Collins v. Fleming

159 F.2d 431
Emergency Court of Appeals·Decided January 16, 1947·No. 352, 353, No. 357·Published·Cited by 12 cases

Opinion

159 F.2d 431 (1947)

COLLINS et al.
v.
FLEMING, Temporary Controls Administrator. HIRSCH
v.
SAME. MORRISON et al.
v.
SAME.

Nos. 352, 353, No. 357.

United States Emergency Court of Appeals.

Heard October 31, 1946.
Decided January 2, 1947.
Petition for Rehearing Filed January 16, 1947.
Rehearing Denied January 30, 1947.
Writ of Certiorari Denied April 7, 1947.

*432 Mac Asbill, of Washington, D. C. (John K. Skaggs, Jr., and Allen P. Dodd, Sr., both of Louisville, Ky., on the brief), for complainants Collins et al.

Frederic P. Lee, of Washington, D. C., (J. Verser Conner, of Louisville, Ky., on the brief), for complainant Hirsch.

Mac Asbill, of Washington, D. C. (Irvin Marcus, of Louisville, Ky., on the brief), for complainants Morrison et al.

Carl A. Auerbach, Associate Gen. Counsel, Office of Price Administration, of Washington, D. C. (Richard H. Field, Gen. Counsel, William R. Ming, Jr., Chief, Court Review Price Branch, and James A. Durham and Irving J. Helman, Attys., all of Office of Price Administration, all of Washington, D. C., on the brief), for respondent in all three cases.

Before MARIS, Chief Judge, and MAGRUDER and McALLISTER, Judges.

Heard at Washington October 31, 1946.

Writ of Certiorari Denied April 7, 1947. See 67 S.Ct. 1094.

MARIS, Chief Judge.

The complainants in these three cases, Nos. 352, 353 and 357, which have been consolidated for hearing, seek a declaratory judgment that Order No. 45 issued by the Price Administrator on June 13, 1945 under Section 1499.3(c) of the General Maximum Price Regulation as amended[1] was invalid. The facts out of which the controversy arises are stated in our opinion filed today in the case of Collins et al. v. Fleming, Temporary Controls Administrator, Em.App., 159 F.2d 426, and need not be repeated here. Suffice it to say that the present complainants are all former stockholders of Cummins Distilleries Corporation and are defendants in a suit for treble damages instituted by the Price Administrator on May 27, 1943 in the United States District Court for the Western District of Kentucky by reason of their sale between January 4 and 9, 1943, through a stockholders' committee, at alleged overceiling prices of warehouse receipts covering a large quantity of whiskey which had belonged to the corporation prior to its dissolution on December 31, 1942.

In complaint No. 371, to which we have already referred and which is being decided today, the same complainants as are now before us in complaint No. 352 sought to have Maximum Price Regulation No. 193[2] declared inapplicable to the sales mentioned or, if applicable, then invalid as applied to them. In that case we have held MPR 193 to be both applicable to the sales in question and valid as applied to them. The discussion of those questions in the opinion filed in that case will, therefore, not be repeated here. We accordingly proceed to the consideration of the issue which the cases now before us present as to the validity of Order No. 45. In order to understand that issue we must first have in mind the relationship of Order No. 45 to MPR 193 and to the GMPR and what the Price Administrator sought to accomplish by the order.

Prior to the issuance of MPR 193 on August 1, 1942 sales of domestic distilled spirits were covered by the GMPR. MPR 193 was issued primarily to provide certain *433 upward price adjustments for increased taxes and costs and it continued the general freeze date pricing scheme of the GMPR. Specifically it provided three alternative pricing methods. Section 1420.13(a) of MPR 193 provided that the seller's maximum price should be the price established under Section 1499.2(a) of the GMPR plus certain additions to cover increased taxes and costs. Section 1499.2(a) of the GMPR, to which reference was thus made, established the maximum price in terms of the highest price charged by the individual seller during March, 1942. Section 1499.2 (b) of the GMPR provided that if a seller had made no sales in March, 1942 his maximum price would be the highest price charged during March, 1942 by the "most closely competitive seller of the same class" for the same or most similar commodity. Following the same pattern Section 1420.13 (b) of MPR 193 provided as an alternative that if a maximum price could not be determined for a seller under Section 1420.13(a) it should be the maximum price established under that section for the "most closely competitive seller of the same class" for such domestic distilled spirits. Finally as a third pricing method in case neither Section 1420.13(a) nor Section 1420.13(b) could be applied MPR 193 provided by Section 1420.13(c) that "the seller's maximum price for such domestic distilled spirits shall be determined in accordance with § 1499.3 of the General Maximum Price Regulation."

Section 1499.3 of the GMPR as amended and in force in January 1943 was as follows:

"1499.3 Maximum prices for commodities and services which cannot be priced under § 1499.2. The seller's maximum price for a commodity or service which cannot be priced under § 1499.2 of this General Maximum Price Regulation shall be a maximum price in line with the level of maximum prices established by this General Maximum Price Regulation. Such price shall be determined by the seller in accordance with the following procedures:

"(a) In the case of a `sale at wholesale or retail' of a commodity, the seller (1) shall select from the same general classification and price range as the commodity being priced under this section, the comparable commodity for which a maximum price is established under section 2 of this Regulation and of which the seller delivered the largest number of units during March 1942; (2) shall divide his maximum price for that commodity by his `replacement cost' of that commodity; and (3) shall multiply the percentage so obtained by the cost to him of the commodity being priced under this paragraph. The resulting figure shall be the maximum price of the commodity being priced. Within ten days after determining such maximum price under this paragraph, the seller shall report such price to the `appropriate field office of the Office of Price Administration' upon a form, duly filled out, copied from the form contained in Appendix A of this Regulation. The price so reported shall be subject to adjustment at any time by the Office of Price Administration.

"(b) In the case of a sale other than at wholesale or retail of a commodity, the maximum price shall be a price determined by the seller after specific authorization from the Office of Price Administration. A seller who seeks an authorization to determine a maximum price under the provisions of this paragraph shall file with the Office of Price Administration in Washington, D. C., an application setting forth (1) a description in detail of the commodity for which a maximum price is sought; and (2) a statement of the facts which differentiate such commodity from other commodities delivered during March, 1942 by such seller and by other competitive sellers of the same class. Such authorization will be given in the form of an order prescribing a method of determining the maximum price for the applicant or for sellers of the commodity generally, including purchasers for resale, or for a class of such sellers.

"(c) In the case of a sale at wholesale or retail of a commodity which cannot be priced under paragraph (a) of this section, the maximum price shall be a price determine

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