Court Opinion

ID: 6895780
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:49:35.83105+00
Date Added: 2024-06-11T16:05:59.129292
License: Public Domain

CLARK, Circuit Judge
(dissenting).
I regret that our decision herein does not settle, or appear even to consider, the important issue of law presented as to the interpretation of this regulation for the fairer allocation of anthracite coal in wartime. Indeed, I fear that our result may only embarrass the new trial which must be conducted somewhat in the dark. The issue concerns the meaning of the words found in SFAW Reg. 28, § 602.761, 30 CFR, 1945 Supp., § 602.761, granting per*480mission to wholesalers to arrange with other wholesalers for distribution of their excess tonnage each month “to or for the account of such wholesaler or wholesalers.” And the crucial question here is whether the wholesaler with excess quota over the tonnage on hand could simply direct supply to his customer by another wholesaler or producer, dropping out of the picture so far as any further responsibility for the shipments was concerned, or whether the coal must be still shipped for the first wholesaler’s account and on his responsibility, so far as the customer was concerned. Here the wholesalers McCann Co. and Gulotta attempted to transfer their quota for the retailer Galumbeck to appellants, but they dropped out completely so that appellants had to look to Galumbeck to carry through the purchase and to make payment therefor. Since this crucial fact was shown by appellants’ own evidence and in fact was thoroughly conceded, appellants’ offer of proof, discussed in the opinion, must be construed accordingly. As it did not assume to show compliance with the regulation on the stricter interpretation, as claimed by the United States, the offer was properly rejected if that interpretation was correct.
I believe that it was and that the transactions did not conform to the purpose of the regulation or to its expressed requirement. They were thus banned by § 602.752, prohibiting distribution of regulated coal unless expressly authorized by the regulation. Here, as we have seen, appellants do not claim that they shipped coal to the McCann Co. or to Gulotta directly, only that they made the shipments to Galumbeck “for the account of” these wholesalers. But under any proper use of these words this cannot be so. In business parlance, as well as 'in law, a shipment by X for the account of Y is one in which X looks to Y for payment. If Z is the consignee he remits to Y. ‘No financial relationship exists between X and Z. 2 Williston on Sales, 2d Ed. 1924, § 525, p. 1336; Void on Sales, 1931, p. 254. As appellants’ witness McCann testified, payment for the shipments on Gal-umbeck’s quota with his company went directly from Galumbeck to appellants. His company neither received nor paid out any money. Thus his company’s accounts with Galumbeck and with appellants remained completely unaffected. These shipments were therefore not sales for the account of the wholesaler McCann Co., but outright direct sales from appellants to retailer Galumbeck, and hence illegal non-quota shipments.
The purpose of the regulation as expressed in § 602.750 was to insure a fair distribution of anthracite coal to consumers through normal sources of supply, so far as practicable. Transactions such as those at bar,' if legal, would constitute methods whereby wholesalers with excess coal could bypass other wholesalers having supply difficulties and establish business relationships with the customers these wholesalers would otherwise normally supply. Because of their lack of marketable coal, short-supplied wholesalers would be powerless to resist this loss of profits and business good will. It is difficult to believe that § 602.761 was drawn to sanction such war profiteering.
The transactions at bar subvert the purpose of the regulation in a more important and fundamental respect, however. Sec. 602.764 required wholesalers having less coal than their retail outlets were entitled to receive, to distribute their coal on a percentage basis without discrimination among retailers. Here appellants, not the McCann Co. and Gulotta, made the decision as to how much coal was to be shipped to Gal-umbeck. By shipping more or less coal to Galumbeck, appellants could vary the percentage of his quota which he actually received. But only the McCann Co. and Gulotta knew the relationship between the percentage which Galumbeck had already received to the percentages with which they had supplied their various other customers. Therefore appellants were unable, even had they so desired, to equalize the percentages. These transactions therefore inevitably produced the inequality and inequity of distribution which the regulation was designed to prevent.
There is a further point involved in this appeal, since as to certain extensive shipments covered by separate counts of the information, there is not even the defense of a transferred quota of the kind just discussed. The McCann Co. authorized appellants to ship 313 tons of domestic sizes *481of coal to Galumbeck during the two months’ period covered by the information. During this period appellants actually shipped 880 tons of domestic sizes to Gal-umbeck purportedly on his quota with the McCann Co. Possibly this quantity may not have been in excess of Galumbeclc’s unfilled year’s quota. But we have neither knowledge of nor purpose in discovering what shipments appellants made to Galum-beck at other periods not covered by the information. Moreover, § 602.761 prescribes disposal of excess tonnage on a monthly basis “to the maximum extent practicable.” The qualification in this section involving practicability was apparently intended to cover shipments dated as of a particular month just before it had begun or just after it had ended. Certainly it cannot be held to excuse an overage of 175% in shipments over a two months’ period. Appellants introdriced in evidence documents describing all shipments made under both of the purportedly transferred quotas. From these documents the shipments purportedly made on the McCann Co.’s quota after 318 tons had already been shipped can be ascertained. These shipments were unquestionably over the quota and violative of the regulation. The convictions under counts alleging them should be affirmed, notwithstanding our sub silen-tio decision against the government on the legal issue as to the regulation’s meaning.