Case ID: us-ct-cl_60/html/0994-01.html
Source: Caselaw Access Project
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Date Created: 2024-08-24T03:29:51.129683

HARRY SRERE, ABE SRERE, ALFRED A. SRERE, TRADING AS SRERE BROTHERS & CO., v. THE UNITED STATES
    [No. C-1183.
    Decided June 8, 1925]
    
      On the Proofs
    
    
      Contract; sale of nonexistent toar supplies. — See Roliwaraeriberg case, ante, p. 898.
    
      
      The Reporter's statement of the case:
    
      Mr. Raymond M. Hudson for the plaintiff.
    
      Mr. 'Edmond G. Fletcher, with whom was Mr. Assistant Attorney Generad Herman, J. Galloway, for the defendant.
    The following are the facts as found by the court:
    I. The plaintiffs, Harry Srere, Aba Srere, and Alfred A. Srere, trading as Srere Brothers & Company, were a co-partnership created and existing under the laws of the State of Ohio, engaged in the manufacture of jute pulp and dealing in paper at Franklin, in said State, and were SO' engaged in the months of April and May, 1920. Plaintiffs are the sole owners of the claim sued on.
    II. The Government was at some time prior to April 29, 1920, the owner of and had in its possession, at Buffalo, New York, 145,817 pounds of surplus wrapping kraft 52" car lining paper, and some days prior to April 29, 1920, acting through the material disposal and salvage division of the Air Service, at Washington, D. C., advertised, as item 5 in bulletin sheet 5176, for bids for said paper.
    III. On April 29, 1920, plaintiffs, acting through Agnes M. Keeve, an employee residing at Washington, D. C., whose duties were to get lines on the various kinds of surplus material that the Governnrnt had for sale, and put plaintiffs in touch therewith, submitted a bid, in writing, for the entire amount of paper included in and covered by said bulletin, said bid being 3% cents per pound, f. o. b. Buffalo, New York. A check for $492.13, ten per cent of purchase price, accompanied bid.
    IV. On April 29, 1920, the date when the bid was submitted, the Government, acting through the officer in charge of the material disposal and salvage division of the Air Service at Washington, D. C., accepted the bid, and on said date notified plaintiffs of such acceptance, being sale No. 3448, by letter addressed to Agnes M. Keeve, Washington, D. O., which letter was received by her on said date and at once forwarded to plaintiffs at Franklin, Ohio. The letter of acceptance, among other things, stated that plaintiffs’ check for $492.13, ten per cent of purchase price, had been received, and requested that plaintiffs immediately forward the remaining ninety per cent, together with shipping-instructions.
    Y. On May o, 1920, the officer in charge of material disposal and salvage division of the Air Service, at Washington, D. C., notified plaintiffs through the said Agnes M. Reeve, in Washington, D. C., by telephone communication, that the contract of purchase and sale covered by the bid and acceptance of April 29,1920, had been and was canceled, which notice of cancellation was at once transmitted by the said Agnes M. Reeve by telegraph to and received by plaintiffs at Franklin, Ohio, on May 5, 1920, on which date plaintiffs telegraphed Miss Reeve acknowledging receipt of her notice by wire of the cancellation of the contract for the 145,817 pounds of paper. On said date the telephone communication and message canceling the contract was confirmed by letter of the officer in charge of material disposal and salvage division of the Air Service, Washington, D. C., addressed to plaintiffs, through the said Agnes M. Reeve, and by her duly received on said day.
    VI. The reasons for canceling the contract were set out in the letter of May 5, 1920, received as above stated, and were as follows:
    May 5, 1920.
    Miss Reeve, Srere Brothers,
    
      Franhlin, Ohio.
    
    (Subject: Sale No. 3448, paper.)
    1. Referring to sale No. 3448, covering 145,811 pounds wrapping kraft 52" car lining paper, bulletin sheet 51T6, all item 5, regret to advise that this sale has been canceled, due to the fact that this material has already been sold in a previous sede. Correspondence advising that paper on sheet 5116 had been substituted on another bulletin did not reach this office until after sale No. 3U8 had been consummated.
    
    By authority of the Director of Air Service.
    Wh. E. Gilmore,
    
      Colonel, A. S. A., Chief of Supply Group.
    
    
      VII. The paper in question was surplus stock owned and held by the Government, at Buffalo, New York, and had been sold and disposed of at the time the bid of plaintiffs was submitted and accepted, which fact was unknown at the time to the officer in charge of material disposal and salvage division of the Air Service, Washington, D. C. Notice of such prior sale was not received at the Washington office until May 5, 1920, on which date the Washington office immediately notified plaintiffs in the manner stated in Finding VI. of such sale and of the Government’s inability to complete the sale of the 145,817 pounds of paper included in and covered b}r the bid and acceptance of April 29, 1920, and that said sale, for said reason was canceled.
    VIII. On May 6, 1920, after receiving notice of-the cancellation and of the Government’s inability to deliver the paper in question; plaintiffs forwarded to the material disposal and salvage division of the Air Service, Washington, I). C.. a certified check for $4,429.19, to cover the balance of the purchase price of the 145,817 pounds of paper at 3% cents per pound, and authorized and directed that the paper be shipped to Cincinnati, Ohio.
    IX. On May 6,1920, after receiving notice of the said cancellation and notice of the Government’s inability to deliver the paper in question, plaintiffs contracted with and sold to the Whittaker Paper Company, of Cincinnati, Ohio, the entire amount of the paper in question, the price therefor to be $100 per ton at Buffalo, New York.
    X. The Government returned the certified check' for $4,429.19, Avhich plaintiffs received under protest. The Government also returned the amount of the other check, $429.13, which Avas also receded by plaintiffs under protest. Plaintiffs demanded delivery of the paper on seA^eral occasions, AA’hich demands Avere never complied with, nor was the paper ever delivered.
    XI. It is claimed in the petition that $2,400 is the difference in Aralue betAveen Avhat plaintiffs Avere to pay the Government for the paper and the market value thereof at the time it Avas to have been delivered. It does not appear what the value of the paper Avas in Buffalo at the time the bid was made and accepted, or at any other time. It does appear that the value generally was in the neighborhood of seven cents per pound. It also appears that the paper was sold to the Whittaker Paper Company by plaintiffs for about six cents per pound, amounting to $6,829.19. It does not appear that the Whittaker Company made any claim upon plaintiffs because of the inability of the plaintiffs to deliver the paper to the Whittaker Company.
    The court decided that iDlaintiffs were not entitled to recover.
   MEMORANDUM BT THE COURT

The plaintiffs sue for an alleged difference between the contract, price of certain material and its market price, alleging that the plaintiffs purchased from the material disposal and salvage division, Air Service, Washington, D. C., certain car-lining paper. The facts show that the salvage division advertised for bids for paper, and on April 29, 1920, plaintiffs made a bid, which they were notified had been accepted, the price being 3% cents per pound, f. o. b. Buffalo, where the material was supposed to be. Within a few days thereafter, to wit, on May 5th, the officer in charge learned that the paper had been disposed of before plaintiffs’ bid had been made or accepted, and he thereupon notified plaintiffs’ agent in Washington, who was dealing for plaintiffs in the matter, that the material had been disposed of as stated, and the Government could not deliver it. The material had been sold in some previous sale, of which fact the Government officer in charge was not informed until May 5th. At that time plaintiffs had paid only the 10 per cent called for in the original bid. Their agent then notified plaintiffs of the notice which the officer in charge had given such agent, at Washington, and, after receiving notice of the cancellation and of the Government’s inability to deliver the paper, plaintiffs forwarded a certified .check for the 90 per cent of their bid, with instructions as to shipping.

This court has several times held that claims growing out of bids for material which the Government was disposing of as surplus material can not be enforced against the Government where it appears that the material covered by the bid is not in the ownership or possession of the Government at the time the bid is made or accepted. The statute authorizes the sale of surplus material, and the authority of the officer is to sell what the Government owns and possesses at the time. Bidders must be held to a knowledge of any limitations upon the authority of Government agents. (See Hummel case, 58 C. Cls. 489, 494; Schwarzenberg case, ante, p. 898.)

An additional ground for dismissing the petition rests upon the fact that the alleged contract was not in writing, as required by section 3744, Revised Statutes. (See Erie Coal & Coke Corporation v. United States, 266 U. S. 518.)

GRaiiam, Judge, took no part in the decision of this case.