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Bowles, Price Adm'r v. Indianapolis Glove Co.

August 3, 1945


Author: Sparks

Before SPARKS, MAJOR, and KERNER, Circuit Judges.

SPARKS, Circuit Judge.

The Administrator of the Office of Price Administration appeals from a judgment of the District Court in favor of the defendant. The suit is to recover treble damages for alleged violation of the General Division, Albert M. Dreyer, Atty., O.P.A., by sales of work gloves at prices in excess of those established by the regulation. By joint request of the parties, the court limited the trial on the merits to those issues not involving the measure of damages, reserving that question for determination, if necessary, after determination of the other issues.

The principal question presented on this appeal relates to the construction of the regulation and whether it establishes the maximum price of a commodity at the highest price at which it was actually delivered during March, 1942, if the only deliveries in that month were made under contracts made before March, 1942. The District Court found that it did not, and that under the regulation, defendant's price list, adopted March 21, 1942, established its maximum prices regardless of whether or not any deliveries of gloves were made thereunder during March.

There is no dispute between the parties over the basic facts, most of which were found by the court in accordance with their stipulation. Defendant is a manufacturer and wholesaler of work gloves, making over 500 different styles or items. March 21, 1942, it published a new price list fixing prices as to all items higher than the prices charged in an earlier price list put out in December, 1941. Approximately 300 styles of gloves were delivered during the month of March, 1942, only at prices established by the December list, or earlier lists, or at prices arrived at by applying the trade differentials to such lists, all of which deliveries were made pursuant to prior commitments. All sales made after March 21, 1942, were for prices established by the price list of that date or in accordance with trade differentials in the case of gloves not listed.

The General Maximum Price Regulation was promulgated April 28, 1942, 7 Fed.Reg. 3153, and became effective May 11, 1942, 7 Fed.Reg. 3156. By section 1499.1, it prohibited any dealing in commodities or services above maximum prices, and by section 1499.2, it established such maximum prices in those cases in which the seller dealt in the same or similar commodities or services during the month of March, 1942, at the highest price charged by the seller during such month for the same commodities or services, or, if no charge was made for the same commodity or service, for the similar commodity or service most nearly like it; it defined such highest price charged as:

"(a) The highest price which the seller charged for a commodity delivered or service supplied by him during March 1942; or

"(b) If the seller made no such delivery or supplied no such service during March 1942 his highest offering price for delivery or supply during that month."

The parties stipulated that on March 3, 1943, the Administrator notified defendant that the prices which it was then charging and receiving for certain of its work gloves were in excess of the maximum prices established pursuant to the Emergency Price Control Act of 1942, as amended, 50 U.S.C.A.Appendix, ยง 901 et seq., and that this was the first notice defendant or its officers had received that there was a claim by the OPA that it was violating the regulation in question; that defendant immediately upon receipt of the notice ceased to deliver gloves and did not deliver any at the prices fixed in its March 1942 list until after the receipt of a letter from the OPA March 18, 1943, containing the following paragraph:

"We have sought but not yet obtained a clarification of your position from the Regional and National Offices. We have been advised, however, that information is being assembled by the National Office for use in preparation of a specific regulation establishing maximum prices for work gloves applicable to the entire industry. Believing that the present situation constitutes a serious impediment to the production of goods and materials essential to the prosecution of the war, we see no alternative other than to advise you to proceed with shipments on the basis of your March 21, 1942, list prices pending a definite ruling and decision by the Cleveland or Washington Offices. It is understood that this does not legalize or validate the prices charged from May 11, 1942, the date the General Maximum Price Regulation became effective, up to the present time."

Between March 4 and 18, 1943, defendant made no sales or deliveries of any gloves.

The parties further stipulated that the Administrator does not claim that defendant willfully violated the regulations by its sale of gloves during the times referred to in the complaint, nor does he dispute defendant's contention that what it did in the sale of its gloves, it did in the belief that it had the right to do under the applicable regulations, and that no claim was asserted prior to March 2, 1943, that defendant was violating such regulations.

Defendant earnestly contends that it at all times, in the sale of its work gloves, complied with the regulation and at no time sold its product at a price in excess of the maximum established by the regulation, and the District Court, by its decision, sustained that contention. Since that decision, however, the Supreme Court has passed upon the question of the construction of a similar regulation with respect to sales made pursuant to prior commitments. In the case, Bowles v. Seminole Rock and Sand Co., 65 S. Ct. 1215, 1218, it upheld the Administrator's contention with respect to a regulation identical with the one here involved, saying:

"* * * The regulation recognizes the fact that more than one meaning may be attached to the phrase 'highest price charged during March, 1942.' The phrase might be construed to mean only the actual charges or sales made during March, regardless of the delivery dates. Or it might refer only to the charges made for actual delivery in March. Whatever may be the variety of meanings, however, rule (i) adopts the highest price which the seller 'charged * * * for delivery' of an article during March, 1942. The essential element bringing the rule into operation is thus the fact of delivery during March. If delivery occurs during that period the highest price charged for such delivery becomes the ceiling price. Nothing is said concerning the time when the charge or sale giving rise to the delivery occurs. One may make a sale or charge in October relative to an article which is actually delivered in March and still be said to have 'charged * * * for ...

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