Court Opinion

ID: 6698953
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:03:41.743219+00
Date Added: 2024-06-11T16:01:20.901602
License: Public Domain

Ervix, J.
This appeal calls to mind the ancient admonition that hard cases form the quicksands of the law.
Congress adopted the Emergency Price Control Act of 1942 as a temporary wartime measure “to stabilize prices and to prevent speculative, unwarranted and abnormal increases in prices and rents” because the stabilization of the national economy was “in the interest of the national defense and security and necessary to the effective prosecution of the . . . war.” Emergency Price Control Act of 1942, sec. 1 (a); 50 U. S. C. A., Appendix, 901 (a); Yakus v. United States, 321 U. S., 414, 64 S. Ct., 660, 88 L. Ed., 834. The Act established the Office of Price Administration under the direction of a Price Administrator appointed by the President, and set up a comprehensive plan for the promulgation by the Administrator of regulations or orders fixing the maximum prices of commodities and rents in conformity with the standards prescribed in the Act. 50 U. S. C. A., Appendix, 901-946.
As an aid to the enforcement of the Emergency Price Control Act, Congress provided certain civil and criminal sanctions. It limited criminal prosecutions to willful violations. 50 U. S. C. A., Appendix, 925 (b); Bowles v. American Stores, 139 F. (2d), 377. But it incorporated in the Act a section imposing civil liability upon persons selling commodities in violation of regulations, orders, or price schedules prescribing maximum prices. As subsequently amended on 30 June, 1944, this section was as follows : “If any person selling a commodity violates a regulation, order, or price schedule prescribing a maximum price or maximum prices, the person who buys such commodity for use or consumption other than in the course of trade or business may, within one year from the date of the occurrence of the violation, except as hereinafter provided, bring an action against the seller on account of the overcharge. In such action, the seller shall be liable for reasonable attorney’s fees and costs as determined by the court, plus whichever of the following sums is the greater: (1) Such amount not more than three times the amount of the overcharge, or the overcharges, upon which the action is based as the court in its discretion may determine, or (2) an amount not less than $25 nor more than $50, as the court in its discretion may determine: Provided, however, That such amount shall be the amount of the overcharge or overcharges or $25, whichever is greater, if the defendant proves that the violation of the regulation, order, or price schedule in question was neither willful nor the result of failure to take practicable precautions against the occurrence of the violation. For the purposes of this section the payment or receipt of rent for defense-area, housing accommodations shall be deemed the buying or selling of a commodity, as the case may *133be; and the word ‘overcharge’ shall mean the amount by which the consideration exceeds the applicable maximum price. If any person selling a commodity violates a regulation, order, or price schedule prescribing a maximum price or maximum prices, and the buyer either fails to institute an action under this subsection within thirty days from the date of the occurrence of the violation or is not entitled for any reason to bring the action, the Administrator may institute such action in behalf of the United States within such one-year period. If such action is instituted by the Administrator, the buyer shall thereafter be barred from bringing an action for the same violation or violations. Any action under this subsection by either the buyer or the Administrator, as the case may be, may be brought in any court of competent jurisdiction. A judgment in an action for damages under this subsection shall be a bar to the recovery under this subsection of any damages in any other action against the same seller on account of sales made to the same purchaser prior to the institution of the action in which such judgment was rendered.” Emergency Price Control Act of 1942, sec. 205 (e); 50 U. S. C. A., Appendix, 925 (e).
Pursuant to the authority conferred upon him by the Act, the Price Administrator issued Revised and Second Revised Maximum Price Regulation No. 19 establishing maximum prices for “purchases, sales, and deliveries of Southern pine lumber for direct mill-shipment.” 8 Federal Register, 5536; 9 Federal Register, 1162.
The plaintiffs bought the lumber mentioned in the complaint in the course of their trade or business as wholesale lumber dealers. When they purchased this timber from the defendant, T. C. Coxe, for prices in excess of the ceiling prices fixed by Revised and Second Revised Maximum Price Regulation No. 19, the plaintiffs violated the provisions of section 4 (a) of the Act making it “unlawful for any person ... in the course of trade or business to buy or receive any commodity ... in violation of any regulation or order ... or of any price schedule” prescribing maximum prices. 50 U. S. C. A., Appendix, 904 (a). As the plaintiffs bought the lumber at prices exceeding the applicable maximum prices in the course of trade or business for resale to others, the Emergency Price Control Act deemed them to be in pari delicto with the seller, T. C. Coxe, denied them any right to sue the seller, T. C. Coxe, for damages for the overcharge, and vested in the Price Administrator alone the right to bring an action against the seller, T. C. Coxe, to recover the statutory damages for the benefit of the nation as a whole. Emergency Price Control Act of 1942, secs. 4 (a), 205 (e); 50 U. S. C. A., Appendix, 904 (a), 925 (e); Bowles v. Glick Bros. Lumber Co., 146 F. (2), 566; Armour & Co. v. Blindman, 73 F. Supp., 609.
When they resold the lumber to their customers at prices in excess of the maximum prices fixed by Revised and Second Revised Maximum *134Price Regulation No. 19, the plaintiffs violated the provisions of section 4 (a) of the Act making it “unlawful . . . for any person to sell or deliver any commodity ... in violation of any regulation or order . . . or of any price schedule” prescribing maximum prices, and thereby rendered themselves liable to the statutory damages mentioned in section 205 (e) of the Act. 50 U. S. C. A., Appendix, 904 (a), 925 (e).
The Price Administrator sued the plaintiffs for the statutory damages, and secured a judgment against them for the total amount of their overcharge to their customers. Having satisfied this judgment, the plaintiffs seek in this action to recover of the defendants the amount of such overcharge, and the expenses incurred by the plaintiffs in defending the Price Administrator’s suit. They concede that they have no right to maintain an action for these items under the Emergency Price Control Act, but say that their complaint states a good cause of action under the common law rule that “one compelled to pay damages on account of the negligent or tortious act of another has a right of action against the latter for indemnity.” 42 C. J. S., Indemnity, sec. 21.
At first blush, the complaint seems to make a just appeal to the judicial conscience. Like Adam, the plaintiffs have offended through the fault of another. It may even be plausibly asserted that the law must afford the plaintiffs the relief they ask if it is to approach close enough to justice to touch the hem of her garment. But we think that this argument gazes at the comparatively unimportant affairs of the parties litigant, and blinks at the vastly important principle of public policy involved in the Emergency Price Control Act.
When all is said, the plaintiffs are attempting to transfer from themselves to the defendants a punishment visited upon the plaintiffs on account of their own violation of a general statute enacted by the lawmakers of the nation to aid the country in effectively prosecuting the Second World War against her armed enemies. The plaintiffs were not assessed treble damages in the Administrator’s suit. They were held liable for their overcharge alone. Congress clearly intended that the plaintiffs should not escape the payment of this overcharge in spite of the fact that they relied on invoices and certificates of inspection furnished by the defendant, T. C. Coxe, and that they acted in good faith and without any intention to violate any existing maximum price schedule wdien they resold the lumber to their customers at prices in excess of the ceiling prices established by Revised and Second Revised Maximum Price Regulation No. 19. This is true because section 205 (e) of the Emergency Price Control Act imposed upon sellers absolute liability for the amounts of their overcharges regardless of their good faith. Under the Act, good faith on the part of a person selling a commodity at a price above the established ceiling was immaterial, except as a partial defense under the provision reducing the statutory damages from three times the amount *135of the overcharge to the amount of the overcharge if he proved “that the violation of the regulation, order, or price schedule in question was neither wilful nor the result of failure to take practicable precautions against the occurrence of the violation.” 50 U. S. C. A., Appendix, 925 (e); Star Steel Supply Co. v. Bowles, 159 F. (2d), 812; Crary v. Porter, 157 F. (2d), 410; Bowles v. Indianapolis Glove Co., 150 F. (2d), 597; Bowles v. Hasting, 146 F. (2d), 94; Bowles v. Franeschini, 145 F. (2d), 510; Brown v. Cummins Distilleries Corporation, 53 F. Supp., 659.
Congress decreed that well intentioned sellers of commodities should act at their peril in so far as liability for their overcharges was concerned because it realized that such course was essential to the accomplishment of the purposes of the Emergency Price Control Act. It knew that “innocent non-conformity with the Price Control Act was as inflationary and as damaging to competitors and the public as guilty nonconformity.” Brown v. Hecht Co., 137 F. (2d), 689. It considered that occasional hardship to one who honestly and intelligently endeavored to comply with the Act was not too high a price to pay for the protection of the whole nation against inflation. Bowles v. American Stores, supra (139 F. (2d), 379).
If the Court should permit the plaintiffs to recover of the defendants upon the complaint here questioned, it would, in final result, exempt the plaintiffs from the consequences of their own nonconformity with the Emergency Price Control Act, and impose upon the defendants responsibility for both their own offending and that of the plaintiffs. Thus the plaintiffs would go unwhipped of justice, and the defendants would suffer double penalties, notwithstanding the plainly expressed intent of Congress to the contrary. Moreover, the court could not uphold the right of the plaintiffs to maintain the action set forth in their complaint without setting at naught the salutary rule that the law will not lend its aid to those who found their claim for relief upon their own unlawful acts. Brown v. Brown, 213 N. C., 347, 196 S. E., 333; Wheeler v. Bank. 209 N. C., 258, 183 S. E., 269; Bean v. Detective Co., 206 N. C., 125, 173 S. E., 5; Strider v. Lewey, 176 N. C., 448, 97 S. E., 398; Lloyd v. R. R., 151 N. C., 536, 66 S. E., 604, 45 L. R. A. (N. S.), 378.
We conclude, therefore, that the complaint fails to state facts sufficient to constitute a good cause of action, and that the court below ought to have sustained the demurrer.
We prefer to rest our decision upon the Emergency Price Control Act itself, and the well settled principle of law mentioned above. But the same result might well be reached by applying to the facts alleged the interpretation put upon the relevant regulation of the Price Administrator by the Circuit Court of Appeals for the Fourth Circuit when it decided the appeals in the action of the Administrator against the plaintiffs. Porter v. Bledsoe, 159 F. (2d), 495.
*136For the reasons given, the judgment of the court below overruling the demurrer is
Reversed.