Dept. of Justice, Washington, D. C., and Francis C. Whelan, U. S. Atty., Los Angeles, Cal., for appellant.
Conron, Heard & James, by Calvin H. Conron, Jr., Bakersfield, Cal., for appellees.
Before POPE, BARNES and BROWNING, Circuit Judges.
This is an appeal and a cross-appeal from an action brought by the United States1 to recover damages from defendants2 on the ground that they had fraudulently obtained government surplus property in violation of Section 26 of the Surplus Property Act3 (58 Stat. 765, 50 App.U.S.C.A. § 1635, 1946 Ed.), repealed and re-enacted by § 209 of the Federal Property and Administrative Services Act of 1949 (63 Stat. 377, 392, 40 U.S. C.A. § 489). The district court found defendants guilty as charged on October 18, 1957 and awarded plaintiff damages under Section 26(b) (1) of the Act in the principal sum of $8,000, plus interest. On appeal, this court rejected plaintiff's contention that it was entitled to choose its remedies under subsections (1), (2) or (3) of Section 26(b) of the Act4.
On certiorari, the Supreme Court reversed, holding that plaintiff was entitled to elect the appropriate measure of damages under the Act, and remanded the cause to the district court "with directions to enter judgment for the plaintiff under § 26(b) (2) of the * * * Act * * *."5
On remand, the district court, on April 11, 1961, entered judgment against defendants in the total principal sum of $159,025.32, less the $8,000 previously awarded and paid by defendants. The district court granted interest on that portion of the judgment over and above $8,000 at seven per cent to run from April 11, 1961 to the date of payment; interest on the additional $151,025.32 from October 18, 1957, the date of the original district court judgment, was denied. The district court denied defendants' claim that plaintiff was only entitled to one-half of the principal amount awarded by the court under Section 26 (b) (2).
Both parties have appealed. This court has jurisdiction to review the judgment entered below under the provisions of Section 1291 of Title 28, United States Code.
The facts need not be reiterated in this opinion. The material facts remain just as they are reported in the Supreme Court's opinion, and as reported in this court's earlier opinion in this case. The parties do not here dispute the facts.
The only question raised herein is one of law. The Supreme Court reversed this court's judgment and held that under the express language of Section 26 (b) (2) of the Act, plaintiff United States, and only that plaintiff, was entitled to elect the theory of damages under which it wished to recover in a particular case brought under this Act; that the courts could not make this choice for plaintiff. (364 U.S. at 317, 81 S.Ct. 13.) The Supreme Court held:
"The judgment is therefore reversed and the cause remanded to the District Court with directions to enter judgment for the plaintiff under § 26(b) (2)." (364 U.S. at 318, 81 S.Ct. at 19.)
Both parties contend the district court committed error in giving effect to the Supreme Court's mandate. We conclude there was no error and deny each appellant relief.
Plaintiff contends that the district court erred in denying plaintiff interest at the legal rate on $151,025.32 from October 18, 1957 (the date of entry of the original district court judgment in this case) to April 10, 1961 (the date of entry of the judgment on remand from the Supreme Court, and the judgment from which this appeal is taken).
In other words, plaintiff contends it was entitled to post-judgment interest on the additional damages awarded by the district court on April 10, 1961 from the date of entry of the original (October 18, 1957) judgment. The district court allowed post-judgment interest on the additional damages only from and after entry of its April 10, 1961 judgment. In so doing, plaintiff contends, the district court erred in its application of Section 1961 of Title 28, United States Code,6 to the facts of this case.
There is conflict between the circuits on this question. Each party claims a "white horse case" of its own, and attempts to distinguish away or devitalize its adversary's mount. Plaintiff claims Louisiana & Arkansas Ry. Co. v. Pratt, 5 Cir. 1944, 142 F.2d 847, 153 A.L.R. 851, is the better case and its "equity of the statute" rule should be made the law of this circuit. Defendants, on the other hand, claim Briggs v. Pennsylvania R. Co., 2 Cir. 1948, 164 F.2d 21, 1 A.L.R.2d 475, affirmed 334 U.S. 304, 68 S.Ct. 1039, 92 L.Ed. 1403,7 is the better law, and should be made the law of this circuit.
This court must determine what meaning it gives to Section 1961, under the facts here presented. We hold the district court correctly applied Section 1961.
That post-judgment interest should be calculated from the date of the entry of the judgment in which the money damages, upon which interest is to be computed, were in fact awarded, does not do violence to the language of the statute. To illustrate with the facts of this case, to compute interest from April 10, 1961 (rather than from October 18, 1957) when the additional $151,025.32 was in fact awarded to plaintiff, does not violate the terms of Section 1961.
The force of plaintiff's argument lies in equitable precepts. But the courts of appeal may make due allowance for all the equities urged by plaintiff, and still read the statute as is done here; for the courts of appeal may, when justice requires, frame their mandates so that allowance can be made for all of those exceptional factors and circumstances urged by plaintiff. This still allows for certainty of meaning in the statute. Whenever the district court is to apply the statute, it can do so with certainty; if the statute is not to be applied, the court of appeals can expressly so order in its mandate.
In the instant case, the mandate makes no mention of interest. And there is no direct connection between the monetary loss to plaintiff and the amount of damages awarded.8
Defendants contested their liability on appeal from the original judgment. On appeal, plaintiff was vindicated, when, and only when, the proper judgment became final. Plaintiff claims that this interpretation will cost it a loss of $37,000 in interest. Such a consequence cannot be escaped in any case where the amount of damages cannot be precisely known prior to final judgment. The law is not perfect. But plaintiff, seeing now only this loss, loses sight of the fact that through the appellate process it gained $151,025.32 which, but for the "imperfect law," it would have lost.
The judgment as to interest commencing on the date the amount became finally fixed is affirmed.
Defendants contend the district court erred in requiring them to pay damages of $159,025.32, less the $8,000 damages previously paid by them. Does this judgment violate Section 26(b) (2) of the Act?
Defendants maintain that since they actually paid $79,512.66 for the goods fraudulently obtained, this amount must be set off or credited to them in the award under Section 26(b) (2), and that, consequently, the judgment below should only require them to pay that amount once again. Otherwise, defendants contend, they are paying three-times, rather than twice, "the consideration agreed to be given."
Section 26(b)9 provides in pertinent part as follows:
Payment of damages under Section 26 (b) (2) is to equal, "as liquidated damages," the amount of a sum "equal to twice the consideration agreed to be given." Here it is not disputed that the consideration agreed to be given by the defendants, and actually paid for the goods fraudulently obtained by them, totaled some $80,000.10 In our opinion, it follows that the district court correctly assessed liquidated damages in the sum of $160,000, or twice the consideration agreed to be given.
On the previous appeal, appellants urged that Section 26(b) (2) did not apply to cash sales, but only to those where the price had not been paid and the goods had not changed hands. That Section 26(b) (2) applies to "executed" (cash paid) sales as well as "executory" (no cash paid and no goods delivered) sales, is established by the Supreme Court. (364 U.S. 310, at 318, 81 S.Ct. 13.) "Plainly", say that Court, ...
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