70 Ct. Cl. 595 | Ct. Cl. | 1930
delivered the opinion of the court:
The issues in this case have already been stated. Plaintiff contends that its relations with the defendant were contractual; that the United States Food Administration compelled it to pay amounts which were covered into the Treasury of the United States which neither the Food Administration nor the United States had a right to exact because the plaintiff had not violated the United States Food Administration regulations and had not made unreasonable profits in its milling operations. Plaintiff further insists that it was not bound by the audit of its books made by a representative of the Food Administration, and, therefore, is not precluded from maintaining this suit. The defendant contends that plaintiff Avas bound by the audit of the Food Administration and can not recover the amounts demanded and exacted by the Food Administration as excess profits; that there was no contract by the plaintiff and the defendant whereby the United States can be compelled to refund the excess profits collected from plaintiff by the Food Administration.
The court is of the opinion that plaintiff is entitled to recover, first, because under the facts and circumstances disclosed by the findings it was not bound by the audit of the Food Administration, and, secondly, because the rela.tion between plaintiff and the defendant was contractual.
At the outset it should be stated that the letter of July 17, 1919, written by the plaintiff to the Food Administra-
The facts further show (Finding XXI) that with full, knowledge of the facts, the method of accounting, and the-manner in which the plaintiff carried on its jobbing business, the United States Food Administration approved its-methods and practice and that the plaintiff was not required' to make any change therein. At that time the plaintiff had been licensed by the Food Administration as a wholesaler and jobber. It appears that plaintiff maintained a-bona fide jobbing department within the meaning of the Food Administration regulations and its license as a jobber, that its books were kept in such a manner as to clearly reflect the facts with reference to its transactions, and that, it charged no excess profits in its operations.
In view of these facts, it is clear that in the audit, by which the defendant seeks to bind the plaintiff, the Food' Administration, through the enforcement division, was guilty of an arbitrary and wanton disregard of plaintiff’s rights and committed errors and mistakes to plaintiff’s, prejudice so gross and palpable as to leave no doubt in the mind of the court that grave injustice was done to plaintiff. In these circumstances the agreement is no bar to-plaintiff’s right to maintain this suit. Ripley v. United States, 223 U. S. 695; Mundy et al. v. Louisville & N. R. R. Co., 67 Fed. 633. The facts in this case distinguish it from the case of Cheyenne Milling Co. v. United States, 59 C. Cls.. 927, and other cases cited by the defendant in support of!'
The relation of the plaintiff and the defendant was contractual. The monies collected, which plaintiff seeks to recover, were covered into the Treasury by the United States Food Administration, which amounts are wrongfully being withheld from the plaintiff — Findings XI and XII. The United States Food Administration exacted and collected from the plaintiff the amounts in question under the authority conferred by the act of August 10, 1911, 40 Stat. 276, and Executive order issued pursuant thereto, and the written .agreements between the parties, and the licenses issued by the Food Administration. If the defendant is entitled to the sums collected, its right thereto arises by reason of such act, agreements, and licenses. In our opinion there is no merit in the claim of the defendant that plaintiff is not entitled to maintain this suit to recover the sums so collected. U. S. Grain Corporation v. Phillips, 261 U. S. 106. United States v. Powers, 274 Fed. 131.