Case Title: JOHNSON LBR. CORP. v. Leonard

Citation: 192 Or. 639, 236 P.2d 926

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1951-06-13T00:00:00Z

Document:
Reversed January 31, 1951.
Former opinion reversed and judgment affirmed June 13, 1951.
Petition for rehearing denied October 17, 1951.
*642 W.C. Winslow and Roy Harland, both of Salem, argued the cause and filed a brief for appellants.
Frank E. Nash, of Portland, argued the cause for respondents. With him on the brief were King, Wood, Miller & Anderson, of Portland.
Before LUSK[*], Chief Justice,  and ROSSMAN, HAY, LATOURETTE and TOOZE, Justices.
Appellants' petition for rehearing denied October 17, 1951.
REVERSED.
LATOURETTE, J.
Plaintiff in the trial court recovered judgment against defendants in the sum of $7,737.45, this being the amount claimed owing from defendants arising out of the operation of a broom handle manufacturing business on plaintiff's premises in Toledo. The case was tried by the court without a jury. The question before us is whether plaintiff, in making the charges (the basis of the judgment), violated the Emergency Price Control Act (hereinafter referred to as E.P.C.A.) promulgated by Congress in 1942.
It is admitted in the pleadings and by the evidence that from December, 1941, until June 13, 1947, plaintiff *643 furnished defendants a lath mill and plantsite at its sawmill in Toledo, and also power, light, water and steam necessary for the operation of said lath mill and for the handle factory and dry kilns of defendants located on the site, and also fire protection and watchman services and woodstock suitable for the production of handles in defendants' said mill and factory. It is further admitted that plaintiff charged defendants, from the inception of the operation up to January, 1946, the sum of 13.3 cents per thousand feet and 8.5 cents per thousand feet on the basis of fir logs and spruce logs, respectively, that were cut in plaintiff's main mill.
The above operation was carried on under such price arrangement until the 1st day of January, 1946, when plaintiff upped its charges to 29 cents per thousand feet. Defendants paid to plaintiff currently on their account from month to month until they [defendants] terminated the contract in June, 1947, when there was a balance owing plaintiff from defendants in the sum of $7,737.45, unless E.P.C.A. forestalls its recovery.
Defendants in their answer pleaded the enactment by Congress of the Emergency Price Control Act of 1942, the establishment of the Office of Price Administration (O.P.A.) thereunder, and the issuance of a General Maximum Price Regulation by the Administrator, which was in effect beginning May 11, 1942, and ending November 10, 1946, and which regulation, among other things, recited:
Plaintiff in its reply admitted the allegations with reference to the E.P.C.A. and O.P.A. as above set out.
It is the contention of defendants that when plaintiff raised the price of 13.3 cents and 8.5 cents, respectively, to 29 cents in January, 1946, it violated the O.P.A. regulations aforesaid, and, for that reason, it cannot collect the $7,745.31 claimed by it in this case, the amount being reflected in the increase to 29 cents per thousand feet. Plaintiff counters that O.P.A. does not apply. Defendants by counterclaim allege an overpayment to plaintiff, by reason of O.P.A., of the sum of $9,537.16, and seeks its recovery.
One of defendants' assignments of error is as follows: "The Court erred in not applying the OPA regulations to the dealings of the parties, as shown by the record in this case."
*645 The important question before us is whether plaintiff sold to defendants, under the arrangement between them, commodities within the purview of the E.P.C.A.
Congress, under 50 U.S.C.A. App. § 942, p. 445, defined the term "commodity" as follows:
A case in point, but not cited, is Carothers v. Bowles, 148 F. (2d) 554, 555, 325 U.S. 875, 89 L. Ed. 1993, 65 Sup. Ct. 1556, decided by the United States Emergency Court of Appeals. The question before the court in that case was whether, in furnishing a "park and lock" type of parking, defendants were providing automobile storage service. It was the position of plaintiffs that they merely rented to their customers land on which the latter parked their cars, and that the operation involved did not constitute storage within the purview of the Act. The court, in dismissing this contention, said:
1. The above statute defining services rendered in connection with the storage of a commodity, as a commodity, also defines services rendered in connection with the processing of a commodity, as a commodity. It thus remains to be seen whether or not the operation in the present case included services rendered in the processing of a commodity, to-wit: woodstock. Webster's dictionary defines "process" as "a method of operation or treatment, esp. in manufacture; as * * * a process of making steel." See Bedford v. Colorado Fuel & Iron Corporation, 102 Colo. 538, 81 P. (2d) 752; 34 Words and Phrases, Processing, 165. When *647 plaintiff sold to defendants woodstock, it sold a commodity; when plaintiff furnished to defendants a lath mill and power, light, water and steam necessary for the operation of the lath mill, handle factory, and dry kilns, and rendered to defendants fire protection and watchman services, it was furnishing services to defendants in connection with the processing of woodstock into handles then being manufactured by defendants.
Plaintiff does not seriously dispute that defendants were processing woodstock into handles by the use of the following language found in its brief:
Plaintiff resists the application of O.P.A. on the following grounds stated in its brief:
We agree that charges made for commercial buildings, manufacturing plants and commercial real property, as such, were never subject to O.P.A. control, but where the sale of commodities and services is had, *648 as in the case at bar, O.P.A. control definitely applies under the express provisions of the Act.
The case of Automatic Fire Alarm Co. v. Bowles, supra, cited by plaintiff, has no application to the question before us. In that case the plaintiffs were engaged in the business of rendering fire alarm protective service. The court said that:
The court held that the services rendered by the plaintiff in that case were not expressly directed by the Act to be considered as commodities, and, therefore, the plaintiffs' operations did not come under O.P.A.
In the case at bar, as hereinbefore pointed out, the Act expressly provides for services rendered in the processing of commodities.
Plaintiff in its brief states the following:
and on that basis concluded that
The trial court evidently based its decision on Morrison v. Taylor, supra, relating to residential rentals and predicated on a different section of the law, the question being whether or not the building occupied by a tenant as a barber shop, with living quarters in connection therewith, was predominantly used for residential purposes or business purposes.
The predominance rule  if we may so term it  has no relevancy to the question before us as the law defining processing of a commodity, as a commodity, covers every step going to make up the processing and does not permit of segregation.
In the case of Carothers v. Bowles, supra ("park and lock" case), plaintiffs raised the same point, now advanced by plaintiff, that they were engaged in a rental proposition. From that opinion, at p. 555, we read: "Their contention is based upon the premise that they are engaged in the rental of real estate for business purposes and not the furnishing of a service." The court, as hereinbefore pointed out, rejected plaintiff's contention.
2. Since plaintiff's charges against defendants of 13.3 cents and 8.5 cents, respectively, were frozen by O.P.A. as of March, 1942, the increase in charges to 29 cents was in violation of the E.P.C.A., and, for that *650 reason, no claim could be predicated on such increase; therefore, the judgment must be reversed.
3. Defendants' next assignment of error is that "The Court erred in not making findings in appellant's favor, as requested by appellants and not entering judgment for appellants, on their counter-claim, for $9,537.16." Defendants cannot recover on their counter-claim because they were parties to the violation of the O.P.A. regulations in payment of the overcharges and are in pari delicto. Bowles v. Trullinger (CCA 9, 1945), 152 F. (2d) 191; Bowles v. Glick Bros. Lumber Co. et al. (CCA 9, 1945), 146 F. (2d) 566.
W.C. Winslow and Roy Harland, both of Salem, for appellants.
Frank E. Nash (King, Wood, Miller, Anderson & Nash, of Portland, on brief) for respondents.
W.C. Winslow and Roy Harland, both of Salem, for petition.
King, Wood, Miller, Anderson & Nash, of Portland, contra.
Before LUSK[*], Chief Justice, and ROSSMAN, HAY, LATOURETTE and TOOZE, Justices.
AFFIRMED.
LATOURETTE, J.
Plaintiff in its petition for rehearing raises the point that we erred in our former opinion in allowing to defendants "a credit or setoff against charges made after removal of O.P.A. controls." It was not until we called for supplemental briefs on the rehearing that we were enlightened on the point now made, and, upon due consideration, we hold the point well taken for the following reasons:
It will be observed that the parties entered into the contract involved in December, 1941. O.P.A. regulations *651 became effective in March, 1942, and terminated on November 10, 1946. Transactions continued between the parties until June, 1947. Plaintiff's amended complaint is predicated on a running account between the parties over the period, summing up the various charges made against defendants amounting to $46,958.15, and an aggregate payment on the account of $39,220.70, leaving a balance of $7,737.45, the amount for which plaintiff sued. The record, however, shows over the years that there were monthly charges and monthly payments made on the account, and on October 31, 1946, ten days before the end of O.P.A. regulations, the unpaid balance was $2,007.14. During November further charges aggregated $2,033.82, and on November 30, the account was reduced by payments to $2,040.96.
4. In our former opinion we held that both parties were in pari delicto because the law prohibited plaintiff from making overcharges and, likewise, prohibited defendants from paying overcharges. It is a well-recognized rule that a party to an illegal contract, made so by a prohibition of law, cannot obtain relief in law or in equity arising out of the contract. In 17 C.J.S., Contracts, 656, § 272, we read:
Again in 12 Am. Jur., Contracts, 721, § 212, we find:
In Mancourt-Winters Coal Co. v. Ohio & Michigan Coal Co., 217 Mich. 449, 451, 454, 187 N.W. 408, the Supreme Court of Michigan in a case somewhat parallel to the one at bar held that where a seller of coal increased the price in violation of federal law, both seller and purchaser were in pari delicto, and that the purchaser would not be permitted to offset illegal charges against subsequent legal charges. In that case arising during the first World War, plaintiff entered into a contract with defendant to furnish defendant with coal at a certain price per ton. Later on the president of the United States promulgated an order under the Lever Act freezing the price of coal at a certain figure. Thereafter the seller raised the price of coal above the presidential fixing order, which increased price was voluntarily paid by the defendant for coal thereafter delivered. Accounts were squared between the parties up to March, 1918. Thereafter plaintiff continued to deliver coal to defendant in March and April of that year, whereupon plaintiff demanded payment for the March and April deliveries. Quoting from the opinion, we read:
The court further said:
In a long line of decisions, beginning with Ah Doon v. Smith, 25 Or. 89, 34 P. 1093, we have consistently held that a party to an illegal contract, such as we have in this case, is not permitted to obtain any relief arising out of an illegal contract.
5. As defendants made payments on the accounts rendered to them by the plaintiff, they were credited on the items of the account, both legal and illegal, and to permit defendants now to offset the illegal payments against future legal charges would in effect allow them *654 to recover illegal payments theretofore made, contrary to all the law on the subject.
The record shows that the charges made by plaintiff against defendants after O.P.A. control ceased in November, 1946, greatly exceeded the amount now sued for, so that the claim made by plaintiff in the present action is in reality based on legal charges made against defendants.
For the above reasons, the former opinion reversing the judgment of the lower court is hereby overruled, and the judgment of the trial court is now affirmed.
ROSSMAN, J.
A petition for a rehearing, filed by the defendants, contends:
We think that all of those contentions can be considered together.
As mentioned in our previous opinions, the plaintiff owns a sawmill, and the defendants are engaged in the manufacture of handles, such as broom handles. A by-product, produced in the plaintiff's manufacture of lumber, which the witnesses termed refuse, consists of edgings and slab wood. As that material falls from the saws it moves upon a conveyor into the plaintiff's lath mill where, until December of 1941, the plaintiff manufactured the suitable parts into lath.
The defendants, believing that they could profitably manufacture parts of the edgings and slab wood into handles, in the latter part of 1941 entered into negotiations with the plaintiff whereby they sought (1) the privilege of taking from the conveyor whatever part of the edgings and slab wood they wished; (2) possession of the lath mill; (3) possession of a large lot adjacent to the lath mill upon which they could erect a building which would house some of their operations; (4) the use of a spur track owned by the plaintiff; and (5) the power, steam, water and other facilities essential to their operations. When the negotiations had reached a favorable juncture, the plaintiff drafted and sent to the defendants a written instrument which it proposed the parties should sign as the memorial of their agreement. For a reason which the record does not disclose, the paper was never signed by either party, but December 1, 1941, the defendants took possession of the lath mill, building site and spur track. At the same time the plaintiff began to furnish them with power, water, steam and the other facilities mentioned *656 in the paper. Concurrently therewith the defendants erected upon the lot which we have mentioned a structure for housing a dry kiln and some of their machinery. In that way the course of transactions described in our previous opinions was begun.
It was not contemplated by the parties that the manufacture of lath should wholly cease when the defendants commenced their operations; to the contrary, it was agreed that the defendants should produce lath for the plaintiff in the lath mill upon request. The aforementioned writing says:
After the defendants took possession, lath was manufactured by them at the plaintiff's request from time to time, and they were credited for it upon the price scale mentioned in the words just quoted.
As is indicated by the foregoing, the defendants received from the plaintiff many facilities, such as power, water, steam, the lath mill, the building site *657 and the privilege of selecting from the conveyor edgings and slab wood. The aforementioned paper, in specifying the amount of compensation which the defendants should pay to the plaintiff, wittingly or unwittingly referred to all of the above as "wood stock", and then provided:
The findings of fact include the following:
6, 7. It will be noticed that, although those findings do not declare that the unwritten contract became effective through the process of offer and acceptance, they find that the parties agreed upon a basis of compensation which was the counterpart of that mentioned in the unsigned paper. We have referred to the latter, not for the purpose of departing from the findings, but because reference to the paper aids a delineation of the course of the transactions.
Referring to the second of the quoted findings, the defendants' brief states: "We assert there is no evidence to sustain this finding." However, the same brief says: "They seem to have agreed that the basic or minimum price should be 13.3 cents per thousand feet gross deck log scale of fir logs and 8.5 cents per thousand feet gross deck log scale of spruce logs." Obviously, a "basic or minimum price" contemplates that at times the charge will be more and at other times less than the "basic or minimum price". Since it envisions fluctuations, contracts which employ basic or minimum prices set forth a formula or method for the application of the "basic or minimum price". Although by the words which we quoted from the defendants' brief, the *659 defendants conceded that 13.3 and 8.5 cents, respectively, were the "basic or minimum" prices for fir and spruce "wood stock", their brief contains not a word which indicates the circumstances under which the "basic or minimum price" was to be charged and those under which a different price was applicable. The absence of any word upon that subject may be significant. We believe that substantial evidence supports the attacked finding, and that the latter is entitled to the controlling effect given to the verdict of a jury. We gave it such effect in our two previous opinions, and by reviewing the matter again have not been prompted by any doubt concerning the propriety of our course; our sole purpose has been to indicate clearly the basis upon which we will proceed from this point on.
When the parties began their relationship on or about December 1, 1941, Congress had not yet enacted the Emergency Price Control Act of 1942 (50 U.S.C.A. Appendix, §§ 901 et seq.) which received attention in our first opinion. As the latter states, the regulations did not become effective until May 11, 1942, and remained in effect until November 10, 1946. The plaintiff and the defendants continued their transactions until June 14, 1947, that is, for seven months and four days after the Emergency Price Control regulations had expired. After the repeal of the act, the month-by-month charges made by the plaintiff to the defendants aggregated $17,784.02, and the sums paid by the defendants to the plaintiff totaled $12,067.91. The difference between the two amounts is $5,716.11. However, at the beginning of November, 1946, the balance of the account was $2,021.34. When that amount is added to $5,716.11 we have $7,737.45, being the amount of the attacked judgment.
*660 Although the charges made by the plaintiff against the defendants after the termination of federal price control aggregated $17,784.02, that amount represents net charges only. Subsequent to November 10, 1946, the defendants produced lath and other items for the plaintiff for which they received credit to the extent of $2,562.85. That sum was deducted from the total charges before the latter were reduced to the net sum of $17,784.02.
We have quoted the finding of fact which states the agreement the parties effected governing the amount of the plaintiff's charges against the defendants. By reverting to the finding, it will be observed that the parties agreed that the amount of the charge should be graduated according to the market price of lath. When their agreement was effected, the market price of No. 1 lath was $3.50 per thousand pieces. However, by the time operations got under way the price had advanced to $4.50 per thousand pieces.
One of the exhibits consists of the statements which the plaintiff sent monthly to the defendants beginning with the commencement of the relationship, December 1, 1941. The statement, dated December 31, 1941, contains this entry:
*661 All of the subsequent statements were couched in similar terms and form.
The defendants made their payments, based upon the statements, to the plaintiff. Even the first statement notified the defendants that the charge made was higher than the basic charge; that is, that it was 25 per cent higher due to the fact that the market price of lath had advanced to $4.50 per thousand pieces.
The statement sent by the plaintiff to the defendants April 1, 1946, read as follows:
In the application of the basic or minimum price formula, the plaintiff, in 1946, began to charge for fir "wood stock" 29.9 cents, and, accordingly, the above charge for 9,300,103 feet of fir was determined at 29.9 cents per thousand feet. However, in harmony with the variable price which the unsigned paper set for lath, the defendants were given credit in the above statement at prices 80 cents and 48 cents higher for No. 1 and No. 2 lath than the basic prices of $2.00 and $1.20 specified in the sliding scale.
The above, in addition to the statements contained in our previous opinions, will suffice as a portrayal of the manner in which the parties operated after they began their relationship.
The defendants do not criticize the plaintiff's records nor the monthly statements rendered to them, with *662 the single exception of the price formula for "wood stock" which the plaintiff employed after January 1, 1946. The defendants concede that the entries in the monthly statements of credits and gross deck log scale were accurate. In fact, they find no fault with anything that was done, entered or charged prior to January 1, 1946. Their brief says: "The parties seemed to be pretty much in agreement until January of 1946." From the testimony given by the defendant, Charles H. Leonard, we quote:
Nothing occurred in 1946 with which the defendants take issue except the use by the plaintiff of the price schedule of 29.9 cents for fir "wood stock" and 19.1 cents for spruce "wood stock". Upon the issues presented at the present time they limit their criticism of the use of those prices to the period of January 1, 1946, to and including November 10, 1946. Upon the day last mentioned the Emergency Price Control regulations expired. The defendants do not contend that the price charged breached the agreement as the latter was found in the aforementioned findings of fact, but claim that it violated regulations promulgated by the administrator under the Emergency Price Control Act. According to them, the charge should have been made upon the basis which was employed when the Emergency Price Control Act became effective in 1942, that is, upon a basis of 25 per cent above $3.50.
The attacked judgment, as we have said, is in the amount of $7,737.45. We have also mentioned the fact that the parties continued their operations for seven months and four days after the Emergency Price Control *663 regulations had expired. The attacked judgment represents a balance which was owing June 14, 1947, when the relationship between the parties ended. If the balance of $7,737.45 arose out of transactions which were consummated after the regulations have expired, it is evident that the repealed regulations have no bearing upon the issues before us. We have mentioned the fact that after the repeal of the regulations the plaintiff made charges against the defendants which totaled $17,784.02. By adding to that total $2,562.85, which represents credits to the defendants for goods produced by them for the plaintiff, we have gross charges against the defendants in the total amount of $20,346.87. We have also mentioned the fact that after the repeal of the Emergency Price Control regulations the defendants paid the plaintiff sums totaling $12,067.91.
The balance of the defendants' account November 1, 1946, was $2,021.34. If it remained unpaid November 11, 1946, then that much of the charges made in the Emergency Price Control period was carried over into the period unaffected by the regulations. During the month of November, 1946, the plaintiff made charges against the defendants totaling $2,115.66 and gave them credit for items produced by them in the amount of $81.84. The net charge made against them was, therefore, $2,033.82. Since the federal regulations were in effect for only one-third of that month, it may be that only one-third of the charge arose in the period when the act was in effect. But we have no evidence upon that phase of the matter. By adding $2,033.82 to $2,021.34 (balance as of November 1, 1946), we have $4,055.16, which, presumably, represents the gross amount of the charges in issue which were made in the period when the price control regulations were in effect. *664 However, as we have noticed, the defendants paid the plaintiff, after the expiration of the regulations, $12,067.91. The payments were made by eight checks which were sent to the plaintiff at different times. The largest was in the amount of $5,000 and the smallest in the sum of $9.21. The payments were made after the defendants had received statements of the kind which we have quoted and were made in the same manner as all other payments had been made since the inception of the relationship in December, 1941. The defendant, Charles H. Leonard, who was the sole witness to appear for the defendants, swore that he knew that the plaintiff's charges violated regulations promulgated under the Emergency Price Control Act. The defendants make no claim that any of the eight payments were accompanied with directions given by them for the application of the payment. Likewise, there is no contention that after the plaintiff had appropriated the payment the defendants were ignorant of the application or protested that the payment should have been applied in some other manner. Mr. Leonard, as a witness, neither by direct statement nor even by intimation, indicated that the defendants found any fault with the application which the plaintiff had made of any payment. The record shows that the plaintiff appropriated all payments received in the same manner, that is, upon open account. To make matters entirely clear, we add that when the plaintiff began to receive payments for the period beginning January 1, 1946, when a material increase in the charges was made for the "wood stock", the payments were applied in the same manner as all payments which had been received since December 1, 1941, that is, upon open account.
Before pursuing further the matter of application of payment, we notice that the complaint avers in dual *665 form the cause of action: the first count is predicated upon an averment that the parties had an agreement which governed the compensation which the plaintiff should receive for the facilities which it delivered to the defendants; the second count is based upon quantum meruit. The answer, after first making admissions and denials, set forth affirmatively that the charges made by the plaintiff after the promulgations of the federal Emergency Price Control regulations were illegal and that the defendants had paid all lawful charges. The reply to the affirmative answer, after averring in separate amounts the charges and payments made in segregated periods beginning with December 1, 1941, and ending December 31, 1945, alleged:
Continuing, the reply set forth facts and figures intended to show that the balance of $7,737.45, for which judgment was sought, arose exclusively out of transactions which occurred after November 10, 1946. In that manner the issue of the application of payments was submitted.
The following is a detailed statement of the debits and credits beginning with November, 1946, and continuing through to the close of the parties' relationship:
In their petition for a rehearing, the defendants say:
The only possible items which could have been pending for payment November 30, 1946, when the defendants made their remittance of $2,000, mentioned in the quoted language, were (1) the balance of $2,021.34, which was carried over from October, and (2) the November net charges totaling $2,033.82. The November statement was dated November 30, 1946, and, unless it was received by the defendants before they delivered their check to the plaintiff on the same day, there was pending for payment only the October balance. Since the federal price regulations expired November 10, it is likely that at least a part of the November charge of $2,033.82 arose in the price-regulated period. But, as we have seen from the language just quoted, the defendants say that "it is wholly impossible to make any segregation at all as of the date O.P.A. was lifted". Therefore, both the balance of $2,021.34 and the new charge of $2,033.82 were, according to the defendants, illegal charges. Accordingly, when they handed to the plaintiff on November 30 their check for $2,000, there was no "legal claim" (we took that term from defendants' above-quoted language) upon which the remittance could have been applied.
Before considering the legal principles which govern the application of a payment received by a creditor, we shall summarize as follows the facts developed by the foregoing narrative: (1) On November 30, 1946, when the defendants paid the plaintiff $2,000, the plaintiff had no "legal claim" against the defendants (assuming that the Emergency Price Control Act governed the transactions); (2) the $2,000 was remitted by the defendants to the plaintiff in the same manner as *668 all other remittances had been made; that is, without direction as to application; (3) the plaintiff appropriated the $2,000 payment in the same manner as it had all previous payments, that is, upon the running account; (4) the defendants presumably knew of the manner in which all previous payments had been applied; (5) the defendants made no objection or protest concerning the application of the November payment; and (6) the defendant, Charles H. Leonard, sole witness for the defendants, did not claim that the defendants took any exception whatever to the application of the November payment.
8. We think that an inference is warranted that when a debtor makes a monthly remittance in the same manner as he has made similar remittances for more than five years, and knows that his creditor has regularly appropriated the monthly payments to the running open account, he intends that the current payment shall be applied in the same way as the previous ones. Especially do we believe that the inference is warranted when the debtor has never objected to the applications. His silence must be deemed acquiescence.
We take the following from Corbin on Contracts, § 1231:
From 40 Am. Jur., Payment, § 112, page 793, we quote:
According to 70 C.J.S., Payment, § 61, page 266:
Restatement of the Law, Contracts, § 387, develops in the following language the principle with which we are concerned:
*670 From the Comment which follows that statement, we take this:
The following illustration accompanies § 387:
Restatement of the Law, Contracts, § 392, says:
9. This court has held that one who owes more than one debt to a creditor may, upon making a payment to him, direct the application of the payment: Fatland v. Wentworth & Irwin, Inc., 149 Or. 277, 40 P.2d 68, 97 A.L.R. 339, and Anderson v. Griffith, 51 Or. 116, 93 P. 934. If the debtor gives no directions, the creditor *671 may apply the payment to any account which he selects, provided the account upon which he applies it is a lawful demand: Fatland v. Wentworth & Irwin, Inc., supra, and Anderson v. Griffith, supra.
10. In Phillips v. Moses, 65 Me. 70, the defendant, a retail druggist, made purchases, including some illegal items, from the plaintiffs, wholesale druggists, on an open account in a period which extended from 1868 to September 13, 1873. The action was instituted to recover an alleged balance of $3,481.68. The total purchases, $21,711.28, included spirituous liquors for which $6,842.26 was charged. The liquor transactions were in violation of law. The payments made from time to time were unaccompanied with any designation as to the item to which the payment should be applied and were appropriated to the entire account. The defendant testified that he intended that the payment should be applied to the legal part of the account. In ordering a new trial after the jury had returned a verdict for the defendant, the court, after holding that a purchaser who makes payment for illegal goods has no right to recover the purchase money, said:
Continuing, the court held that a debtor has a right to control the application of any payment which he makes
We take the following from Richardson v. Woodbury, 66 Mass. 279:
The decision, written by Chief Justice Shaw, declared:
In Treadwell v. Moore, 34 Me. 112, the court said:
11. We are in accord with the views expressed in the authorities from which we quoted. We believe that a debtor has a right to require that a payment which he makes shall be applied upon an illegal claim. We also believe that when the application has been made in obedience to his wishes, he cannot change the appropriation without the creditor's consent.
12. Without further analysis of the evidence, we express the conviction that it unequivocally requires a conclusion that the defendants desired to have their payments applied in the exact manner in which the plaintiff applied all of them; that is, upon the open account.
It is true that the findings of fact contain no finding *674 upon the foregoing; however, none was requested, and those which were entered support the attacked judgment.
From the above it will be seen that the balance of the account for which judgment was rendered was based wholly upon transactions which occurred after the Emergency Price Control regulations had expired. To render certain our meaning, we call attention to the fact that after the expiration of the Emergency Price Control regulations the defendants paid to the plaintiff $12,067.91, and that the greatest possible amount of "illegal claims" that remained unpaid after the termination of the act was $4,055.16. When the latter sum is deducted from $12,067.91 we have $8,012.75, an amount materially larger than the attacked judgment, $7,737.45.
We express our belief that the Emergency Price Control Act had no application whatever to any transaction which constitutes a part of the balance. Hence, no item represented in the balance was an illegal item (assuming that the act, while it was in effect, governed the relationship between the parties).
To avoid misinterpretation of our position, we add that since the balance for which judgment was rendered by the Circuit Court was based upon transactions which occurred after the Emergency Price Control regulations had expired, the cause called for no determination as to the legality of the transactions between the parties in "wood stock", and, accordingly, we express none.
In reaching the foregoing conclusions, we have not embraced "a theory different from that on which it was tried." We took the quoted words from the brief which accompanies defendants' petition for a rehearing. After the case had been submitted to the trial *675 judge, and while he had it under advisement, plaintiff's counsel filed with him a brief which contained this statement:
We found that brief in the judgment roll. The latter also contains an answering brief submitted by defendants' counsel (not the present one), but it left unmentioned the assertions contained in the quoted passage. Accordingly, even when the cause was pending in the trial court, the plaintiff urged the point of view which influenced our second opinion and which is developed in this one.
Before writing this opinion we restudied the entire case. We once more read the briefs and the evidence which was given during the trial. All contentions advanced by the parties in their original briefs, as well as in the two petitions for rehearing, have been carefully analyzed again and all of the authorities cited by the parties have been consulted. Our second opinion is affirmed and the defendants' (appellants') petition for a rehearing is denied.
[*]  Chief Justice when this case was argued.