#### CHEYENNE MILLING COMPANY v. THE UNITED STATES

[No. 34739.

Decided October 28, 1924]

*On the Proofs*

*Food control; price -fixing; settlement.*— Tlie United States Food administration fixed the maximum allowable profits on flour and feed dealt in by plaintiff during the period of food control, from September 1, 1917, to June 30, 1918, and plaintiff voluntarily agreed to the fixing of such profits. The Food Administration at the close of said period sent auditors to examine plaintiff’s books to ascertain what profits it had earned in excess of the maximum allowed. At the conclusion of this examination the auditors notified plaintiff of an excess earned over and above the profits allowed, for which plaintiff promptly gave its cheek. After the completion of all audits by the Food Administration the President approved, ratified, and confirmed all acts done or authorized. After the settlement part of the records which went *into*said audit were burned. *Held,*that it is now too late to reopen this settlement.

*The Reporter's*statement of the case:

*Mr. Lawrence H. Gake*for the plaintiff. *Britton & Gray*were on the brief.

*928
      *Mr. P. M. Cox,*with whom was *Mr. Assistant Attorney General Robert II.*Lovett, for the defendant. *Mr. John G. Dudley*was on the brief.

The following are the facts of the case as found by the court :

I. Plaintiff is a corporation organized and existing under' the laws of the State of Wyoming. Between September 1, 1917, and June 30, 1918, it operated an elevator, warehouse, and mill in the city of Cheyenne, State of Wyoming, under license No. E-11171 issued by the United States Food Administrator for the purpose of buying, selling, and storing-wheat and rye and their derivative products as an *(a)*elevator and warehouse, and manufacturing and distributing wheat and rye and their derivative products as a (5) mill of 200 barrels daily capacity. Plaintiff was required by the rules and regulations lawfully promulgated by the United States Food Administrator to keep its records and accounts of wheat flour milling operations separate from its other activities so as to make practicable the verification of all reports rendered to the United States Food Administrator ; and to make periodically to the United States Food Administrator reports under oath of such wheat flour milling operations as are shown by the records of the mill. Plaintiff has never in any way voluntarily aided, abetted, or given encouragement to rebellion against the United States.

II. August 10, 1917, the President of the United States by executive order, and acting pursuant to the provisions of the act of Congress approved August 10, 1917, 40 Stat., 276, entitled “ An act to provide further for the national security and defense by encouraging the production, conserving the supply, and controlling the distribution of food products and fuel,” created a governmental organization entitled the United States Food Administration, and designated Herbert Hoover as United States Food Administrator, with direction to supervise, direct, and carry into effect the provisions of the said act and to exercise the powers and authority therein given to the President so far as the same apply to foods, feeds, and their derivative products, and to any and all practices, procedure, and regulations authorized or required under the provisions of said act.

*929November 27, 1917, tlie President by executive order authorized and directed the United States Food Administrator, in prescribing regulations for licenses under section *5*of the act of August 10, 1917,” to find that a just, reasonable, and fair profit is the normal average profit which persons engaged in the same business and place obtained prior to July 1, 1914, under free competitive conditions; to indicate, if it shall see fit to do so, what margin over cost will return such a just, reasonable, and fair profit; and to take such legal .steps as are authorized by said act to prohibit the taking of any greater profit.”

III. Under authority of the said act of Congress and the executive orders of the President the United States Food Administrator, through its officers and agents, acting for the President, fixed certain maximum allowable profits on flour and feed, and exacted that all persons or corporations engaged in the business of manufacturing and milling said products should pay to the United States any excess over the allowable margin of profit. These restrictions were in effect from September 1, 1917, to June 30, 1918, inclusive, a period usually referred to and described as the Food Administration control period. As applied to the plaintiff’s business the maximum allowable profits were twenty-five cents per barrel on flour and fifty cents per ton on feed.

IV. Section 2 of the act of August 10, 1917, supra, provides that in carrying out the purposes of the act the President is authorized to enter into any voluntary arrangements or agreements. By Executive Order dated August 10, 1917, such authority was delegated to the United States Food Administrator. Pursuant to the law and regulations plaintiff signed a voluntary arrangement or agreement in words and figures as follows:

“AgkeemeNts with United States Food Administrator

“Whereas, Pursuant to an Act of Congress approved the 10th day of August, 1917, and known as the Food Control Act, the President of the United States appointed Herbert C. Hoover Food Administrator, and the undersigned Cheyenne Milling Co., a miller of flour with mills located at Cheyenne in the State of Wyoming, is desirous of cooper*930ating with the said Herbert C. Hoover for carrying out the purposes of said Act by voluntary agreement as provided in Section 2 of said Act:

“ Now, therefore, Know All Men by These Presents, That the undersigned Cheyenne Milling Company has agreed, and does hereby agree, to and with said Herbert C. Hoover as Food Administrator:

“ To observe the rules and regulations enacted or promulgated by the said Food Administrator for the government of the milling trade, under the date of 24th day of August, 1917, and any modifications thereof that may be made with the approval of the Committee named in said regulations.

“In witness whereof the said Cheyenne Milling Company has caused this pledge to be executed by D. F. Chandler, duly authorized representative in his behalf.

ClIEXENNE MILLING COMPANY,

By D. F. Chandler, Mgr.”

Y. July 8, 1919, the plaintiff by its president and general manager signed another agreement as follows:

United States Food Administration, Food Administration Grain CORPORATION, Minneapolis Agency, Flour Exchange, Minneapolis, Minn.

July 8, 1919.

In consideration of a license being issued to Cheyenne Milling Company by the United States Wheat Director, pending a detailed examination of the records and accounts of this mill by the Division of Enforcement of the United States Food Administration, covering the period between September 1st, 1917, and June 30th, 1918, I (we) agree to abide by the findings of such audit when made and to divest myself (ourselves) promptly of any excess profits which, under the rules and regulations of the United States Food Administration, may be found to have been made during the Control Period ended June 30, 1918, and to voluntarily pay any and all other amounts found to be properly due the Food Administration Grain Corporation under the rules.

D. F. Chandler, President,

Date 7-26-19.' - Cheyenne, Wyoming.

VI. After the close of the Food Administration control period in July, 1919, the Food Administrator sent auditors to the plaintiff’s mill for the purpose of examining its books and accounts and of ascertaining what profits it had earned during the Food Administration control period from Sep*931tember 1, 1917, to June 80, 1918, and whether such profits were in excess of the allowed maximum profits fixed by the Food Administrator. They were given access to all the plaintiff’s books and records. At the conclusion of their examination they notified the plaintiff that during- the Food Administration control period it had earned profits in excess of those fixed by the Food Administrator, amounting to $3,706.61. The plaintiff thereupon delivered to the auditors of the Food Administration its check for $8,788.82, $3,706.61 being excess profits of those fixed by the Food Administrator and $82.21 found to be due on account of the contract of the plaintiff with the United States Grain Corporation. The amount so paid by the plaintiff has not been paid to it but has been covered into the Treasury of the United States as miscellaneous receipts pursuant to the order of the President of August 21, 1920.

VII. After the audit by^ the Food Administration auditors had been made, and after the plaintiff had paid the amount found to be due by it without protest, the mill of the plaintiff ivas burned, and along with it. some of the records which entered into the audit made by the Government auditors. The plaintiff’s employees, in the latter part of 1919 and early in 1920, undertook to make a further examination of the boobs and accounts of the plaintiff, and as a result of this examination employed a firm of accountants to reaudit its books and accounts for the control period, September 1, 1917, to June 30, 1918. The defendant was not notified of this purposed reaudit.

VIII. The plaintiff sent all its books and accounts which had not been burned to the public accountant whom it had employed. By rewriting, reforming, recasting, and reconstructing the accounts and records of the plaintiff the public accountant arrived at the conclusion that the plaintiff was not due anything on account of excess profits to the Government and made a report to plaintiff accordingly. This report is filed with the petition as Exhibit A and is made a part hereof by reference and is dated June 23, 1920, almost a year after the audit made by the Government and after the plaintiff had paid without protest the amount found to be due by the auditors of the Government. The *932plaintiff’s general manager and bookkeeper were present and took part in the audit made by the Government auditors and furnished them with the information upon which the audit was made.

IX. After the completion of the audits of wheat flour mills, including the audit of the mill operated by plaintiff, the President of the United States approved, ratified, and confirmed all acts done or authorized by the United States Food Administration or any division or branch or agency thereof under and pursuant to the act of August 10, 1917, supra, and the proclamations, Executive Orders and regulations thereunder.

MEMORANDUM BY THE COURT

It is too late for the plaintiff to question the audit made by the Government auditors, especially as the plaintiff acquiesced in the settlement then made and voluntarily paid the amount found due. After this settlement some part of the records which entered into it were burned, and any audit made from a part of the records cari not be recognized by the court.

Moreover after the settlement was made it became a closed transaction, which will not be reopened unless some good cause is shown for so doing, and nothing in the evidence in this case goes to show that the plaintiff has suffered any injustice, or that there was any mistake of both parties. In fact the settlement was made with full knowledge on the part of the plaintiff of every step taken and of every item which entered into the settlement.

The petition is dismissed.