Leavitt v. United States

60 Ct. Cl. 952, 1925 U.S. Ct. Cl. LEXIS 408, 1925 WL 2678
CourtUnited States Court of Claims
DecidedJune 8, 1925
DocketNo. E-91
StatusPublished
Cited by1 cases

This text of 60 Ct. Cl. 952 (Leavitt 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
Leavitt v. United States, 60 Ct. Cl. 952, 1925 U.S. Ct. Cl. LEXIS 408, 1925 WL 2678 (cc 1925).

Opinion

Booth, Judge,

delivered the opinion of the court:

A few months after the signing of the armistice the Government had on hand over 200,000,000 pounds of Army bacon. Some j>ortion of this enormous supply was what is known in the trade as five-year pack, and the remainder as two-year pack, indicating the time limit for safe consumption. Confronted thus with the problem of disposing of a vast quantity of surplus bacon, and desiring to save the Government harmless to the greatest possible extent, the Surplus Property Division of the War Department, in pursuance of law, on May 10, 1919, advertised for bids to purchase 2,493,386 pounds of this bacon. The advertisement [970]*970specified the terms and conditions of the sale and fixed a minimum price of 22% cents per pound. There was no favorable response to the advertisement, and the proposed sale thereunder failed. Subsequently, the plaintiff, who was not a bidder theretofore, entered into negotiations with the.officers in charge, and on June 10, 1919, purchased for 28% cents per pound the 2,493,386 pounds of bacon previously advertised for sale. He met the obligations of his contract to the letter. The plaintiff began immediately a campaign to resell the purchased bacon. A short time subsequent to the sale he sold 211,116 pounds of the same, and to one of his customers had given an option to purchase 500,000 pounds more. This particular customer, on a visit to the warehouse in Baltimore to inspect the bacon upon which he had an option of purchase and with whom the plaintiff was then in a course of direct dealing, was knowingly and intentionally tolled away from his connections with the plaintiff by officers of the Government, who offered him bacon at a less price, succeeding in selling to him from time to time 800,000 pounds, more or less, of bacon, thereby precluding the plaintiff from disposing of the 500,000 pounds the prospective purchaser had gone to inspect. In the ordinary marts of trade acute competition might possibly characterize this transaction as within the zone of fairness. On the part of the Government, the legitimate custodian of property it had sold to the plaintiff, and knowing the purpose and intent of the plaintiff in making this large purchase, the transaction is impressive as one which might with great propriety have been omitted. The plaintiff at this very moment was assiduously engaged in seeking a market for his bacon, both at home and abroad. The hazardousness of his undertaking was manifest; the bacon purchased was' of the two-year-pack variety. The Government was selling bacon in large quantities. The surplus supply was sufficient to demoralize the market, and every contemporaneous incident was direct notification to the plaintiff to expeditiously dispose of his purchase or lose his profits.

On October 10, 1919, four months to the day after his purchase in good faith of this very substantial quantity of food supply, the plaintiff, without warning or previous no[971]*971tice of any character whatever, was indicted, by a Federal grand jury for the eastern district of New York for an alleged violation of the Lever Act, the act of August 10, 1917, 40 Stat. 276. The plaintiff was arrested, arraigned, and compelled to give bond upon a charge of hoarding the very bacon the Government had sold him, and for which the Government had received payment. This indictment was dismissed on demurrer January 10, 1920. In the meantime, however, the astute district attorney had procured another indictment of the plaintiff in the same court and for precisely the same cause on November 7, 1919. The second attempt met the same fate as its predecessor on March 24, 1920. Not content with these two abortive attempts at criminal prosecution, and displaying a persistence of extremely doubtful propriety, the plaintiff was for the third time indicted under the same statute on December 10, 1919, and thereafter, on February 28, 1920, this indictment was dismissed on motion of the Government. Three indictments had been returned against the plaintiff, and in each instance the prosecution of the plaintiff had ignominiously failed. Two decisions of a Federal court that under the statute a case had not been made out, and a voluntary dismissal as to the third, would in the usual course of criminal procedure be of itself sufficient to convince an ordinary prosecutor that his resources had been exhausted. Not so in this instance, however, 'for the plaintiff finally went to trial on a fourth indictment returned on February 4, 1920, and was promptly acquitted by a jury on February 16, 1920. It is true that under the special jurisdictional act we may not award the plaintiff damages resulting from the criminal proceedings. We set the facts forth in the findings and comment upon them because they form the fundamental basis and the alleged justification for the supplementary proceedings which resulted so disastrously to the plaintiff in this case. Contemporaneously wfith the criminal prosecution of the plaintiff the Government under section 7 of the Lever Act in the same Federal court libeled the plaintiff’s bacon then in warehouses in Brooklyn, N. Y., and by process of law absolutely forestalled the possibility of his selling a single pound of the same from October 27, 1919, until 29th day of March, [972]*9721920, when the same was formally released, the libel having-been voluntarily dismissed on March 1, 1920.

During this period of suspense the plaintiff endeavored in good faith to procure a stipulation from the Government authorizing the sale of the bacon and impounding the proceeds to await the decision of the court. Obviously this was of prime necessity to the plaintiff, for the bacon market was declining rapidly and his supply deteriorating in quality. The attempt failed because of the obstinacy of the district attorney. The Lever Act was a war emergency measure. It has been before the Supreme Court and we need not indulge in a discussion of the decisions. What the legislation intended to and did accomplish is a matter of public notoriety. By what process of reasoning it was applied to the sale, under a statute passed subsequent to the close of hostilities by the Government to a citizen of over two million pounds of surplus food supply, is most difficult to conjecture. In this instance we are confronted with an anomalous situation. The Government lawfully sells to a purchaser a sufficient quantity of supplies to make him a hoarder under the Lever Act, accepts his payments for the purchase, and then proceeds to prosecute him for the violation of a law to which its own conduct makes it a contributor, and, what is of more significance, is the admitted fact that the Government was engaged in doing the precise thing the plaintiff was doing. The Government was holding' at minimum prices a huge supply of bacon, refusing bids at a less figure, exerting every resource and resorting to every known business principle to prevent the decline of the market value of bacon, so that in the end the possibility of a great loss might not befall the United States. Manifestly the conduct of the affairs of the defendant was as clearly within the letter of the Lever Act as any conduct of the plaintiff appearing from the record herein. As said in the defendant’s brief: “As a general proposition, when the Government or individual sells or contracts to sell property to another, it is wrong for the seller to interfere with the buyer’s right to fully use or dispose of such property.”

It i,s true the defendant’s counsel labors diligently to escape the consequences of this statement, seeking to avert [973]

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Bluebook (online)
60 Ct. Cl. 952, 1925 U.S. Ct. Cl. LEXIS 408, 1925 WL 2678, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leavitt-v-united-states-cc-1925.