Case ID: us-ct-cl_61/html/0360-01.html
Source: Caselaw Access Project
Author: {"author": "Downey, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

INTEROCEAN OIL COMPANY v. THE UNITED STATES
    [No. D-865.
    Decided December 7, 1925]
    
      On the Proofs
    
    
      Purchase order; provisional price. — See Pocahontas Fuel Go. and California PacMng Corporation cases, ante, pp. 231 and 272.
    
      The Reporter's statement of the case:
    
      Mr. John Paul Earnest for the plaintiff. Mr. Charles E. Kern was on the brief.
    
      Mr. Edwin S. McCrary, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. The plaintiff is, and at the times hereinafter mentioned was, a corporation created by and existing under and by virtue of the laws of the State of South Dakota, having its principal office or place of business at No. 90 West Street, city of New York, State of New York. It is and was engaged in buying, selling, and refining petroleum, oil and gasoline, fuel oil, and other products thereof.
    II. On or about October 11, 1918, plaintiff received from the Navy Department an order, designated as N-4913, a copy of which order is attached to the petition as Exhibit 0 and made a part of this finding by reference. This order was for “ bunker oil ” in quantities up to 100,000 barrels and made provision for an advance payment at specified rates and for a later determination as to what was just compensation.
    There are filed with and attached to the order set out as “ Exhibit C,” but not printed as a part thereof, certain “ specifications and conditions,” in subsection {d) of paragraph 5 of which it is provided that “ in making deliveries of oil at the oil supplier’s works or tanks the supplier shall furnish all necessary piping and connections to the intake at the vessel’s side and will pump the oil on board; also, in delivering oil in the supplier’s barges to vessels at anchorage within harbor limits or outside thereof, the supplier will provide necessary connections and pump the oil into the vessel’s tanks.”
    This order was accepted in writing by the president of the plaintiff company, in its name, under subparagraph (B).
    III.Deliveries of oil were made by the plaintiff to the defendant under N-4913 on the following dates and in the following amounts:
    Invoice date
    1918 No. of barrels
    Nov. 26_ 1,773.96
    Dee. 13_ 6, 701.49
    Dec. 13_ 320.9
    Dee. 31_ 436. 88
    1919
    Jan. 24. 674.76
    Feb. 4_. 694.10
    Feb. 18. 4, 937.19
    Feb. 19. 4, ,668.26
    Total_ 19, 897. 63
    Deliveries were from the plaintiff’s refinery at East Baltimore, Baltimore, Md., to vessels in the harbor of Baltimore.
    IV. The plaintiff received as payment for the oil the provisional price named in the Navy order, totaling $43,253.32.,
    V. Under date of July 31,1922, the Secretary of the Navy transmitted to the plaintiff a letter in which he advised the plaintiff that the advance payment prices had been determined to be the fair and just prices to be paid for the oil, to which he added that “ these prices will therefore apply to the Navy order under the provisions of subparagraph A thereon, subparagraph B being eliminated.” The plaintiff returned this letter with its indorsement thereon indicating that the prices stated therein were not satisfactory.
    VI. The fair market price of the oil delivered has been stipulated by the parties as follows :
    “ It is hereby stipulated and agreed that for all oil delivered upon said Navy Order N-4913, during November and December, 1918, and January, 1919, the price of $3 per barrel was the fair market price thereof; that for all oil delivered on said Navy order in February, 1919, the price of $2.7<) per barrel was the fair market price thereof.”
    The total value of the oil delivered as shown in Finding III at the stipulated prices is $56,968.26. The excess over the amount paid the plaintiff as shown in Finding IY is $13,714.94.
    VII. The plaintiff on the various dates of deliveries above set forth incurred expenses in connection with the transferring of the oil to the defendant’s vessels in the aggregate amount of $471.07.
    The court decided that plaintiff was entitled to recover, in part.
   Downey, Judge,

delivered the opinion of the court:

Under Navy Order No. N-4913, dated October 11, 1918, which Was accepted by the plaintiff in writing, the plaintiff delivered to the United States a quantity of oil shown in the findings. The order tentatively fixed a price but stated that it was under the conditions stated in subparagraph (B) and the acceptance was under that paragraph. That paragraph was as follows:

“(B) As it is impracticable to now determine just compensation for the material to be delivered or services rendered, the\ fixing of the price will be subject to later determination. You are assured of just compensation under this order, and pending the determination of the final price, you will be paid the provisional price stated hereon, with the understanding that such price paid will not be considered as having any bearing upon the price to be subsequently fixed. Any difference between the amount of such payment and the amount finally determined upon as just compensation will be paid to you or refunded by you, as the case may require. The provisional price stated herein will not prejudice any future price determination or be considered as a precedent in determining such increases or decreases as may be later decided upon as proper.”

The order is upon the same general form as those involved in other cases which have recently received the attention of the court. Federal Sugar Refining Company v. United States, No. B-147, decided January 19, 1925, 60 C. Cls. 184; Consolidation Coal Company v. United States, No. A-262, decided January 26, 1925, and on motion for a new trial April 20, 1925, 60 C. Cls. 608; Pocahontas Fuel Company v. United States, No. C-739, and California Packing 0orporation v. United States, No. C-1137, both this day decided, ante, pp. 231 and 272.

We need not repeat discussions in other cases leading to the conclusion which very clearly must prevail in this case, that the relations between the parties by reason of the placing of this order and its acceptance were contractual, the prices stated being tentative and subject to future adjustment upon such a basis as to entitle the plaintiff to recover the fair market value of its oil at the time and place of delivery. The parties have stipulated the fair .market price of the oil shown in the findings and which in the aggregate was $13,714.94 in excess of the amount- paid plaintiff under the tentative prices. This it is entitled to recover.

Plaintiff seeks interest as a part of just compensation but as the relation of the parties was contractual no interest can be awarded. The subject has been discussed in other cases.

Plaintiff’s additional claim for expense, incurred in connection with the transferring of the oil to the defendant’s vessels is precluded by a paragraph found in the specifications and quoted in so far as material in Finding II.

We have directed judgment for the plaintiff in accordance with these conclusions.

Graham, Judge; Hay, Judge; Booth, Judge; and Campbell, Chief Justice, concur.