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PORTER v. DENHOLM PACKING CO.

October 17, 1946

PORTER, Price Administrator,
v.
DENHOLM PACKING CO.



The opinion of the court was delivered by: GIBSON

The Denholm Packing Company has moved the court to strike off the order of court, the findings of fact and conclusions of law, and for leave to withdraw a stipulation on the part of defendant, filed in above entitled case.

After a rule to show cause issued and answer by plaintiff, the following facts appeared:

 On April 17, 1946, plaintiff filed a complaint wherein it charged defendant with a violation of Maximum Price Regulation No. 574, which provides that slaughterers shall not pay for live cattle more than the amount fixed by the regulation, and which prescribed a formula by which the purchase price was to be determined after the animal had been killed and dressed. By this formula the price of the animal was to be determined by the amount of the result after it had been dressed. While ordinarily the regulation was reasonably fair, loss of weight of the animal, in shipment or otherwise, made it impossible to determine with absolute certainty whether the maximum purchase price had or had not been exceeded.

 One week after the complaint was filed the counsel for the plaintiff and the defendant filed a stipulation by which the findings of fact, conclusions of law and the order of the court were recited. By findings of fact it was agreed that the defendant had purchased 1109 head of cattle at a cost of $ 169,116.47, whereas the cost permissible under the Maximum Price Regulation was $ 165,077.79.

 It was also stipulated that defendant had not paid over the over-riding selling price (price of the live animal) at any time.

 By the conclusions of law it was stipulated:

 '3. The defendant has violated one of the provisions of Maximum Price Regulation No. 574.'

 '4. The violations of the said regulations by the defendant were not wilful and purchases made by the defendant were in good faith, with no intent of violating said regulation.'

 '5. The actions of the defendant were the result of failure to take practicable precautions in that upon the slaughtering of said cattle they failed to grade out as the defendant in good faith believed they would do.'

 The following order was made by the court:

 'And now, to wit, this 17th day of April, 1946, the injunctive relief prayed for by the Government is presently denied, provided, however, that said proceedings shall remain on the docket in the Office of the Clerk of Courts with the right given to the Administration of the Office of Price Administration upon reasonable notice being given to the defendant that violations of the Act have been resumed, to again apply to the Court for injunctive relief, at which time additional and appropriate consideration will be given the facts that will then be presented.

 'The defendant is directed to pay the costs which have accrued to date in connection with each of said proceedings.'

 While a violation of the Regulation No. 574 is recited in the stipulation (which was prepared upon the stationery of the plaintiff) the findings of fact state nothing more than that defendant bought cattle at a lawful price and when killed such cattle failed to produce the amount of meat prescribed by the Regulation. In other words no violation of law is found as a fact, but just a misfortune on the part of the defendant.

 But the failure of defendant to obtain the Regulation amount of meat was not its only misfortune. Prior to the preparation of the stipulation counsel for the Administration, doubtless unaware of the card which the Office of Economic Stabilization had concealed in its sleeve, had assured the defendant and its counsel that the Administration did not desire an injunction in the case but only desired a reservation of the judgment in the order for use in case of any future violation of the order (see order). Thus assured, and the order for judgment denying the only relief prayed in the complaint, the defendant was induced to enter into the stipulation which admitted a violation of the ...


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