Opinion
Rehearing Denied Sept. 3, 1947.
Hearing Granted Oct. 2, 1947.
Appeal from Superior Court, Los Angeles County; Carl A. Stutsman, Judge.
Action by Mary Heesy against Richard E. Vaughn and another, individually and doing business as Vaughn’s, and others, to recover possession of automobile, for damages for breach of contract for sale of automobile to plaintiff and for treble damages and attorney’s fees for alleged sale at a price above the OPA ceiling price. From that portion of judgment for defendants which denied claim for treble damages and attorney’s fees, the plaintiff appeals.
Reversed. COUNSEL
Cantillon & Glover, of Los Angeles, for appellant.
Albert G. Bergman, of Los Angeles, for respondents.
OPINION
SHINN, Acting Presiding Justice.
This is an appeal by plaintiff from a judgment which denied her claim to the possession of an automobile, her claim for damages for breach of contract of sale of the automobile to her and her claim for treble damages and attorneys’ fees for the alleged sale at a price above the OPA ceiling price. Reversal of the judgment is sought only as to the portion of the judgment which denied the claim for treble damages and attorneys’ fees.
Plaintiff’s version of the transaction was that she purchased a Cadillac car for $2,250, paying $766.67 down and being informed that she could pay the balance at any time within thirty days; that she tendered payment of the balance of some $1,500 within thirty days, which was refused by defendant upon the ground that plaintiff had signed an installment purchase contract which called for $766.67 cash and fifteen monthly payments of $154.03 each, or a total purchase price of $3,077.12. Plaintiff had, indeed, signed such a contract and moreover had written upon it at the dictation of the salesman the following statement: ‘I understand my deal to be as follows: My deal is $766.67 down and fifteen payments of $154.03 each the cash selling price acceptable to Vaughns was $2,250.00. I was not required to buy on time. I was not required to finance with Vaughn’s or Vaughn’s Finance Co. Mary Heesy.’ Defendant was willing to accept $2,310.45, the balance of the installment purchase price, but was unwilling to accept only the balance of the cash price. Plaintiff was unwilling to pay the difference of $827.12 and the present litigation ensued.
The theory of the complaint upon which plaintiff mainly relied was that while defendant knew she was intending to buy the car for cash she was induced to sign the installment contract by false representations and promises that she could have it at the cash price, and that the scheme of defendant of inducing cash buyers to sign installment contracts and insisting on payment of the full price, was a device to evade the Price Control Act and regulations thereunder. The findings on this issue were against plaintiff; they were made on conflicting evidence and may not be disturbed. The question remains, however, assuming that plaintiff voluntarily signed the agreement, whether the nature of her purchase and the price charged were such as to render the sale one made in violation of the Emergency Price Control Act of 1942, 56 Stats. 23, 50 U.S.C.A.Appendix, § § 901-946, hereafter called Price Control Act. Section 925(e) of this act creates a statutory cause of action against any person selling a commodity in excess of the prescribed maximum price for that commodity. This cause of action runs in favor of the buyer if the purchase was ‘for use or consumption other than in the course of trade or business.’ Otherwise it runs in favor of the Price Administrator only.
The initial question presented then is what purchasers possess this statutory cause of action. It is to be noted in this connection that the key and qualifying words which we quoted appear also in section 904(a) of the act. That section places in pari delicto both parties to a sale in excess of the prescribed maximum price only when the purchase involved is made ‘in the course of trade or business.’ In other words the noncommercial consumer, as Congress described him, is not to be regarded as being in pari delicto with his seller and is therefore entitled to the statutory cause of action provided by section 925(e) against his seller. Bowles v. Trullinger, 9 Cir., 1945, 152 F.2d 191, 192; Bowles v. Glick Bros. Lumber Co., 9 Cir., 1945, 146 F.2d 566, 568, 569. But it is to be noted further that the disqualification as to the cause of action under section 925(e) extends not only to those who purchase for use or consumption in the course of trade, that is for resale, but also to those who purchase as ultimate consumers in the course of business, that is for an essential use in their business. Bowles v. Seminole Rock & Sand Co., 5 Cir., 1944, 145 F.2d 482, 483; Bowles v. Whayne, 6 Cir., 1945, 152 F.2d 375; Lightbody v. Russell, 1944, 293 N.Y. 492, 58 N.E.2d 508, 510. Thus to determine whether plaintiff was entitled to sue under section 925(e), we must ascertain whether the use she made of the automobile constituted a personal or noncommercial use, as opposed to a use in the course of business.
Plaintiff alleged that she did not purchase the car for use or consumption in her business. Her testimony on the subject was meager. She was conducting a cocktail bar and cafe as a business. She testified as follows:
‘Q. When you purchased this car, Mrs. Heesy, did you purchase it for use in your business or trade? A. Yes, I did.
‘Q. And what is your business or trade? * * * A. Cafe and cocktail bar and also some small real estate. * * *
‘Q. You were not in the business of buying or selling automobiles? A. No.
‘Q. After you purchased the car did you use it to go to and from your place of business and things like that? A. Yes, I did.’
There was no other evidence as to the purpose of plaintiff in the purchase of the car nor as to the use which she made of it. Her answers merely show that she used the car as a means of transportation to and from her place of business, and for similar purposes, and considered that to be a use in her business. The question is one of law and the answer is not to be found in the belief of plaintiff as to what constituted use in ‘the course of business.’ The court found, however, that plaintiff did not purchase the car for use other than in the course of business.
Our first question is whether the use of the automobile by plaintiff as a means of transportation to and from her cocktail bar and cafe business, which was the only use definitely shown, was a use in the course of that business. Respondent has cited no authority and we have found none in which it has been held that the use of a vehicle as a means of transportation to and from a place of business is a use in the course of business. It is well settled in workmen’s compensation law that although an employee is engaged in the business of his employer when he is doing what might reasonably be expected of him under the employment, he is not engaged in his employer’s business when he is merely going to and from work. The rule is too familiar to require citation of authority. It is applicable here only to illustrate a common situation in which it is understood that work or the transaction of business does not include coming and going to and from the place of work. An example familiar to many will be found in the laws and regulations relating to the federal income tax; traveling expenses to and from the place of business are not allowed as expenses of business. As stated in Commissioner of Internal Revenue v. Flowers, 326 U.S. 465, 474, 66 S.Ct. 250, 254, 90 L.Ed. 203, before such expense may be allowed as a deduction ‘the exigencies of business rather than the personal conveniences and necessities of the traveler must be the motivating factors.’ Professional and office workers, mechanics, artisans, and many other classes of people whose work requires no travel, use automobiles as a means of transportation to and from work. While they are engaged in their various occupations their cars remain idle and are not then being used in the business or work of their owners, or otherwise. We cannot refuse to recognize the distinction between such use and the use of vehicles by deliverymen, salesmen, collectors, itinerant workers, and others who must necessarily travel by vehicle in order to carry on their work.
If plaintiff purchased the car as a means of transportation to and from her place of business she did not purchase it for use in the course of the business. If it may be inferred from plaintiff’s ambiguous testimony that she also used the car occasionally for business errands, this would not, of itself, constitute a use in the course of business. Casual or occasional uses which are merely incidental to, and unnecessary in, the actual operation of a business, are not uses in the course of business and do not fall within any definition of the term which we have found. The phrase ‘in the course of business’ is defined as ‘what is usually done in the management of trade or business.’ Black’s Law Dictionary. Bouv.Law Dic., Rawle’s Third Rev., P. 695 gives the same definition to ‘course of business’ and Cyclopedic Law Dictionary defines ‘course of business’ as ‘the ordinary custom or practice observed in business in general or in a particular class of business.’
After extended search we have not discovered an instance of a construction of this section of the Price Control Act as applied to the purchase of an automobile which was used incidentally and casually in the owner’s business. But the terms to be construed are common ones and have often been defined by the courts. It has been held in insurance law that a car used casually in attending to work is not thereby being subjected to business use. In Automobile Ins. Exch. v. Wilson, 144 Md. 249, 124 A. 876, 877, it is said that if this were not so ‘no man engaged in business, who occasionally used his car to go to his place of business or for any errand he might have during the day, although such use was merely incidental, and these occasions were opportunities for deriving pleasure from the ownership of the car, could safely insure his automobile as ‘used for pleasure." There was a similar holding in Bloom v. Ohio Farmers’ Ins. Co., 255 Mass. 528, 152 N.E. 345, in which the occasional use for business was merely incidental to the use of the car for pleasure. ‘In the course of business’ obviously means more than ‘in business.’ ‘In the course of’ implies more than an occasion or casual use which is merely incidental to the business. To be in the course of the business a use must be essential and indispensable to the operation of the business in the customary manner.
It appears to be the purpose of the law to distinguish generally between personal use and business use. We would think that as applied to automobiles those which are used as a means of transportation to and from the place of business, or casually upon business errands, as well as those used exclusively for pleasure, are being put to a personal use, rather than one in the course of business or trade. Such a use is a convenience but certainly not a necessity when the business is carried on in its usual and customary manner, without other and further use of the car. In using the term ‘personal use’ as distinguished from use in the course of trade or business, we have in mind the distinction between costs which must be borne by the purchaser and those which he directly or indirectly passes on to others in one form or another. In a purchase for personal use the purchaser, a noncommercial consumer, suffers damage from the overcharge and is therefore allowed to bring suit under the act. In the second case the consuming public suffers the damage and the right to sue is in the Administrator exclusively. Bowles v. Googins, Utah Dist.Ct. 1944, 1 Price Control Cases par. 51,176; Bowles v. Trullinger, supra, 152 P.2d 192; Bowles v. Glick Bros. Lumber Co., supra, 146 F.2d 569. We conclude therefore that the finding that plaintiff did not purchase the car for use other than in the course of trade or business is not supported by the evidence.
The court found that the car was not sold for a price in excess of the established selling price. It could have been sold without a warranty for $1,800, or if warranted by the seller, as it was, for a price of $2,250. Under Regulation 4540, Office of Price Administration, a seller was not permitted to require the purchaser to make an installment purchase or to finance a purchase through any particular lending agency or to make ‘the terms and conditions of sale more onerous to purchasers than they have customarily been, except to the extent allowed by this regulation.’ Defendant sought to prove that the excess of the installment sales price over the cash price represented only their customary charges for financing. Defendant Richard A. Vaughn was asked the question, ‘To your knowledge, does the total amount of the monies to be paid by Mrs. Heesy as the purchaser under that contract violate Regulation 540 in any respect whatsoever?’ An objection that the question called for a legal conclusion was sustained. Counsel for defendants then made an offer to prove that the financing charges in plaintiff’s contract were defendants’ customary charges before the enactment of the price control law. The court raised an objection to the offered evidence although plaintiff’s attorney not only made no objection but insisted that the facts sought to be proved were material and, if proved, would constitute a good defense to the action. In spite of the arguments of both counsel that the evidence should be received and that plaintiff should then have the right to inquire further into defendants’ past transactions for the purpose of determining what defendants’ customary financing charges had been, the court persisted in the refusal to receive any evidence on the subject, stating that it did not agree with either counsel. The attorneys were agreed that plaintiff’s evidence made out a prima facie case of an overcharge and that the burden of proof was upon defendants to show that the financing charges were not greater than had been customarily made in defendants’ business. This, we think, was a proper view to take of the situation. The matter was one peculiarly within the knowledge of defendants and the burden of going forward with proof rested upon them. If there was any question as to the sufficiency of plaintiff’s prima facie case it was waived by defendants. Plaintiff’s attorney expressed a willingness to have the witness testify that only defendants’ customary financing charges were made and expected then to inquire further on cross-examination, based upon defendants’ business records as to whether defendants’ testimony was supported by such records. We are unable to determine from the record upon what theory the offered evidence was excluded. The court found the purchase price of $3,077.22 was not in excess of the ceiling price under the Price Control Act or in violation of the regulations of the Office of Price Administration. This finding is not supported by the evidence. The insufficiency of the evidence does not result from the failure of counsel for either plaintiff or defendants to make proof of the essential facts. It is a most unusual and unfortunate situation. Defendants must suffer a reversal of the judgment in their favor because of the insufficiency of the evidence to establish a pleaded defense, although they did their utmost to prevail upon the court to receive their offered evidence, and in their efforts had the earnest cooperation and support of their adversary. The findings upon the material issues being without support in the evidence the judgment must be reversed and it is so ordered.
WOOD, J., and KINCAID, J., pro tem., concur.