J. M. MacDonald Coal Mining Co. v. United States

56 Ct. Cl. 440, 1921 U.S. Ct. Cl. LEXIS 283, 1921 WL 1253
CourtUnited States Court of Claims
DecidedNovember 21, 1921
DocketNo. 84-A
StatusPublished

This text of 56 Ct. Cl. 440 (J. M. MacDonald Coal Mining 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
J. M. MacDonald Coal Mining Co. v. United States, 56 Ct. Cl. 440, 1921 U.S. Ct. Cl. LEXIS 283, 1921 WL 1253 (cc 1921).

Opinion

G-baham, Judge,

delivered the opinion of the court:

This case comes on demurrer to the plaintiff’s petition. The plaintiff was a producer of bituminous coal and owned and operated a mine in the State of West Virginia, after the price for the sale of coal had been fixed by the President under the authority of the act of August 10, 1917, 40 Stat., 276, known as the Lever Act, and plaintiff claims that owing to labor troubles and car shortage it was unable to produce its coal at the price fixed except at a loss; that it petitioned the Fuel Administration to allow it to sell at a higher price than that fixed on the ground that it could not produce its coal except at a loss, which petition was refused. It continued thereafter to produce and sell its coal at a loss and seeks to recover the amount of said loss represented by the difference between the cost of production and the selling price, together with a reasonable profit, which it liquidates on the basis of 20 per cent of its capital stock.

The facts of this case are very similar to those in the case of the Pine Hill Coal Company v. United States, 55 C. Cls., 433, and it is ruled by the principles announced in the decision in that case and the case of Morrisdale Coal Company v. United States, id., 310.

The question of the constitutionality of the act of August 10, 1917, known as the Lever Act, under the provisions of which recovery is sought in this case, is not questioned here, nor is the constitutional right of Congress to fix' the price and to delegate that authority to the President and to empower him in its exercise to use any such agency as he might see fit'to create. It is admitted that the President did, under [442]*442the authority of that act, fix the price of coal for producers of coal; that he created and used the agency of the Fuel Administration for this purpose; and that he did not use. the Federal Trade Commission. Nor is it questioned that when Congress authorized the President to fix the price, if nothing more had been said in the act, there could be no recovery because such fixing of the price, under the circumstances surrounding the passage of the act, is not such a taking of property as would entitle the plaintiff to compensation.

The plaintiff in its brief attempts to distinguish its case from that of the Pine Hill Coal Company v. United States, supra, upon the ground that the claim for recovery in that case was based upon paragraph 4 of section 25 of said act of August 10, 1917, and that the opinion in that case was based upon a construction of that paragraph, which is as follows:

“ That if the prices so fixed, or if, in the case of the taking over or réquisitioning of the mines or business of any such producer or dealer, the compensation therefor as determined by the provisions of this act be not satisfactory to the person or persons entitled to receive the sanie, such person shall be paid seventy-five per centum of the amount so determined and shall be entitled to sue the United States to recover such further sum as added to said seventy-five per centum will make up such amount as will be just compensation in the manner provided by section twenty-four, paragraph twenty, and section one hundred and forty-five of the Judicial Code.”

The court did not construe or attempt to construe paragraphs 13 and 14 of said section 25, under the provisions of which the plaintiff claims the right to recover. These paragraphs are as follows:

“ Having completed its inquiry respecting any commodity in any locality, it shall, if the President has decided to fix the prices at which any such commodity shall be sold by producers and dealers generally, fix and publish maximum prices for both producers of and dealers in any such commodity, which maximum prices shall be observed by all producers and dealers until further action thereon is taken by the commission.”
“ In fixing maximum prices for producers the commission shall allow the cost of production, including the expense of operation, maintenance, depreciation, and depletion, and shall add thereto a just and reasonable profit.” .

[443]*443The answer to this contention is the concluding paragraph of the opinion of the court in the Pine Hill Coal Company case, supra, which is as follows:

“ It is our conclusion that the Lever Act does not create a liability on the United States to producers of coal who sold their product at the prices fixed by the Government.”

As stated, in the case at bar the plaintiff was a producer and “ sold its product at the prices fixed by the Government,” and is claiming a liability upon the part of the Government by reason of its fixing a price for the sale of coal. The theory of the plaintiff’s recovery seems to be that gTanting the power of Congress to authorize the President to fix prices without allowing compensation, and that by reason of the act of fixing-prices the plaintiff would have no right to recover compensation resulting therefrom, yet it was within the power of Congress in authorizing the fixing of prices to allow compensation for any loss incident thereto, if it saw fit, and thereby render the Government liable therefor, and that this is what it did and what it was its intention to do in this act, as shown by the provisions of said paragraphs 13 and 14 of section 25, which indicate, it is claimed, that Congress intended in fixing the prices to allow “ the cost of production, including the expense of operation, maintenance, depreciation, and depletion * * * and a just and reasonable profit ” as compensation, which it is claimed the Fuel Administration, acting for the President, did not do originally in fixing the price and afterwards refused to do when the plaintiff petitioned it for a higher price upon the ground that it could not produce its coal at the- price fixed except at a loss. The. plaintiff therefore contends that Congress intended by these paragraphs to thus create a liability upon the part of the United States Government in fixing the price to allow to producers the cost of production and a reasonable profit, and that from this liability arises an obligation upon the part of the Government to fix the price upon that basis and that its failure to do so gives the plaintiff a right to recover any loss incident to its failure in fixing the price so as to allow the cost of production and a reasonable profit, which loss the plaintiff claims to have sustained in the sale of its product.

[444]*444Opinion of tko Court.

To the suggestion that these paragraphs only applied when the President should see fit to use the Federal Trade Commission as his agency in fixing the price, and that he did not use it.but used the Fuel Administration, the plaintiff contends that the mere creation and use of the Fuel Administration does not set aside the intention of Congress, as shown by paragraphs 13 and 14, to fix liability upon the Government.

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56 Ct. Cl. 440, 1921 U.S. Ct. Cl. LEXIS 283, 1921 WL 1253, Counsel Stack Legal Research, https://law.counselstack.com/opinion/j-m-macdonald-coal-mining-co-v-united-states-cc-1921.