Condenser Service & Engineering Co. v. United States

. Whitaker and Madden, J. J.,

concurring:

We concur. Paragraph “f” of the Standard Conditions of Sale limits the seller’s liability to refunding the amount paid if the property sold is “lost, damaged, or destroyed” prior to delivery. This seems to us to cover the situation in this case. Since nothing was paid, nothing can be recovered.

FINDINGS OF FACT

The court makes findings of fact, based upon the evidence, the report of Commissioner W. Ney Evans, and the briefs and argument of counsel, as follows:

■ 1. Plaintiff is a New Jersey corporation engaged in the manufacture of steam condensers and heat exchangers.

2. One of the components of such condensers and exchangers is tubing with chemical and metallurgical characteristics making it resistant to rust, corrosion, heat and erosion. In 1947, such tubing was in short supply, and one of the most satisfactory types of tubing for the purpose was copper-nickel tube meeting Navy specification 44-T-10.

'3. On March 21, 1947, the War Assets Administration issued its Special Offering KHO-93-242 (hereinafter referred to as the Special Offering) inviting sealed bids on certain non-ferrous metals listed and described by lots. Lot No. 331, in issue in this action, was described as follows:

*195COBBER-NICKEL TUBE

29,444 lbs. 3/4"x.049"xl4'6'/, soft, 4A-T-10, 4,858 ea. 39,600 lbs. %"x.049"x20', soft, 3,750 ea.

Location: Naval Gun Factory, Washington, D. C.

Owning Agency No.: 602059-5-1-5712.

All of this tubing was new, and met Navy specifications 44-T-10. The symbols “ea” at the end of the foregoing descriptions referred to lengths.

4. The Special Offering contained instructions for submitting bids, general provisions, and a sealed bid form on the reverse side of which were (a) terms and conditions of sale and (b) standard conditions of sale.

The instructions for submitting bids stated that the Special Offering was issued on March 21, 1947, that offers would be received until the close of business on April 10, 1947, and that consideration and allocation would be made in the order of (a) Federal Agencies, (b) veterans, (c) Reconstruction Finance Corporation, (d) State and local governments, (e) nonprofit institutions, and (f) all others.

The general provisions provided that “sale of each lot as one unit will be made to the highest qualified bidder # * * ?J

The terms and conditions of sale provided that the War Assets Administration reserved the right “to withdraw all or any part of the property included in the sale at any time prior to a Contract of Sale.”

The standard conditions of sale contained the following provisions:

* * * The Sales Memorandum and these standard conditions of sale constitute the entire agreement between the parties with respect to the sale of the property specified in the Sales Memorandum. * * *
* * * e. * * * Specific shipping instructions from Purchaser must be received by the Regional Office of War Assets Administration responsible for the sale within ten (10) days from the date of the Sales Memorandum; or if prior to the expiration of said 10-day period Purchaser notifies Seller that' he will remove the property, such removal must be effected within fifteen (15) days of the Sales Memorandum. "* * *
*196/. If the property covered by Sales Memorandum is lost, damaged, or destroyed otherwise than by the fault or negligence of Purchaser prior to removal of shipment during the applicable period prescribed in paragraph (e) above for removal or the issuance of shipping instructions, Seller’s liability shall, at election of Seller, be limited to the replacement of the property lost, damaged- or destroyed or refunding any amount paid by Purchaser therefor.

The Sales Memorandum was not identified in the Special' Offering otherwise than as indicated by the foregoing.3

5. On March' 25,1947, plaintiff submitted to the Richmond Regional Office of War Assets Administration (hereinafter referred to as the Richmond Office) a bid for the purchase of 13 of the 27 lots described in the Special Offering. Plaintiff’s bid for Lot No. 331, i. e., for both the %" tubing and the %" tubing, was 23.125 cents per pound or a total of $15,966.43 ($9,157.50 for %" tubing and $6,808.93 for %" tubing).

6. On May 12,1947, the Committee of Awards of the Richmond Office advised plaintiff that Lots Nos. 331, 334, and 343 had been awarded to plaintiff and that:

* * * Pending verification that the items are still available, you will receive the proper sales documents. * * #
* * * All action by the Committee of Awards is subject to review.

7. On May 21, 1947, the Richmond Office sold to Okley L. Post (owner of Post Sales Company, and hereinafter referred to as Post) 4,858 “units” (lengths) of copper-nickel tube, %" thick x .049" x 14'6". The price at which the sale was made is not established by the evidence. The sales documents of this transaction showed:

* * * Salesman: Auction * * *
Property Location: Supply Officer, Norfolk
Navy Yards, Portsmouth, Virginia * * *
Owning Agency No. 602059-5-1-5712.

The tubing so sold to Post comprised all of the %" tubing described in the Special Offering as part of Lot No. 331.

8. Post was a veteran of World War II and held a veteran’s priority certificate from War Assets Administration. *197The sale described in the preceding finding was not made under the provisions of the Special Offering.

9. (a) On June 2,1947, plaintiff wrote the Richmond Office that the sales documents mentioned in the letter from the Committee of Awards had not been received, asked for early processing, and inquired whether payment might be made through the establishment of an irrevocable letter of credit.

(b) On June 9, 1947, the Richmond Office replied that payment as suggested would be acceptable.

10. On June 11, 1947, plaintiff forwarded to Post its purchase order for 70,000 feet4 of copper-nickel tube u%" O. D., .049 thickness, 14'6" long” at 15 cents per pound, and offered to take up to 200,000 feet at that price.

11. (a) On June 18, 1947, an irrevocable letter of credit was issued by the Bank of Manhattan Company, payable, in effect, to the Richmond Office, in the sum of $26,957.34, being the aggregate amount plaintiff had bid for Lots Nos. 331, 334, and 343.

(b) On June 20,1947, the letter of credit was forwarded by registered mail to the Richmond Office.

(c) Within the next month several changes were made in the letter of credit, all pertaining to shipping instructions and the consignment address.5 The amount of the letter of credit was not curtailed nor was it cancelled prior to August 15,1947.

*19812. On June 30, 1947, Post forwarded to plaintiff his invoice for the sale to plaintiff of 5,858 lengths 6 of copper-nickel tubing %" O. D. X .049 X 14'6" at 15 cents per pound for a total of $5,465.25.7

13. On July 1, 1947, the Richmond Office forwarded to plaintiff its Sales Document No. 4542421, confirming acceptance of plaintiff’s bid for Lots Nos. 334 and 343. During the month of August 1947, the rods and tubes included in Lots Nos. 334 and 343 were shipped to plaintiff and payment was made therefor by means of sight drafts totalling $10,990.91 drawn by the Richmond Office against plaintiff’s letter of credit.

14. (a) On July 3, 1947, the Richmond Office forwarded to plaintiff its Sales Document No. 4542643, confirming acceptance of plaintiff’s bid for Lot No. 331, showing the amount to be $15,966.43. The Sales Document carried on its face Owning Agency No. 602059-5-5712, and designated the Norfolk Navy Yard as the location of the property.

(b) There was a lapse of approximately 18 days between the issuance of Sales Document 4542643 and the clarification of shipping instructions. It is not established by the evidence that this delay entered into the consideration by or judgment of the Richmond Office with respect to the sale or disposition of Lot. No. 331.

15. (a) On July 7,1947, the Supply Officer, Norfolk Navy-Yard, issued to the Richmond Office his receipt/expenditure invoice showing delivery to be made to plaintiff of 4,855 lengths 8 of %" tubing theretofore sold to Post. The delivery was to be made of packages addressed to Post for plaintiff. The invoice carried on its face Owning Agency No. 602059-5-1-5712.

(b) On July 8,1947, two trucks picked up the %" tubing at the Norfolk Navy Yard, based on a bill of lading showing *199plaintiff as the consignee and the Eichmond Office as the shipper and stating that “this is not the property of the Federal Government * * The bill of lading carried on its face references to sales documents’ numbers and Owning Agency No. 602059-5-1-5712.

(c) In due course 4,855 (of 4,858) lengths of the tubing described in the Special Offering as part of Lot No. 331 were delivered to plaintiff as part of its purchase from Post.

(d) Plaintiff did not, in the course of the transactions described in preceding findings, specifically advise the Eich-mond Office of its purchase of copper-nickel tubing from Post.

(e) The Eichmond Office did not, in the course of the transactions described in preceding findings, specifically advise plaintiff of its sale of copper-nickel tubing to Post.

(f) It is not established by the evidence that plaintiff knew, or ought to have known, prior to its delivery, that the copper-nickel tubing it bought from Post was the same tubing it had contracted to buy from the Eichmond Office.

16. On July 18, 1947, plaintiff paid Post for the 36,435 pounds of tubing it had bought from him.

17. During the last days of July, or early in August 1947, plaintiff was advised by the Eichmond Office that there had been some mix-up over the tubing contained in Lot No. 331; that part of the tubing had been sold to Post, and the remainder sold to someone else. The disposition actually made of the y8" tubing in Lot No. 331 is not established by the evidence.

18. On August 13, 1947, the Eichmond Office wrote plaintiff respecting Sales Document No. 4542643 (Lot No. 331):

* * * this property cannot be shipped due to nonavailability, Appropriate adjustment of your account has been authorized.

19. (a) None of the tubing contained in Lot No. 331 was delivered to plaintiff by the Eichmond Office pursuant to Sales Document No. 4542643.

(b) Plaintiff’s letter of credit was unused to the extent of $15,965.43, being the price of Lot No. 331.

. 20. (a) Plaintiff promptly demanded of War Assets Administration that the tubing listed in Lot No. 331 be sup*200plied from other sources or that plaintiff be recompensed for its loss.

(b)On September 30,1947, the Washington Office of War Assets Administration wrote plaintiff:

* * * Our Richmond Office has informed us that during the processing of the sales document, the tubing covered by the sale was inadvertently sold at location and that there was unusual delay in the documentation due to the fact that the material was originally shown as being located in Washington while actually it was located at the Naval Shipyard, Portsmouth, Va. We were further informed that a teletype broadcast was dispatched to all other regional offices in an effort to obtain similar material for you. However, our regional offices replied that tubing of the type required was not in their inventories. * * *

(c) On October 10,1947, plaintiff replied:

* * * We must either receive from the Administration tubing in every respect similar or be reimbursed by the Administration for the difference between the amount of the sale to us and what we have had to pay to obtain the replacement material. We make this claim now and request your immediate advice * * *. We * * * ask your further advice as to the proper method to pursue to obtain just compensation.

(d) On October 17, 1947, plaintiff again wrote to the Washington Office of War Assets Administration:

May we respectfully refer to our letter to you dated October 10,1947 in which we asked your further advice as to the proper method to pursue to claim compensation for the damage we incurred because of the failure on the part of the Administration to make delivery under certain sales documents. * * *

(e) On January 10,1948, plaintiff again wrote the Washington Office requesting the courtesy of a reply to its previous letters.

21. On July 26,1948, the Washington Office of War Assets Administration wrote plaintiff “* * * that after thorough consideration your claims have been denied in their entirety.” Enclosed with the letter was a certified copy of the decision of the Claims Division, War Assets Administration, stating in part as follows:

*201In consideration of that part of the claim arising out of the non-delivery of 69,044 pounds of Copper Nickel Tube awarded the claimant company as evidenced by Sales Document No. 4542643, it is concluded that a valid contract existed and WAA breached the contract by its failure to deliver the property awarded. However, the claimant company has submitted no evidence to show that they have been damaged by such breach and accordingly the claim should be denied.

22. Following receipt of the letter of July 26, 1948, and the enclosed decision, plaintiff on July 27, 1948, in a letter addressed to the Washington Office of War Assets Administration, pointed out that it had on several previous occasions requested advice “* * * as to the proper method for us to follow to obtain proper compensation for our loss * * *” and asked that a hearing be held for the purpose of assessing and determining plaintiff’s damages, or in lieu of a hearing that plaintiff be permitted to submit written proof of damages sustained.

23. By letter dated August 81, 1948, the War Assets Administrator informed plaintiff that a hearing on the question of damages “* * * would serve no useful purpose * * *” and continued in pertinent part as follows:

Essentially your claim is one for anticipated profits, which are in the nature of unliquidated damages due to the fact that the material in question was not available for delivery. Funds available to this Administration are not available for payment of such claims.
* * * # *
In your case, the claim has been reconsidered on the basis of the facts of record, including the matters emphasized in your letter, and since no new evidence was presented in support of the claim, no reason exists for modification or reversal of the decision.
Accordingly * * * you are advised that the decision of which you were notified by letter of July 26, 1948, represents the final position of the War Assets Administration in this matter.

24. (a) Plaintiff’s purpose in buying tubing from War Assets Administration was for use in the manufacturing business.

(b) During the summer of 1947 plaintiff maintained an inventory of condenser tubing (copper-nickel and other *202types) averaging 500,000 pounds and was using approximately 100,000 pounds per month in normal operations.

. (c) Plaintiff was in the market continuously, buying condenser tube at the rate of 2,000,000 pounds per year from the mills, War Assets Administration, and other sources.

25. At all times between June 10, 1947, and February 4, 1948, the prevailing market price, f. o. b. mill, of copper-nickel tube of size and quality equivalent to that contained in Lot No. 381 was, for %" tubing, 54.78 cents per pound, and for %" tubing, 54.53 cents per pound.

26. At prevailing market prices the cost to plaintiff during the last half of 1947 for 69,044 pounds of tubing equivalent to that contained in Lot No. 331 would have been $37,723.30.

' 27. The difference between the contract price for Lot No. 331 ($15,966.43) and the market price for equivalent tubing ($37,723.30) was $21,756.87.

coNcnnsioN of law

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law the plaintiff is not entitled to recover and its petition is dismissed.

Judgment is rendered against the plaintiff for the cost of printing the record herein, the amount thereof to be entered by the clerk and collected by him according to law.

Plaintiff eventually received Sales Documents. See Findings IB and 14.

70,000 feet of tube in lengths of 14.5 feet equals 4,827.6 lengths. Cf., Special Offering listing of 4,858 lengths.

The changes were begun on July 3 and completed on July 22, 1947.

The letter’s provisions as to shipping instructions were vague. On July 11, 1947, the Richmond Office telephoned plaintiff for clarification. Plaintiff advised that the letter would be cancelled, and a check forwarded in payment of the amount due, together with formal shipping instructions.

On July 15, 1947, the Richmond Office again telephoned plaintiff saying that no check or letter containing shipping instructions had been received. Plaintiff advised that a letter and telegram were en route. Thereafter, on the same day, the Richmond Office received a telegram from the Bank of Manhattan Company changing the shipping instructions to make the destination c/o Metals, Inc., Raritan, New Jersey.

On July 16, 1947, the Richmond Office advised plaintiff that injection of the name and address of Metals, Inc., had confused existing instructions, and requested instructions to ship to the order of War Assets Administration, Raritan, New Jersey, with common carrier to pick up for plaintiff at that point.

On July 17, 1947, plaintiff authorized shipment in accordance with the suggestion made by the Richmond Office, and the change was confirmed by the Bank of Manhattan Company on July 22,1947.

84,941 feet. (5,858 X14'6")

36,435 pounds. ($5,465.25+.15). 4,858X7.5=36,435. It therefore appears that the Invoice contained a typographical error and was intended to have stated 4,858 lengths. The invoice stated that the tubing weighed 7% pounds per length. 5,858X7.5=43,935. On the other hand, 36,435+6,858= 6.22 pounds per length, while 29,444+4,858=6.06 pounds.

The %" tubing was carried in three parcels. One length from each parcel had been previously sent to Post by the Richmond Office, leaving in its possession 4,855 of the 4,858 lengths described in the Special Offering.