Porter v. Schaefer

69 F. Supp. 1013, 1946 U.S. Dist. LEXIS 1865
CourtDistrict Court, S.D. California
DecidedOctober 24, 1946
DocketCiv. No. 327
StatusPublished
Cited by3 cases

This text of 69 F. Supp. 1013 (Porter v. Schaefer) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Porter v. Schaefer, 69 F. Supp. 1013, 1946 U.S. Dist. LEXIS 1865 (S.D. Cal. 1946).

Opinion

. MATHES, District Judge.

The Administrator seeks judgment against defendant.on behalf of the United States in the sum of $1,123.58 for violations of the Emergency Price Control Act of 1942, 50 U.S.C.A. Appendix, § 901 et seq. Injunctive relief is also sought.

The violations are alleged to have occurred in connection with the sale of imported Mexican clothespins to certain retailers in the city of Bakersfield, California. Determination of the maximum prices for imported clothespins is made pursuant to the Maximum Import Price Regulation (8 F.R. 11681).

In order to procure a maximum price to be fixed by the Administrator under that regulation, the seller is required to file an application with the Export-Import Branch of the Office of Price Administration. The regulation provides that: “The importer, primary wholesaler, or secondary wholesaler may deliver the goods to his customer, but he shall not accept payment therefor until his selling price has been approved by the Office of Price Administration.”

Prior to approval of any maximum price under .this regulation, defendant as salesman for one Rojas sold and delivered the imported clothespins in question to retailers and accepted payment for the quantities delivered. Subsequently the Office of Price Administration, upon defendant’s applica[1014]*1014tion, issued Order No. L-9521 approving a maximum price for the sale of such clothespins to retailers.

The Administrator contends that this order establishes the maximum price for the sales made prior to issuance and bases his claim for overcharges thereon. The Administrator further urges that § 204 of the Act, 50 U.S.C. Appendix, § 924, deprives this court of jurisdiction to pass upon the validity of such retroactive application of Order No. L-9521.

While § 204 creates an Emergency Court of Appeals with exclusive jurisdiction, subject only to review by the Supreme Court, to determine the validity of the Administrator’s orders and regulations, § 205 (a) and (c) of the Act, 50 U.S.C. Appendix, § 925 (a) and (c), confers upon this court jurisdiction to enforce such regulations and price orders. In exercising such power, this court must necessarily pass upon the scope of each regulation or order involved and its applicability to the particular facts at bar. Cf. Porter v. Senderowitz, 3 Cir., 158 F.2d 435. In this case any application of' the price order in question requires a determination of whether or not the order is to have a retroactive effect.

The objection to permitting orders to be retroactive is that the Administrator cannot make an act penal which was not penal when done. Bowles v. Griffin, 5 Cir., 1945, 151 F.2d 458, 461. But that is not the situation here, since the sales in the case at bar were penal prior to issuance of the order, having been consummated in violation of the regulation. The extent of the violation should be measured by what would have been the maximum price had the order approving a maximum price been issued prior to the sales.

It has recently been held by the third, eighth and ninth Circuit Courts of Appeal that where a regulation requires the seller to secure approval of a maximum selling price from the Administrator before he may sell, the overcharges as to sales consummated in advance of an approval of the price shall be measured by the maximum selling price subsequently established by the Administrator. Porter v. Senderowitz, supra, 3 Cir., 158 F.2d 435; Porter v. Kramer, 8 Cir., 156 F.2d 687; Martini v. Porter, 9 Cir., 157 F.2d 35.

If this measure proves inexact, the seller alone is to blame. He will not be heard to complain of inexactness occasioned by his failure to comply with the requirements of the regulation. Story Parchment Co. v. Paterson Parchment Paper Co., 1931, 282 U.S. 555, 51 S.Ct. 248, 75 L.Ed. 544; Hetzel v. Baltimore & O. R. Co., 1898, 169 U.S. 26, 39, 18 S.Ct. 255, 42 L.Ed. 648; F. W. Woolworth Co. v. N.L.R.B., 2 Cir., 1941, 121 F.2d 658, 663.

As Judge Bone pointed out in Martini v. Porter, supra, a contrary view might lead to the conclusion that a seller could lawfully ignore or defy the regulation and thereafter, when sued, successfully defend the suit and retain the profits directly flowing from this act of defiance or indifference.

The complaint alleges that defendant made the sales in question as a wholesaler, but the evidence disclosed that one Rojas was the importer of the clothespins and that defendant in selling them acted as salesman for Rojas. It is difficult to find Congressional intent that the provisions for damages for overcharges should subject sales personnel to personal liability. If there is such personal liability, as the Administrator here contends, a salesperson working for a nominal salary might be subject to liability for an amount many times greater than his earnings. This would impose upon all sales personnel the burden to determine if the article is lawfully priced.

It has been held that the president and treasurer of a corporation were not personally liable for damages because of overcharges in sales made by the corporation. Bowles v. Cardinal Cutlery Corp., D.C.S.D.N.Y., 69 F.Supp. 435. JudgeLeibell there made a thorough analysis of the question. After considering various, provisions and definitions in the Act, he concludes that: “These definitions affirm the distinction between the ‘seller’ and a. ‘salesman’. The ‘seller’ is the owner of the-business * * *. The ‘seller’ is not an officer of the corporation, or one of its. salesmen. * * * 205 (e) relates to overcharges of the seller, i.e., of the person whose commodity is sold, and logically the-[1015]*1015suit would be against the seller to recover the overcharge or statutory damages which he has received and pocketed.”

The Administrator cites the following decisions as authority for his contention that defendant, even though only a salesman, is liable under § 205(e) of the Act: Brown v. Cummins Distilleries Corp., D.C.W.D.Ky., 1944, 68 F.Supp. 985; Bowles v. Lecht, D.C.R.I., 1944, 68 F.Supp. 986; McFadden v. Shore, D.C.E.D.Pa., 1945, 60 F.Supp. 8; Kurland v. Bukspan, 184 Mise. 590, 55 N.Y.S.2d 135; Ziebell v. Kagan, 3 Opin. & Dec. 2144 (Municipal Court for Oshkosh, Wis., 1945), and People v. Zion National Kosher Sausage Factory, Inc., 184 Mise. 689, 54 N.Y.S.2d 785.

In the Cummins Distilleries case, the Administrator brought an action for treble damages against a corporation for over-ceiling sales made by the corporation, joining as defendants four officers and seven directors, three of whom were also officers. Motions to dismiss made by the individual defendants were denied, and it was held that they were properly joined. The court said [68 F.Supp. 986]: “Ordinarily, such liability, if any, would be that of the corporation alone.

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69 F. Supp. 1013, 1946 U.S. Dist. LEXIS 1865, Counsel Stack Legal Research, https://law.counselstack.com/opinion/porter-v-schaefer-casd-1946.