# Brief for the United States — Rex Trailer Co. v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA04386408_0149%3A6 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for the United States - **Published:** January 1, 1956 - **Citation:** 350 U.S. 148 ## Text pie : ne . = - 4 - % % mE ‘ 2, se ¢ . ‘ 2ENY iioos ee. 7 “ . és > ’ ‘ : e ’ ; aa * « x : . * . . 5 Page pinjons below ast ee he are ee 4G fate earn weer fat Jurisdiction Nee i A ey Oa aca l (Question presented yi ..........605. Stowe eae kage “2s tetas tivelved °.. ~~... POETAG EE REE SOOO Ae 2 Statement OR EEE SE SAS SA DELO ae 3 /The- statutory background pax peRes Wea euss etiows 4 “The proceedings. in the instant case....... : eee 7 i a A Eee ras ‘10 - Argument: ; Boss pee =, The Government's suit’ to recever under Section ~ \ 26(b)(1) Of the Surplus Property Act‘is not bar- : red by the prohibition against double jeopardy. ._ 12 A. Well-established principles support — the holding below that recovery by the Gov- : . ernment would not place petitioner in : -* jeopardy ‘for a second time. 3. B. The fact that no. damages. were dies ian does not convert the suit into an action. eS Se | ees er eRree pevees ses 27 i i ERE Ee kT Le eee eas 4 orate 39 : ‘ CITATIONS Cases: hea | ‘Ate hison, Topeka & Seite ‘Fe Ry. v. Nichols, 264 = Us ERR RENTS hss Okie ae ane - 2 Barnes Coal Cor p.V. Retail Cc oal Merchants. Ass’ n, 128 F. 2d @45....... Cr iodine as ee Pe ee as 22 Bigelow v. RKO Radio Picture s, 327 US. 254. - 38° Boyd v. United States, MEI MOUs kv ns os giv e's 14 Brady: Dale, FBG 0... ioe 21,38 _._—__-=“talvin v. thidaiey 178 Mass. 29° TC ere aa (hattanooga Foundry v. Atlanta, 203 U.S. 390.... " 21-22 - ( ‘lydebank sen gee igh & Shipbuilding Co. v. C as- | te taneda |1905] A.C. 6........1:,...: Pe ere yen -* jo Coffey v. United oy 116 U.S. 436 Narain et ‘+> 28,98 \ Cox‘ ¥. ibe Brothers, 237 N.Y. 376; 143 NE, eR: een e Capea eereaean tei e reer te wy Cases— ‘ontinued : : oe : Page Crary v. Porter, 157 % 2d 410..........-.. ed ie a _ Currie v. Flack, 190 F. 2d. 549... 22. .00.00.08. 22,38 | P Se Douglas v. Cunningham, 294 Uses. 207........ Vora, Federal Trade ¢ ‘ommission v. mwa Co.; 263- US. 565 ......: DIR RAE Ree r se aot ee - 34 _ Fields v. Washington, 173 F. aA id bab eced eae 22 Gordon’ v. Street [1899] 2.Q.B. 641-.......... os, 34 (rreen Vv. Victor Talking Machine Co., 24 F. 2c 378, certiorari denied; 278 U.S. me. re 34 Guessefeldt v. McGrath, 342 U.S. 308. / Pitecerey es 26 Hedden v..Griffin, 136 Mass. 229. Fives cee Chena 34 Helvering v. Mitchell, 303 U.S, 391, | ‘ ? 10. 14, 16, 19-21, 26, 27, 28, 36, 38, 39 Huntéhgton v. Attrill? “LEE Sg seen ee 21, 22 James-Dickinson Co. ¥: Harry, 273,US8. 119..... 22 Meeker & Co. v. esata Valley. R. Co.,.236 U.S. * WE sea Ps rk Oh ks ie EG ES 22 Murphy v. U hited States, 272 ing 33 eee 14, 26 } Murray «& Sorenson, Inc. U nited states, 207 P.. 2d 146. .: 2. veers re ear via ble kek cies ae Overnight Motor Co. v. Missel,. 316 U.S. 572..:... 38 Pri€be & Sons v. United States, 332 US..407...... 29 . Popham v. Eyre, Lofit 786, 98 Eng. Rep. 919 (Ch., : ete lar Se” Saee ee ae in 34° Robertson v. “Argus Hosiery Mills, 2h P..9d 205, °. ° certiorari denied, 314 USS. 681....... ee apie 22 * Schinkal v. United States, CA. 9, No. 14313° (de- ~~ elded September Be one ceeWiwes » aa ; Smith vo W heatcroft, 9 ¢ ‘h. Div. re een Sy hes? 34 ~ Stockwell v. United States, 13 W: “3 eee Y 36, 38 Sulfivan: v. “Associated heen ond Distrib =" lors, 6 F.2d 1000..... Sd ae non ae Walla hk ee bk 22 SiungPrinting & Pub. Assn. Vv. Moore, 183 U. s. 642. 30) United States *: Pe rceaans Steel, Co., 205 US. : eo eee ee PEPE ee Perey Kieend” > sae : U nile d States V. Choufeau, 102 US S603... at (ees 13 - Enited States.v. © OngTess of Inubuistrial Organiza . | Hors, 335 US. 106... .. ieee uerck Mas Keeei 26 C nited States ¥. Graingey, 306 US. 25........... 39 . United States v. Cramer, 191 F. 2d “41. beexicrienk : bor HI Cases—Continued : ie 3 ry : | ee : Page United States v. Grannis, 172 F. 2d 507, certiorarl _ - denied, 337 U. 3. 918. Me chee ae ed Pha Rast Sayed 18, 22, 31 “L'nited State sv. ‘LaFrancd, 282 U.S.568: ay United States v. One Dodge Sedan, 113 F, “2d. 552." 26 _ United States v. Real Estatg Boards, 389 U.S7485. . - 1820 : Enited States v. Rohleder,.157 F.2d 126........ '_. aa ‘United States v. Smith, 342 U.S. 225....:....... _ 39 United States vy. Waikof, 144 F, ged ga......: cman 30 United States v. Weaver, 207 F: 2d 796 an 10, 21, 1, 32, 39 United States vs Withesspoon, 211 F. SAO. oi css 21,39 United States ex rel. Marcus v. Hess, 41 F. Supp. We oe Spee ena oben wimncheeye ake ‘oe : United ‘States éx rel. Marc ie v. Hess, 317 Us - 5 jee 10,11, 42, 13, 14- 19, 21. -22: 33. 26, 27 , 28, 39 SU nited States ex rel Ostrager v. Contractors, 317 Sa 8 bce hes OA Gears een ones :- 14,16: | - Various [tems v. United States, 282 U.S. 577...... -14, 26 ‘¢ — Wisconsin v. Pelican Insiirance Co., 127,US8: 265.2" 22 Woolworth Co. v. Contemporary, Arts, 344 USS. lee ee eer aint Nees PPP EE EP eS Se Constitution and Statutes: cae “Constitution of the United States: - y faa) ~ Fifth Amendment --....:...%.. ies estes J # — Act of September 18, 1945, 59 Stat. 533, 50 US .C. App. (1946 ed.) 1614a, 1614b ..2........ es et False Claims ~Act (Rev. Stat. 5438, 3490, 31 OBC. SBE) on. cets et eg ieee gts 21, 22, 32 : Og - Federal Property and Administrative Services. Act.” of 1949; 63 Stat. 377: ‘Section 105, 5 U.S.C. 630c ...;...... Patein 307 | 5 Section. 209, 40 U.S.C. 489 See 2 | pretense ae here re re eee pg? 2: . Revenye Act of 1928, Section 203--........ weeeee ‘419 Surplus Property Act of 1944, 58 Stat. 765, et. ‘seq. atid as amended, 60. Stat. 168, 50 U.S.C. App. (1946 ed.) 1611 -et 2 per 31. Section 2 ..... Nie es Pee Trt Tere TT CES noe ett IAA). 56 Giese acer eieaun ei "av ; ger i Constitytion aud Statutes —t ‘ontinued | eee : mh oo) 5 (Section | Rea erg ier poe pkbuepreweaes 4 "section 2(h) AER COREA fe Sa oe eterno a Section 2(q): ...7....... Ss ieuede as a ene 5° eee ee ci Paty i eras: pas . section 12 (1940°ed., Supp. yo Se 6 | Section- 43° (1940 ed., NGF ered e ees at 6. ; Section 16° (1940 1 = SUPP. BMGs iene cage 5 RR Ante re eo erty Seer re Pe 9, 10 Section 26(b) ie 2 4, 10, 11, 12, 14, “21, 22, 23, 25,39 © et ‘i re Ay he tn a ayes Mis 11, , 24, 25° Is USC. cay on wih a Rw ool Mane vedas 26 - - 98 USC.” fi pete ape a Spee Tee re ie Ve st Se ~ epg ees Me ees Sa vines 21, 39: “Miscellanéous: . : hiner | ee, Kerk 32 C.F.R. (1946 Supp.) : ag a) I nk cao ean Pisieiceeeese Oe Section 8302.11 .......: SS Peatad ni 3 ake oe 0: MN RE 6 oes oases ern ees cle OD Coie: Mec. 7500... ...-.... te ase es Sein ae 92 Cong. Rec: 4001 ..... Rees Site has ocr 6. UE hiebe cca te liys tens ser vis eS: 7 Executive Order No. 9689 of January 3], 1946 2 23 (UR Rae daca’ mat pene atts ed Pap er ety eee : 5 H. Rep. No. 1954, 79th Cong. 2d $ Sesé., and p. 2. = 2 _ H.R. 5125, 78th.Cong., 2d Sess.... charwed weeks 24 ~ Quarterly Progress Report to the Congress en the > War Assets Administration,” Second Ss cans “s ; | * lbp. 8... te Cea t aaa pa ae aes ee No. 1 of 1947, Sec. 501, 61 i: ' ME Bet ekce kad ea wes odes Se ere, eee es 5 "+ S$. 2065, 78th Cong., 2d. MM Sel cwescavackaessace - 24 > oe: ‘No. 1057, 78th ¢ ong.,- 2d, Sess: “pp. to ESTER TELE TET TLL CTT eee saa oo 31 Be NN Se tee 4,11, 24, 25 8. Rep. No. 1142, 79th Cong., 2d Sess a ee ioe 6 iE gti ek i ten cee dace osap rr teys 35 ik gee Sater ery ie eeut caaeasad ewes 6 : bad ne Sayre Gort te Mite Stes Oc TOBE. s Team: 10065: ; &% . ae e + A = : e No. 46. : ? ‘Rex TrRAiLeR Company, INc., PETITIONER: \ pes , Uwnirep States-oF AMERICA ; « be ON WRIT, OF CERTIORARI TO THE [NITED STATES — COURT OF APPEALS FOR THE SEVENTH CIRCUIT , : 8 BRIEF FOR THE UNITED STATES OPINIONS BELOW y : L The ordef of the District Court granting the -Government’s motion for summary judgment (R. - 12-13) is not reperted. ~The opinion of the Court / of Appeals (R. 17- 23) is Ree, 4002. : ae ©Sehedule of Property to be set aside for veterans: Ex- hibit A following 32 C.F.R. (1946 Supp.) 8302.14. Sa 4 oe gx’ ™ ww . an-agency of the United States Government, for the purpose of obtaining 1 Ross Carrier Company : Straddle Truck, model 90-7056, serial 1940 USA 963821"! (R.:2)." The complaint contained four additional counts, numbered TI through V, which are identical with C ount I except as to the name of the person whom petitioner had caused to, make the false statement and the description of the vehicle involved (R. 2. 3). On the basis of the allegations contained in rae five counts, the complaint prayed for judgment in the amount of $2,000 for each of the five frauds perpetrated by petitioner upon the - Was Assets Administration, as provided in Sec- tion: 26(b) (1) of the Surplus Property Act (supra, pp. 2-3), a total of &10,000 plus costs (R.3)+ By its amended answer, petitioner in effect ad- mitted the truth of the allegations in the Govern- ment’s complaint, but sought to defend on the ground that the Government’s action was: one for a ‘statutory penalty”? and not “for the collection of ‘any obligation or indebtedhess owing to or the re- coupment or recover, of damage suffered by ‘the [United States] ™ €R. 6). The answer alleged that petitioner had previously been indicted for the ‘identical offenses charged inthe * * * com- plaint * * * to which it had pleaded nolo con- tendere, and upon which fines in the aggregate gee of $25,000 had heen imposed and paid (Rt. -7, 8-11). The answer further averred that’ peti- 1 The “false statements” were statements qualifying .the- persons named in each of the counts as a veteran for a pri- ority right to make the purchase, See R. 7, 18. 9. tioner’s frauds have net caused the Government any cae or loss since it received the fuil ad- vertised offering price for the trucks and, had the trucks nat all been sold to those having claiming priorities, they would have been sold at the same. price to nNon-priority pure hasers suc ‘h as petitioner (R. 7-8). : | } | | Thereafter, both parties’ moved for summary “judgment. The Government? s motion was on the —'vround that there was no genuine’ issue of fact and further that, since the defenses set out in peti- —tioner’s. answer were insufficient, the Government was entitled to judgment as a matter of law (R. 3-4), Petitioner’s motion was based on the’ claim that the Government's suit, being for a statutory penalty, was barred by the Fifth Amendment's pro- hibition against double , jeopardy (R. 4-5). | The District Court over ruled petitioner’ s motion for summary judgment .and gr ranted the Govern- ment’s motion, holding im effect that the double jeopardy provision of the Fifth Amendment was | not applicable to this civil-aection for damages” TR. 12-13). Accordingly, the District Court’ entered judgment for the Government for $10, 000, $2,000 for each of thé five frauds practiced by petitioner, plus eosts (R. 13). On appeal, the court below at- firmed, holding that Section 96(b) (1) was com- pensatory and ‘not -penal, and therefore that the action was not. barred by the Fifth oe ae. nt’ s prohibition against double jeopardy. (R, 17-2: : i Pees 10 SUMMARY OF ARGUMENT The holding of the court below that the Govern- ment’s sult untler Section 26(b) (1) of.the Surplus Property Ket. to recover $2,000 for each of peti- ; tioner’s five frauds, was not:barred by the double jeopardy prohibition—because the civil remedy is compensatory and not punitive—is suppojted, if . ‘not required, by several decisions of this Court, particularly United States er rel. Marcus v. Hess, 317 UL 8,937, See also, United States v. Weaver, 207 BF. 2d 796 (CLA. 5) (agreeing with the court below). Applyi ing the comparable provision of the False Claims Act, Wareus v. Hess held that a prror criminal proceeding’ ras no bar to the Govern- ment’s recovery of $2,000 for each of: the false claims filed in that case. The critical facts are the saine here and the statutory provisions and their purposes are practically identical. rae In-addition, the Surplus. Property. Act-and-its— ns - legislative @ history show a definite -eongressional purpose—the gov erning criterion, under npr us Ve Hess and Helvering v. Mitchell, 303 U. 391, in characterizing remedies of this gener al pfeonadr provide a civil compensatory remedy and not merely a penalty or punitive imposition. Jas‘ us, ~ flrss having been decided. shortly before the enact- ment of the Surplus Property Act, ‘‘we. may as- sume ‘that ‘the framers of § 26(b) were aware of . that decision when they formulated § 26¢b)"" (R- 19). Moreover, since the other subparagraphs of the Scetion prov ide aoe’ compensatory, remedies pt - for violation of the Aét, it is highly unlikely that Congress intended to include a punitive s sanetion in ‘the same section; indeed, Section 26(¢d) describes: 26(b) as.providing “civil reniedies”* and the Senate Committee's report characterizes Section -26 as giving: to the United States “the option of eléct- ing ‘among three different measures of, damages. S. Rep. No. 9057. TSth Cong., 2d Sess:, ppe 13-14. Finally, since the Act itself and its législativ e his- - a ‘tory show that Congress intended that suits under’ Section 26(b) could and would be brought in addi- tion (and not merely as an alternative). to criminal strued to avoid constitutional issues would seem to require that Section 26(b) be held to proyide a compensatory remedy, not a penal sanction. . ee proceedings, the rule that statutes are to be con-™* Petitioner’s argument that-Section 26()) (1) is F —penal in the particular cireumstances of this case because the frauds assertedly caused no damage to the Government is “based | on a misreading of Marcus v. Hess. That case, as well as Helvering V. Mitchell, ruled that the issue is whether Congress, anticipating that frauds under the partic ‘ular stat- - ute would venerally « cause damage, designed a gen- eral statutory formula to provide restitution for damage which might well he hard to prove in “any. individual case; on¢e-it is decided. that such was. the congressional pUrpose, the remedy ‘ap- plies: to all cases under the statute ‘irrespective of their individual facts: or of proof of actual 5; = e o «o ° . 12 damage. The comparable remedy in the False Claimis Act was actually applied in Marcus v. Hess without regard to a showing of loss. | Similarly, here it is clear-that-not only did Con- -gress anticipate damage generally from frauds under the Surplus Property Act but that in fact damage and injury to the Government résulted in- several ways. And the difficulty of reducing these damages to a monetary equivalent. furnishes full, justification - form the $2,000 provision of Seetion 26(b) 61). “The inherent diffic ulty of choosing a proper specific sum whic h would’ give full restitu- tion was a problem for C ongress.’ ’ Mareus \V: Hess, , 317 U.S. at 592. 3 . SB aaa o ARGUMENT See as The Government’ s Suit to Recover Under Seviton 26(b) (1) of “the Surplus Property wi Not Barred by the Prohibition Against Double Jeop rdy. — _ This suit was brought by the United States under: Section 26(1) (1), of the ‘Surplus Property Act which provides that *tevery person who shall use or ‘engage in * * * any fraudulent trick, scheme, or device, for the purpose of securing or obtaining — * * * for any person any payment, property, or po r henefits from the United States or any Gov-- ernment agency in connection with the disposition of property under this Act * * *°' **shall pay to the United States the sum of #2000 for each such. act, and double the athount of any damage whieh | the United States may. have : ‘sustaine d by r ‘aSOn | thereof, | Petitioner in effect admits that it, defr waded the = oe aka al > : ay, e War “Assets Administration i in connection with eer- tatn sales ‘hy that agency of strplus motor vehicles “in 1947 (RL 6). Tt, however, seeks ta avoid making the paviments prese ‘rihed hy Section 26(b) (1) on the ground that the £2,000 pilus doubt damage pro- vision constitutes a statutory: penalty and conse- quently that, because of the prior criminal proc eed- | ings based on, the same frauds, the Government is harreth from recevering under Section * 26(b) (1) by. the double jeopardy provision of the: Fifth ; Amendment. i, This contention is without merit. ; . Ww sit cd cbiinihe Principles Support the Hold- 7 eee ing Below that Recovery by the Government would not Place Petitioner in Jeopardy for a _ Second ime. - ge a : The- ecisions of this C ourt, particularly that in United States érxel. Marcus vy. Hess, 3Y7-U. S. 537, » leave no doubt that the instant suit does not operate to place petitioner in jeopardy for a second time contrary to the proscription of the. Fifth Amend- 3 ment. For while it is clear that the double jeop- -ardy provision prohibits the imposition of pun- ishment twice for the sae (see &. g., United States v. LaF ranca, 282.0 8. 568; Coffey v. United States, 116 USS. 486.0 oT “Stites v. Chouteau, -102 ULS, 603), it is equally well settled that the'con- stitutional prohibition, is. inapplicable Where the. second proceeding, although based on the same facts, is not penal in nature.® See ¢. Yu. United © 1s* * * nor shall any person: be subject for the same of-” . fence to be twice put in jeopardy of life « cclmb: * * *”, ¢ 4 -@s 3 | 14 States ex ret. Marcus \. Hess, SV US. 0387; bl onited States er rel, Ostrager. \. Contractors, 317. U.S ‘562: Helvering v. Mitchell, 303.0. 8. 391; United Mate sv. Real Estate Boards, 339 ULS, 485. 493. fn.- : i: Murphy v. United, States, 242 u. S. 630; Vari: ous Items v. United States, 282° U.S. 577; Boyd v. ©" United States, 116 U.S. 6162 Under the latter de- cisions, particularly Marcus v. less, supra, which — involved the very same situation and contention. by | the defrauders @s to the comparable provision of ‘the False Claims Act, the right of action vested in - the Government by Section 26(b)(1) of the Sur- plus Property Act constitutes a civil remedy, com- pensatory in nature. Accordingly, the court below properly held that the instant proce ceding does no come under the proscription of the F ifth Anie nd- ment. | | bee Se | Marcus v. Tless, the defendants hal pleaded nolo-contendere to an indictment for conspiracy ‘to. defraud the United States and had: paid the fines e.- imposed. (317 Us S. at SH, 548). After this.¢riminal _ proceeding, there was instituted agi inst the defend- ants an actron seeking judgment in accordance with the provision of np False Claims Act (Rev, Stat. 5438, 3490, 34 U.S.C. 231), which provides, iu lan- . guage once identical to “that here in- volved,” that a person who perpet ‘ates certain frauds upon the U nited States: | . a? ie forfeit and pay to the U nited States the sum of two thons: uid dollars. anil, in - 2 Rev Stat. 3490 apparently served as a model for See-- tion 26(b) (1); see infra, p. 23. *. ; Soda: ee ie 2 , addition, double fhe amount of dathages which “the United States may have sustained ta togethe r with the costs of suit. 4 LS The defendants. argued that the statute ander which the action was brought prescribed p penalty and so the prior criminal proceeding, coupled with the pro- hibition. against double jeopardy, precluded as-' ‘sessment of. the sti atutory #2.000 plus double dani complaint (317 U.S. at 548). : This Court was unanimous in rejec ting these cone tentions." With . the exeeption of Ma. Justice. Frankfurter, who would have based the ruling on’ this issue on another eround (S17 ULS. at 593 ff.) the court was in agreement ‘that the proviston. of the False Claims Act that the-defr auder should ‘forfeit and pay’? $2,000 and double damages for ages for each fraudulent act, as sought in the each fraud upon the Government was remedial and — Mr. Justice Murphy did not participate in the -consider- ~ ation of the ease, 317. Us. 553.) The dissent of; Mr. Justice Jackson was direéted tO ansissue other than that of the as- ~ serted double jeopdrdy. 317 U.S. at 556.562. Wy the view of Mr. istice Frankfurter, there was no double jeopardy involved because * * * where two such proceedings me ety | Carry cutethe remedies whieh Congress has presertbed in advance - for ‘a wrong, they do not twice: put a man in jeopardy. for the same offense. Congress thereby merely allows the J . comprehensive pe énalties which it has imposed to-be en- foreed in separate suits ingtead of in a single proceed - ing.. By doing this Congress does not impose more than ‘a single punishment. And the double’ jeopardy clause cedure for the —— of punitive eae. {317 US 5. at 555.) - does not prevent. Congress from prescribing such a pro-_ X \ » 4 oi 16 ae not penal. ** Pointing out that the double jeopardy * provision applies only té ‘‘actions intended to ati- thorize ¢riminal punishment to vindicate public | justice’? and.not to ‘‘civil, remedial actions brought | primarily to protect the government from financial —loss’’ (317 U.S. at 548-549), the Court quoted from _its earlier decision in Helvering v. Mitchell, 303 U. S. 391, 399, to the effect that (317 U.S. at 549): Congress may | impose both a criminal and a civil sanction in respect, to the. same “act or omission ; for the double jeopardy clause pro- “hibits merely punishiggs twice, or attempting a second. time to punish criminally,: for the same offense:. The question for decision is thus whether * * * [the statute in question] * * * imposes.a cr iminal sanction. That ques- tion is one of statutory construction. - oo with reference to the False Claims Act ‘before it, the Court held (ibid) :- i It is enough for present purposes if we con- clude that the instant proeeedings are remedial and impose a tivil sanction. * * * Ww e cannot. say that the remedy now before us requiring _ payment of a lump sum [of $2,000] ‘and double -damages will do more than afford the govern- > 7 - 15 The holding in Marcus v. Hess. was applied in United States ex rel. Ostrager v. Contractors, 317 U.S. 562, decided the ‘ same. day as Marcus v. Hess and similarly -involving the ap-. ‘ plicability of the double jeopardy. provision to an acfion _¢ under the False Claims Act following a crininal proceeding. . ment complete indemnit y for the injuries done The Court further aenabe that the $2,000 plus |. _ double damage provision of the False Claims Act was enacted by Congress not as a preserver of peace or to vindicate ‘public justice, but. in order’ to protéct the property rights of the United States, rights which the whe gare has" jist like any other person (at 549-550) :° pon a vate It is, Of course, well accepted that for one act a. person may be liable both to-pay dam- ages and to suffer a criminal penalty. Long ago, this Court said, ‘A man may, be com- | pelled to make reparations in damages to the injured party, and be liable ajso to -punish- mert for a breach of the publie peace, in con- sequence of the same act; and may be said, — in common parlarice to be twice punished for the same offense.’’ Moore v. Illinois, 14 How. 13,19, 20. Congress has ‘‘ power to. give.an ac fs: tion for damages to ah individual who suffers | by breach of the law.’”” Chattanooga Foundry v. Atlanta, 203, U.S. 390, 396, 397. And it has tlris same power when it, ratlier than some _private individual, is injured by a fraud. | - Quite aside from its interest as preserver of the peace, the government When spending its . money has the same interest in protecting..it-— self from. fraudulent practices ax it has in pro- tec ting any citizen from frauds w vhiech may be | practiced upon him. ‘The powers of the ¢ ny ” United States as a sovereign, dealing with of: fenders: agaist their laavs, “must not he con- founded ‘with their rights is: a body pofitic. It would present a’ ktrange anomaly, indeed,, if, having, the power to make contracts and hold property as other persons, natural or artt- ficial, they were not entitled to the same reme- ‘dies for. their protection.” Miton. v. United States, 1] How. 229, 231, The opinion conclided on this point (at PP 5o1- (02): a . : « “ Tt is trie that “* Punishment, in a wertain and very limited sense,. may he the result of the statute hefore us so far as the wrong-doer is, concerned,” but: this is not enough tO abel it asa criminal statute. Brady v. Daly, 175 _ U.S. 148, 157. We think the chief purpose of : the statutes here was to provide for restitur. tion to the. government of money taken from “*! it By fraud, and that the device of double dam- ages plus di specific sum was chosen to make - sure thatthe government w ould he made com- pletely whole. * * * The inherent difficulty of. choosing: a proper specifie sum which would re full restitution was a probleni for Con- ; gress," eet aby 4 : : ‘ ‘ ° co] ‘fe re i> = o . ’ on See also, United States’ v. Grannis; 172 F. 2d°507, 511 Wye 4); certiorari denied, 337° US. 9t8. where the Court _ of Appeals. for the Fourth Circuit held that “Tt is: clearly pee ire that the defense of double jeopardy is not ap- | plicable. to civil aefions ‘under the federal false claims stat- ute.” _As already indicated, Marcus v. Hess refers to the. Court’s earlier decision in Melrering) \. Mit- ehell, 303 U.S. 391. In that case, the — liaving heen acquitted of fraud under thie in earlier criminal proceedings. sought to defeat . the Government's subsequent suit for the 50% , avd- ~ dendim to the taxes assessed under Section 293 of the Revenue Act of 1928 onthe ground that; this additional 50 constituted ao penalty and henee its recovery byethe-Government was barred by the double jeopardy prohibjtion. Iu rejecting: this claim, the-Court reaffirmed as long settled [TJ hat | acquittal on a cyiminal charge. ix not ‘a v har toa evil action by the Government, remedial, in its - ® ‘nature, arising out of thes sane facts on = h the zetisninte proc coding was hased”’ BOB, Boat, HOT. see also 308 US, at 398-3 HO) oy “ ‘ourt then went , on to comment (303 ELS. at 401): Scie coe he remedial character of actions impos- ing additions to at TaN, has heen made clear by this Court in passing ppon similar legislat on. They are. provided primarily as ‘a safeguard forzthe protection of. the revenue anid to reim- burse the Government for the heitvy’ expe Hse of inyestigation and the loss resulting from the: taxpayer's fraud. Tn Stockwell v.. United ys States, 13 Wall. 531. 547,551, the Court said of a provision which added double the value. of. the goods: 4s | | o “Tt. sare therefote he éonside red as remed-_ ial. as. providing indemnity for Joss. And it . ‘ tax laws - a 20 - ts not the less sq because the liability of the wv rongdoer is ‘measured by double the value of the goods, rec eived, concealed, or purchased, instead of their single value.. The act of ab- stracting goods illeg ally. ‘imported, ree eiving, concealing or buying. them, inter poses difficul- ties In the way of a government seizure, and» impairs, therefore, the value of the govern-— ment right. It is, then, hardly accurate. to say that the only loss the government can sus- tain from ‘concealing the goods liable to seizure is their single value, dr to assert that the liabil-. ity imposed by the statute of double the value is arbitrary and. without reference to indemni- figation. Double the value. may not be more / than complete indemnity * * *.: “The act of 1823 wasg.as we. have seen, remedial in its mature. Its purpose was ‘to - secure full compensation forinterferenc ew ith ~ the rights of the United States.’ Noting that wmong the various types of remedial sanction was ‘‘the payment of fixed or variable. sums of money”’ (303 U.S. at 400), the Court con- ssininnsicjinl esate \ 3 Another remedial sanction, “which | is characteristically- free of the punitive criminal element is revocation of a priv-: ilege voluntarily granted” such as the deportation of -aliens and disbarment. 303 U.S. at 399. fn. 2 and cases there cited. See also, United States v. Real Sele Boards, 339 U.S. 485, 493, tn. 6 «°The-fact that in ease of corporations dissola- tien ean resnit from a civil suit under the anti-trust laws _ doés not muke+the proceeding any the less*remedial. The civil-suit aims to put an end to the restraint, not to impose. punishment for+past acts”) Bea ‘ “ } ° . ate 21 cluded that thé basic qugstion is one of statutory construction and that the statute and its history in- dicated clearly that Congress intended a civil re- ‘medial, not a criminal penal, sanction | (id., at 401- - 402). : ; i 2. ine construction accorded by this Court in Marcus v. Hess to the $2,000. plus ‘double dami ge t provision of the False Claims Act is fully appli- cable to the virtually identical provision of Section 96(b)(1) of the Surplus Property Act here in- ‘volved. “As ‘in. Marcus v. Hess, the, action was brought by the Government not as preserver of peace or to vindicate: public justice, but, as‘held in United States v. Weaver, 207 F. 2d 796,797, (CLA, 5), as ‘sa civil action to reeoyer an award of, dam- ages of a compensatory nature, payable to the Is es States for injuries to its eee ty rights." ® The We eaver case involved the same basie issue as that presented by the instant case, ?. e,, Whether Section 26(b+(1) of the Surplus Property Act is penal or compensatory Al- though the context in which that issue was raised in Weaver differs from the present one (in Weaver, the ultimate ques- tion was whether“the ‘action was subject to the statute ‘of limitations for suits for penalties: contained in 28 USC. 2462), petitioner has recognized that» this difference is im- material and has. invoked as support for its position United States v. Witherspoon, 211 F. 2d 858 (C.A. 6), where in pre- cisely the same context as Weaver, Section 26(b) (1) was held. penal. (Pet. 5-6, Br. 9). See infra, p. 39, fn. 34. In fact, as the court below held (R. 21), no distinction. flows fromthe difference, for in -both the double jeopardy _ (involved ‘here) and the dimitations situations (jnvolved in’ Weaver ‘and Witherspgon), “penalty” is. used in the sense of an exaction designéd to punish. an offense against. the public justice. Compare Marcus v. Hess, 317 US. at 548-549, supra,.p. 16, with Huntington vy. Attrill, 146 U.S. 657, 658, 673- 74, 683; Brady v. Daly, 175 Us. 148, 156; Chattanooga: 7” 22 _This is evident from, the similarity in purpose of the provisions; both relate to: frauds, upon the Government, the False Claims Act pertaining to. frauds in connec tion with elaims submitted to the Government and Section .26(b) (1) dealing with | frauds in procuring. praperty from the. CGovern- ment. Andee d, inasmuch a& the strong “forfeit . and pay’ fanguage of False Claims Act was not” deemed by this Court to convert the $2 000 plus double damages provision of that Act into a pen- alty. it would. seem, ‘as the court below held‘ (R. Foundry v. Atlanta, 203 U.S. 390, 397; Meeker & Co. v. Lehigh Valley R. Co., 236 U.S. 412, 423 (all but one of which eases were referred to in Marcus v. Hess): This is the sense ‘that: “penalty "is given generally ‘under federal law.. Hunt- mnaton ¥. Attrill, gupra (conflicts of laws); Wisconsin v. Peli- can Insurance Co. } 137 US. po (confliets of laws); James- Pickinson Co. v. Harry, 273 U.S. 119, 126 (conflicts of laws) ; Sullivan v. Associated aaa and -Distributors, 6 - 2d 1000. 1009 (CLA. 2) (abatement); Barnes Coal Corp. v. Re- _ tal Coal Merchants Ass'n, 128 F. 2d 645 (C.A. 4) lalate: - ment); United States v. Grannis, 172 F. 2d 507, 514 (C.A. 4), certiorari denied, 337 U.S. 918 (abatement): Robertson v. Argus Hosiery Mills, 121 F. 2d 285 (C.A. 6), certiorari de- _ nied, 314 U.S. 681 (jurisdiction under 28 U.S.C. ° 1355); Fields v. W ashington, 173 F. 2d 701. (CLA. 3). (jurisdiction under 28 U.S.C. 1355); Curne v. Flack @Q0 F. 2d 549 (CLA. . 1) taste under 28 UNC. 1355); Cor v. Lukes Broth- ers, 237 N.Y. 376, 143 N.F. 226 (jurisdiction under 28 S.C. 1355); Crary v. Porter, 157-F. 2d 41@, 413-414 ie A. 8) (self+ incrimination): Schinkal v" Unitéd States. C.A. 9 No. 14313 (decided Septen*er 20, 1955), (self-inerimination). "In regard: to the * ‘forfeit and pav”™ language of the False Clainis Act the Court commented i317 Us. at 55ld: Ht is argipd that the $2,000 “forfeit and pay” provi- sion is “eriminal” rather than “civil,” even if the double damage feature is not. The words “forfeit. and pay” - relate alike to the $2.000 sum and the double. damages. S ‘ 23 20), Shine the ‘milder require mens of “pay* imposed hy* Section 26(b)(1) would « fortiori militate against petitioner's construction. Moreover, in view of the express ruling in both Marcus V.. Hess and Helvering v. Mitchell that the ° problem of the nature of remedy is basically one of statutory construction, and of ascer taining. the leg- islative intent, it is important to note that Marcus v. Hess was decided in Janwaty 1945, shortly hetore the enactment of the ee Property Act of 1944 on Octobe 1 3. 1944. Tie these cireumstances, "we may assume that the framers of \ 26(b) were aware of that decision when they formulated » 26( b)’?: CR. 19), and, consequeritly, ‘that by « ‘arrying over into Section 26()) (1) the provisions of. the False Claims Act ¢ construed aq conipensatory in Marcus v. Hess, Congress intended: Section 26(b) (1) simi- - larly to provide a civil compensatory remedy, That Congress intende «1 Section 26(b) (1) ‘to, The use of the word “forfeit in conjunction with the word “pay” dees not force the conclusion that the pro- vision is criminal. No one doubts that Congress could have. accomplished the same result’ by authorizing “double” or “quadruple” or “punitive” damages or a: Jump sum payment for attorney's fees, or by definition of the elements of “actual damages.” Special conse- quence cannot be drawn from the usé of the word “for- feit.” While this might under other circumstances be. an appropriate word td suggest a fine upon the failure to pay which an individual: might be imprisoned, ‘no such punishment is prov ided here upon ‘default in pay- ment. The words “forfeit and pay” are wholly con- - sistent with a civil action for damages. Atchison, T. &. S. F. Ry. Co. v. Nichols, 264 US. 348, 350-352; cf. Hepner v. United States, 213 US, 103. 104-111. | 4 be compensatory ts also nianifest fromthe face of the Act. Section 26(b), supra, , p. 3, explicitly deséribes subsection (b)as providing *!c ‘ivil rem- edies.”’ In addition, subparagraphs (2) and (3) of that Section, providing only for multiple dam- ages, plainly are compensatory in nature (see, infra, p. 38, fn. 32), and it is unlikely that Congress would include a punitive sanction and two compen- satory remedies inthe same sec tion. | Any doubt as to the congr essional intent is dis- sipated by the legislative histery. In its report on 2065,. 78th Cong., 2d Sess., the Pll which, as. amended, became.the Surplus Prop- 44,°" the Senate Committe on Military subsequently erty Aet of Affairs desermbed the provisions of what was then — Section 23(b) as dealing (S. Rep. No, 1057, 78th: ~ Cong., 2d Sess., pp. 13-14.). + 2 engage in false, fraudulent, or fictitious activ- ities, or conceal or misrepresent material facts, or act with intent to defraud the United States, or who enter into an agreement or conspiracy or cause other people to-do any of the fore- going. The United States is given the option of electing among three different measures of damages— : | Ae ) Any person engaged in such activities “° While the bill enacted was Resienated H.R. 5125, the Senate, after considering S _ 2065, struck everything after the enacting clatse. of H.R 5125 as it passed the House and ‘substituted therefor the text of the Senate bill, as amended. ' 90 Cong. Rec. 7330: “ w * with the civil liability of persons who se, ns He “ aw can be sued for the sum of $2,000 fer each such ‘act, plus twice the amount of any damage sus- | oe nited States, plus the cost of suit. : (2) The United Stites may recover from such person twice the consideration which hic agreed to give to it: | (3) The United States may rors ‘* prop: erty acquired by reason ef the aboverdescribed given to it for that ‘property. Piainly, Congress viewed all three subparagraphs of Section 26(b) as in part materia and, of par-- ticular significance here, viewed subparagraph (1), as well as the other subparagraphs, as compensa- tory in nature. Finally, Section 26(d) supra, 'p. 3, expressly | -8 - ~ " provides that the ‘civil remedies provided in [See- tion 26} shall be in addition to all other criminal penalties and civil remedies pr ovided by law.’’. In the same vein, the report of the Senate Committee eras out (8. Rep. Neo. 1057, 78th @ong., 2d Sess., . 14): | _@ © * these ee are exclusive of any other civil remedies which the United States may have and of such provisions of the Crimi- - nal Code as relaté to fraud (18 U S.C. sec. 80) and conspirac] v'(18 USC. sec, 83). It is apparent that not only did ‘Congress in- tend actions-under Section 26(b) to bein addition, fraudulent’ activities, ‘plus’ the consideration — . 65. , a not an alte ‘native, to criminal proceedings: but - also that it.contemplated the very situation which is here presented—a prior ¢ ‘Timinal proceeding un- der 18 ULS.C. 80-(R, 8: Pet. Bro 4. fu. 2) —and which petitioner lsdean as the basis for the out- lawry of the present action by the proseription. against double jeopardy. Furthermore, since it would he wiconstitutiouml to apply Section 26 (b) (1). in these cireunistances (specifically Ch- , visaged by Congress) if it were construed as penal (Helvering vo Mitchell, supra, at 401; United States Vv. apeiugeise 282 U.S. 568; Coffey v. United States, 116 U.S. 436) but there isto suc h problem: if Section ° 26 (bb qs held to be compensatory, ¢ the rule that statutes are to be construed to avoid constitutional issues * *(see, €.9.; Murph yoy. United States, 272 U.S. 680, 632: U nited States v. Con- gress of Industrial Organizations, 385 U.S. 106, 120, 121: Guessefeldt ve MeGrath, 349. U.S. 308, 319) would seem particularly applicable: Petitionher’s reliance on this Court’s earlier opin- ions in Coffey v. United States, 116 U.S. 436, and United States v. LaF ranca, 282 U.S. 568, is inis- placed (Br.10). Inaddition to the doubt ful-valitt- ity of Coffey (se e, €.9.; Various Items Wis {" nited Stites, 282 US. 577; United States V. One Dodga Sedan, 113 F.2d 552, 953 {€.A. 3): United States vy. Grammer, 191 B. 2d 741, 743 (CLA. 9), it should’ he noted ‘that (1) the defrauders invoked these cases—without success—in Mareus vy. Hess and Helvering v. Mitchell (Brief for Respondents in No, 173, Oct. Term, 1942, pp. 80 ff.: Brief for Re- spondent in No, 324, Oct, Term, 1937, pp. 6, 7, 19, oe QT 26,36); (2) that the Second Circuit, in arriving at its holding in Mitchell that the double jeopardy provision was applic ‘able, likewise relied iipon these . cases (89 F. Bd 8&3, 878 ; see 303 U.S, at 405- 406): ‘and (3) that in Mitchell this Court expressely held these cases inapplicable, reasoning that **[s Jinee we construe [the statute] as imposing ay civil ad- ministrative. sanction, neither case. presents an eb- stacle to the recovery of * * * the 50 per centum addition here-in issue’? (303 U.S. at 406): sge.also. | Marcus ¥. Fess, supra, ‘at Dp. 54 (Cone urring oOpin- ion of Frankfurter, J.). Similarly, these ‘ASes Pre- sent no obstacle to the Government’s recovery in the instant cAse, sinée as we have shown above, Section 26(b) (1) is compensatory, not penal: ages. “By the comnion as well as by statute law, men . Mr. Hastice 7 Frankfurter so understood the Court’s opinion.’ 22 See, also Sun Printing & Pub. Assn. ¥. Moore, 183 U.S; 642, 672-674: United States v. Bethlehem Steel Co., 205 U.S. 105, 121; Clydebank Engineering & Shipbuilding Co. vy. Castaneda {1905| A.C. 6, 11- 13, 20; United States Vv. Walkof, 144 F. 2d 75, 77 (C.A. 2). “The next reason “urged by defendants: for a new trial Is that the court etred in refusal of. defendants” 9th point. which reads as follows: ‘9. There ean be no reeovery of any penalty or forfeiture on account of any project in which no actual damages have been shown.’ Section 3490, RUS... ex- pressly provides for-a penalty of $2,000, ‘and, in addition. daable the amount of damages which the United States may: have’ sustained.’ This makes it-piain that regardless of dam- ages sustained, the United States would still be entit4ed to - recover the penalty. This point refers to instances where the United States withheld payments on account of the dis- “covery of the fraud, so that no actual damage was shown. However, that woutd not .preelude the Umited States from recovery ‘of the penalty pre scribed by Section 3490, R.S.” “4 In his cogeurring opinion. Mr. Jhistice Frankfurter criti- cized the. Court, for not allowing “the - who invoke the i A a i a a ee . w The courts of appeals have. also dead Marcus Vv. Hess as giving a general constraction of the statute. onpt limited to particular cases in whieh damages vare proved. United States v. Grannis, 172 F. 2d 507, 511 (CLA. 4)3 ve denied, 337 U.S. 918; Murray d& Sorenson, Trev. U nited: States, 207 F: a 123 (CA. 1). ens ; | ‘Since the Surplus Property Act of LO44 ont: with ihe disposal of all kinds and manner of: sur- plus equipment and property, real and persohial, ranging vip to war plants, ships, str ategic minerals, e airports, aircraft, se and port terminals. (see, DS Stat. 769 ff) 2 it w ould seem ‘lear that the dam- = Constitution, as do the sila here ** to preve that, as a matter of fact, the ‘forfeiture and the double damages ° are punitive because they exceed any amount (gat could reasonably be regarded as the equivalent of compensation * for the Govermment's loss” (317 U.S: at 554). 2 As noted-by. the Senate Committee on Military \afiaig (S. Rep..No. 1057, 78th Cong., 2d Sess., pp. 2-34: \ * © © Estimates of the value of surplus Government-' owned property available for distribution. at the \ end of the war vary from 50 billion collars to 112. billion. Of course, the bulk of this material will consist’ of — weapons of war unsuitable for any peacetime use. How- | ever, it is certain that there will be many billions of dollars of consumers’ goods available to’ supply the se- cumulates! demand of war- -imposed civihan shortages: to provide a large part of this: ans contribution. & foreigh relief; and to sitimulate new demands for -new civilian-type products, largely unknown, or at. least un- available to civilians in pre-war times. — At Jeast a third, and probably more, of fhe Govern- ment's $15,000,000,000 investment in plants ‘and equip- ment will be convertible to peacetime uses. The dispe- sition of the Governmept-owned plants constructed to supply the expanded d-for steel, light metals, chemi- cals, synthetic rubber, and high- octane gasoline will have ages likely to result. to the Government from. frauds cormnitted in connec tion with, the disposal of such property would be at least as e xtensive and diftieuk ‘of exact proof as those resulting from the frauds a en dealt. with in the I’: Ise ( ‘laims Act. Thus, the Ste : plus Prope rty Act’s provision for $2,000 plus’ dou- ble damages for each fraudulent act, like the COME parable provision of: the. False Claims Act, consti- - tutes a reasonable measure, in general, of the fore- ~ seeable damage to the Government. » As was stated in United States v. Weaver 207 F. 2d 796, 798 (CA. 5): 3 a ea he intent and purpose of the Surplus Prop-. erty Act of 1944, 58 Stat. ' 756, were to facil tate and regulate the orderly: disposal of sur- plus ‘property of the United States, ‘including the giving of an opportunity to returning vet- erans to establish themselves in: business, agri- culture, or professional life. Therec; an be no doubt that the property rights of the U nite dL yo States were injured as a result of the actsal- Jeged in the complaint. Section 26(b) (1) seeks ‘to indemnify the United States for such’ injuries. za provides foP payment to the United: States of an amount. hot so dispro- a profound-effeet on the future industrial structureepf the ‘Nation. In addition to -these integrated facilities, the - Government has ‘several billions of dollars invested in such \equipment- as machine tools, whose wartime. pro- duction amounts to. 20 years’ normal supply, apd in Structures which may, if preperly used, house the thousands, of new enterprises needed: to supply peace- time. employment to millions of war workers. vw, eS, | : os | portionate to the actual injury that -it cannot he deemed wholly compensatory. saan ‘- Petitioner's ‘claim that its frauds caused the Government no damage overlooks the fact that the Government intended to sell the surplus motor. ve-. hicles in the prescribed order of. priority under which dealers such as petitioner were at: the bat- made (shortly ‘after the termination of active-hos- tilities in World War II). there was an ac ute shortage of motor vehicles; that the Government °_ wished. to accord a priority to. purchase surplus motor vehicles to certified vetérans in order to aid them in their reassimilatiogzinto civilian life; and consequently that the prices and conditions under - which the Government was willing td make these | sales to these veterans were far more favorable to them than those generally prevailing im’ the | iarket place. = -In-order to help certified. Peery in eis “re- adjustment to civilian life, the~Government wads willing to sell these’ vehicles: to them at a price substantighy: lower than that which the vehicles”: wouk-bring in the open market. See, supra, p.°7, fn. 6. Howev ér;:the Government ‘was not willing to sell these motor vehicles generally to those not” entitled to priority, and even if ‘it were, there: is no indication that it would have heen willing to sell the vehicles generally at the same price and — the same: conditions.” In these circum as. Petitioner’ s allegations that’ under’ the advértisement and tom of the list; that at the time these salés were’, Q + : . 2% : ‘ . . ow SA, A, Ae 2 - + = —_ ad -_ = is 2° Sees cn ~ —_— «= ~ - = ~ a ~ stances, petitioner’ S “fraudulent masque rade as various veter ans had the effect” hot only Gf dndtie- + ang the Government to sell the vehicles to persons with whom: it had no ‘intetition ‘of dealing” bait also of selling the vehicles at lower thi m market prices to per sons’ not entitled to priority for pur- + - _ order of sale, any vebicles left over after all priorities were ‘satisfied would’be sold to non- priority purchasers such’ as petitioner, fail to recognize’ thé realities of the situation ther prevailing. Thé shortage’ of civilian’ Vehicles was so acute . in 1946-1947. that there, were not enough: surplus vehicles to — satisfy the ‘neéds ‘of all priority holders. The result was that it, was an extremely rare ‘situation that vehicles “were ’ sold to non- priority purchasers. In this connection, it is significant that. petitioner nowhere claims or even suggests that the’ price at which the vehicles were: sold by. the Gov-- -ernment was the price then prevailing:, in’ the market, whether Jegitimate, gray or black; in contrast, the fact ‘that petitioner was willing to- resort to fraud to obtain these vehicles strongly: indicates that the Government's. sell- profit, probably .substantia'ly; on the resdle. At this point, it shoukt also be recalled that among. the stated. purposes of the Surplus Property Act were the. discouragement of, dis- posal of surplus property te speculators andthe prevention | ‘of the making of unusual and excessive profits. © Supra,.. pp. 4- 5. e ; 27 It-is well established that a sites es the right Yo select his Pye) (Federal Trade Commission v, Raymond’ Co., 263 U.S . 573; Green V. Victor. Talking: Machine Cwm, 24 : BL 2d 378, 4 'C.A. 2)“eertiorari den ied,. 278 Us. 6u2!, ahd the law will protect a-seller who has been misled into making a sale: by. virtue of the purchaser's Taise representa- tion that he belongs to a class with whom the “vendor is wWill- “ing to, deal or that he“does not belong to a group with wlio, ‘the seller is unwilling to have any dealings. Gorddn v. Street [1899] 2Q B: Al (C.A.); ef. Smith v. Wheatcroft, 9 Ch. Div. . 223; Popham \ . Eyre, Lofft. 786, 98 Eng. Rep. 919 (Ch 174); Hedden v. Grigin, 136 Mass. 229. “ing price was below market and that petitionet expected to ° Ae ole Peete sce 3 \ ° ‘poses not within the stated priorities. Plainly, this caused damage to the (iovernme nt anicits interests. In addition, by fraudulently procuring the ve- hicles,, petitioner reduced the mumber of. surplus ~*% vehielés in the hands of the War Assets Adminis- 3 ‘ation. AsSa_ result, some government agency. Hy which was entitled to pr lar ity might-very well have been uni able to purchase vehicles which it needed- sates War Assets Administration aud so ¢ ompelled to purchase vehiclés at the higher market pFice. JW hile Congi'ess was agreeable to.that result as far @ as veterans were cone ‘erned; it intended that gov- crment ‘agencies have top priority after vete rans to in S. - - guard against prefisely suc h a. result as far. as other purchasers were concerned, = As stated Rep. No. 1142. 79th Cong., 2d Sess, ‘on the | hill according top pr jority to veterans (at. pp. 1-2): 3 . 36. those which were disposed of as surplus by the War Assets Administration. Thus, petitioner's frauds had the effeet. of redue- ° £ . sd f a . . : . ; : 2 w ing the number of vehicles available to priority helders, including governmerit agencies, and? so might very well have caused damage to the Govern- * "ment.on this’ additMaal score, - Finally, it is settled that the Government entitled not only to recovery of its actual | a but also to reimbursement ‘of the’ costs ine surred : in connection w ith the ferreting out and investigat- ing the frauds. In Helvering. v. Mitchell, supra, “at 401, this Court held that the additional tax of 50°, imposed in the case of a:tax fraud was of a remedial nature ‘‘to reimburse the Government — for the-heavy expense of investigation and the loss resulting from the taxpaver’s eo “) Simi- larly, Stockwell vy. UnitedAStates, 1 3 Wall. 53 had : stressed (at. AT): ne “Y While petitioner iiouien that its answer negates danrage te the Government, examination thereof indicates that it does hot, eompletely do so. “The pertinent allegation of the an-. swer is.to the effgct TR. 8: see also, supra; p. 9): That ‘by reason of the facts above set forth. the pli 1in- tiff was not-damaged and did not suffer any loss because of the sale 6f said trucks and. received-the full\advertised offering price for the same, and had said trucks not been sold to the persons who purchased them: they “be have been sold at the. same price to other priority . -non-priority. purel: agers. *. : This allegatren attempts to negate only out-of- pocket dam- ages stemming from the sales themselves ‘and in no way ‘denies that the Government incurred costs” in connection with “ferreting out the frauds, for whiel) it is entitled to reim- bursement as set out in. the text. | . . ia a“, ‘ . ee ° . m= aes . ° . ‘ vale ili i is, er" hardly accurate to say thi it the only loss the Government eau sustain from concealing the goods liable to seizure is their single \ ‘ale, or to assert that the li: ability in- paked: by the statiite of doulle the value is ar- bitrary and. Without reference té indemmific ‘a- tion. Double the value may not he more than complete indemnity. ~~ Althouginthe Goverment was damaged in seva. ‘eral ways in the instant case, it is difficult, if not 7 impossible, to reduce the injury to a monetary equivalent.” This does not mean, however, that the ~exaction of the prescribed sum of $2,000 was in- trinsically a provision for a penalty. To the con- trary, it furnishes the raison d'etre tor the di NA gC formulae of Section 26(b). In cases involving ‘ac- tionable wrongs the injured party is frequently confronted with serious difficulties in establishing the full extent of the injuries suffered by him and an ‘proving. their monetary equivalent.” Ci. Wool- worth Co. Vv. Contemporary. Arts, 3844 U.S, 228, 932. . . 4 United States’ v. Witherspoon, 211 Fo 2d 858 (CLA. 6), relied on by petitioner (Br. 9), while opposed “to our position, is, We believe, incorrectly: decided. In. eon ease, which ‘involved, the. same situation as-the We aver case, the Court of Appeals for the Sixth Cireuit ruled that Section 26ibd (1) was penal, . subject’ to the limitation provision of 28 U.S.C. 2462. See supra, p. 21, fn. 18.-. However, the Sixth Circuit went on to rule that the War, ‘Time Sus- pension of Limitations Act was applicable to those frauds which occurred before December 31, 1946. As a result, when Witherspoon was deeided* on “March 22, 1954, suifs under pepsi Nie fot such frauds were i not time barred. United Statée> em 342 U.S. 225; at v. Ole er, 346 U S. 23 , 240-248. Apart from the J fact that the W itherspoon pinion. merely states its conclusion without qepporing reasoning or rationale, it is noteworthy, us the court below commented, that “the opinion. made pe mention of Helvering v. Mitchell, supra, or Marcus, v. Hess. supra. nor why these decisions which we regard as persuasive, were regarded by that court as Inapi- plicable” (R. 21,.fn. 2). These cases were urged upon’ the Sixth Circuit by’ the Govermment as was Weaver, and as to the litter, the only recognition accorded by the Sixth Cireuit ‘was its bare: citation preceded by “But see contra” (211 F. 2d at-861) fe $ GOVERNMENT PRINTING OFFICE -'955 3és3o3 . ab6 ~ --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA04386408_0149%3A6. Public record. Not legal advice.