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HENDERSON v. GLOSSER

July 30, 1942

HENDERSON, Adm'r, Office of Price Administration,
v.
GLOSSER et al.



The opinion of the court was delivered by: SCHOONMAKER

This action brought under the provision of the Emergency Price Control Act of 1942, Public L. No. 421, 77th Congress, 2nd Session, C. 26, 50 U.S.C.A.Appendix, § 901 et seq., charges that defendants sold or bought iron or steel scrap at prices violating Revised Price Schedule No. 4-Iron and Steel Scrap (appearing 7 Fed. Reg. 1207), which establishes maximum prices for various grades of iron and steel scrap.

The plaintiff is seeking an injunction against defendants in accordance with Section 205(a) of said act, to enjoin them from any acts and practices which constitute a violation of any provision of Section 4 of said act, which makes it unlawful for any person to sell or deliver any commodity or to buy or receive any commodity in violation of price schedule effective under the provisions of Section 206 of the Act.

 Consent decrees have been entered in this case as to defendants M. Glosser & Sons and Staiman Brothers, enjoining them from violating this Act. A default decree has been entered against the defendant F. Hodes Coal & Junk Company, enjoining that company from violating this Act.

 The defendant Allegheny-Ludlum Steel Corporation has moved for summary judgment in its favor, under Rule 56 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, on the ground that the complaint states no cause of action against that company. That motion we are denying in accordance with an opinion filed herewith.

 The case, as against the Jones & Laughlin Steel Corporation, was heard on complaint, answer and proofs. From these we find the facts, so far as concerns this corporation, to be briefly these:

 Defendants M. Glosser & Sons are engaged in the business of buying and selling scrap iron and steel at Johnstown, Pa. The Jones & Laughlin Steel Corporation owns and operates a large steel-manufacturing plant in Pittsburgh, using in the course of its business about fifteen thousand tons of scrap iron and steel per month. On or about January 26, 1942, it placed a written purchase order with defendants M. Glosser & Sons for seven hundred and eighty tons of heavy melting steel scrap to be shipped as soon as possible. The same day it entered into an agreement with M. Glosser & Sons to sell to that firm a battery of two hydraulic presses then located at one of its plants at a price of eight cents per pound, or approximately $16,800. It was agreed that the purchase price was to be paid in number-one heavy melting scrap at a base price of $20 per ton. These presses have not yet been delivered by Jones & Laughlin Steel Corporation to M. Glosser & Sons. Some forty-seven cars of scrap were shipped under this agreement. Among them were two cars involved in this suit, i.e., P&LE Car 46905 and B&O Car 259038, which were invoiced as heavy melting steel at the rate of $20 per ton. The contents of these cars did not come up to specification of number-one heavy melting steel, but were unloaded by the Jones & Laughlin Steel Corporation, and used by it in its furnaces. Within a week after the delivery of these two cars, J. W. Miller, scrap buyer for the Jones & Laughlin Steel Corporation, notified said M. Glosser & Sons by telephone of the defective quality of the contents of these two cars, and stated that the Company would not pay $20 per ton for them. The price to be paid for these two cars has not yet been agreed upon. By letter of June 23, 1942, from the Jones & Laughlin Steel Corporation to M. Glosser & Sons, that firm was credited with $17,148.51. But the letter stated that the Jones & Laughlin Steel Corporation would withhold $1,111.55 for the purpose of adjusting claims on account of off-grade material. On the witness stand, David Glosser stated his firm would be obliged to accept such adjustment.

 Under those circumstances, we cannot find that the Jones & Laughlin Steel Corporation has paid or bound itself to pay the $20 per ton for the off-grade steel scrap contained in these two cars. Its conduct in connection with these two cars of off-grade scrap is fully justified by Section 69 of the Pennsylvania Sales Act of May 19, 1915, P.L. 543, 69 P.S. § 314, which provides:

 "First. Where there is a breach of warranty by seller, the buyer may, at his election, --

 "(a) accept or keep the goods and set up against the seller the breach of warranty by way of recoupment in diminution or extinction of the price;"

 We cannot see that by accepting and using this scrap, the Jones & Laughlin Steel Corporation committed any act that would infringe the price regulation, as long as it did not pay therefor a price higher than that fixed by the Regulation. That it has not done.

 Findings of fact and conclusions of law in accordance with this opinion are filed herewith.

 The complaint will be dismissed as to the Jones & Laughlin Steel Corporation. A decree may be submitted accordingly on notice to opposing counsel.

 Findings of Fact and Conclusions of Law with Respect to the Trial of Above Action as to Defendant Jones & ...


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