De Soto Lead & Zinc Co. v. United States

146 Ct. Cl. 640, 1959 U.S. Ct. Cl. LEXIS 176, 1959 WL 7569
CourtUnited States Court of Claims
DecidedJuly 15, 1959
DocketCong. No. 4-55
StatusPublished
Cited by2 cases

This text of 146 Ct. Cl. 640 (De Soto Lead & Zinc Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
De Soto Lead & Zinc Co. v. United States, 146 Ct. Cl. 640, 1959 U.S. Ct. Cl. LEXIS 176, 1959 WL 7569 (cc 1959).

Opinion

Whitakee, Judge,

delivered the opinion of the court:

Congress has referred to us a bill (H.K. 5543, 84th Congress) directing the Secretary of the Treasury to pay plaintiff the sum of $190,716.83, in settlement of its claim for premium payments on lead and zinc ores produced under the premium price plan during November 1, 1943 to January 1, 1947. We are asked to report the amount legally or equitably due the plaintiff. It now admits it has no legal claim, which leaves only the question whether in equity and good conscience the defendant should pay it anything and, if so, how much.

In plaintiff’s petition in this court its claim is reduced to $89,837.29, and in its brief it is further reduced to $46,597.42. We are of opinion it has no claim at all, either at law or in equity and good conscience.

Plaintiff’s claim is based on the Emergency Price Control Act of 1942. A part of the purpose of this Act was to promote increased production of materials necessary to the prosecution of the war. Ceiling prices on all such commodities were fixed by the Office of Price Administration (OPA). On lead the ceiling price was 6.5 cents a pound, and on zinc, 8.25 cents a pound. But, in order to spur production of these commodities, the defendant offered to pay a premium of 2.75 cents a pound for all lead and zinc produced above the quota established for the particular producer. A producer’s quota was his 1941 production, or such lesser or [642]*642greater quantity as be could reasonably be expected to produce at the established ceiling prices.

These quotas were fixed by Quota Committees under established rules and regulations. They were known as “A” quotas, and, once fixed, they remained the same. However, the Quota Committees were also authorized to fix “B” quotas for lead and zinc and, in addition, a “C” quota for zinc. An additional premium of 2.75 cents a pound was paid for all production over the “B” quota, and a still additional 2.75 cents for production over the “C” quota. While “A” quotas remained constant, “B” and “C” quotas could be increased or decreased or revoked on 30 days’ notice.

Plaintiff mined and milled lead and zinc from old surface dumps owned by the Valle Mining Company near DeSoto, Missouri, about 35 miles south of St. Louis. A lease was secured on the mine dumps and a mill was purchased and dismantled and erected again about 3 miles from the mine dumps by a partnership, later incorporated as the DeSoto Lead and Zinc Company. From July 1943 to October 1944 operations were carried on by the partnership and a subsidiary corporation, which did the milling. In October 1944, plaintiff corporation succeeded to both the mining and milling business.

Plaintiff’s predecessor was assigned an “A” quota of zero, and, hence, was paid premium prices of 2.75 cents a pound over the ceiling price for all lead and zinc produced by it. In July 1945 the corporation applied for an increase in its quota, and was given a “B” quota, based on zero production, for its lead production. Thereafter, it was paid 5.5 cents a pound above the ceiling price. It was also assigned a “B” quota for its zinc production, but this was based on a production requirement of 70 tons a month, so that it got the additional' 2.75 cents a pound for only the tonnage produced in excess of 70 tons a month.

Plaintiff did not produce more than 70 tons of zinc a month and, hence, got no benefit from the assignment of the “B” quota for zinc. Plaintiff did not protest the assignment of this quota, and made no later application for a revision of it.

Plaintiff was required to make monthly reports of its operations, so that the Quota Committee might make adjust[643]*643ments in its “B” quotas, but no report was filed by it for July, August, September and October, and not until November 23, 1945. This report covered operations for July through October. It showed a profit from operations for these four months of $6,013.26 before depreciation;

No further reports were filed by plaintiff, although it was repeatedly requested to do so, nor did plaintiff make any further request for a revision of its “B” quotas. Hence, there was no basis for a revision of them.

Plaintiff has been paid all it is entitled to under the law and the quotas assigned to it. It could not complain of its quota for the production of lead, for that was zero, and plaintiff got the “A” premium and also the “B” premium for all lead produced. ' It did not complain of its “B” quota for zinc, nor furnish any basis upon which the Quota Committee might have revised it bn its own motion.

There is no equity in plaintiff’s claim.

It may be that plaintiff lost money from its operations, but this is immaterial. The Act under which plaintiff claims did not guarantee operators against loss; it gave them a premium price for production above what would reasonably be expected, and that is all.

If plaintiff did sustain a loss from operations, it is far from clear that this was due to improper quotas, assuming, quite contrary to the evidence, that the quotas were improper. Plaintiff’s loss, if any, was due to indifferent management and lack of adequate capital to provide necessary equipment. All of plaintiff’s officers lived in Joplin, Missouri, which was 290 miles from the site of operations. They rarely visited the site, but left all operations in the hands of a superintendent, who worked for a salary, which was not regularly paid. For months at a time there were no operations at all. There was no mining from February 16, 1945 to June 19,1945, and none from December 18,1945, to February 4,1946. The mill did not operate from March to June 1945, nor during March 1946.

Plaintiff ceased operations in January 1947. Daniel R. Lee acquired all the stock of the other stockholders'and is now the sole stockholder. On January 17, 1948, all of the corporation’s assets, except this claim, were sold to the [644]*644Fredericktown Lead Company for $20,000, which, was $9,-716.21 over their depreciated book value.

We are of opinion that, based on the findings of fact, which follow, plaintiff has no legal claim against defendant, nor any claim which in equity and good conscience the defendant should recognize. The trial commissioner to whom this case was referred is also of this opinion, for the reasons set out in his opinion, which is transmitted herewith.

This opinion, together with the findings of fact and also the opinion of Trial Commissioner Marion T. Bennett, which follow, will be certified to the Congress pursuant to House Resolution 208, 84th Congress.

OPINION OP THE COMMISSIONER

This case is before the court by reference pursuant to House Resolution 208, passed by the Congress on June 17, 1955, and reading as follows:

Resolved, That the bill (H. R. 5543) entitled “A bill for the relief of DeSoto Lead and Zinc Company,” together with all accompanying papers, is hereby referred to the Unted States Court of Claims pursuant to sections 1492 and 2509 of title 28, United States Code; and said court shall proceed expeditiously with the same in accordance with the provisions of said sections and report to the House, at the earliest practicable date, giving such findings of fact and conclusions thereon as shall be sufficient to inform the Congress of the nature and character of the demand, as a claim legal or equitable, against the United States, and the amount, if any, legally or equitably due from the United States to the claimant.

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Related

Paul v. United States
20 Cl. Ct. 236 (Court of Claims, 1990)
MacArthur Mining Co. v. United States
167 Ct. Cl. 143 (Court of Claims, 1964)

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Bluebook (online)
146 Ct. Cl. 640, 1959 U.S. Ct. Cl. LEXIS 176, 1959 WL 7569, Counsel Stack Legal Research, https://law.counselstack.com/opinion/de-soto-lead-zinc-co-v-united-states-cc-1959.