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BROWN v. MOLLOY

March 10, 1944

BROWN, Administrator, OPA
v.
MOLLOY et al.



The opinion of the court was delivered by: WELSH

This action is brought under the provisions of the Emergency Price Control Act, Public Law 421, 77th Congress, 2d Session, Chapter 26, 50 U.S.C.A.Appendix, § 925. The Administrator of the Office of Price administration charges that the defendants sold used farm equipment at prices above those prescribed by Price Regulations No. 133, and amendments, promulgated by the O.P.A. establishing maximum prices for farm machinery and other commodities.

Section 205(a) of the Act provides: 'Whenever in the judgment of the Administrator any person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of section 4 of this Act, he may make application to the appropriate court for an order enjoining such acts or practices, or for an order enforcing compliance with such provision, and upon a showing by the Administrator that such person has engaged or is about to engage in any such acts or practices a permanent or temporary injunction, restraining order, or other order shall be granted without bond.'

 Section 205(e) provides: 'If any person selling a commodity violates a regulation, order, or price schedule * * * the person who buys such commodity for use or consumption other than in the course of trade or business may bring an action either for $ 50 or for treble the amount by which the consideration exceeded the applicable maximum price, whichever is the greater, plus reasonable attorney's fees and costs as determined by the court. * * * If * * * the buyer is not entitled to bring suit or action under this subsection, the Administrator may bring such action under this subsection on behalf of the United States.'

 The Administrator seeks in this action an injunction against the defendants under Section 205(a) and triple damages amount to $ 4,293.69 under Section 205(e). The evidence offered at the trial discloses the following facts:

 Pursuant to the powers granted in the Act the Office of Price Administration on April 28, 1942, issued its Maximum Price Regulations No. 133, effective May 11, 1942. Section 1361.1(a) of the regulations declared that 'no person shall sell, deliver, or negotiate the sale of any farm equipment at prices higher than the maximum fixed by this regulation.' By amendment to the regulations effective Jan. 4, 1943 (sec. 1361.3) a base price for farm equipment was established as 'the manufacturers suggested retail price for the same item of farm equipment f.o.b. factory which is currently in effect, or * * * the manufacturer's suggested retail price last issued.' 'The maximum price applicable to the sale by any person, other than a retail dealer, of any item of used farm equipment', including tractors and hay balers, 'shall be 85% of the base price if the item is sold within one year after sale new, and in any other case shall be 70% of the base price.'

 J. Carroll Molloy, an auctioneer, was engaged by Joseph Erwin to sell at Public sale certain farm equipment of Erwin at his farm in Chalfont, Pa. The defendant Newlin Brown, also an auctioneer, was engaged by Molloy to cry the sale which was held on February 5, 1943.

 Prior to the sale Molloy, being uncertain as to whether the Price Control Act and the O.P.A. regulations applied to auction sales of used farm equipment, sought a ruling and advice from the War Price and Rationing Board at Doylestown and at the Philadelphia office of the O.P.A. He was unsuccessful in his efforts to obtain official information or rulings with regard to applicable regulations prior to the sale.

 At the sale on February 5, 1943, the defendant auctioneers sold in combination a tractor and plow for $ 1,250. The ceiling price of the tractor under the regulations then in force was $ 766.50, although there was no ceiling price on the plow. There was also sold a tractor, having a ceiling price of $ 781.39, in combination with a plow for $ 1,295.

 The defendant at the same sale offered a hay baler upon which there was a ceiling price of $ 830. Several bids of $ 900 were received, which the defendants believed was the ceiling price, if it should be found that auction sales of farm equipment were actually subject to this maximum price regulation.

 Being faced with the necessity of determining the successful bidder among the several who had bid $ 900, and in duty bound to procure the highest possible price for their principal, the auctioneers adopted as an expedient the device of auctioning the 'delivery' of the bailer, to premises of the highest of the bidders willing to purchase the baler at $ 900. Such 'delivery' was sold to the successful bidder for $ 575 and carried with it the purchase of the baler for $ 900.

 The said sales were made by the auctioneers with the intention of fulfilling their legal duty to procure the best available prices for their principal, and as an expedient method of avoiding maximum price regulations it if were later determined that auction sales of farm equipment were subject thereto. The auctioneers had no knowledge of the applicability of the existing maximum price regulations, although they had in good faith made reasonable efforts to obtain the information from official sources, and they had no intention to violate the law and the regulations.

 Defendant auctioneers are continuing in their profession and have since February 5, 1943, complied with all the laws and regulations regarding price control. There is no likelihood of them or of their principal engaging in any acts or practices in violation of the Act. The defendant Molloy has since said sale been appointed a member of War Price and Rationing Board 269.3 at Doylestown by the District Director of O.P.A. at Philadelphia and has become chairman of that board with the commendation of the District Director.

 By a further amendment to the Regulations (136.4) effective February 20, 1943, combination sales of tractors with other items of equipment designed for mounting thereon, and sold as a unit, were expressly declared to be subject to the price ceilings. There was also added a prohibition against evasion of the regulations 'by requiring the buyer to purchase any optional equipment or pay for any services not desired; or * * * by selling through an agent or auctioneer at higher than maximum prices; or by any other hidden or indirect price increases.' This regulation, though applicable to sales of the character about which the Administrator now complains, was not in effect at the time of the public sale held by the defendants on February 5, 1943.

 By reason of the foregoing facts the Court is asked to conclude that the defendants have violated the regulations, that they must be enjoined from further violations, and that, the Act being mandatory in its terms, the Court has no discretion in the remedy to be applied. ...


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