Source: http://www.law.cornell.edu/supremecourt/text/350/148
Timestamp: 2014-03-09 21:45:34
Document Index: 597454598

Matched Legal Cases: ['§ 26', '§ 26', '§ 26', '§ 26', '§ 5438', '§ 231', '§ 26', '§ 2462', '§ 26', '§ 26']

REX TRAILER COMPANY, Inc., Petitioner, v. UNITED STATES of America. | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews REX TRAILER COMPANY, Inc., Petitioner, v. UNITED STATES of America.
350 U.S. 148 (76 S.Ct. 219, 100 L.Ed. 149)
Argued: Dec. 5, 1955.
Decided: Jan. 9, 1956.
[HTML] Mr. Gustav H. Dongus, Indianapolis, Ind., for petitioner.
Petitioner contends that this action brought by the Government to recover $2,000 on each of five counts of a complaint based on § 26(b)(1) of the Surplus Property Act of 1944
places it twice in jeopardy in violation of the Fifth Amendment. In an earlier proceeding it had pleaded nolo contendere to a five-count indictment bottomed on the same five transactions and paid fines in the aggregate amount of $25,000. In the present case the District Court granted the Government's motion for summary judgment, and the Court of Appeals affirmed, 218 F.2d 880. We granted certiorari, 349 U.S. 937, 75 S.Ct. 784, to resolve an asserted conflict between the decisions of the Courts of Appeals.
We conclude that the recovery here is civil in nature. The Government has the right to make contracts and hold and dispose of property, and, for the protection of its property rights, it may resort to the same remedies as a private person. Cotton v. United States, 11 How. 229, 13 L.Ed. 675. Liquidated damages are a well-known remedy, and in fact Congress has utilized this form of recovery in numerous situations. In all building contracts, for example, Congress has required the insertion of a liquidated-damage clause which 'shall be conclusive and binding upon all parties' without proof of 'actual or specific damages sustained * * *.' 32 Stat. 326, 40 U.S.C. 269
. Liquidated-damage provisions, when reasonable, are not to be regarded as penalties, United States v. United Engineering & Contracting Co., 234 U.S. 236, 241, 34 S.Ct. 843, 845, 58 L.Ed. 1294, and are therefore civil in nature.
In § 26 of the Surplus Property Act, Congress has provided three alternative remedies. The first provides a recovery of $2,000 plus double the amount of the damage sustained; the second permits a recovery 'as liquidated damages' of twice the consideration agreed upon; the third permits the Government to recover the property and retain 'as liquidated damages' the consideration it received. These alternative remedies are set out in three consecutively numbered subsections of § 26(b). All three were recognized as civil remedies by Congress before the bill was passed,
and the conclusion is inescapable that each was of the same nature and designed to serve the same purpose. Further, Congress provided in § 26(d) that: '(t)he civil remedies provided in this section shall be in addition to all other criminal penalties and civil remedies provided by law.'
The case of United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443, involved a provision of the False Claims Act, R.S. §§ 5438, 3490, 31 U.S.C. 231, 31 U.S.C.A. § 231, essentially the equivalent of § 26(b)(1).
In Marcus, as here, the defendant had pleaded nolo contendere in an earlier criminal prosecution based on the same transaction. This Court rejected the petitioner's contention of double jeopardy and held that the statute involved was remedial and not penal, since it was unable to say that the provision for $2,000 plus double damages would 'do more than afford the government complete indemnity for the injuries done it.' 317 U.S. at page 549, 63 S.Ct. at page 387. In concluding, it recognized that '(t)he inherent difficulty of choosing a proper specific sum which would give full restitution was a problem for Congress.' 317 U.S. at page 552, 63 S.Ct. at page 388.
It is insisted, however, that the failure of the Government to allege specific damages precludes recovery here. But there is no requirement, statutory or judicial, that specific damages be shown, and this was recognized by the Court in Marcus.
The Government's recovery here is comparable to the recovery under liquidated-damage provisions which fix compensation for anticipated loss. As this Court recognized in Priebe & Sons v. United States, 332 U.S. 407, 411412, 68 S.Ct. 123, 126, 92 L.Ed. 32, liquidated damages 'serve a particularly useful function when damages are uncertain in nature or amount or are unmeasurable, as is the case in many government contracts. * * *' And the fact that no damages are shown is not fatal. Section 26(b)(1) merely accomplishes the intended result of Congress by authorizing a separate proceeding for the recovery of a lump sum in damages.
It is obvious that injury to the Government resulted from the Rex Trailer Company's fraudulent purchase of trucks. It precluded bona fide sales to veterans, decreased the number of motor vehicles available to Government agencies, and tended to promote undesirable speculation.
The damages resulting from this injury may be difficult or impossible to ascertain, but it is the function of liquidated damages to provide a measure of recovery in such circumstances. On this record it cannot be said that the measure of recovery fixed by Congress in the Act is so unreasonable or excessive that it transformed what was clearly intended as a civil remedy into a criminal penalty.
'(b) Every person who shall use or engage in or cause to be used or engaged in any fraudulent trick, scheme, or device, for the purpose of securing or obtaining, or aiding to secure or obtain, for any person any payment, property, or other benefits from the United States or any Government agency in connection with the disposition of property under this Act; or who enters into an agreement, combination, or conspiracy to do any of the foregoing
In considering whether the statute of limitations contained in 28 U.S.C. 2462, 28 U.S.C.A. § 2462, applied to § 26(b)(1) of the Surplus Property Act, the Fifth Circuit held § 26(b)(1) to be a civil remedy in United States v. Weaver, 207 F.2d 796, 797, and the Sixth Circuit held it to be penal in United States v. Witherspoon, 211 F.2d 858.
In referring to these provisions, the Senate Committee on Military Affairs described them as providing for 'the civil liability of persons who engaged in false, fraudulent, or fictitious activities, or conceal or misrepresent material facts, or act with intent to defraud the United States * * *. The United States is given the option of electing among three different measures of damages.' S.Rep. No. 1057, 78th Cong., 2d Sess. 1314.