Reporter's Statement of the Case they may have suffered because of the action of the Federal Food Administration, division of enforcement, in directing and compelling said George C. Mansfield Company and said George D. Mansfield to sell certain cheese products. Jurisdiction is hereby conferred upon the Court of Claims of the United States to hear, consider, and determine such action on its merits, and to enter decree or judgment against the United States for the amount of such actual loss, if any, as may be found due to said George C. Mansfield Company and said George D. Mansfield, without interest, with the same right of appeal as in other cases, notwithstanding the lapse of time or statute of limitations or the tortious character of the action: Provided, That such action shall be brought within six months from the date that this Act becomes effective. (49 Stat. 2148.) 2. The correct name of the plaintiff corporation is "The Geo. C. Mansfield Company." It has been occasionally referred to by the parties hereto, both in correspondence and testimony, as "George C. Mansfield Company" and "The George C. Mansfield Company." "The Geo. C. Mansfield Company" is a Wisconsin corporation, and there is no other Wisconsin corporation of a similar name. It was incorporated in 1888, since when it has been engaged in the manufacture of ice cream and butter, conducting a cold storage business, and buying and selling, at wholesale, butter, eggs, cheese, and other dairy products. George D. Mansfield was president and treasurer and the owner of a majority of the stock of the corporation at all times material herein up to June 18, 1928. At the time of its dissolution he was the owner of all of its capital stock. On February 1, 1927, the corporation sold all of its property and assets with the exception of the claim here in litigation, which claim was excepted and reserved from said sale. On June 18, 1928, the corporation was voluntarily dissolved. 3. About March 13, 1917, George D. Mansfield, plaintiff, attended a convention of dealers in dairy products at which he was advised that the British Government would be in the market for cheese, it having decided to use cheese as a regular army ration. The English cheese trade required that cheese be cured in cold storage for a period of from twelve to fifteen months. On March 14, 1917, The Monarch Cold Reporter's Statement of the Case Storage Company of Chicago advised George D. Mansfield to invest in cheese because of said English demand, offering to Mansfield its cold storage facilities and agreeing to help him finance cheese purchases. Mansfield had prior thereto, at times, depended on The Monarch Cold Storage Company for cold storage facilities. It had been the custom of dealers in cheese to purchase heavily during the months of May, June, and July of each year, that being a period of surplus production. 4. During the period beginning in May 1917, and ending early in July 1917, George D. Mansfield purchased in good faith and in the regular course of business 3,672,661 pounds of cheese with the intention of keeping same in cold storage for a reasonable curing period until he could secure a reasonable profit thereon. The curing period for most of the cheese so purchased was complete between August 1, and September 1, 1918. The annual cheese production in the United States was about 270,000,000 pounds. During this period he purchased, in the name of the company, cheese which had been manufactured by the cheddar process, which was designated according to the size of the package, and known as: cheddars, twins, daisies, and long horns. The purchases were made at Plymouth, Wisconsin; Chicago, Illinois; New York City; and Lowville, New York, generally through a broker, the price being gauged by market prices at Plymouth, Wisconsin, plus the freight charges. The cheese was manufactured in the State of Wisconsin, except for a small portion which was manufactured in New York State. It is not known by whom any of the cheese was manufactured. About 75 percent of the cheese so purchased was stored at The Monarch Cold Storage Company, Chicago, Illinois, and other cheese was stored at The National Cold Storage, New York City; Merchant's Refrigerating Company, New York City; Lowville Cold Storage, Lowville, New York; and The Geo. C. Mansfield Company, Milwaukee, Wisconsin. The cheese in New York City and Lowville, New York, was in storage when purchased, but other cheese was removed from where it had been bought and placed in storage at Milwaukee, Wisconsin, or Chicago, Illinois. Most of the cheese, when purchased, was but a few weeks old. Reporter's Statement of the Case 5. The Geo. C. Mansfield Company had no financial interest in the purchase of the cheese in controversy, although the purchases were all made in the name of said company, which helped in financing the same. About 10 percent of the money used for the purchase of the cheese was furnished by this company, and loans from various warehouses represented 90 percent of the invoice. George D. Mansfield was to have the profits, if any, and he was to stand all losses, if any, on said cheese investment. He did in fact suffer all losses of said cheese investment and saved The Geo. C. Mansfield Company harmless therefrom. All of the cheese purchases herein considered were made prior to the passage on August 10, 1917, of the "Food Control Act," occasionally referred to as the Lever Act. (40 Stat. 276.) The borrowings began immediately after plaintiff started to accumulate the cheese, and continued until 60 days after they collected on the last sale. Money was borrowed from the various warehouses and The First Wisconsin National Bank, and The Geo. C. Mansfield Company charged George D. Mansfield interest on the money loaned by the company to carry the difference between the cost of the cheese and the loan made by the warehouse. George D. Mansfield never became liable as an endorser on notes to The First Wisconsin National Bank which he signed as president of The Geo. C. Mansfield Company. Insurance was paid, as the banks and warehouses would not loan money on any commodity unless it was insured. The cheese would be shipped to the warehouse with a sight draft attached to the bill of lading, which was usually paid before unloading the cheese, and The Geo. C. Mansfield Company would be notified of any shortages. The warehouse would in turn bill The Geo. C. Mansfield Company for the purchases. The Geo. C. Mansfield Company was never engaged in the manufacture of cheese. It had not purchased large quantities of cheese for future sale in the manner in which this cheese was purchased during May, June, and July 1917. Prior to 1917 plaintiff had not depended upon Chicago storage warehouses for the storage of its cheese, although some had been stored there prior to 1917. Cheese of various descriptions had been retailed to the grocery trade in a Reporter's Statement of the Case small way prior to 1917. However, the total cheese purchases by The Geo. C. Mansfield Company from 1908 to 1916 were as follows: 6. After the passage of the Food Control Act on August 10, 1917, the President, on August 10, 1917, issued an Executive Order providing for the organization of the United States Food Administration. October 8, 1917, pursuant to said Act of Congress, the President, by proclamation, announced that it was essential in order to carry into effect the purposes of said Act to license the importation, manufacture, storage, and distribution of certain commodities, among others milk, butter, and cheese, including the operation of cold storage warehouses in which food products were, or had been, placed and held for thirty days or more, and that it should be unlawful for any person, firm, corporation, or association to engage in or carry on any business, as specified in the Proclamation, after November 1, 1917, without first securing a license so to do. October 26, 1917, The Geo. C. Mansfield Company, by George D. Mansfield, its president, filed with the United States Food Administration an application for a license to engage in and carry on the business of a wholesaler or jobber in cheese, and as a cold storage warehouse operator. November 1, 1917, the United States Food Administrator granted it license No. 08608. The license so granted to The Geo. C. Mansfield Company was revocable at any time for violation thereof by any officer, agent, or employee of the licensee, or of any of the provisions of said Act or of any regulations subsequently issued thereunder. Rule 13 of the general regulations of the Food Administration provided: The licensee shall not, without the written consent of the United States Food Administrator, or his duly authorized representative, keep on hand or have in posses Reporter's Statement of the Case sion or under control, by contract or other arrangement, at any time, any food commodities in a quantity in excess of the reasonable requirements of his business for use or sale by him during a period of 60 days: Provided, however, That this rule shall not prevent the licensee from storing, in sufficient quantities to fill his reasonable requirements throughout the period of scant or no production, any of the following commodities: cheese, * * Rule 5 of said regulations provided: * The licensee in making loans, either directly or indirectly, to patrons or other persons concerned, on commodities required to be licensed, or who shall become liable on notes covering such loans by indorsement, guarantee, or otherwise, shall limit the amount of such loans, including all advance charges, to a maximum of 70 per cent of the market value of said commodity on the date of the said loan. A margin of not less than 30 per cent on all such loans and advance charges shall be maintained at all times. 7. On November 1, 1917, George D. Mansfield requested the chief clerk of The Geo. C. Mansfield Company to transfer to the company all goods standing in his name on the books of said company. A license from the United States Food Administration was required after November 1, 1917. George D. Mansfield had no Federal license to buy, sell, or deal in cheese. All the cheese was in the Company's name. The purchases of cheese were made during the months of May, June, and July 1917. On January 23, 1918, there was on hand 60,142 boxes of cheese which weighed 3,610,445 pounds, when purchased, at a cost of $867,005.63, including brokerage of $4,513.06. 8. During the early part of January 1918 an investigating agent of the Food Administration ascertained that The Monarch Refrigerating Company, of Chicago, had in storage for curing a large quantity of cheese. Upon inquiry, the refrigerating company directed the agent to George C. Mansfield Company and George D. Mansfield, of Milwaukee, Wisconsin. The agent thereupon called upon plaintiffs and after examining their books as to the quantities and dates of purchase of the cheese inquired what they intended to do with the cheese. He was advised that it had been purchased in May, June, and July 1917, as shown by the |