Case ID: us-ct-cl_127/html/0038-01.html
Source: Caselaw Access Project
Author: {"author": "LittletoN, Judge,\n     JoNes, Chief Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CHAIN BELT COMPANY, A WISCONSIN CORPORATION v. THE UNITED STATES
    [No. 49292.
    Decided September 30, 1953.
    Defendant’s motion for new trial overruled January 5, 1954]
    
      
      Mr. Jackson M. Bruce for the plaintiff. Messrs. Wood, Warner, Tyrrell <& Bruce were on the brief.
    
      Mr. Thomas B. McKevitt, with whom was Mr. Acting Assistant Attorney General Ralph J. JjwttreTl for the defendant. Mr. Garry V. Fisher was on the brief.
   LittletoN, Judge,

delivered the opinion of the court.

In this suit the plaintiff seeks to recover damages in the amount of $267,223.74, for breach of contract arising out of defendant’s failure to move its machinery out of a portion of the premises purchased by plaintiff from defendant on the date agreed to in the contract of sale, and defendant’s failure to repair damage caused to the floors as a result of the moving operation when it was performed. The damages alleged and claimed by plaintiff to have resulted from such breach consist of the cost of $42,098.68 to plaintiff of repairing the floors damaged by the machinery removal methods employed by defendant’s moving contractor; the cost of utilities and services in the sum of $34,888.30 for the period- following the agreed removal date during which time the Government-owned machinery remained in plaintiff’s plant; the cost of $2,191.52 to plaintiff of removing some of the Government-owned machinery when it became apparent that the Government was not going to be able to complete the moving by the agreed date; and plaintiff’s losses in the sum of $178,045.24 resulting from its inability to make profitable use of that area of the plant containing the Government-owned machinery for the above.period.

Plaintiff is a Wisconsin corporation with its principal office located at 1600 West Bruce Street, Milwaukee. For many years plaintiff has been one of the country’s leading manufacturers of construction and conveying machinery employing chain transmission, and owning plants in Massachusetts and in Wisconsin. Plaintiff had five plants in the Milwaukee area including Plant No. 1, located at 1600 West Bruce Street, where its chain manufacturing operations were carried on.

In December 1941, the United States, through the Defense Plant Corporation, constructed in the Village of West Milwaukee, on land previously purchased from plaintiff, a large factory-type building designed for use in the production of gun barrels and related military equipment. During the war these premises were leased to plaintiff corporation which thereafter manufactured military materials therein under contracts with the defendant until the lease was terminated on October 18, 1945. From that time until September 10, 1946, plaintiff continued in possession of the plant pursuant to an informal understanding with defendant, whereby plaintiff provided protection and maintenance services for the whole building and utilized some of the plant space for storage of its own materials.

Plaintiff did not exercise a three-months’ option contained in the lease to purchase defendant’s plant, because it planned instead to construct a new and large plant in which to expand its chain manufacturing business to meet a strong postwar demand for its products. However, because of the availability, good condition and extensive floor space of defendant’s plant, plaintiff, in December 1945, commenced negotiations with defendant for the purchase of the gun plant. Plaintiff was also influenced by the fact that defendant’s plant could be made ready for use in a much shorter time than would be required to build a new plant. During the course of the negotiations defendant was advised of plaintiff’s intended use of the plant, of its urgent need of the floor space and its desire to occupy the building in sound, usable condition at the earliest practicable date. On February 20, 1946, plaintiff offered to purchase the property for $1,041,599.97, including certain mechanical equipment and cranes present in the building. In April 1946, plaintiff increased its offer to $1,422,000 and this offer was accepted by defendant in July 1946.

On September 10, 1946, plaintiff and defendant, through War Assets Administration, entered into a contract of sale which provided for the sale to plaintiff of the land, buildings and installations, as listed on attached schedules, for $1,422,-000 to be paid in cash upon delivery to plaintiff of a quitclaim deed, which deed defendant agreed to deliver to plaintiff within thirty days. Paragraph THREE provided that plaintiff had examined the premises and was satisfied as to their existence and condition. Paragraph SIX provided that plaintiff understood that there was located on the premises a great number of items of production equipment, machinery and tools, automotive equipment, laboratory and testing equipment, and furniture and office equipment, which were owned by the Reconstruction Finance Corporation and were not included in the sale of the premises. The parties agreed that such items of machinery, etc., even though affixed to the realty, should be considered to be personal property of the seller and would not pass with the quitclaim deed to be later delivered. Defendant agreed that it would remove the items of machinery in question within 90 days from the date of the delivery of the quitclaim deed. Plaintiff agreed that defendant, its vendees, contractors and other authorized persons should have access to the premises at all reasonable hours “to the end that said property may be exhibited, sold, prepared for shipment, and removed in an orderly manner within said ninety-day period,” and that the property might remain on the premises during that period as part of the consideration for the transaction without cost or charge against defendant. Plaintiff further agreed to provide without cost to defendant such facilities and utilities as were on the premises and might be reasonably required to accomplish the purposes mentioned.

In Paragraph TEN plaintiff “certified” and agreed that it was acquiring the premises for its own use and not for the purpose of reselling or leasing it; and that in no case would plaintiff resell or lease the premises within three years from the date of the contract without first obtaining written authorization from the War Assets Administrator.

Although the contract of sale allowed defendant 30 days in which to deliver the quitclaim deed, the deed was delivered to plaintiff on September 11, 1946 (the day following the execution of the contract of sale), at which time plaintiff paid the full purchase price in cash.

Because of the large number of Government-owned machines located on the premises and the manner in which they were installed, it was reasonably to be anticipated that the better part of the stipulated 90 days would be required to effect an orderly removal of such machines. When, by October 1, 1946, defendant had done nothing to prepare for removal of the machinery, plaintiff commenced writing to defendant calling attention to the magnitude of the removal task and to the fact that unless defendant commenced removal operations at once, the plant would not be cleared within the 90-day contract period. Somewhat later, plaintiff pointed out to defendant that further delay in effecting the removal would aggravate the already inevitable damages that would accrue to plaintiff because of plaintiff’s inability to fully occupy and use the plant on the promised date, and plaintiff offered to cooperate with defendant in any manner possible to help bring about the timely removal of defendant’s property.

On November 25, 1946, defendant finally entered into a contract with the Shea-Matson Trucking Company for the removal of defendant’s machines. On December 4, 1946, War Assets Administration representatives held an on-site sale of some of defendant’s machinery, but defendant’s removal work did not commerce until after that date.

On November 29, 1946, War Assets Administration wrote to plaintiff asking for an extension of the time within which it might remove its property from plaintiff’s plant. On December 11,1946, the day following the date on which the parties had agreed the plant would be completely cleared of Government-owned machinery, etc., plaintiff wrote to defendant disclaiming any responsibility thereafter for any persons or property, other than its own, on or in the vicinity of the plant, and notifying defendant that it expected to be paid damages for the loss of use of the plant, for losses arising from the impairment of its operations, for the cost of utilities and services, and other cash outlays which might be necessitated by the presence of defendant’s property in the plant after December 10, 1946.

Following the on-site sale of December 4, 1946, defendant’s contractor commenced clearing the areas occupied by Government-owned machinery, and a day-to-day record of the square-foot space not yet cleared was kept jointly by representatives of defendant and plaintiff. Within a very short time plaintiff noted what it considered to be excessive damage being caused to the plant’s wood block flooring by the manner in which Shea-Matson Trucking Company was taking up defendant’s machines and moving them out of the plant. Plaintiff immediately complained to the War Assets Administration custodian and to the Shea-Matson supervisor, both of whom advised plaintiff that they had no authority to repair any damage caused to the floors. After repeated complaints in which plaintiff contended that it was the obligation of defendant and its contractor to repair all floor damage caused by the removal work carried on by defendant’s contractor, plaintiff threatened to stop all moving operations. The War Assets Administration custodian then took up the matter with the regional office and that office authorized him to instruct Shea-Matson to replace all wooden blocks removed or damaged, and to make repairs in. all places other than in voids left by the removal of machines, which had rested directly upon the concrete flooring.

Shea-Matson was unable to make the floor repairs, so authorized, because it lacked the proper equipment and employees qualified to do that type of work. Accordingly, on January 7,1947, Shea-Matson wrote plaintiff a letter, countersigned by the War Assets Administration custodian, which stated that plaintiff was thereby authorized to repair the wood block flooring damaged in the plant clearance program, and to bill Shea-Matson monthly for the labor and materials expended by plaintiff for such repairs. On January 11, 1947, plaintiff’s contractor, Klug & Smith Company, commenced the floor repair work in question. The work performed by Klug & Smith covered all the work necessary to put the floors in good condition and included laying wood blocks over the voids left by the removal of some of the machines. Concurrently with the floor repair work, this same company also performed all the accumulated maintenance repair work necessary in connection with plaintiff’s occupancy program.

Apparently defendant’s representatives considered the quality and extent of the floor repair work being done by Klug & Smith, to be beyond the scope of the January 7th letter of authorization and, on February 20, 1947, defendant’s contractor wrote plaintiff advising that it would not be responsible for the cost of any portion of the floor repair work already done or to be done. Despite the ensuing controversy, plaintiff’s contractor proceeded with the floor repair work as speedily and economically as possible in order that the plant would be ready for use at the earliest possible date.

Concurrently with defendant’s removal work, plaintiff proceeded with its own reconversion work which included the making of preliminary excavations in some areas of the plant. None of this work interfered with the work of defendant’s contractor, and it did serve to keep at a minimum plaintiff’s losses arising from its inability to obtain the full use of its plant on December 10,1946.

By the close of business on February 15, 1947, the last of the Government-owned machinery was out of the plant. Floor repair work in those areas, from which Government-owned machinery had been moved, continued until April 19, 1947.

On March 11, 1947, while the floor repair work was still going on, plaintiff submitted its first claim to War Assets Administration in the amount of $69,661. On June 11,1947, plaintiff increased its claim to $120,625.45 by including therein an amount to cover the cost of floor repairs which had by then been ascertained, and the cost to plaintiff of moving certain Government-owned machines from the south ends of Bays A and B (finding 18). Ultimately, all of plaintiff’s claims were denied by defendant.

CLAIM FOR FLOOR DAMAGE CAUSED BY DEFENDANT’S MOVING OPERATIONS

Plaintiff contends that defendant is liable for all repair costs arising out of damage caused to the plant floors by reason of the Government’s moving operations, regardless of the question of possible negligence on defendant’s part in performing the work. Plaintiff’s position is based upon the theory that the portion of the plant occupied by Government-owned machinery was in the possession of defendant and was not delivered to plaintiff until the machinery was moved out. From this, plaintiff argues that until real property contracted to be sold is actually delivered to the buyer, the seller in possession must bear all the loss arising from any damage thereto.

Defendant contends that for the period during which its machinery remained in the plaintiff’s plant, defendant was the tenant of the plaintiff and that under applicable Landlord and Tenant law (Sec. 408 of 51 C. J. S. 1157) the tenant is liable for only such damages as are unnecessarily or wantonly caused by the removal of improvements which the landlord has allowed the tenant to make, and permits him to remove. Defendant urges that the record in this case does not establish unnecessary or wanton damage on defendant’s part in performing the removal work, but that if it does, the plaintiff’s claim sounds in tort and is accordingly beyond the jurisdiction of this court.

The above contentions of both plaintiff and defendant are based on the conclusion that under the provisions of paragraph SIX of the Contract of Sale, defendant was in possession of that portion of the plant containing the machinery which the parties had agreed was personalty belonging to defendant, was reserved from the sale, and should remain in the plant for a period of 90 days from the date of the delivery of the quitclaim deed to the realty. From plaintiff’s point of view, defendant’s “possession” was that of a vendor under a contract of sale which remained executory as to that portion of the building “possessed” by defendant. Defendant’s position seems to be that the contract of sale was fully executed and that defendant’s “possession” was that of a tenant of plaintiff.

We cannot agree with the positions taken by either party. The true status of the parties and their respective rights and obligations in connection with the floor damage claim, can be ascertained only in the light of paragraph SIX of the contract of sale and the action taken thereunder. What was the relationship between the parties under paragraph SIX? The contract of sale was signed by the parties on September 10,1946. It was provided therein that the provisions relating to the Government-owned machinery should survive the execution and delivery of the quitclaim deed. On the following day, September 11,1946, defendant delivered to plaintiff the quitclaim deed and plaintiff paid to defendant the entire purchase price in cash. With respect to the property conveyed by that deed, plaintiff was certainly a vendee in possession under an executed contract of sale, with the possible exception of that portion of the plant occupied by the Government-owned machinery.

Paragraph SIX of the contract of sale provided that certain specified machinery, whether affixed to the realty or not, was, by agreement of the parties, to be considered the personal property of defendant and was not to pass with the quitclaim deed. Defendant agreed to remove its machinery within 90 days from the date of delivery of the quitclaim deed, and plaintiff, vendee, agreed that the seller, its vendees, contractors and other persons authorized by the seller, should have access to the premises at all reasonable hours “to the end that said property may be exhibited, sold, prepared for shipment, and removed in an orderly manner within said ninety-day period.” Plaintiff, vendee, agreed that the seller’s property might remain on the premises during the ninety-day period as part of the consideration for the transaction and without cost or charge against the seller and that during that period the vendee would furnish without cost to the seller such facilities and utilities as were on the premises and “as reasonably may be required to accomplish the purposes mentioned.”

We are of the opinion that under the above discussed provision of the contract of sale defendant was not “in possession” of any portion of plaintiff’s plant, in either of the senses urged by the parties. At the beginning of the ninety-day period, the quitclaim deed to the premises had been delivered to plaintiff-vendee, and the purchase price paid in full. Therefore, pursuant to paragraph SIX of the contract, the defendant, vendor, had only the right or privilege to enter the vendee’s premises and do certain specified things in connection with personal property or chattels belonging to the vendor. What the vendor had was, in our opinion, a license coupled with an interest, that is, the privilege of using the vendee’s land for a specified period of time with the privilege being incidental to the vendor’s interest in certain chattels which it owned. Defendant could not have had a lease because a lease confers exclusive possession to the premises, or to some part thereof, against all including the owner. Seabloom v. Krier, 18 N. W. 2d 88 (Minn.). Insofar as the premises conveyed were concerned, plaintiff-vendee had the right to possession of the entire premises and, in fact, was in possession as owner. Defendant was a licensee of plaintiff through plaintiff’s consent, expressed in paragraph SIX of the contract of sale, granting defendant the privilege of entering a portion of plaintiff’s building for certain limited purposes in connection with chattels therein belonging to defendant.

The rights and obligations of the parties to a license agreement depend upon the terms of, or the scope of, the consent which created it. In this connection the Restatement of the Law, Property, Vol. V, Servitudes, contains the following statement (§516, pp. 3128-29) :

* * * The privilege of use created [by the license] cannot go beyond the limits indicated by the consent by which it was created. The extent of the privilege is measured by the breadth of the consent. The breadth of the consent is determined, as in other cases of consensual transactions, by holding the licensor responsible to the extent to which he,might reasonably have foreseen reliance upon an appearance of consent indicated by his conduct and by limiting the privilege of the licensee to such uses as are made in reasonable reliance upon an appearance of consent in the licensor. The consent of a licensor may be broader than he intended because, having appeared to intend more than he did, and having so acted that he should reasonably have foreseen the appearance resulting from his consent, he is deemed to have consented to the extent of the appearance he created. On the other hand, the consent of the licensor may be narrower than the licensee thought it to be because he was not reasonable in relying upon an appearance of consent broader than that intended. In such a case, the licensor is deemed to have consented only to the extent to which the licensee reasonably relied upon an appearance of consent.

In the instant case the extent of defendant’s privilege can be determined to some extent from the provisions of paragraph SIX of the contract of sale which constitutes the license agreement. That agreement, however, is silent on defendant’s duty to repair floors that might be damaged as a result of defendant’s use of that portion of the premises included in the license, and we must therefore examine the facts and circumstances surrounding the transaction to determine what the parties might reasonably have contemplated in that respect.

It is plaintiff’s position that defendant is liable for any and all floor repairs made necessary by its removal work. We cannot agree with this contention. Because of the number, size, and concentration of the Government-owned machines in the areas covered by the license, and because of the manner in which many of them were installed, we think both parties must have known that inevitably a certain amount of damage would result to the wood block flooring as a result of the severance of the machines and their removal from the building. On the other hand, the contract expressly provided that the removal work would be done in an “orderly manner” and by that we think the parties intended not only that the removal work should be conducted in an expeditious manner by defendant and without interference by plaintiff so that it would be completed within the ninety-day period, but also that it should be done in a workmanlike and careful manner. Thus, while we think that an obligation on defendant’s part for all repair costs cannot reasonably be implied from either the terms of the license or the circumstances surrounding it, we are of the opinion that defendant was obligated to use ordinary care in its use of the premises and, accordingly, that defendant would be responsible for the cost of damages to the floor which were in excess of what would have been normal had the work been done in an orderly and workmanlike manner.

Defendant contends that in the event it should be held liable for excessive damage to the floors in plaintiff’s plant, the record establishes that the removal work was carried out by its contractor with ordinary care and that the damage to the floors was not in excess of what might reasonably have been expected by the parties. Defendant also contends that plaintiff’s contractor was working in that part of the plant during the floor removal work and contributed to the floor damage and interfered with the removal work of defendant’s contractor.

The facts as found by the court do not support either of defendant’s contentions, but on the contrary establish a lack of ordinary care in defendant’s contractor, considerable unnecessary damage to the floors, and no interference with defendant’s work on the part of plaintiff’s contractor.

The interior of the plant consisted of 20 large bays running north and south, designated by letters from A to Y, inclusive (excluding I and O), running from west to east. There were 13 high bays, i. e., A through J on the west, and S, T, TJ, and Y on the east, each being 50 feet wide and having a 27-foot clearance. They were equipped with conductors for 10-ton cranes. There were 7 low bays in the central section of the building, K to R, 30 feet wide with a 15-foot clearance, and equipped with tramrails and hoists. The high bays were serviced by railroad spur lines, one on the east and one on the west side. The low bays were serviced by truck entrances at the north ends of the bays.

The manufacturing area of the building had an 8-inch thick reinforced concrete subfloor surfaced with 3-inch thick cedar blocks except for small areas along the railroad tracks and immediately under certain machines, which were placed directly upon and anchored to the concrete flooring. This area, except for the office space, was occupied to the greatest extent possible by machinery of various types and installed in different ways. Some of the machines weighed as much as from 45,000 to 50,000 pounds each and were placed directly on the concrete subflooring with wooden blocks set closely around the base of each machine. A few machines were mounted on cement pedestal foundations which were raised above the wood block floor. Most of the remaining machines were placed on square metal leveling blocks, one to each corner, resting in the wooden floor flush with the surrounding wood block floor surface. Each leveling block contained four bolts by means of which the machines were held in place. The machines were operated by electricity and the electric conduits ran from nearby pillars, under the wood flooring, to the base of each machine. Wherever possible these conduits had been placed so that they did not run under the main aisles.

Pursuant to an arrangement with defendant’s Ordnance Department, plaintiff removed all the Government-owned machines from the east high bays, S, T, U and Y, during the early part of the 90-day period. Plaintiff also purchased and removed some 40 Government machines located in the low bay areas during October and November 1946. The machines so removed by plaintiff were in general representative as to size and type of installation of the remaining 300 Government-owned machines, ultimately removed by defendant’s contractor. Plaintiff’s contractor carried out this removal work with rollers, cranes and trucks, and with the minimum amount of damage to the wood block flooring. In those instances where the machines were anchored in concrete foundations, plaintiff’s contractor immediately filled in the resulting voids in the floor to provide a base over which other machines could be moved and to protect adjacent floor areas. Plaintiff’s moving operations took place before the Government began its moving operations in December 1946, and served to relieve the congestion of machines in the low bay areas. Plaintiff also removed Government-owned machinery from five sections of the southern part of Bays A and B, and some from part of Bay C, making the necessary repairs.

By the time defendant began its moving operations in December 1946, there remained some 300 Government-owned machines to be removed. These machines had to be moved out through exits at the north ends of Bays K and J, for loading on flatcars or trucks.

Defendant’s contractor was inexperienced in performing the type of operation called for, and the methods employed were far from the best. In addition, the work was performed hastily, and to a large extent in a careless manner. The details of how the removal work was performed by defendant’s contractor are set forth in findings 24 and 25. In general the excessive damage to the floor was caused by the fact that voids left by the removal of machines were not even temporarily filled. It was impossible to move out other machines without passing over these voids and in so doing the wood blocks surrounding the voids were torn up. Some machines were dragged over the floor without the benefit of rollers under the temporary wooden bases provided for shipping purposes. The anchor bolts which had held in place those machines resting on steel leveling plates, remained sticking up two or more inches after removal of the machines, and instead of cutting off the bolts at floor level, defendant’s contractor removed the entire leveling plate leaving voids three inches in depth, in each instance. Electric conduits were literally pulled up out of the floor, tearing up or loosening the wood floor blocks on each side of the conduits.

The damage to the floors in the areas where defendant’s contractor worked was greatly in excess of the damage reasonably to have been expected had proper methods been employed, and was also much greater than the damage resulting. to the floors in the areas where plaintiff’s contractor operated. However, the areas worked in by defendant’s contractor contained a greater concentration of machines of all kinds and also more heavy machines than in the S, T, U, V area, where plaintiff’s contractor did the moving. We have found that under all the circumstances it is reasonable to conclude that had defendant’s removal operations been carried out in the same workmanlike manner as were plaintiff’s in the east S, T, U, V area, the normal cost of repairing the floors in the west area would have been approximately three times the repair costs in the east area. Accordingly, any repairs in excess of an amount representing three times the cost of repairs in the S, T, U, V area, would be excessive.

We have found that the average cost per square foot of floor repairs in the S, T, U, and V area was $0,051, exclusive of the cost of new blocks used (finding 28). The normal cost of making repairs in the west bay areas would thus have been three times that amount or $0,153. There were approximately 202,050 square feet of wood block flooring in the area where defendant’s contractor worked and, accordingly, the normal cost of repairs in that area would have been $30,913.65. Finding 31. The actual cost of repairs made necessary by defendant’s removal operations was $47,319.47, exclusive of the cost of new wood blocks used, or $16,435.82 in excess of what it should have been.

We have also found that new wood blocks costing plaintiff $2,659.15 were required to repair the excessive damage caused by defendant’s moving operations, making the total cost of the excessive damage in this area $19,094.97, which we hold plaintiff is entitled to recover.

Inasmuch as we have found that defendant’s removal methods resulted in unnecessary and excessive damage to the floors, we discuss briefly defendant’s contention that this claim is beyond the court’s jurisdiction because it sounds in tort. While it is time that this court does not have jurisdiction over claims sounding primarily in tort, an action may be maintained in this court which arises primarily from a contractual undertaking regardless of the fact that the loss resulted from the negligent manner in which defendant performed its contract. Chippewa Indians of Minnesota v. United States, 91 C. Cls. 97, 130, 131. A tortious breach of contract is not a tort independent of the contract so as to preclude an action under the Tucker Act. United States v. Huff, 165 F. 2d 720, 723. In the Huff case, the Government had leased lands occupied by others as grazing lands under leases. The Government desired the land for military purposes, and it was agreed that it would have the right to let down any wire on the then existing wire fences but that following the crossing of the fences by troops, the Government would re-staple the wire and leave the fences in as good condition and repair as they were at the time of entry on the premises by the Government. The Government failed to re-staple the fences in a reasonable time and the grazing tenants were damaged. The court held that this failure of the Government was a tortious breach of contract but that such a breach was not a tort independent of the contract such as would preclude action under the Tucker Act. See also Keifer & Keifer v. Reconstruction Finance Corp., 306 U. S. 381.

In the case at bar the wrong actually derived from the Government’s contractual undertaking to use ordinary care in removing its machinery from plaintiff’s plant and was in no sense a tort independent of the contract. Accordingly, we bold that tbe defendant’s claim on this point is without merit.

CLAIM E0R MAINTENANCE AND UTILITIES COSTS DURING PERIOD OF DEPENDANT’S REMOVAL WORK SUBSEQUENT TO DECEMBER 10, 1946

Plaintiff seeks reimbursement for maintenance and utilities costs averaging $12,372.58 per month for the period from December 10,1946, through February 15,1947, when the plant was finally cleared of all Government-owned machinery. Although plaintiff was obligated to and did furnish certain services to defendant free of charge during the 90-day contract period, it was under no obligation to supply such services following the expiration of the 90 days. We think that plaintiff is entitled to be paid the cost of any utilities and services incurred in connection with the area made unavailable to plaintiff after December 10, 1946, by reason of the presence therein of defendant’s machines and the operations of its moving contractor.

The various items making up the total monthly cost of $12,372.58 to which plaintiff claims it is entitled, include, among others, metered power, gas, water, heating, supervision, and miscellaneous supplies. We have found that those specific items represent services and utilities required largely for plaintiff’s own manufacturing operations which were going on in Bays S, T, TJ, and V, during the period in question. The average monthly cost of those items, including a 5% allowance for general administrative expense was $7,769.22, and we think that no part of that amount is fairly chargeable to defendant.

The remaining items, representing the cost of insurance, taxes, watchmen, maintenance and repairs, were applicable to the entire plant area, including the area in which the defendant’s moving operations were going on. The average monthly cost of those items was $4,603.36, including a 5% allowance for general administrative expense.

The entire plant area was 313,460 square feet, of which 208,040 square feet, or 66 percent, of the entire plant was rendered unavailable to plaintiff by the presence therein of defendant’s machines. Accordingly, plaintiff is entitled to be paid 66 percent of tbe cost of those items of service and utilities which were required for the entire plant (including the area in question), for the period during which plaintiff was deprived by defendant of the use of that area, that is, for 67 days. The total amount of $6,785.09 is due plaintiff on this claim.

CLAIM POR EXPENSES INCURRED BY PLAINTIFF IN MOVING GOVERNMENT-OWNED MACHINES

By November 1946, it was apparent that under no circumstances could defendant move out all its machinery by December 10, as provided in the contract. This was so because of the number of machines to be moved, their size, the manner of installation, and the fact that at that time not a single machine had been moved by defendant and no arrangements for removal had been made. Commencing in November, and from time to time thereafter, in December 1946 and January 1947, plaintiff removed Government-owned machines from five sections of the southern part of Bays A and B and from part of Bay C, and placed these machines in the north portions of those bays. Plaintiff was then able to use the cleared area amounting to about 15,000 square feet as storage space for steel needed in its plant-reconversion program. Some of this removal work was done by plaintiff’s own employees but the record does not establish the amount of plaintiff’s costs for the work of such employees. The record does establish that plaintiff paid its contractor $2,191.52 for the work the contractor did in connection with this removal.

Defendant concedes that if the above removal work was done by plaintiff after December 10,1946, the Government is liable for the expense of such work, but urges that if the work was done prior to that date no such liability results since plaintiff had no right to touch the machines and in doing so was guilty of conversion under the principles of Landlord and Tenant Law. Furthermore, defendant contends that the removal was accomplished solely for plaintiff’s benefit, was done without the permission of defendant, and cannot be said to have served to mitigate damages.

The record does no show precisely what portion of this removal work was completed prior to December 10, but it does establish that the bulk of it was done subsequent to that date. While there was not specific permission granted by defendant to plaintiff to do this work, defendant knew that it was being done and did not object. Unquestionably this work on plaintiff’s part was of benefit to defendant because no excessive floor damage resulted, and defendant was able to move out the severed machinery more quickly than would have been possible if it had remained installed in its original positions. We have already decided that the relationship of plaintiff and defendant was not that of landlord and tenant and, accordingly, that law is not applicable here.

We think that plaintiff is entitled to recover the amount proved to have been spent as expenses incurred in a reasonable effort to avoid the harm which both parties had reason to foresee would be the probable result of defendant’s breach of the contract. As pointed out in § 335 of the Restatement of the Law, Contracts, plaintiff was under an obligation to avoid by a reasonable effort any damages which it should have foreseen and, having done so, it may recover as damages the expense incurred in such reasonable effort to avoid harm which the defendant had reason to foresee would be the probable result of its breach when the contract was made. It makes no difference whether the breach has already occurred, or where (as was the case of the work done prior to December 10) it is merely impending under circumstances such that it was not reasonable for plaintiff to expect defendant to prevent the harm. Both parties herein knew that defendant could not get the machinery out by December 10, because of the nature of the task and because defendant had not even started the removal work in November 1946. Defendant knew that time was an essential element of its license agreement and must have foreseen that plaintiff would be injured by its failure to have its machinery out of the plant by December 10. Under these circumstances, we hold that plaintiff is entitled to recover the $2,191.52 paid to its contractor for doing this removal work, in portions of Bays A, B, and C.

LOSS OP PEOPITABLE USE

Plaintiff contends that because of defendant’s breach of its agreement to have all of its machinery out of plaintiff’s plant by December 10, 1946, plaintiff was prevented from making profitable use of the floor space so occupied for the period of such delay subsequent to December 10, and is entitled to recover as damages the amount of such lost profits. Defendant contends that plaintiff may not recover for loss of profits because (1) such loss was not within the contemplation of the defendant when it made the contract; (2) the evidence supplies no basis for estimating the amount of such lost profits except in the most remote and conjectural sense; and (3) plaintiff was engaged in an entirely new business.

In order to recover lost profits as damages for breach of contract, it must first appear that such loss is the immediate and proximate result of the breach. It must also be established that loss of profits in the event of breach was within the contemplation of the contracting parties either (1) because the loss was natural and inevitable upon the breach so that the defaulting party may be presumed from all the circumstances to have foreseen it; or (2) if the breach resulted in lost profits because of some special circumstances, those circumstances must have been known to the defaulting party at the time the contract was entered into. Finally, there must be established a sufficient basis for estimating the amount of profits lost with reasonable certainty.

Much has been said in the cases about the uncertainty of anticipated profits lost as a measure of damages for breach of contract. The more recent and general view of the courts seems to be that if the fact of damage, that is, lost profits, is certain, uncertainty as to the precise amount lost is not necessarily fatal to recovery. Story Parchment Co. v. Paterson Parchment Paper Co., 282 U. S. 555. In Penn Foundry & Manufacturing Co. v. United States, 110 C. Cls. 374, this court allowed plaintiff a sum representing anticipated profits lost through defendant’s refusal to permit plaintiff to complete its contract with the United States. In reversing the judgment of this court, the Supreme Court (337 U. S. 198) pointed out that the record and findings indicated that plaintiff company was not actually in a position to complete the contract in any event because it lacked capital, know-how, and the necessary trained employees. Under such circumstances it would appear that the Government’s breach was not the direct cause of plaintiff’s failure to earn profits, and such uncertainty as to damage was held fatal to plaintiff’s right to recover. In United States v. Purcell Envelope Co., 249 U. S. 313, the judgment of this court awarding as dam-mages an amount for profits lost as a result of defendant’s breach of contract, was affirmed on the ground that the record established that plaintiff could have performed the contract at all times in accordance with its terms and that loss of profits was the direct and immediate result of defendant’s breach.

Whether or not loss of profits on breach was within the contemplation of the parties at the time the contract was made, depends on the facts of each case. The Restatement of the Law, Contracts, states the following on the matter of foreseeability of harm as a requisite for recovery:

§330. * * *
In awarding damages, compensation is given for only those injuries that the defendant had reason to foresee as a probable result of his breach when the contract was made. If the injury is one that follows the breach in the usual course of events, there is sufficient reason for the defendant to foresee it; otherwise, it must be shown that the defendant had reason to know the facts and to foresee the injury.

In Howard v. Stillwell c& Bierce Manufacturing Co., 139 U. S. 199, the Court held that under the circumstances of that case loss of profits as a result of breach could not be said to have been within the contemplation of the parties because of the nature of the contract, nor were any special circumstances communicated to the defaulting party which could be said to have put it on notice. In a number of other cases, however, the courts have found that loss of profits resulting from breach was within the contemplation of the contracting parties and have allowed recovery of such profits as damages. Williams v. Island City Mercantile & Milling Co., 37 Pac. 49 (25 Or. 573) ; Bates Machine Co. v. Norton Iron Works, 68 S. W. 423 (113 Ky. 372); Dilley v. Ratcliff, 69 S. W. 237 (29 Tex. Cv. A. 545); Koehler & Co. v. York Mfg. Co., 193 Fed. 981; Carroll Porter Boiler & Tank Co. v. Columbus Machine, 55 Fed. 451.

On the question of the degree of certainty required to establish the amount of profits lost, the Restatement of the Lamo, Contracts, states in pertinent part as follows:

§331. * * *
(1) Damages are recoverable for losses caused or for profits and other gains prevented by the breach only to the extent that the evidence affords a sufficient basis for estimating their amount in money with reasonable certainty.
(2) Where the evidence does not afford a sufficient basis for a direct estimation of profits, but the breach is one that prevents the use and operation of property from which profits would have been made, damages may be measured by the rental value of the property or by interest on the value of the property.
% * * ❖ ifc
(d) If the defendant’s breach has prevented the plaintiff from carrying on a well established business, the amount of profits thereby prevented is often capable of proof with reasonable certainty. On the basis of its past history, a reasonable prediction can be made as to its future.

See also Williston on Contracts, Rev’d Ed., Vol. V, § 1346.

In general the courts have held that in the case of a new business there is no way, short of pure speculation, of determining what the plaintiff’s profits would have been. Even in the case of an established business it is only possible to estimate the amount of profits that would have been earned if the contract in question had not been breached, but the courts will make that estimate if a reasonable basis therefor is provided. In the case of Rankin Co. v. Associated Bill Posters of United States, 42 F. 2d 152, plaintiff was permitted to show by the testimony of its treasurer, a compilation prepared on the basis of the business’ net profits in one year, and the treasurer’s knowledge of business conditions when the company was free from defendant’s unlawful interference, what might have been the normal increase in plaintiff’s business from year to year, and from all this to estimate plaintiff’s probable yearly earnings for a four-year period. In holding such proof admissible, the Court of Appeals stated in part (p. 155) :

* * * The fact that this amount of the plaintiff’s damages could not be expressed in exact figures did not make them speculative. There was no speculation as to the fact of actual damage. Its [plaintiff’s] business had been seriously curtailed. The defendants had caused the damage, and cannot be permitted to escape liability because it is difficult for the plaintiff to express in terms of dollars the damages it has suffered. This evidence, while purely an estimate and introduced as such, was proof of a kind as definite and certain as the subject matter admitted. It had to do with what was never actually earned because of the defendant’s wrongdoing. The witness testified from his knowledge of the business history, made his calculations upon what appears to be a reasonable basis, and the defendants had ample opportunity by cross-examination or the offer of their own evidence on the subject to discredit him and show any fallacy in his reasoning or testimony.

In Hedrick et al. v. Perry, 102 F. 2d 802, Hedrick and Perry had been competitors for a number of years in the trucking business. In 1937, Perry entered into a contract with Hedrick, whereby Perry bought Hedrick’s trucking business (which was larger than Perry’s) and Hedrick agreed not to engage in the trucking business between certain named points for ten years, and also to use his best efforts to induce his customers to become Perry’s customers. Hedrick breached his contract and commenced operating a new trucking business in the forbidden area, whereupon Perry sued to enjoin further breach and also for damages for past breach, alleging lost profits as damages. In allowing Perry to recover for loss of profits, the court stated in part (pp. 806, 807) :

The award of damages is challenged on the ground that the damage alleged was remote, speculative, and contingent; that there was no tangible basis on which to predicate any loss; and that there was no competent evidence from which the court could find or ascertain the amount of the damages. The cause of action pleaded in respect to damages was loss of profits * * *. Anticipated profits from a business which is contemplated but not established are too remote and speculative to form the basis on which to recover damages for the reason that there are no facts from which the amount of such profits can be determined with the degree of certainty required by law. * * * But the business in question here was not merely contemplated. It was established, had existed for several years, and was reasonably stable in volume. It could not be reasonably expected that Perry would hold all of it, but in view of his experience and efficiency in the trucking business it was not too much for the court to determine that he would have retained most of it if Hedrick had aided him and co-operated with him in the manner required by the contract.

Although Perry’s business organization was much larger after the purchase of Hedrick’s business than before, the court did not consider the enlarged enterprise a new one and it rendered judgment for anticipated profits which would have been earned by the enterprise after the sale, after making a reasonable allowance for the probable loss of some business which might have been expected even if Hedrick had not breached his contract.

In Gross v. Heckert, 120 Wis. 314, 97 N. W. 952, defendant leased to plaintiff certain premises, knowing that plaintiff intended to use them as a saloon and to commence business immediately upon the beginning of the agreed lease term. When the lease was signed, defendant knew that he would be unable to deliver possession of the premises to plaintiff at the time promised, and in fact did not do so. In his suit, plaintiff asked for damages representing profits lost through bis inability to occupy and use the premises as a saloon and, although plaintiff was new to the saloon business, he felt he should be able to rely on the profits made by the saloon-keeper then occupying the premises. The court held that while defendant was liable for all damages which could reasonably be considered to be natural and proximate result of defendant’s breach, it was not certain that plaintiff would have earned any profits had the contract been carried out. Furthermore, the court pointed out that presumably the resident saloon-keeper would take with him some substantial portion of his good will when he moved and plaintiff’s probable earnings in what for him was a new venture, were highly conjectural. Finally, the court noted that plaintiff had not shown that he was unable to rent other premises in the same locality which were equally as desirable for his business and at the same or a lower rent, making it even less clear that plaintiff’s loss of profits was the proximate result of defendant’s breach.

The question whether or not plaintiff company herein would conduct a new or a well established business on the premises purchased from defendant, goes both to the matter of whether loss of profits may be said to be the proximate result of defendant’s breach as well as to the problem of making a reasonable estimate of what those profits would have been. There also remains the question as to whether loss of profits from defendant’s breach was sufficiently foreseeable by defendant when the contract was entered into. The plaintiff has established certain facts in the trial which we believe determine each of these issues favorably to plaintiff.

Plaintiff had been in the chain manufacturing business since 1891, and at the time of the purchase of defendant’s plant was a well established going concern. Because of the strong post-war demand for plaintiff’s chain products and a substantial backlog of orders, plaintiff decided to greatly expand its chain manufacturing business which was then being carried on at its Plant No. 1, located at 1600 West Bruce Street, Milwaukee. In order to implement the desired expansion, plaintiff needed additional floor space and it first planned to build a large new plant. Because of the time required for such a program, and because defendant’s plant was of the necessary size; was designed so that all manufacturing operations could be carried on on one floor; was desirably located; in good condition and immediately available, plaintiff decided to negotiate for the purchase of that plant into which it would then move all its chain manufacturing operations. Although the business was to be conducted at a new site and was to be on a much larger scale than formerly, we are of the opinion that these considerations did not render plaintiff’s proposed operations a new business. Hedrick, et al. v. Perry, 102 F. 2d 802.

On the question of foreseeability, it appears that defendant was well aware of plaintiff’s circumstances and plans. Plaintiff paid cash for the plant almost immediately following the signing of the contract of sale and when defendant agreed to remove its machinery from the large floor area it occupied within 90 days, it knew that plaintiff wished to make immediate use of that area for the purpose of carrying on a profitable business. We think that loss of profits upon defendant’s breach of its agreement to vacate the floor area within 90 days, was clearly within the contemplation of the parties when the contract was negotiated.

At the time of the negotiations for the purchase of defendant’s building and during all the period in suit, there was no equivalent suitable space available for plaintiff’s expanded business in the Milwaukee area, either to rent or to purchase. Even if such space had been available for rent, it would have been impractical for plaintiff to have acquired such space on a temporary basis since major installations, involving great expense, would have been required to make such space suitable for plaintiff’s particular manufacturing operations. Accordingly, the rental value of the manufacturing area made unavailable to plaintiff through defendant’s breach is not under the facts of this case, a proper measure of plaintiff’s damages.

Plaintiff showed that during the year ending October 1946, its backlog of orders had increased from approximately $9,000,000 to over $20,000,000, for all of its divisions. Its backlog for the chain belt and transmission division had increased approximately 72 percent to . over $6,000,000. By the end of 1947, plaintiff’s backlog of orders for all divisions totaled approximately $10,500,000, although such orders for the chain belt and transmission division remained fairly constant and were slightly higher in December 1947.

During 1947, plaintiff received substantial cancellations of orders in all divisions. Because of its inability to meet delivery schedules in connection with its chain belt orders, plaintiff’s new orders were restricted and some cancellations resulted. In our opinion it is reasonable to conclude from the evidence of record, and we have so found, that the additional capacity of plaintiff’s new plant would have resulted in increased earnings approximately equivalent to the earnings realized by plaintiff from its other manufacturing facilities.

It is also established by the record that plaintiff was fully ready and able to proceed immediately with its reconversion work in the new plant on or before December 10,1946. While the record is not detailed on this point, there is unrefuted evidence from which it is reasonable to conclude that plaintiff had on hand the necessary capital, new machinery, and trained labor, to enable it to proceed at once with its conversion plans and with its manufacturing operations. The only thing that prevented plaintiff from going ahead on December 10, 1946, was the presence of defendant’s machinery in a substantial portion of its new plant. It, therefore, appears that loss of profits was the direct and proximate result of defendant’s delay in removing its machinery from the plant.

There remains for consideration the question of whether plaintiff has furnished a reasonable and acceptable method of estimating, with reasonable certainty, the amount of profits it would have earned but for defendant’s breach of its agreement to vacate the plant by December 10, 1946.

Plaintiff introduced evidence of its sales for the ten-year period from 1936 through 1945, from its Milwaukee and West Milwaukee plants, exclusive of its gun manufacturing operations for the Government during the war years. These sales totaled $99,967,600, on which plaintiff realized a net profit of approximately $17,838,600, or a profit ratio on sales of approximately 17.8 percent. Its sales from the chain belt and transmission division of its business during this period were approximately $40,155,100, or 40 percent of its total sales, with a net operating profit ratio of approximately 21 percent on such sales.

During plaintiff’s 1947 fiscal year, its total sales were $18,500,113, with a net profit ratio of 15.8 percent, and for the fiscal year 1948, its total sales were $21,369,977, with a net profit ratio of 16.5 percent.

During the period from December 1946 through April 1947, plaintiff’s total sales from its Milwaukee and West Milwaukee plants were $7,478,915.60, upon which it realized a net operating profit of $1,062,859.25, or a net profit ratio of 14.2 percent.

The total productive floor area of plaintiff’s plants was 597,645 square feet. Because of the nature of plaintiff’s manufacturing operations, its earning capacity bore a substantial relation to its available manufacturing floor space. Accordingly, the productive factory area is a fair and reasonable measure of attainable profits from plaintiff’s business during the period it was denied the use of manufacturing floor space in the new plant, acquired for this purpose. Plaintiff’s net profit per square foot of manufacturing floor space, a calendar day, from December 1946 through April 1947, was equivalent to $0.0118. Plaintiff’s profit ratio on the products of its chain belt division was at least as large as the average on all its sales.

Since we have found that plaintiff’s business operations earned a net profit of approximately $0.0118 per square foot, a calendar day, during the period from December 1946 through April 1947, while defendant was conducting its moving operations and plaintiff was engaged in making the necessary repairs to the floors damaged by those operations, there remains to be determined the area rendered unavailable to plaintiff by defendant and the period during which it was thus unavailable.

We have found (finding 40) that the last Government-owned machine was out of the plant by the close of business on February 15,1947, and on that date plaintiff had the same use of the plant it would have had if defendant had vacated by December 10,1946, as agreed. Plaintiff was thus held up for a period of 67 days. Defendant took the position that certain areas of floor space became available to plaintiff from day to day, after December 10, 1946, as Government-owned machinery was gradually moved out. A daily record of diminishing floor space, remaining to be cleared, was kept by the parties during the removal work. However, the areas so cleared were not contiguous but were scattered at random over larger areas of the plant, and plaintiff was not able to use them. Also, all machines had to be carried out through the north ends of Bays J and K, and some of the machines in Bay J, which was approximately in the middle of the plant, were the last to be removed. Because of the large number of machines, the manner in which they were removed with the resulting excessive damage to large areas of flooring, it was not until all the machines were out, and some of the floor damage repaired, that any of this space was available to plaintiff for its use. On the other hand, we are not justified in holding that this area was unavailable to plaintiff until April 19,1947, when all the floor repairs and restoration was completed, since this work went on concurrently with the Government’s removal operations and also with plaintiff’s normal repair and reconversion program. We, accordingly, hold that plaintiff’s property was unavailable to it, because of defendant’s breach, from December 10, 1946, through February 15, 1947, and plaintiff was thus delayed for a period of 67 days in obtaining the full earning capacity of its plant.

The total productive floor space in the new building, denied to plaintiff for the 67 days, consisted of 208,040 square feet. However, plaintiff’s old chain belt plant was still in operation and contained 91,974 square feet of manufacturing floor space so that plaintiff’s actual loss of productive earning space during that period was only 116,066 square feet.

On the basis of all the evidence in the record, we think it is reasonable to conclude, and we have found as a fact, that plaintiff lost $91,761.78 in profits during the 67 days it was delayed by defendant from having the use of the 116,066 square feet of plant, figured on the basis of $0.0118 per square foot as profit for each calendar day of delay.

Plaintiff’s total damages, resulting directly from defendant’s breach of its agreement to remove its machinery from plaintiff’s plant in 90 days and in an orderly manner, total $119,833.36, and judgment will be entered in favor of plaintiff for that amount.

It is so ordered.

Howell, Judge, and MaddeN, Judge, concur.

JoNes, Chief Judge,

dissenting in part:

I agree with the opinion and conclusions of the majority, except for the item of lost profits.

In all the circumstances of this case I do not believe that lost profits during a post-war period for a building originally constructed for war purposes are sufficiently established by a showing of profits which plaintiff made during the same postwar period in buildings which it had constructed for and which for a long time it had operated in its regular business.

Instead of lost profits, which are to some degree necessarily speculative, I would allow plaintiff the reasonable rental value of the average space occupied by the defendant, as found by the trial commissioner, for the 67-day period of excess occupancy, to wit, $11,610.

I agree to the other items as set out in the opinion of the court.

Judge Whitaker joins in this dissent.

FINDINGS OF FACT

The court, having considered the evidence, the report of Commissioner George H. Foster, and the briefs and arguments of counsel, makes findings of fact as follows:

1. Plaintiff is a Wisconsin corporation with its principal office located at 1600 West Bruce Street, Milwaukee, and its main manufacturing operations in the village of West Milwaukee.

2. In December 1941, Defense Plant Corporation constructed in the village of West Milwaukee, on land previously purchased from plaintiff, a large factory-type building designed for use in the production of gun barrels and related military equipment. The premises were leased to plaintiff corporation which thereafter manufactured military materials therein under contracts with defendant until the lease was terminated on October 18,1945.

Plaintiff’s lease contained a three-months’ option to purchase the premises. The option was not exercised, but plaintiff continued in possession of the plant from October 18, 1945, to September 10, 1946, pursuant to an informal understanding with the defendant whereby plaintiff provided protection and maintenance services for the whole building and utilized some of the plant space for storage of materials owned by plaintiff.

3. In December 1945, plaintiff began negotiations for the purchase of the property, first with Eeconstruction Finance Corporation, and later with War Assets Administration to whom the property had been declared surplus. An appraisal of the property was prepared by defendant and submitted to plaintiff who objected to certain items therein as being of no value to a purchaser of the property for ordinary commercial use, and to other items as carrying a value in excess of ordinary commercial-use value. With these adjustments, the appraisal amounted to $1,245,741.22. On February 20, 1946, plaintiff offered to purchase the property for $1,041,599.97. In April 1946 plaintiff increased its offer to $1,422,000 and this was accepted by defendant in July 1946.

4. During the course of the negotiations, defendant knew that plaintiff intended to use the plant to expand its chain belt and transmission manufacturing operations; that plaintiff’s need was urgent and that it hoped to occupy the building in sound, usable condition at the earliest practicable date.

5. The formal contract of sale was dated September 10, 1946, and the quitclaim deed to the premises was delivered to plaintiff on September 11, although the contract of sale allowed defendant 30 days in which to deliver such deed. Upon delivery of the deed plaintiff was required to and did pay the full purchase price in cash.

6. The contract of sale stipulated that there was present on the premises certain described items of machinery owned by Reconstruction Finance Corporation and not included in the sale. Defendant agreed therein to have such items removed from the building within 90 days from the date of the delivery of the quitclaim deed and plaintiff agreed that defendant, its vendees, contractors and others authorized by defendant, should have access to the premises at all reasonable hours to exhibit, sell, prepare for shipment, and to remove in an orderly manner, the items reserved from sale, during the 90-day period. Plaintiff agreed that as part of the consideration for the transaction, this machinery might remain on the premises for the 90 days and that plaintiff would furnish without charge to defendant such facilities and utilities as were on the premises and as were reasonably required to accomplish the sale and removal of the property.

7. The contract of sale also contained the following certification and agreement on the part of plaintiff as purchaser :

A. It is acquiring the real estate herein contracted to be purchased for its own use.
B. It is not acquiring the said real estate for the purpose of reselling or leasing it.
C. In no case will it resell or lease the said real estate within three years from the date of these presents without first obtaining the written authorization of the War

8. Because of the number of Government-owned machines located on the premises and the manner in which they were installed, it was reasonably to be anticipated that the better part of the stipulated 90 days would be required to effect an orderly removal of such machines.

On November 25, 1946, defendant entered into a contract with a private company for the removal of its machines, but actual removal operations did not begin until shortly after the date of an “on-site” sale of December 4, 1946.

9. From October 1, 1946, until actual removal work was commenced by defendant in December, plaintiff from time to time wrote to defendant calling attention to the magnitude of the removal task and to the fact that if defendant was to clear the plan of its property within the 90-day contract period, it would have to commence immediately. Plaintiff also pointed out to defendant that further delay in effecting the removal would aggravate the already inevitable damages accruing to plaintiff because of plaintiff’s inability to fully occupy and use the plant on the promised date and plaintiff offered to cooperate in any possible manner to help bring about the timely removal of defendant’s property.

10. When it became apparent that defendant could not possibly have its machinery out of the plant by the expiration of the 90-day period on December 10, 1946, defendant asked plaintiff for an extension of the time in which it could remove its property. On December 11, 1946, plaintiff wrote to defendant disclaiming any responsibility thereafter for any persons or property other than its own, on or in the vicinity of the plant, and notified defendant that it expected to be paid damages for the loss of the use of the plant, for the losses arising from the impairment of its operations, for the cost of utilities and services and other cash outlays necessitated by defendant’s delay in removing its property after December 10,1946.

11. Following . December 4, 1946, areas occupied by Government-owned machinery were cleared daily by defendant’s contractor and a day-to-day record of the square-foot space not yet cleared was kept jointly by representatives of defendant and plaintiff. In general, defendant’s contractor followed a removal plan requested by plaintiff in that clearances were made from east to west, after having cleared machines from the north sections of the plant to provide an exit for loading the machines on flatcars.

12. Concurrently with defendant’s removal operations, and to the greatest extent possible, plaintiff proceeded with its own reconversion work which included the making of preliminary excavations in some areas of the plant. This had the effect of keeping at a minimum plaintiff’s damages arising from its inability to obtain the full use of its plant. None of this conversion work interfered with the work of defendant’s contractor in carrying out the removals.

13. Before the moving operations were commenced by defendant’s contractor, the 3-inch wood block flooring in the plant was in good condition except in the main north-south aisle in Bay J, where ripples indicated some wear.

In December 1946, early in defendant’s moving operations, plaintiff noted what it considered to be excessive damage caused to the flooring by the manner in which defendant’s moving contractor, Shea-Matson. Trucking Company, was taking up the machines and moving them out. Plaintiff complained of this situation to both the War Assets Administration custodian, Mr. Phelps, and to Mr. James J. Perkins, who supervised the Shea-Matson operations. Both advised plaintiff that they had no authority to repair the damage to the floors. After repeated complaints in which plaintiff contended that it was the obligation of defendant and its contractor to replace all wooden blocks ripped up and to repair all floor damage caused by the removal of Government-owned machinery, plaintiff threatened to stop all moving operations. Mr. Phelps then took up the matter with the regional office of War Assets Administration and that office authorized him to instruct Shea-Matson to replace the wooden blocks removed or damaged in the moving operations, and to make repairs in all places other than in the voids under machines which had rested directly upon the concrete flooring.

14. Because it lacked both the necessary equipment and employees qualified to do this type of work, Shea-Matson was unable to make the floor repairs. On January 7,1947, Shea-Matson wrote plaintiff a letter, countersigned by Mr. Phelps of War Assets Administration, which stated in part as follows :

Please accept this as your authority to repair the wood block flooring in Plant #7, which has been damaged in the plant Clearance program.
You will please bill us monthly for the labor and material expended for these repairs.
For your additional protection, we are having this letter endorsed by Mr. Phelps, of War Assets Administration.

15. On or about January 11, 1947, plaintiff’s contractor, Klug & Smith Company, commenced the floor repair work referred to above. The work performed by Klug & Smith covered all the work necessary to put the floors in good condition and included the laying of floors over voids left by the removal of some of the machines. This company also performed all the accumulated maintenance repair work necessary in connection with plaintiff’s occupancy program.

16. Defendant’s representatives considered the quality and extent of the repair work performed by Klug & Smith to be beyond the meaning of the above-quoted letter of authorization. On February 20, 1947, defendant’s contractor wrote plaintiff and advised that it would not be responsible for any portion of the floor repair work done up to that time nor for any further work undertaken with respect to floor repair or replacement.

Despite the above controversy, plaintiff’s contractor proceeded with the floor repair work so that the plant, would be ready for use at the earliest possible date.

17. By the close of business on Feberuary 15, 1947, all of the Government-owned machinery was out of the plant. Floor repair work in the areas from which Government-owned machinery had been moved continued until April 19,1947.

18. On March 11, 1947, while the above mentioned floor repair work was going on, plaintiff submitted a claim to War Assets Administration in the total amount of $69,661. On June 11, 1947, it increased its claim to $120,625.45, and on January 21, 1948, plaintiff reduced this latter amount by $4,410.09 representing the cost of wood block flooring which it had laid over voids in the concrete.

In a letter, dated January 21, 1948, relative to its claims, plaintiff stated in part as follows:

* * * The cost of removing Government-owned machinery was discussed with our maintenance foreman who directed this work. We are advised by him that this work costing $2,191.52 and performed by a subcontractor, the King & Smith Company, consisted of removing certain heavy machinery located in bays A and B, Sections 1 to 5, inclusive, in the west end of the plant, to provide space to store plate steel and bar stock. This work commenced on December 17, 1946, and was completed on January 25, 1947, with a very minor amount of work performed on November 2, 1946. This work was undertaken by us, as we had no other solution to provide ourselves with adequate space for this material, and knowing fully well that no progress was being made by the War Assets Administration to clear the plant by December 10,1946.

On January 24, 1949, defendant indicated a willingness to pay plaintiff’s claim for rental of space in the amount of $10,293.31 (computed on plaintiff’s basis but excluding tbe day of December 10,1946), and also to pay $2,191.52 representing the cost of removing Government-owned machines from the south ends of Bays A and B. The allowance of the $2,191.52 item was stated to be subject to a finding by “an appropriate Regional Office official [of War Assets Administration] that the charges are reasonable and that they pertain only to removal of Government-owned property from the premises subsequent to December 10,1946.” There is no evidence that such a finding was ever made. All other claims made by plaintiff were denied by defendant.

CLAIM FOR FLOOR DAMAGE CAUSED BT DEFENDANT’S MOVING OPERATION

19. The building conveyed to plaintiff was located on 10.1 acres of land and contained 313,460 square feet of floor space. It was of excellent construction and well designed for heavy manufacturing.

The interior of the building consisted of 20 large bays running north and south and designated (from west to east) as Bays A to Y, inclusive (excluding I and O). There were 13 high bays, A to J on the west side and S, T, U, V on the east side, each being 50 feet wide and having a 27-foot clearance. The high bays were equipped with conductors for 10-ton cranes.

There were 7 low bays in the central section of the building (K to R) each being 30 feet wide and having a 15-foot clearance. The low bays were equipped with tramrails and hoists.

The high bays on the west side of the building were serviced by a railroad spur line, approximately 400 feet of which was under roof along the north end of the building. The high bays on the east side were serviced by a spur line on the north end, of which approximately 200 feet were under roof. The low bays were serviced by truck entrances at the north ends of the bays.

There was a two story section, 200 by 60 feet, along the central portion of the south wall of the low bay area containing modern air-conditioned offices, a conference room, cafeteria, and other personnel facilities. The remainder of the building was one story and was utilized for manufacturing.

The manufacturing area of the building had an 8-inch reinforced concrete subfloor surfaced with 3-inch thick cedar blocks, except in - small areas along the railroad tracks and also immediately underneath certain machines that were placed directly upon and anchored to the concrete flooring.

20. On the date of the sale to plaintiff, the first floor of the plant, except for the office space, was occupied to the greatest extent possible by machinery used in the production of military equipment. The machines were of various types and were installed in different ways. The large gun-boring and gun-mounting machines weighed from 45,000 to 50,000 pounds each, while the smaller machines in the low bays were light enough to be carried on fork-lift trucks. Fifteen of the largest machines were placed directly on the concrete subflooring with the wooden floor blocks set closely around the base of each machine. A few machines were mounted on cement pedestal foundations raised above the wood block floors. Most of the remaining machines were placed on square metal leveling blocks, one to each corner, resting in the wooden flooring flush with the surrounding wood block floor surface. Each leveling block contained four bolts by means of which the machines were held in place.

The electric conduits through which each machine was supplied with electrical energy ran from a nearby pillar, underneath the wood flooring, and to the base of the machine. Wherever possible, these conduits were placed so that they did not run under the main aisles.

21. Shortly after its purchase of the plant (September 10, 1946), plaintiff, on authority of the Ordnance Department, removed all machines from east high Bays S, T, U, and V. These machines were owned by the Water Yliet Arsenal, were lighter than most of the machines in the west high bays, but were heavier than the machines in the low bays. The machines were moved out by rollers, cranes, and trucks with the minimum damage to the wood block flooring. The floors in these bays were repaired by plaintiff’s contractors, Klug & Smith Company and the Shannon Floor Company, Inc., and by November 1946, plaintiff was using the four bays for the manufacture of parts for concrete mixers.

22. Plaintiff purchased approximately 40 of defendant’s machines located generally in the low bay areas. Plaintiff moved these machines out in October or November 1946, before defendant began any of its removal work. Where the machines were anchored in concrete foundations, plaintiff took care to fill in the resulting voids immediately. While the repairs so made were of a temporary nature, they at least served to preserve the adjacent floor areas and provided a base over which other machines could be moved out by the Government. This removal of machines by plaintiff took place before the Government began its moving operations in December 1946, and served to relieve somewhat the congestion in those areas.

23. Commencing early in November 1946, and from time to time thereafter, plaintiff removed Government-owned machinery from five sections of the southern part of Bays A and B, and from part of Bay C, and placed these machines between other machines in the north portions of these bays. Necessary floor repairs were made by plaintiff’s contractor Klug & Smith, in November and December 1946. The floor space created by this removal was used by plaintiff for the storage of steel.

24. By the time defendant began its moving operations in December 1946, there remained some 300 Government-owned machines to be removed. These machines had to be moved out through exits at the north ends of Bays K and J for loading on flatcars or trucks.

A base had to be provided for each machine in preparation for shipment. These bases consisted of heavy timbers bolted to the bottom of each machine. In the low bay areas the machines were placed on temporary metal plates to which a cable was hooked and the machine then pulled to a point where the wooden timber bases were made up and installed by the carpenters. These metal plate skids were also used in other areas for the lighter machines to move them to the nearest crane.

Where machines were recessed below the wooden floor level and rested directly on the concrete, defendant’s contractor loosened and removed the wood blocks from around the machine’s edge. Crowbars, pinchbars and jacks were then employed to raise these machines.

Where machines rested on steel leveling plates or blocks, the wood floor blocks were removed for a space of from one to two feet around the machine in order to place a jack under the legs of the machine. When these machines were dislodged from the steel leveling plates or blocks, the anchor bolts which had held them in place were left sticking up two or two and one-half inches. Instead of cutting off these bolts at floor level, defendant’s contractor removed the whole leveling plate leaving a void three inches in depth in each instance. Depending on the size of the machines, cranes, when available, and fork-lift trucks were used to dislodge these machines from their foundations.

Hardwood rollers were placed under the timber bases to facilitate moving the machines over the floor area to the loading exits. When the weight of the machines and timber bases was improperly distributed on the rollers, the timber bases tended to drag over the floors and the many voids, causing damage to the wooden floor and ripping up additional wood blocks. Cranes were used by defendant’s moving contractor whenever possible in the high bays to pull the machines along. Where cranes were not available, tow trucks were used. Occasionally the tow trucks could not pull the load and the truck wheels would spin on the wood floors causing damage to them. In some cases machines were pulled over the floors on their timber bases without benefit of rollers. When machines were skidded across the voids instead of down the aisles, flooring blocks, which were held in place by pitch sealing or by their proximity to other blocks, were loosened by the skids and the uneven pressure from rolling the machines over them.

25. Conduit pipes which housed the electric power lines were installed in channels three inches in width cut into the wood block flooring and extending from the switch block columns over to each machine. Channel blocks were notched out over the conduit and sealed back in place. When machines were removed, both ends of the conduits stuck up over the floor to the height of the switch box and constituted a hazard to other operations. Defendant’s contractor employed the quickest and easiest way of removing these conduits by literally pulling them up out of the floor. Small ones were ripped out by hand and larger ones were loosened by crowbar or pinchbar and then pulled out by crane or small hoist. As a result, blocks that were bonded along each side of the conduits were torn up or loosened.

Wood blocks were not replaced by defendant’s contractor, but were brushed into piles, generally around the columns.

26. The methods described above and used by defendant’s contractor in removing the machines, the inexperience of the contractor’s employees and the haste employed in removing the machines and conduits, resulted in excessive damage to the flooring.

27. Plaintiff’s contractor, Klug & Smith, commenced floor repairs in the low bays area on about January 11, 1947. Repair work in the areas where defendant had carried out the moving program was not completed until April 19, 1947. By May 24,1947, all floor repairs in the entire building were completed.

Plaintiff’s maintenance supervisor designated the areas which Klug & Smith were to repair but in certain small areas the contractor took up additional islands of blocks which had not been damaged or loosened because it was actually cheaper to remove and relay these small areas than to build around them. All old blocks which could be re-used were first cleaned in a vat brought upon the premises. Old pitch was cleaned from the floors before the blocks were re-laid upon a spread of new pitch to seal them in place. Klug & Smith regularly employed two shifts daily and a third shift was employed for the cleaning of old blocks.

The greatest concentration of machines was in the low bays area where the machines were also very close together. Consequently, most of the blocks not already dislodged by defendant’s moving operations had to be taken up. Approximately 50 to 75 percent of the floor in this area had to be re-laid.

28. Approximately 272,875 square feet of the plant’s floor area was covered by wood blocks. Plaintiff performed all the floor repair work and replacement work necessitated by the removal of machines (whether moved by plaintiff or defendant) at a total cost of $58,817.87 of which $8,182.01 represented the cost of 2,380 square yards of new wood blocks purchased by plaintiff.

Plaintiff could reasonably have anticipated a certain amount of floor damage resulting from the removal of the gun manufacturing machinery. In the four east Bays, S, T, U, and Y, where plaintiff moved out the Government-owned machines prior to December 10, 1946, plaintiff had to make floor repairs costing $3,286.39, exclusive of the cost of any new blocks which may have been used. The wood block flooring in these 4 bays covered 64,225 square feet. The average cost per square foot of floor repairs in this area was thus $0,051, exclusive of the cost of new blocks used. The machine removal work performed by plaintiff was done in a workmanlike manner with the minimum of damage to the wood block flooring.

29. Most of the larger machines which had to be removed were located in the high bays in the west part of the building. About 15 of the larger machines were recessed into the wood block floors and rested directly on the concrete subfloor so that large voids were left after their removal. A few other machines were on concrete pedestal foundations which had to be cut down and leveled before placing new flooring. The shipping exit was at the north end of the plant and consequently many machines had to be moved over the same area leading to the exit with considerable damage resulting to the floors in this area. There was also a substantially greater concentration of machines of all kinds in the low and high bays west of S, T, TJ, V, where defendant performed the machinery removals.

30. Under all the above circumstances, it is reasonable to conclude that had the removal operations in the areas west of S, T, U, Y bays been carried out in the same careful manner as in the S, T, U, V area, the normal cost of repairing wood floors in the areas west would have been approximately three times the normal repair costs incurred in the four east bays.

31. Except for a small area occupied by plaintiff in the low bays north of the general offices, the wood block flooring areas west of Bays S, T, U, Y contained approximately 202,050 square feet. The Government’s contractor performed the machine removal work in this area and the cost of floor repairs was approximately $47,349.47, exclusive of the cost of new wood blocks used. The normal cost of repairing wood block floors in this area would have been three times the cost of repairing floors in the S, T, U, Y area (finding 30), or $0,153 a square foot (3 X $0.051), resulting in a total normal repair cost of $30,913.65 ($0,153 X 202,050 s. f.) exclusive of new wood blocks used. Accordingly, the increased cost of repairing the wood block floors in the areas west of Bays S, T, U, Y, as a result of the excessive damage caused by defendant’s contractor, was approximately $16,435.82.

The cost of new wood blocks, that is, $8,182.01, is reasonably allocable to floor areas on the basis of other repair costs, and a fair allocation of new blocks purchased by plaintiff and used as a result of the excessive damage resulting from defendant’s machinery removal methods in this area, is $2,659.15, making plaintiff’s total increased cost of floor repair in this area $19,094.97.

PLAINTIFF’S MAINTENANCE AND UTILITIES COSTS DURING PERIOD OF defendant’s REMOVAL WORK SUBSEQUENT TO DECEMBER 10, 3946.

32. Plaintiff seeks reimbursement for maintenance and utilities costs averaging $12,372.58 per month for the period December 10, 1946, through February 15, 1947, when the plant was finally cleared of all Government-owned machines. Such costs include metered power, gas, water, heating and supervision, among others. Those particular items represent services and utilities required for plaintiff’s own manufacturing operations which were then going on in Bays S, T, U, Y. The average monthly cost of those items (including a 5% allowance for general administrative expense) was $7,769.22.

Other items representing the costs of insurance, taxes, watchmen, maintenance and repairs, were applicable to the entire plant area and averaged $4,603.36 per month (including the 5% allowance for general administrative expense), or $153.44 per day.

The entire plant area was 313,460 square feet. Contiguous areas occupied by plaintiff, or available for its use on or before December 10, 1946, including the four east bays (S, T, U, V), the first and second floors in the south sections of the low bays, and the gate houses, contained 105,420 square feet. Those areas which were occupied by Government-owned machinery covered 208,040 square feet, or 66 percent of the entire plant.

Plaintiff’s maintenance costs for the plant area occupied by Government machinery or rendered unavailable to plaintiff by reason of defendant’s moving operations after December 10,1946, amounted to $101.27 per calendar day (66% of $153.44=$101.27), or a total of $6,785.09 for the period of 67 days from December 10,1946, through February 15,1947.

EXPENSE INCTffiKED BY PLAINTIFF IN MOVING GOVERNMENT-OWNED MACHINES

33. In November 1946, it was apparent that defendant could not possibly have its machinery out of the plant by December 10,1946, because not a single machine had yet been moved and defendant had made no arrangements for removal. Commencing in November and from time to time thereafter in December 1946 and in January 1947, plaintiff moved the Government-owned machines from five sections of the southern parts of Bays A and B and from part of Bay C, and placed the machines in the north portions of these bays. Plaintiff then used the cleared areas as storage space for steel which was intended for use in its anticipated manufacturing program in the new plant. This removal work was done with the knowledge of defendant and without any protest on its part. Most of this removal work was done after December 10, 1946. The presence of these machines in the north ends of the bays and the fact that they had been disengaged from the floors where they had been installed, made their removal from the building by defendant easier and quicker.

Plaintiff paid its contractor $2,191.52 for this removal work.

PLAINTIFF’S LOSS OF PROFITABLE USE OP PLANT AREA RESULTING PROM DEPENDANT’S DELAY IN VACATING PREMISES

34. At the time of the sale of the plant, plaintiff was a well-established, going concern. It had started its chain manufacturing business in 1891, making sprocket chain for the transmission of power. Later plaintiff made belts of chain for conveying machinery, and eventually built and assembled the conveying machinery itself. Plaintiff had its own foundry for the manufacture of most of the parts required in the assembled machines as well as trade castings for sale to other machine-assembling concerns. By 1941, plaintiff was one of the country’s largest manufacturers of construction and conveying machinery employing chain transmission, owning plants in Massachusetts as well as in Wisconsin. Plaintiff had five plants in the Milwaukee area, including Plant No. 1, located at 1600 West Bruce Street where its chain manufacturing operations were carried on. The Bruce Street building was a multiple floor plant having 91,974 square feet of floor space.

Due to the strong post-war demand for plaintiff’s products, plaintiff determined to greatly expand its chain manufacturing business, and at first contemplated building a new enlarged plant for that purpose. Because the gun manufacturing plant operated by plaintiff for defendant during the war was available, in good condition, and contained the necessary floor space, and because it could be made ready for use in a much shorter time than would be required to build a new plant, plaintiff commenced negotiations with defendant for the purchase of the gun plant. The main factors of discussion in the negotiations were the price and availability of this plant for use in plaintiff’s manufacturing program.

No comparable space was available in the Milwaukee area for sale or rent, suitable for plaintiff’s chain manufacturing needs, during the time plaintiff was prevented from making profitable use of its building by defendant’s failure to remove its machinery. Furthermore, it would not have been practical for plaintiff to have acquired additional rental space, if such had been available, on a temporary basis since major installations involving great expense would have been required to make any space suitable for plaintiff’s particular manufacturing operations.

35. Plaintiff was prepared to proceed with the conversion of the new plant to chain belt and transmission production on or before December 11, 1946. As contiguous areas of the plant were cleared, the conversion work proceeded rapidly. The principal addition to the plant required by the conversion program was the installation of a heat treating department. The program also contemplated installations for oil, water, and electrical connections and the total cost of the conversion was approximately $500,000, exclusive of the cost of manufacturing machinery. Plaintiff moved the machinery from its Bruce Street plant to the new plant as soon as space was available.

Despite the 67-day delay to plaintiff’s obtaining the full use of the large area housing the Government-owned machinery, and the large amount of conversion work required, plaintiff commenced substantial operations in the plant in July 1947. Chain production began in September 1947, and full operations were attained by the latter part of 1947.

On December 10,1946, plaintiff had available the necessary capital, machinery, materials and labor to proceed with its reconversion program. There is no evidence the plaintiff would have been delayed if defendant had removed its machinery from the plant by December 10,1946.

36. Plaintiff’s sales during the 10-year period from 1936 through 1945, from its Milwaukee and West Milwaukee plants, exclusive of its gun-manufacturing during the war years, totaled $99,967,600, on which it realized a net profit of approximately $17,838,600, or a profit ratio on sales of approximately 17.8 percent. Its sales from the chain belt and transmission division during this period were approximately $40,155,100, constituting about 40 percent of its total sales, with a net operating profit ratio of approximately 21 percent on such sales.

During plaintiff’s fiscal year 1947, its total sales were $18,-550,113, with a net profit ratio of 15.8 percent, and for the fiscal year 1948, its total sales were $21,369,977, with a net profit ratio of 16.5 percent, for all of its Milwaukee and West Milwaukee plants.

During the period from December 1946 through April 1947, plaintiff’s total sales from its Milwaukee and West Milwaukee plants were $7,478,915.60 upon which it realized net operating profits of $1,062,859.25, or a net profit ratio of 14.2 percent. The productive factory floor space areas of these plants totaled 597,645 square feet and the net profit realized was thus equivalent to $0.0118 per square foot a calendar day during this period. Plaintiff’s profit ratio on the products of its chain belt division was at least as large as the average on all sales.

37. During the year ending October 1946, plaintiff’s backlog of orders had increased from approximately $9,000,000 to over $20,000,000 for all of its divisions. Its backlog for the chain belt and transmission division had increased approximately 72 percent to over $6,000,000. By the end of 1947, plaintiff’s backlog of orders for all divisions totaled approximately $10,500,000, although such orders for the chain belt and transmission division remained fairly constant and were slightly higher in December 1947.

38. During 1947 plaintiff received substantial cancellations of orders in all divisions of its production, and particularly in the production of construction equipment. Because of its inability to meet delivery schedules in connection with its chain belt orders, plaintiff’s new orders were restricted and some cancellations resulted.

39. Plaintiff’s old Plant No. 1, where it carried on its chain belt production, was a multiple floor factory. The new plant purchased from defendant was designed so that all manufacturing operations could be carried on on one floor having considerably more production floor area. The single factory floor plant could be operated much more efficiently and profitably than the multiple floor plant.

It is reasonable to conclude that the additional capacity of the new plant purchased from defendant would have resulted in increased earnings approximately equivalent to the earnings realized by plaintiff from its other facilities.

40. The last Government-owned machine was out of the plant by the close of business on February 15, 1947, and on that date plantiff had substantial use of the plant. Concurrently with defendant’s moving operations which began in December 1946, plaintiff commenced and proceeded with its work of converting the gun plant into a chain belt and transmission plant. The areas made available for such conversion work, subsequent to the commencement of the moving operations, were approximately what would have been made available if defendant had started its moving operations in time to have vacated the plant by December 10, 1946.

41. Plaintiff was delayed in obtaining the full earning capacity of its new plant for a period of approximately 67 days, or a period equal to the defendant’s delay in removing its machinery from the plant.

42. Those areas of the new plant that were denied to plaintiff for 67 days covered 208,040 square feet of manufacturing-space. Since the old plant, containing 91,974 square feet of productive floor area remained in operation during this period, the actual loss of productive earning space was 116,066 square feet.

Because of the nature of plaintiff’s manufacturing operations, its earning capacity bore a substantial relation to its available manufacturing floor space. The productive tac-tory area is a fair and reasonable measure of attainable profits from plaintiff’s business during the period it was denied the use of the new plant acquired for this purpose.

Plaintiff’s net loss of profits for the 67 days was $0.0118 per square foot a calendar day, or a total of $91,761.78.

SUMMARY

43. Plaintiff’s increased costs, and its loss of profitable use of its new plant by reason of defendant’s failure to vacate approximately 208,040 square feet of the plant for a period of 67 calendar days are as follows:

Cost of repairing excess damage to the wood flooring (Fdg. 31)_$19,094.97
Cost of protection and maintenance supplied for 67 days beyond Dec. 10, 1946, at an average cost of $101.27 a calendar day (Fdg. 32)_ 6, 785.09
Cost of moving some of the Government-owned machines (Fdg. 33)_ 2,191.52
Loss of profitable use of that portion of the plant occupied by Government-owned equipment (less square foot space utilized in plaintiff’s old plant during that time) for an average of 67 days (Fdg. 42)_ 91,761.78
Total_ 119,833.36

conclusion of law

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that, as a matter of law, the plaintiff is entitled to recover.

It is therefore adjudged and ordered that plaintiff recover of and from the United States the sum of one hundred nineteen thousand eight hundred thirty-three dollars and thirty-six cents ($119,833.36). 
      
      The plant contained much valuable machinery used in the manufacture of military materials, and in July 1946, plaintiff and Reconstruction Finance Corporation (successor to all rights of Defense Plant Corporation) entered into an agreement whereby plaintiff agreed to pay defendant 66 cents per square foot per year for its use of certain areas of the plant, and defendant agreed to pay the cost of the protection and maintenance services performed by plaintiff.
     
      
       The authorities relied on by plaintiff in support of its contentions deal ■with situations where the so-called “New York Rule” has been applied, i. e., that the burden of loss from damage to realty falls on the party (buyer or seller) in possession of the realty under an executory contract of sale. This “test of possession” has been adopted by a number of other states including Wisconsin. In Appleton Electric Co. v. Rogers, 200 Wis. 331, 228 N. W. 505, relied on by plaintiff, certain real estate with buildings thereon was the subject of a contract of sale. Pending payment of the balance of the purchase price, the vendor remained in possession and the buildings were, without fault of the vendor, materially damaged by fire before the purchaser had become entitled to possession or to the delivery of a deed. Among other things, the court held that in such circumstances the loss must fall on the vendor in possession. Plaintiff also refers to another line of cases holding that a seller who delivers land and improvements in a different condition from that in which it was agreed they would be conveyed, is liable to the buyer for the cost of remedying the defects so as to give the buyer property equivalent to that contracted for, not in excess of the purchase price.
     
      
       During the period of time when defendant exercised its privilege to use the premises in connection with its personalty located therein, plaintiff carried on its plant reconversion program and was in all material respects in control of the entire plant.
     
      
       Certain material differences as to number and concentration of machinery did exist between this area and the area in which defendant’s contractor operated, and these factors will be discussed later.
     
      
       Basis of allocation of items of expense claimed:
      
        
      
      $4,603.36 -r 30»$153.44 per day X 66% is $101.27 X 67 days is $6,785.09.
     
      
       See 32 A. L. R. 120; 78 A. L. R. 858.
     
      
       See also Williston on Contracts, Rev’d Ed., Vol. V, §§ 1344, 1344A, and 1345.
     
      
       See 46 Harvard Law Review, 696; 104 A. L. R. 132.
     
      
       Total damages:
      Cost of repairing excess damage to wood flooring (Finding 31)_$19. 094. 97
      Cost of protection and maintenance for 67 days (Finding 32)_ 6,785.09
      Cost of moving some government-owned machines (Finding 33)— 2,191. 52
      Loss of profits for 67 days (Finding 42)-91, 761. 78
     
      
       The land and buildings were known as Plancor 390.
     
      
       Reconstruction Finance Corporation succeeded to aU the rights of Defense Plant Corporation on July 1, 1945.
     
      
       In July 1946, plaintiff entered into an agreement with Reconstruction Finance Corporation to pay 66 cents per square foot per year for its use of the plant, and defendant agreed to pay all taxes and the cost of protection and maintenance services performed by plaintiff.
     
      
       Surplus Property Act of 1944, Sec. 11 (58 Stat. 765, 769) ; Executive Order 9689, 11 F. R. 1S65.
     
      
       $950,000 for all installations and items covered by the appraisal except cranes, and $91,599.97 for certain mechanical equipment including overhead and tramrall cranes, wire conductors and compressors.
     
      
       Prior to the commencement of negotiations, plaintiff had planned to construct a new building which would at least double Its facilities for chain manufacture. Defendant was aware of this fact and that plaintiff’s urgent need for additional space prompted its acceptance of the terms finally agreed upon.
     
      
       The quitclaim deed delivered to plaintiff on September 11, 1<946, contained substantially the same provisions.
     
      
       Details concerning the number of Government-owned machines, their location in the plant and the manner of installation, will be discussed hereinafter.
     
      
       The removal work of defendant’s contractor, Shea-Matson Trucking Co., had to be coordinated with the on-site sale of the machinery arranged by W. A. A. All machines sold on the premises had to be removed for shipment to the purchaser, and unsold machines had to be shipped to Government warehouses.
     
      
       By letter of War Assets Administration to plaintiff, dated November 29, 1946.
     
      
       Plaintiff's original claim and amended claim consisted of the following items:
      
        
      
     
      
       Plaintiff conceded that it would have normally had to do this work and deducted the cost from its floor damage claim, leaving a balance of $42,098.68.
     
      
       Rental charges for space not promptly cleared was based on the dally record of occupation made by the parties, which showed an average of 86,644 square feet per day for the 67 days of defendant’s occupancy after December 10, 1946. The charge was on the basis of $0,002 per day per square foot.
     
      
       The machines in the low bay areas were pooled mostly in J Bay where the work of putting on the timber bases was done.
     
      
       Voids 3 inches in depth were left wherever a machine was taken out or wherever wood blocks or metal leveling plates were removed. Defendant’s contractor did not attempt to replace any of the wood blocks removed or dislodged, and as the machinery removal progressed, more and more voids appeared throughout the entire area.
     
      
       The record does not establish the number of new wood blocks used to repair floors in this area.
     
      
       The 272,875 square feet of plant floor covered by wood blocks was located as follows: west high bays : 157,950 square feet; low bays: 50,700 square feet; east (S, T, U, V) bays: 64,225 square feet. The small area occupied by plaintiff in the low bays north of the general offices, consisting of approximately 6,600 square feet, has been excluded in arriving at the 202,050 square feet of wood block flooring contained in those areas, where the Government performed the removal work.
     
      
       The 202,050 square feet of wood block flooring west of Bays S, T, U, V, included an area of approximately 22,000 square feet which was involved in plaintiff’s new pit construction work and required no replacement or repair of wood block flooring within this area. However, a substantial amount of expense was incurred in re-laying floors around these excavated areas, and since plaintiff’s total invoice costs of floor repairs ($47,349.47) does not indicate the specific areas where repair work was performed and since all floor work around these pits was included in such total invoice costs, the entire floor area is included in determining the normal or reasonable costs incurred.
      The $16,435.82 excess repair cost in the areas west of Bays S, T, U, V is 32.5% of the total repair cost ($50,635.86) in all areas, exclusive of the cost of blocks. Applying that percentage to the total cost of all new blocks ($8,182.01) used by plaintiff in the entire floor repair operation, results in $2,659.15 cost of new blocks used due to excessive damage In the areas west of Bays S, T, U, V.
     
      
       The following table will show tbe basis of allocation:
      
        
      
      $4,603.36-v-30=$153.44 per dayX66% is $101.27.
     
      
       Plaintiff claims that some of its own employees were also used in this removal work but the record does not establish the amount of plaintiff’s costs for the work of those employees.
     
      
       A reasonable rental value of this building with restored floors and heated for occupancy during the period from December 1, 1946, through February 15, 1)947, was from 72 to 75 cents a square foot per year, or $0,002 a square foot per calendar day. The daily rental value of the 208,040 square feet of the building occupied by Government-owned machines after December 10, 1946, was 8116.08 and would have amounted to $27,877.36 for 67 calendar days.
     
      
       Defendant has taken the position that certain areas of floor space became available to plaintiff from day to day after December 10, 1946, as Government-owned machinery was moved out. A daily record of diminishing areas of floor space remaining to be cleared was kept by the parties. The areas so cleared were not contiguous but were scattered over larger areas of the plant. (All machines had to exit through the north ends of Bays J and K and some of the machines in Bay J (which was approximately in the middle of the plant) were the last to be moved out. Because of the large number of machines, the manner in which they were removed, and the excessive damage resulting from the removal methods employed by defendant’s contractor, the area housing Government-owned machinery was not available to plaintiff until all machines were out and the excess damage to the floors to some extent repaired.
      Although complete repair and restoration of the floor areas in question were not completed until Auril 19, 1947, a part of this work went on concurrently with the Government’s removal operations and also with plaintiff’s normal repair work and reconversion program.