Duffy v. Howell

KINCAID, J.

Plaintiffs' first amended complaint is not of the character claimed for it by defendants, whereby they are, in effect, both rescinding and affirming the contract to purchase and sell the used automobile. Facts are sufficiently alleged in the first cause of action showing grounds of rescission for fraud, the election to rescind and notice of rescission accompanied by a return to defendants of everything of value received by plaintiffs, a demand for the return of the amount paid by plaintiffs on the contract and the refusal of defendants to comply.

The second cause of action of such complaint concerns itself with neither rescission nor affirmance of the contract to purchase and sell the used automobile, but is prosecuted under the provisions of the Emergency Price Control Act of 1942, as amended, to recover the penalty of an amount three times the sum claimed to have been paid in excess of the lawful ceiling price. Such a cause of action is not one for damages for the fraud pleaded in the first cause of action but to recover a sum to which they have a right under the federal statute apart from and regardless of whether they affirm or rescind

[992]

the contract. That right arose when the unlawful sale was made by defendants.

The evidence sufficiently supports the court’s findings to the effect that defendants knowingly, falsely, fraudulently and untruly misrepresented the mechanical condition of the car to plaintiffs and that they charged the plaintiffs a sum $70 above the lawful ceiling price then in effect for said automobile, in violation of O.P.A. Regulation 540, as amended.

In order to avoid the penalty of an amount three times the amount of the overcharge, as claimed in the second cause of action, the burden of proof is on defendants to show that the violation of the regulation, order, or price schedule in question was neither wilful nor the result of failure to take practicable precautions against the occurrence of the violation. (§ 205(e) of the Emergency Price Control Act of 1942, as amended by § 108(b) of the Stabilization Extension Act of 1944, 50 U.S.C.A. App., § 925(e) ;

Bowles

v.