91 Ct. Cl. 419 | Ct. Cl. | 1940
delivered the opinion of the court:
Plaintiff claims that on August 9, 1921, the United States through the Shipping Board unconditionally accepted its
Plaintiff computes its claim as follows:
Alleged fair market value of— 100 ships for operation at $13,000 each_$1, 300, OOO
168 ships for dismantling, $10,500 each-■_ 1, 764, OOO
3,064, OOO
168/200ths of $900,000, the alleged fair market value of equipment, spare parts, and supplies belonging to the ships stored for safekeeping when the ships were laid up and not put on the ships to be dismantled_ 756, 000
Expenses for attorneys, engineers, officers’ expense, and expenses of making preparations to perform incurred between August 9 and September 27, 1921_ 10, 000
Interest on $10,000 from September 27, 1921_ 10, 000
3, 840, 000
Less: Contract price-$562,800
Alleged repairs to 100 ships having an alleged market value for operation of_ 78, 902
- 641,702
3,198,298
The essential facts as established by the record are set forth in the findings. Plaintiff bases its claim for the amount above stated solely on the contention that the Shipping Board on August 9, 1921, adopted the resolution embodied in the document furnished to plaintiff by the secretary of the Shipping Board on August 12, 1921, which is set forth in finding 4, and that its bid and this resolution, which plaintiff contends was an unconditional acceptance by the board, constituted a legal and binding contract. We are of opinion that this contention is not sustained by the
The Shipping Board, which was the agency authorized by statute to act for the United States in the sale of the wooden fleet at private or public competitive sale, was composed of seven members. The evidence clearly shows that after the bids were opened on July 30, 1921, the board without acting upon any of the bids or upon the general question of the sale of ships or the terms and conditions upon which they would be sold directed one of' the commissioners of the board and the assistant to the chairman of the board to
With reference to the nature of the action taken by the board at the meeting on August 9,1921, A. D. Lasker, chairman of the board, testified in part as follows:
The matter, if I remember now, came up at a subsequent meeting [August 9, 1921], with a resolution prepared by Mr. Plummer authorizing the sale. We had a general conversation of a very general nature, and I remember distinctly, and in this my memory is clear, that I said before I would vote for any final sale I wanted to submit the matter to the President. I had not been long in office. I didn’t know exactly how far my powers went. I didn’t know what the background of this thing was, and maybe he might want to submit ifc to the Congress. And I remember someone — I forget whom — there were a lot of loose tail ends; and after a long rambling discussion, it was' decided we would take a vote on the resolution based, however, on the loose ends being tied up, and my submitting it to the President. The whole meeting was informal. * * *.
Q. Was that resolution, Mr. Lasker, acted upon at that meeting?
A. Informally only, and with conditions surrounding it that gave no man the right to say that Board had authorized a sale. I refer to that because two or three days later, on the Mayflower, when I saw in the Washington Post an. account, of the sale, I expressed to the President my utter surprise and indignation and discouragement that such a thing could happen.
Q. I show you paper marked plaintiff’s exhibit No. 3, purporting to be a resolution, alleged to have been passed by the United States Shipping Board on that date. Will you state whether or not that resolution was passed on that date?
A. According to my understanding, it was not.
Q. Will you please state what did take place at that meeting with reference to that subject-matter?
A. We were discussing the bids that had been received for the sale of the wooden fleet and what the policy of the Board should be, what action we should take in regard thereto. There was a good deal of discussion lasting a long time. During the course of that discussion the suggestion was made and generally approved that we should take a tentative vote upon the high bid, which is the discussion in this case, but that the vote would only be tentative, and that any action that we would take upon the matter would be subject to the approval of the President and Congress. That was my understanding of what we did. And later on, when I voted on this matter, I understood that I was voting simply on a tentative proposition with the'limitations that Í expressed.
Q. Did you understand that the terms of that bid were definitely acceptable to the Board ?
A. I did not.
Q. It had been threshed out or negotiated by anybody in behalf of the Board?
A. I did not understand that the matter was in definite shape at that time for final acceptance at all.
Commissioner Thompson of the board testified in part as follows:
Q. I show you a copy of the resolution which has been marked Plaintiff’s Exhibit No. 3. Will you state whether or not that resolution was passed by the Shipping Board at that meeting?
A. I am quite confident this resolution was never presented to the Board upon which I voted at any time.
Q. Will you tell us in a way — I mean, tell us what happened at that meeting, what discussion there was at that meeting with reference to the bid of the Ship Construction Company?
A. The whole question of the disposition of the wooden fleet was up. My recollection is very clear, and*460 I so contended when this matter has been discussed, that the vote taken that day was to ascertain the sentiment of the Board with respect to the disposition of the wooden fleet. Personally I had very pronounced views that there should be some Congressional authority. My recollection is distinct that the Chairman stated he wanted to discuss this matter with the President. There was considerable discussion, and I am not usually given to being misled at Board meetings, and I said “I want to duck under the table.”
Q. Wanted what?
A. To duck under the table. It was a tiling that greatly worried the Board, as to what disposition to make of the wooden fleet. A resolution had been introduced in Congress, I think, directing us to dispose of the wooden fleet by October 1. I felt that it was too serious a matter to hasten on, and I am quite assured that the vote taken that day was merely to test the sentiment of the Board as to how they felt as to the disposition of the wooden fleet.
I will say this, that had it been a direct question upon a resolution, I would most certainly have voted no.
Commissioner Chamberlain testified in part as follows:
Q. I show you what purports to be a resolution of the Shipping Board. Will you state whether or not that resolution was passed at that meeting?
A. The resolution, as I recall, was passed by the board at that meeting as a tentative proposition and in connection with the general discussion which was had.
Q. What am I to understand by that statement, Senator? Do you mean that particular resolution, without any qualifications, was passed?
A. No; the resolution was read by Mr. Plummer, and after this discussion, which had extended over several hours — I do not remember how many — it was passed as a part of the general discussion in connection with the disposition of wooden ships; and I think the minutes would have been proper if, in the preparation of them, they had stated that the resolution was only to become effective if the financial standing of these gentlemen was good, if the President approved and if the matter could be submitted in Congress, in some way, by resolution or otherwise. In other words, the resolution was a part of the whole general scheme with reference to the disposition of wooden vessels. That is the way I understand it. I did not understand that the resolu*461 tion would be effective except on tbe conditions which were discussed and which I have named.
Q. What other things, if any, were to be fixed up, that you recall, or to be made certain as a part of that?
A. This bid, as I understand it, was made by this company upon an advertisement which called for the sale of the ships “as is, where is, and what is.” It was discovered, because there had been no due appraisement, as I understand the term, that there was an immense amount of property that had been taken off the ships and was stored in different warehouses and other places. All of this had to be adjusted before the final contract of sale was entered into. Those were some of the things that Mr. Farley spoke of in his statement which has appeared here. All of that was to be adjusted as a part of the sale of these ships and the terms to be embodied in the contract, as I understood it.
Commissioner O’Connor testified in part as follows:
Q. Will you state whether or not the resolution was passed on that day at that meeting?
A. I would say not, the way it is drawn up in the paper.
Q,. Will you tell the court what your understanding is of what happened at that meeting?
A. If I understand it rightly, the motion that was passed was to give the Committee power to trade. After several hours of negotiations they were then given power to trade.
The above testimony of the five commissioners, which is not contradicted by any evidence in the record, shows clearly that the action of the board was not an approval or adoption of a resolution unconditionally accepting plaintiff’s bid in the language of the document which was later prepared by the secretary of the board and delivered to plaintiff on August 12, 1921.
Commissioner Plummer, who during the course of the meeting of the board on August 9, 1921, had prepared a proposed resolution substantially in accordance with the document later delivered to plaintiff on August 12, testified with reference to the matter in part as follows:
Q. Did you have a meeting of the board on August 9th after you had in the July 30th bid and the amendment of August 5th?
*462 A. Yes, sir.
Q. Mr. Plummer, did you introduce a resolution in that meeting of August 9th, accepting the bid as amended of the Ship Construction & Trading Company?
A. I offered such a resolution.
Q. May I ask you if this is a copy of the resolutions which you then offered?
A. I should say it was.
Q. Mr. Plummer, were you present during all of that meeting of August 9th?
A. I can’t say. At that time I had no secretary and so I was in and out a good deal.
Q. Were you present during a discussion of the Ship Construction & Trading Company’s bid at that August 9th meeting ?
A. Well, now, I cannot say.
Q. Mr. Plummer, was that resolution passed on that day by the board?
A. I so understood. I learned that some of my colleagues disagreed with me later.
In view of the foregoing and upon the facts as set forth in the findings, we hold that no legal and binding contract resulted from plaintiff’s bid and the action which was actually taken by the board at its meeting of August 9, 1921. Where one authorized to do so receives and accepts a bid and awards a contract but whose action with reference to the contract to be executed between the parties is subject to approval by another and that approval is not subsequently given, no binding contract exists on which the United States may be required to respond in damages as for a breach. Monroe v. United States, 184 U. S. 524; Cathell et al. v. United States, 46 C. Cls. 368; Horton v. United States, 57 C. Cls. 395; Jacob Reed’s Sons Inc. v. United States, 60 C. Cls. 97; Burney Axe, Trading as B. Axe & Co. v. United States, 60 C. Cls. 493; American Electric Co. v. United States, 60 C. Cls. 993.
The record shows that the Shipping Board did not at any time subsequent to August 9, 1921, take any action which would constitute the making of a contract with plaintiff, either on the terms of plaintiff’s bid or on any other definite terms.
With reference to the matter as to whether an appraisement of the ships had been made, as required by the statute, the record shows that when this matter was taken up by the Shipping Board for consideration it decided upon the basis of all the documents and facts upon which plaintiff relies*
This leaves for consideration the question whether the defendant is entitled to maintain and to recover on its counterclaim. The principal amount due the defendant by plaintiff is stipulated to be $299,918.27, on which defendant also-claims interest. In view of the facts set forth in the findings we think an extended discussion as to whether the defendant owns the counterclaim and may legally assert it and whether it is barred by the statute of limitation is not necessary. The fact that the contract, under which the overpayment made the subject of the counterclaim, was entered into with plaintiff by the Fleet Corporation in its corporate capacity does not, in the circumstances disclosed by the record, preclude the defendant from maintaining its countersuit. Crane et al. v. United States, 73 C. Cls. 677, 684-5, 689. Nor does the fact that the contract did not state that the Fleet Corporation was representing or acting as the agent for the United States preclude recovery. The Fleet Corporation was created by the United States through the Shipping Board for the purpose of providing ships desired and needed by the United States. The Fleet Corporation was owned, and its every action controlled, by the government. Officers and directors of the Fleet Corporation were composed of officers and employees of the Shipping Board and all the transactions by the Fleet Corporation, including those out of which this overpayment grew, were financed by the United States from public funds authorized and ap
The United States is entitled to recover interest. Billings v. United States, 232 U. S. 261. In the Seventh Article of the contract of November 22, 1917, plaintiff agreed to repay to the Fleet Corporation any overpayment that the Fleet Corporation might make in paying all the expenses of completing the hulls under the terms of that contract. Plaintiff’s shipyards, which in the meantime had been taken over by the Fleet Corporation, were turned back to plaintiff July 28,1919, and the hulls were accepted by the United States in October. The Fleet Corporation stated an account in the matter on February 28, 1922, and delivered the same to plaintiff and demanded payment of the balance shown to be due the Fleet Corporation on March 18, 1922. On that date interest in favor of the creditor commenced to accrue. See Enright & Fletcher v. United States, 73 C. Cls. 416. The amount of interest at 6 percent per annum to which the defendant is entitled on. the principal amount due by plaintiff from March 18,1922, to April 1,1940, the date of judgment, is $324,561.62. The defendant is therefore entitled to recover $624,479.89. Judgment will be entered accordingly. It is so ordered.