Matthew Addy Company v. United States Ford/Opinion of the Court

The petitioners were found guilty of violating the President's order of August 23, 1917, by receiving margins above those prescribed for coal jobbers. Both causes present the same fundamental questions and one opinion will suffice.

The Lever Act, 'An act to provide further for the national security and defense by encouraging the production, conserving the supply, and controlling the distribution of food products and fuel,' approved August 10, 1917, c. 53, 40 Stat. 276, 284, 286 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 3115 1/8 q, 3115 1/8 qq), provides:

'Sec. 25. That the President of the United States shall be,     and he is hereby, authorized and empowered, whenever and      wherever in his judgment necessary for the efficient      prosecution of the war, to fix the price of coal and coke,      wherever and whenever sold, either by producer or dealer, to      establish rules for the rugulation of and to regulate the      method of production, sale, shipment, distribution,      apportionment, or storage thereof among dealers and      consumers, domestic or foreign; said authority and power may      be exercised by him in each case through the agency of the      Federal Trade Commission during the war or for such part of      said time as in his judgment may be necessary. * *  *

'Whoever shall, with knowledge that the prices of any such     commodity have been fixed as herein provided, ask, demand, or      receive a higher price, or whoever shall, with knowledge that      the regulations have been prescribed as herein provided,      violate or refuse to conform to any of the same, shall, upon      conviction, be punished by fine of not more than $5,000, or      by imprisonment for not more than two years, or both. Each     independent transaction shall constitute a separate offense.'

'Sec. 26. That any person carrying on or employed in commerce     among the several states, or with foreign nations, or with or      in the territories or other possessions of the United States      in any article suitable for human food, fuel, or other      necessaries of life, who, either in his individual capacity      or as an officer, agent, or employee of a corporation or      member of a partnership carring on or employed in such trade,      shall store, acquire, or hold, or who shall destroy or make      away with any such article for the purpose of limiting the      supply thereof to the public or affecting the market price      thereof in such commerce, whether temporarily or otherwise, shall be deemed guilty of a felony      and, upon conviction thereof, shall be punished by a fine of      not more than $5,000 or by imprisonment for not more than two      years, or both. * *  * '

On August 21, 1917, after prescribing a schedule of prices for bituminous coal at the mine, the President said:

'It is provisional only. It is subject to reconsideration     when the whole metnod of administering the fuel supplies of      the country shall have been satisfactorily organized and put      into operation. Subsequent measures will have as their object     a fair and equitable control of the distribution of the      supply and of the prices not only at the mines but also in      the hands of the middlemen and the retailers.'

August 23, 1917, pending further investigation and determination, it was ordered by the President:

'A coal jobber is defined as a person (or other agency) who     purchases and resells coal to coal dealers or to consumers      without physically handling it on, over, or throught his own      vehicle, dock, trestle, or yard. For the buying and selling     of bituminous coal a jobber shall not add to his purchases      price a gross margin in excess of 15 cents per ton of 2,000      pounds, nor shall the combined gross margins of any number of      jobbers who buy and sell a given shipment or shipments of      bituminous coal exceed 15 cents per ton of 2,000 pounds.'

September 6, 1917, the Fuel Administrator directed that--

'Contracts relating to bituminous coal made before the     proclamation of the President on August 21, and contracts      relating to anthractite coal made before the President's      proclamation of August 23, are not affected by these      proclamations, provided the contracts are bona fide in      character and are enforceable at law.'

[On August 23 the President issued an order fixing prices for anthracite coal at the mines, effective September 1st.]

A statement and order by the Fuel Administrator, dated September 7, 1917, contained the following paragraphs: 'A very large proportion of the coal supply available  for the coming winter is under contract. These  contracts, which are allowed to stand for, the present,   were made prior to the President's proclamation and very   largely limit the amount which may be placed on sale at   retail prices based on the President's order.

'It is absolutely essential, however, that a sufficient     amount of coal be put on the market at once at these prices      to meet the needs of domestic consumers. The Fuel     Administration believes that this supply of coal can be made      available and will be made availabe by voluntary arrangement      between the operators and those with whom they have      contracts, and thus make it unnecessary for the Fuel      Administration to exercise or recommend the exercise of the      powers provided in the Lever Act.'

On October 6, 1917, the Fuel Administrator further directed--

'Coal may be bought and sold at prices lower than those     prescribed by the orders of the President.

'The effect of the President's orders on coal rolling when     the order affecting such coal was issued is to be decided by      first ascertaining whether or not the title had passed from      the operator to the consignee at the time the President's      order became effective. If the title had passed to the     consignee, the price fixed by the President does not apply. *     *  *

'A jobber who had already contracted to buy coal at the time     of the President's order fixing the price of such coal, and      who was at that time already under contract to sell the same,      may fill his contracts to sell at the price named therein.

'A jobber who, at the time of the President's order fixing     the price of the coal in question at the mine, had contracted      to buy coal at or below the President's price, and at that      time had no contract to sell such coal, shall not sell the      same at a price higher than the purchase price plus the proper jobber's commission as determined by the      President's regulation of August 23, 1917.

'A jobber who, at the time of the President's order fixing     the price of the coal in question, was under contract to      deliver such coal at a price higher than a price represented      by the price fixed by the President or the Fuel Administrator      for such coal plus a proper jobber's commission as determined      by the President's regulation of August 23, 1917, shall not      fill such contract at a price in excess of the President's      price plus the proper jobber's commission, with coal      purchased after the President's order became effective and      not contracted for prior thereto.

'A jobber who, at the date of the President's order fixing     the price of the coal in question, held a contract for the      purchased of coal without having already sold such coal,      shall not sell such coal at more than the price fixed by the      President or the Fuel Administrator for the sale of such coal      after the date of such order, plus the jobber's commission as      fixed by the President's regulation of August 23, 1917,'

The Fuel Administrator issued many other orders, not presently important.

The petitioning corporation, Matthew Addy Company, acting by petitioner Ford, the Vice President, did business as coal jobber at Cincinnati, Ohio. By contract dated July 31, 1917, it purchased many carloads of coal from Bluefield Coal and Coke Company, at $3.25 per ton f. o. b. the mines in West Virginia. With knowledge of jobbers' margins fixed by the President's order of August 23, 1917, it sold sundry lots of this coal during August and September, 1917, at $3.50 per ton f. o. b. the mines, without having contracted so to do before that order issued. Do these circumstances suffice to establish the offense charged? We think not; and, accordingly, the judgments below must be reversed.

The order must be construed as criminal statutes are-strictly and without retroactive effect unless clearly indicated. Chew Heong v. United States, 112 U.S. 536, 559, 5 Sup. Ct. 255, 28 L. Ed. 770; Shwab v. Doyle, 258 U.S. 529, 534, 42 Sup. Ct. 391, 66 L. Ed. 747, 26 A. L. R. 1454. If it be construed as applying to the sales of coal purchased by petitioners prior to August 23d, we must decide a grave constitutional question, not necessary to consider if another view be accepted. Under the existing circumstances, did Congress have power to fix prices at which persons then owning coal must sell thereafter, if they sold at all, without provinding compensation for losses? If this difficulty can be eliminated by some reasonable construction of the order, it should be accepted. United States v. Delaware & Hudson Co., 213 U.S. 366, 407, 408, 29 Sup. Ct. 527, 53 L. Ed. 836.

The above quoted statements and orders show plainly enough that in August, 1917, a very large part of the available coal supply was under contract. This greatly limited the amount which 'may be placed on sale at retail prices based on the President's order,' as pointed out on September 7th. Nevertheless, the contracts were 'allowed to stand for the present.' Evidently the purpose was to begin the administration of the fuel supplies by regulating subsequent transactions without striking down all existing bona fide contracts which might affect such supplies. If, prior to August 23d, petitioners had agreed to sell coal purchased in July, such contracts would not have been within the order. October 6th more sweeping rules were promulgated; one of them has direct relation to circumstances like those here presented.

The order treated buying and selling as integral parts of the regulated transaction and made no reference to expenses incident thereto. If it applied only to transactions thereafter begun, all had opportunity to govern themselves accordingly; but, if given retroactive effect, jobbers who had negotiated purchases at costs exceeding fifteen cents per ton would necessarily lose if they sold, although they had acted in entire good faith. Certainly, there was no purpose to encourage hoarding, contrary to the Lever Act, § 26, or to retard movement of fuel to the ultimate consumers by making sales unprofitable. No imperative reason appears for treating jobbers who had bought but had not contracted to sell with less consideration than was accorded those with agreements for sales, irrespective of the stipulated price.

Considering the ordinary rules of interpretation and the circumstances disclosed, we conclude that the order of August 23d did not apply to the sales in question. It was not retroactive, and the sales were but part of a transaction begun before its date. We are not unmindful of the forceful argument to the contrary; and we consciously refrain from indicating any opinion respecting the validity of the order as interpreted.

The judgments of the court below are reversed and the causes will be remanded to the Distict Court for further proceedings in harmony with this opinion.