Case ID: us-ct-cl_63/html/0199-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per curiam:\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

AIR NITRATES CORPORATION v. THE UNITED STATES
    [No. D-889.
    Decided February 21, 1927]
    
      On the Proofs
    
    
      Pleading; submission of cases; definite stipulations. — Where in a stipulation of facts, the parties thereto seek to agree upon the amount due the plaintiff if entitled to recover, the agreement as to the amount should be stated with certainty.
    
      The Reporter’s statement of the case:
    
      Mr. Charles E. Hughes for the plaintiff. Mr. H. H. Shelton was on the brief.
    
      Messrs. Dwight E. Borer and Assistant Attorney General Herman J. Galloway for the defendant.
    
      The court made special findings of fact, as follows:
    I. The plaintiff, Air Nitrates Corporation, is a corporation organized and existing under and by virtue of the laws of the State of New York, with executive office at 511 Fifth Avenue, New York City, New York.
    II. On or about August 14, 1918, the plaintiff, acting by and through its duly authorized officers, and the defendant, acting by and through Colonel Samuel McEoberts, Ordnance Department, United States Army, and under the direction of the Secretary of War, entered into a contract in writing wherein the plaintiff was appointed and agreed to act as the sole and exclusive agent of the defendant for the following purposes:
    (a) To design, construct, and operate ammonium nitrate plants, as follows: (1) A plant at Muscle Shoals, Alabama, having an approximate capacity of 110,000 short tons of ammonium nitrate per annum; (2) a plant at Toledo, Ohio, and one at Cincinnati, Ohio, each having an approximate capacity of 55,000 short tons of ammonium nitrate per annum.
    (b) To carry out the terms and conditions of the contract marked Exhibit “A,” and in so doing to maintain such departments, including engineering, administrative, purchasing, construction, manufacturing, inspection, labor relation, workmen’s compensation, statistical, commissary, police, fire, medical, housing, accounting, and legal, as might be necessary for such purpose.
    (c) To operate such plants and to continue the operation thereof up to June 1st, 1921 (or as long thereafter as the war continued), when and as any part or parts of said plants, or any of them, was sufficiently completed and ready for operation, and to do all things necessary or proper in and about the operation of said plants, including the employment of all necessary labor and power and the purchase of all necessary materials.
    III. A copy of the contract between the plaintiff and the defendant, together with Schedule “A” thereof, is attached to plaintiff’s petition as Exhibit “A,” and a copy of the license agreement between the American Cyanamid Company and the defendant, together with Schedule “ B ” thereof, is attached to plaintiff’s petition as Exhibit “I,” and are both made part of these findings by reference thereto.
    IY. Under and in accordance with the said contract between plaintiff and defendant, the plaintiff designed, constructed, completed, and placed in operation a nitrate plant at Muscle Shoals, Alabama; it designed and began the construction of a nitrate plant, one each at Cincinnati, Ohio, and Toledo, Ohio, and had partially completed the said two plants upon the signing of the armistice on November 11, 1918.
    All activities looking toward the completion of the plants at Cincinnati and Toledo were stopped on November 12, 1918, by order of the construction division of the Ordnance Department of the United States Army. The plant at Muscle Shoals was completed, and the Air Nitrates Corporation was notified that all activities at that plant would be terminated as of June 1, 1920.
    Y. Under Article XI, subdivision 1, of said contract, the defendant agreed to pay to the plaintiff a construction fee as follows:
    “Three and one-third (8I/3) per cent of the cost in connection with the construction and equipment of the said plants, until such cost (exclusive of the agent’s compensation) shall equal thirty million (30,000,000) dollars, and thereafter one and two-thirds (1%) per cent of such cost in excess of said thirty million (30,000,000) dollars. Said fee shall be payable monthly upon that portion of the cost for which payment has been made during the month or months preceding and as to which the fee is unpaid * * *. The total of the construction fee shall not exceed one million five hundred thousand ($1,500,000) dollars.”
    The cost of the construction and equipment of all said plants was in excess of $30,000,000, and not less than the sum of $82,070,000.
    The defendant has paid the plaintiff (at the rate stated in Article XI of the contract) the sum of $1,144,211.61 on account of said construction fee, and there is a balance of $355,788.39 which has never been paid by the defendant to the plaintiff, or any part of same. The said sum of $355,-788.39, if added to the sum of $1,144,211.61, will equal the sum of $1,500,000, the total construction fee as stated in Article XI of the contract.
    VI. Under Article XI, subdivision 2, of said contract, the defendant agreed to pay to the plaintiff an operation fee as follows:
    “ One-quarter of one cent ($0.0025) per pound of ammonium nitrate produced .in compliance with Article VII hereof, and accepted or utilized by the United States, up to and including 110,000 tons produced in any fiscal year of the United States, and one-eighth of one cent ($0.00125) per pound of ammonium nitrate so produced and accepted or utilized in any said fiscal year in excess of such 110,000 tons. Payment shall be made monthly.”
    Plaintiff in accordance with the said contract began operating the said plant at Muscle Shoals, Alabama,, on the 25th day of November, 1918, and continued operating the same for approximately four months thereafter, during which time it produced 1,710.8 tons of ammonium nitrate, which was accepted or utilized by the defendant. The operation fee, at the said rate stated, amounts to the sum of $8,554.00, no part of which has been paid by the defendant to the plaintiff.
    VII. The sum of $47,044.10 is the amount agreed upon between the parties as having been expended by the plaintiff in payment of costs incurred by it, as provided in Article X, in its performance of said contract. No part of the $47,-044.10 has been paid by the defendant to the plaintiff.
    VIII. The plaintiff duly presented to the Chief of Ordnance of the United States Army for payment bills for the balance due on the construction fee, the balance due on the operation fee, and for other amounts then claimed by it to be unrecouped refundable expenses, under said contract, including, among others, the items herein above referred to, but payment thereof was not made. Thereafter the plaintiff presented to the Secretary of War for payment its said claims for the balance due on the construction fee and the balance due on the operation fee and for a reduced amount for such unrecouped refundable expenses, including, among others, the items herein above referred to, but under date of May 2, 1923, such payment was refused by the Acting Secretary of War. Thereafter the plaintiff began this action in this court, praying judgment in the sum of six hundred eight thousand two hundred forty-eight dollars and seventy-nine cents ($608,248.79), with interest thereon, embracing not only the items set forth in these findings, but all items for which bills had been presented as aforesaid to the Chief of Ordnance. Thereupon the plaintiff’s said claims were referred to the Department of Justice, which made an investigation of the same in consultation with the War Department. As a result of such investigation conferences were held between representatives of the Department of Justice and the War Department of the United States and representatives of the plaintiff, during the course of which a proposed stipulation of facts setting forth the same items as are embraced in these findings of facts (with the exception that there was included in said proposed stipulation an item of $5,260.28, which is not included in these findings) was prepared and submitted to the War Department. On November 19, 1925, the Acting Secretary of War wrote to the Attorney General of the United States as follows:
    WAR DEPARTMENT,
    
      Washington, Nov. 19, 1925.
    
    The honorable the Attorney General.
    My Dear Mr. Attorney General: Eeference is made to your letter of November 16th, 1925, and its enclosure, a proposed stipulation as to facts submitted by plaintiff in the case of Air Nitrates Corporation v. The United States, Court of Claims'No. D-889.
    I have considered the proposed stipulation of facts and believe that it would be to the best interests of the Government to enter into such a stipulation in the sum of $416,646.77, as proposed by the plaintiff.
    I feel that the War Department has no counterclaim which can be proved against plaintiff on account of the construction and/or operation of the plants under the contract. This matter has been under consideration by the War Department for a number of years. Proof has not been obtained wdiich would justify the filing of an affirmative counterclaim for any sum, and I understand that the Department of Justice has obtained no additional information. In view of the years which have passed since the transactions in question, tbe position of the Government in court proceedings becomes more difficult, and I believe it is to its benefit to terminate this litigation on the present advantageous terms.
    Very truly yours,
    (Signed) Haneord MacNider,
    
      Acting Secretary of War.
    
    Thereafter there was further correspondence between the War Department and the Department of Justice, as a result of which the Secretary of War on April 12, 1926, wrote to the Attorney General as follows:
    War Department,
    Washington, April 10, 1926.
    
    The honorable the Attorney General.
    Dear Mr. Attorney General : Eeplying to your letter of March 27th, 1926, concerning the case of Air Nitrates Corporation v. The United, States (Court of Claims No. D-889) and the proposed stipulation in connection therewith submitted with your letter of February 27, 1926, to this office, it is understood that the particular advice required is that connected with paragraph 7 of the stipulation, and the item of $52,504.38 (refundable expenses) of paragraph 9. All other matters contained in the stipulation are apparently verified by official reports of the Ordnance Department and other documents contained in the file.
    You are advised that an examination of the records of the Air Nitrates Corporation shows that of the item of $52,504.38 (refundable expenses) certain sums amounting to $5,260.28 are not, in the opinion of this office, within the intent of the proposed stipulation and should be deducted; that when so deducted there will remain items of refundable expenses aggregating $47,044.10 which are true and within the intent of the proposed stipulation.
    The items of $355,788.39, unpaid construction fee, and $8,554.00, unpaid operation fee, which appear in the official report of the Ordnance Department, were found to correspond with unpaid vouchers for like amounts retained by the Air Nitrates Corporation.
    The above three items make up the total sum which this office considers may be correctly incorporated in the proposed stipulation and are summarized as follows:
    
      Unpaid construction fee-$355, 788. 39
    Unpaid operation fee_ 8, 554. 00
    Refundable expenses_ 47, 044.10
    411, 386.49
    Eeport of the technical advisor on accounting of the Judge Advocate General, setting out in detail the item of $41,044.10, is transmitted herewith.
    There is also transmitted the file in connection with the case.
    Sincerely yours,
    (Signed) Dwight F. Davis,
    
      Secretary of War.
    
    IX. The amount of the money unrecouped by plaintiff under said contract is therefore composed of the following items:
    Balance construction fee_$355,788.39
    Operating fee_ 8, 554. 00
    Refundable expenses_ 47, 044.10
    411, 386.49
    The court decided that plaintiff was entitled to recover $411,386.49.
   Per curiam:

This case was submitted originally upon a “ stipulation as to facts ” and was remanded for a definite stipulation if one was desired. The case is again submitted upon a stipulation signed by the Attorney General and attorneys for the plaintiff. In this second stipulation the parties agree upon an item that was indefinite in the first stipulation. It is desirable where parties seek to stipulate the amounts that the' agreement should be definite as to these amounts. The present stipulation meets this condition. No counterclaim has been filed, and upon inquiry at the time of submission the attorney for the Government stated that it interposed no defense.

Judgment is therefore awarded in accordance with the stipulation.