Case ID: us-ct-cl_60/html/0037-01.html
Source: Caselaw Access Project
Author: {"author": "Hay, Jxidge,\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MARSH MANUFACTURING COMPANY v. THE UNITED STATES
    [No. A-91.
    Decided December 1, 1924]
    
      On the Proofs
    
    
      Contract; advance payment; damages. — Plaintiff submits a proposal to furnish certain articles to the Government in which it requests an advance payment. The proposal is accepted but no reference is made to the request for an advance payment. The parties enter into a contract which does not mention the advance payment. The Government at the time had regulations providing for advance payments on contracts. After the execution of the contract the plaintiff called on the Government to make the advance payment, whereupon the Government requested certain information in accordance with its regulations, which the,plaintiff did not furnish. Held, that the plaintiff cannot recover damages for the failure of the Government to make such advance payment.
    
      The Reporter’s statement of the case:
    
      Mr. H. S. Whitman, for the plaintiff. Lyon dc Lyon were on the briefs.
    
      
      Mr. Howard J. Bloomer, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant. Mr. George H. Foster was on the brief.
    The following are the facts as found by the court:
    I. The plaintiff is a corporation organized under the laws of the State of Indiana, with its offices and principal place of business in the city of Vincennes, in said State.
    II. In response to an inquiry from the Quartermaster’s Department of the United States Army, the president of the plaintiff company took up with the Quartermaster’s Department orally the question of the manufacture of certain tent pins. The plaintiff advised the Quartermaster’s Department orally that it was in a position to manufacture the tent pins, but that due to the slowness of payments by the defendant on other contracts it would ask the Quartermaster’s Department to advance the plaintiff $15,000 for the purchase of lumber out of which to manufacture the pins.
    III. On the 4th day of October, 1917, the plaintiff submitted the following proposition for the manufacture of tent pins:
    
      October 1917.
    
    Depot Quartermaster,
    
      Jefersonville,Ind.
    
    Dear Sir: Confirming verbal quotation given to Captain Volgenau, we will furnish equipment as per following-prices :
    
      Shelter tent pole, Jeffersonville, Philadelphia
    
    Shelter tent pole-$262. 00 $264. 00
    Tent pins, large_ 17.25 19.00
    Tent pins, small_ 13. 70 14. 50
    Shelter tent pins, in bags_'_ 6.20 6. 40
    Shelter tent pins, in boxes_'_ 6. 60 6. 80
    The following prices are per thousand f. o. b. our factory, but freight allowed to destination.
    In addition to our present contracts, we can guarantee to undertake the following quantities to be delivered within a period of six months from date of order:
    Shelter tent poles_ 974, 000
    Shelter tent pins- 6,200, 000
    Tent pins, large or small_ 7, 800,000
    If awards were given us on the above quantities we would ask the assistance of the Government to the extent of $15,000 in advance payment, to be invested in lumber and stored in our yard as a reservation to be drawn upon only in case of railroad failure to deliver, but this reservation to enable us in such failure to maintain the rate of production 'and maintain the organization necessary to produce this output. * * *
    These prices for both poles and pins are subject to acceptance within two weeks, but after that time we would be unable to guarantee the price and delivery, as lumber conditions and metal conditions are becoming more and more unsettled.
    Very respectfully submitted.
    (Signed) The MaRsh Meg. Co.,
    H. B. Maesh,
    
      President.
    
    IV. Subsequent to the joroposal as above set forth the plaintiff’s president was advised that its proposal for tent pins had been forwarded to the Philadelphia office of the Quartermaster’s Department. Later in October the plaintiff’s president was in the East and he stopped in at the Philadelphia office of the Quartermaster’s Department. While there he made a penciled revision of the figures in his original bid, as above set forth, but told the defendant’s officers that the plaintiff’s entering into a contract was conditioned upon the advance of $15,000 by the defendant to the plaintiff.
    Thereafter, on October 13, the defendant’s Quartermaster’s Corps wrote the plaintiff the following letter accepting the plaintiff’s bid on the revised figures, as follows:
    October 13, 1917.
    No. 424.4-145 Our.
    From: Depot Quartermaster.
    To: Marsh Mfg. Co., Vincennes, Ind.
    Contract No. 1339.
    Subject: Award of contract.
    1. In accordance with your offer, contract is awarded you for furnishing to this corps, f. o. b. cars, Jeffersonville, Ind., approximately—
    Per thousand
    3,818,480- tent pins, large_$16.25
    1,087,200 tent pins, small_ 12. 25
    5,125,800 tent pins, shelter_ 6.50
    (As per specification requirements and standard sample.) Delivery: 400,000 tent pins (large or small) and 400,000 shelter tent pins weekly, commencing December 1, 1917.
    
      2. Contract will be dated October 15 and numbered “ 1339.” Payments thereunder will be made by the Depot Quartermaster, Jeffersonville, Ind., who will have entire charge of the contract.
    3. Bond in the amount of $11,000 will be required for the faithful fulfillment of this contract, and you are requested to-advise this office the name of a qualified surety company or two individuals who will join in this bond with you. Also advise whether your company is a corporation or a partnership ; if a corporation, under the laws of what State incorporated ; if a partnership, the full names of all the members of your firm.
    4. Please acknowledge receipt.
    J. Ghat Zalinski,
    Colonel, Q. M. Corps, D. Q. M.
    
    Y. The plaintiff replied to the defendant’s letter of October 13, as follows:
    October 17, 1917.
    Depot Quartermaster,
    Philadelphia, Pa.
    
    Dear Sir : This to acknowledge receipt of your award of contract No. 1339, and in accepting this it is understood that steps would be taken to advance us $15,000 to be used in the purchase of the lumber entering into this contract. This purchase is necessary in order that steady flow of material be insured on your order.
    As the transactions have been in the past, there has been an unexpected and very serious delay by the Philadelphia and Jeffersonville in the payment of our bills, and this has worked hardship, which we do not believe would have been altogether necessary and has been very embarrassing at times in our relations with our bank, and we sincerely hope that the time these deliveries begin that prompt payments will be the rule.
    Yours very truly,
    The Marsh Mpg. Co.,
    HBMrMC -, Pres.
    
    YI. Thereafter a formal contract was drawn bearing date October 15, 1917, and signed by the* defendant’s officers. On October 23, 1917, the plaintiff was forwarded a copy of said contract. Upon receipt of the contract the plaintiff sent the same to a bonding company which executed the same, and returned it to the plaintiff, and the plaintiff signed it and returned it to the defendant about December 5, 1917. A copy of the said contract is attached to the petition of the plaintiff marked “ Exhibit D,” and is made a part hereof by reference. On December 5, 1917, the plaintiff wrote to the defendant asking that the advance payment of $15,000 be expedited.
    VII. After the plaintiff had signed the contract and had returned the same it asked for the advance of $15,000. On December 8, 1917, the defendant advised the plaintiff what steps it must take in order to secure the advance. The plaintiff failed to take the necessary steps prescribed by the Government, and again on January 16, 1918, the plaintiff asked for the advance of $15,000, and again the Government advised what it must do in order to secure the advance. The plaintiff failed to comply with the regulations, and the Government refused to make the advance.
    VIII. Plaintiff, after execution of the formal contract, proceeded with the performance of the contract.
    Plaintiff manufactured 3,964,417 large tent pins and 1,-106,760 small tent pins and has been paid the contract price thereof. No shelter tent pins were manufactured. The performance of this contract was greatly delayed, and the price of material and labor had increased to such an extent by December 1, 1918, that plaintiff was not able to manufacture the tent pins at the prices fixed in the contract. The manufacture of the remaining portion of the contract would have been carried on at a loss to plaintiff.
    On. December 16, 1918, plaintiff was requested to suspend operations on the contract, except to finish work in process. Work was suspended, and an agreement was reached as to terms and conditions of the settlement and adjustment of claims arising out of the termination of the contract. The terms of this proposed settlement are not shown.
    On February 8, 1917, a letter signed “The Marsh Manufacturing Co., John L. Klemeyer, receiver,” was sent to the Board of Contract Review, zone supply officer, Jefferson-ville, Ind., asking to amend the plaintiff company’s claim. Thereafter considerable negotiations were had, resulting in an award to plaintiff by the Board of Contract Adjustment in the amount of $1,725 on February 25, 1920, covering loss on lumber assembled for the performance of 'the contract. The plaintiff appealed to the Secretary of War, who on January 20, 1921, directed that an order be entered denying all relief.
    The court decided that plaintiff was not entitled to recover.
   Hay, Jxidge,

delivered the opinion of the court:

This is a suit brought by the plaintiff to recover from the United States the sum of $57,155.96, which sum the plaintiff alleges is due it because the defendant failed to advance to it the sum of $15,000, which sum the plaintiff alleges the defendant agreed to advance, but failed to include that provision in the contract which was entered into by the parties.

The plaintiff submitted to the defendant a proposal for a contract for a large number of tent pins. In that proposal the plaintiff said:

“If awards were given us * , * * we would ask the assistance of the Government to the extent of $15,000 in advance payment, to be invested in lumber and stored in our yard as a reservation to be drawn upon only in case of railroad failure to deliver * * *.” The defendant, in answer to the aforesaid proposal, wrote a letter to the plaintiff purporting to be an award of contract, based on the proposal. This letter, which is set out in the findings, made no mention of the $15,000 advance payment. The plaintiff accepted the award, and in its letter of acceptance stated, “ In accepting this it is understood that steps would be taken to advance us $15,000, to be used in the purchase of the lumber entering into this contract.”

On October 23, 1917, the formal contract embodying the terms of the contract was forwarded to the plaintiff, signed by the defendant. -

The plaintiff upon receipt of the contract forwarded it to a bonding company, which executed the same, and the plaintiff on December 5, 1917, signed the contract and returned it to the defendant. The contract filed with the petition as Exhibit D contained no provision as to the advance payment of $15,000.

On December 5, 1917, the plaintiff wrote to the defendant asking that .the advance payment of $15,000 be expedited. The defendant on December 8, 1917, advised the plaintiff that in order to support its application for an advance payment the law and regulations required certain information from the plaintiff. The plaintiff failed to supply this information, but continued to insist upon the advance payment of $15,000. The defendant again advised the plaintiff that no advance payment could be made until the information asked for was given. The plaintiff did not give the information, and, failing thus to comply with the regulations which had been made to apply to all contractors who were applicants for advanced payment, the defendant refused to make the advance asked for by the plaintiff.

The plaintiff now contends that the provision for the advance payment of $15,000 was a part of the contract and that it signed the contract believing that that provision was-embodied in it, and that it is entitled to have the contract reformed and to have a recovery for the sum of $57,000, the damages which it alleges it has suffered by reason of the failure of the defendant to embody in the contract the provision for the $15,000 advance.

The facts do not bear out the contention of the plaintiff. It signed the contract, which it had in its possession for several weeks before signing it, and must be supposed to-have known what the contract contained, especially as it laid great stress upon the advance-payment provision. On the date when it signed the contract it also wrote the defendant as to the $15,000 advance, and when the Government pointed out to the plaintiff how it could obtain the advance it failed to comply with the law and regulations,, which compliance would have entitled it to the advance.

It is obvious that the defendant never intended that the provision for the advance payment should be included in the contract; its letter accepting the proposal, and the contract itself negative any such intention. The plaintiff had every opportunity to acquaint itself with the terms of the contract. If it did not do so, it can not now be heard to complain. It has no grounds to ask for a reformation of the contract. It has not shown that there was any mutual mistake as to its provisions.

The defendant having made no agreement to advance a payment can not be held to account for any damage which the plaintiff may have suffered by reason of the fact that no advance was made.

The petition of the plaintiff must be dismissed. It is so ordered.

Geaham:, Judge; Downet, Judge; Booth, Judge, and Campbell, Chief Justice, concur.