Before MAJOR, Chief Judge, and FINNEGAN and SWAIM, Circuit Judges.
This action, filed by the United States of America under the Renegotiation Act, 56 Stat. 245, as amended, 50 U.S.C.A.Appendix, § 1191, against the defendant, Edward Valves, Inc., an Indiana corporation, sought judgment against the defendant for the recovery of alleged excessive profits realized by the defendant during the calendar years 1942, 1943, 1944 and 1945, together with interest thereon at 6 per cent per annum from the due dates specified in the respective orders. The facts as to the four calendar years were set out in Counts, I, II, III and IV, respectively, of the complaint.
The respective orders for repayment of excessive profits were entered by the War Contracts Price Adjustment Board on the following dates for the net principal amounts after tax credits (allowed pursuant to § 3806 of the Internal Revenue Code, 26 U.S.C. § 3806) and the District Court allowed interest at 4 per cent per annum on the respective principal amounts, all as shown in the table below.
Profits for the Year Date of Notice Principal Interest
1942 July 5, 1945 $140,000.00 $26,497.00
1943 July 8, 1946 $257,200.00 54,145.88
1944 August 31, 1948 $304,557.97 $37,948.76
1945 August 31, 1948 $41,615.00 $5,185.35
The defendant filed petitions in the Tax Court of the United States for a redetermination of the amounts of excessive profits for the years 1942, 1944 and 1945, pursuant to Subsection (e)(1) of the Renegotiation Act, but did not file such a petition for a redetermination of the order concerning the excessive profits found for the year 1943.
In its answer to the complaint the defendant set out the fact that its petitions for redetermination of excessive profits for the years 1942, 1944 and 1945 were still pending before the Tax Court; that its liability for excessive profits realized during the year 1943 had been extinguished by the failure of the parties to reach an agreement as to the amount of such profits, or the entering of an order determining the amount of excessive profits, within one year following the commencement of the renegotiation proceedings for that year as required by Subsection (c)(3) of the Renegotiation Act; that, since there was no statutory provision for interest on the amount of the excessive profits determined to be due, either no interest was collectible on the amount found to be due or no interest was allowable for any time prior to the final determination of the amounts by the Tax Court; and that, in any event, the amount of interest allowed to the plaintiff should not have exceeded "the actual money damage to plaintiff resulting from delay in payment which in this case would not exceed one and three-fourths per centum (1 3/4%) per annum," the average interest the plaintiff was paying during this period on borrowed funds.
The United States filed a motion for a summary judgment on all counts of the complaint and the defendant filed a motion for a summary judgment on Count II of the complaint (the count involving profits for the year 1943).
The District Court granted the Government's motion on all four counts of the complaint and allowed interest at 4 per cent per annum to the time of the judgment. From this judgment the defendant has appealed as to the principal amount allowed under Count II of the complaint and as to the allowance of interest at a rate higher than 2 1/2 per cent. The ...