Case ID: us-ct-cl_61/html/0482-01.html
Source: Caselaw Access Project
Author: {"author": "Campbell, Chief Justice,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WESTERN CARTRIDGE COMPANY v. THE UNITED STATES
    [No. A-320.
    Decided January 25, 1926]
    
      On the Proofs
    
    
      Reformation of contract; parole evidence. — Where the plaintiff has entered into a written contract with the Government to adapt its “ plant, machinery, and tools ” to the purposes thereof, seeks to have the contract reformed by eliminating this provision, in order that it may, by parole evidence, set up a prior oral agreement by the Government to pay the expenses of the transformation, and does not furnish clear and convincing proof of mutual mistake in including the said provision in the written contract, the instrument will not be so reformed.
    
      
      Contracts; expense of changing equipment. — Where the manufacturer of one kind of cartridges undertakes to make a different kind involving a change of “ plant, machinery, and tools,” and the contract names a price per thousand and is silent as to reimbursement for the expense of such a change, it is not entitled to reimbursement.
    
      The Reporter's statement of the case:
    
      Mr. Joseph E. Davies for the plaintiff. Mr. Nelson Thomas and Davies c% J ones were on the briefs.
    
      Mr. Fred K. Dyar, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. The plaintiff is, and was during the different transactions hereinafter set forth in these findings of fact, a corporation duly incorporated under the laws of the State of New Jersey, with its factory and principal place of business located at East Alton, Ill.
    II. In the fall of 1916 the plaintiff entered into a fixed-price contract with the United States for the manufacture and delivery of over 50,000,000 .30-caliber ball cartridges, and this number was afterwards increased by supplemental agreements. The plaintiff was engaged in the manufacture of cartridges under this contract until about December 10, 1917. Some time in August, 1917, it entered into a cost-plus profit contract with the United States for the manufacture of about 130,000,000 .30-caliber ball cartridges, which number was later increased to about 179,000,000, and under this contract plaintiff, some time'after December 10, 1917, manufactured 19,970,000 .30-caliber cartridges.
    III. Prior to its contracts for the manufacture of .30-cali-ber cartridges for the Government the plaintiff had been engaged in the manufacture of 8-millimeter Lebel machine-gun cartridges for the French Government under a contract made in 1914, and it completed this contract by the delivery of 200,000,000 cartridges in the fall of 1916.
    IV. In the summer of 1917, the Army having been equipped with machine guns of French manufacture, and the necessity for ammunition for these guns being urgent and as the French Government could not supply it, General Pershing sent a rush cablegram to the War Department for 80,000,000 of the 8-millimeter French Lebel cartridges. Officers connected with the Ordnance Office at once began an investigation of the sources of supply of such ammunition and learned that plaintiff had about 2,000,000 of these cartridges, part of the overrun of the 1914 French contract. These cartridges were purchased by the Government from plaintiff in August, 1917, at $45 per thousand. Two of the officers who were making these investigations, Colonel Eames, head of the production division, and Captain Clark, his assistant, began to consider the availability of plaintiff’s plant to fill General Pershing’s order.
    Shortly afterwards Colonel Eames procured the assignment of Captain Holcombe, head of the contract section of the small-arms division of the Ordnance Office, to assist him in arriving at the terms under which plaintiff should be engaged to manufacture the cartridges. The duties of Captain Holcombe at that time were to carry out the instructions of the chief of the division of small arms Colonel Thompson and the contracting officer Major Warren, and to see that formal matters pertaining to contracts were properly carried out. The contracting officer was the officer delegated by the Secretary of War to bind the Government by contract. Captain Clark was familiar with the manufacture of the 8-M/M cartridges from having been on duty at the lieming-ton plant. These officers sometimes between themselves and sometimes with Mr. Olin, president of the plaintiff company, discussed the terms upon which plaintiff should be engaged. They all agreed upon $47.50 per thousand, subject to changes, to meet fluctuations in the cost of materials. They were all of the opinion that the direct cost of the transformation of plaintiff’s plant, machinery, and tools to manufacture 8-M/M cartridges should be paid for by the Government in addition to $47.50 per thousand. Owing to fluctuations in the cost of materials and the uncertainty of obtaining a sufficient quantity of bronze bullets, they were unable to reach a conclusion as to how it should be provided for or how much should be paid. Captain Holcombe thought it should be taken care of under the cost-plus profit agreement the Government then had with plaintiff for the .30-caliber cartridges. None of these officers had authority to bind the Government by contract. As a result of their recommendations, the following letter, dated December 10, 1917, signed by General Crozier, Chief of Ordnance, was sent to plaintiff:
    “ You are hereby authorized and directed to proceed with the necessary preparations for the manufacture, and with the manufacture of eighty million rounds of model D (a. m.) 8-millimeter French Lebel cartridges, to be delivered as soon as possible and not later than July 1, 1918, at forty-seven dollars and fifty cents per thousand, r. o. b. your plant at East Alton, Illinois, or Kansas City, Missouri; this price to be adjusted to correspond to fluctuations in cost of materials above and below those upon which the estimate of cost was based, as follows:
    Copper_at 23% c. per lb.
    Spelter_at 13% e. per lb.
    Water-dried powder_at 60 c. per lb.
    “Formal contract with you covering the terms of delivery and payment, and containing such other and usual terms as the Chief of Ordnance may prescribe will be prepared and forwarded you for execution as soon as practicable. It is understood that if the pending orders and contract with you for .30-caliber cartridges are placed on a cost-plus basis of payment, that in such case the contract for these 8-M/M cartridges will be placed upon the same basis.
    “ If you find it necessary to the prompt execution of this order to lease the plant for which you are negotiating in Kansas City, Missouri, you may add $1.00 per thousand to the price of the cartridges there manufactured to apply on the rental of said plant. If you have any difficulty in obtaining this plant this office ivill endeavor to assist you.
    “You are further authorized to purchase additional machinery necessary to balance the plant to its full capacity, estimated to cost $60,000 and at most not to exceed $100,000, such cost to be repaid to you by the United States upon the submission of proper vouchers showing payment by you for said machinery; the machinery so purchased to become the property of the United States upon the United States reimbursing you therefor, and to be disposed of upon the termination of the contract as the United States shall determine.
    “Please wire your acceptance of this order.”
    At or about the time of the receipt of General Crozier’s letter of Docember 10, 1917, the plaintiff began the transformation of its plant and machinery for the manufacture of 8-M/M cartridges. The plaintiff transformed its machinery to meet all requirements as the bullets were received. The actual manufacture of 8-M/M cartridges began some time in January, 1918.
    V. A plan for the reorganization of the Ordnance Office which had been pending from some time in.December, 1917, was consummated about January 15, 1918, and there was a general shifting of positions, as a result of which the contract section of the small-arms division was discontinued and Captain Holcombe was transferred to a subordinate position .in the legal section of the Ordnance Office and Colonel Eames and Major Clark were assigned to other duties. After the reorganization of the Ordnance Office none of these officers had anything further to do with General Crozier’s order or the details for furnishing the 8-M/M cartridges to the Government. The preparation of the contract referred to in the letter of December 10, 1917, which was later executed and bears date as of February 26, 1918, had passed into other hands and the practice of using cost-plus profit contracts had been discussed and questioned by Colonel McEoberts, whose policy it was to adopt fixed-price contracts. Col. Samuel McEoberts on February 15, 1918, succeeded Maj. Charles E. Warren, who was contracting officer of the Ordnance Office when the said negotiations between Captain Holcombe, Colonel Eames, Major Clark, and Mr. Olin took place.
    YI. The plaintiff entered into a contract with the United States, through Col. Samuel McEoberts, contracting officer, dated February 26, 1918, to manufacture in accordance with certain drawings and specifications, “ eighty million (80,-000,000) eight-millimeter (8-m/m) French Lebel ball cartridges, Model D (a. m.),” to be delivered not later than July 1, 1918, for $47.50 per thousand, or a total purchase price of $3,800,000. A substantial copy of the contract is attached to the petition as Exhibit B. This contract was on one of the printed forms of contracts prepared and used by the Ordnance Office with the blank spaces filled in-with the typewriter. There were two drafts of the proposed contract furnished to plaintiff. The first draft, without date, had an additional sheet, numbered 3 (a), inserted immediately after sheet 3; the second draft,#dated January 29, 1918, embraced among other ghanges the following addition to sheet 3 (a) :
    
    “ 7. The United States agrees to place at the disposal of the contractor for the purpose of this contract machinery procured from the plant of the Brass and Metals Manufacturing Company, Kansas City, Missouri, under Army requisition dated December 28, 1917 (K-413.8/1064); and the contractor agrees at its own expense to care for and maintain said machinery in good working order (reasonable wear and tear accepted) and to deliver the same to the United States upon, the termination of this contract.”
    The second draft also had a number of notations for changes and corrections in pen and ink made by the secretary of the plaintiff company, showing a very complete and careful study of the draft looking to the preparation of the final contract. The last and final draft which was executed as the contract of February 26, 1918, had immediately following sheet 3 (a) another sheet, numbered 3 (&), inserted, containing two clauses, the first of which reads:
    “ The contractor agrees to make the necessary changes in the rearrangement of its plant, machinery, and tools to accommodate such of the additional machinery furnished by the United States as is utilized for the purposes of this contract, and to adapt said plant, machinery, and tools and said additional machinery to the purposes of this contract, and to replace the same at the termination of the contract in condition for the manufacture of caliber .30 ball cartridges, without cost to the United States.”
    The second clause was paragraph numbered 8.
    This is the second and final clause of paragraph 7 of Article III of the contract of February 26,1918, as executed.
    VII. The final draft of the contract of February 26, 1918, as executed, containing the addition to sheet 3 (a) and the provision of sheet 3 (5) set out in Finding VI, was mailed to plaintiff with the following letter:
    Maeoh 5, 1918.
    The Western Cartridge Company,
    
      East Alton, Illinois.
    
    Gentlemen : 1. The Acting Chief of Ordnance directs me to transmit herewith for your signature thereon contract No. 16303, in quintuplícate, dated February 26, 1918, for the manufacture of eighty million (80,000,000) eight-millimeter (8-m/m) French Lebel ball cartridges; and bond in duplicate in the penal sum of three hundred eighty thousand ($380,000) dollars for the faithful performance of this contract.
    2. It is necessary that the contract and bond shall be executed by the officer of your company duly authorized to execute the same. To each copy of the bond will be attached evidence showing the authority of the officer to execute the same on your behalf, and this evidence should be of substantially the same character as that illustrated in the sample form for the Washington Steel Company which is enclosed for your information and guidance.
    3. Please be sure that your corporate seal is affixed to the contract.
    4. After execution please return all copies of the contract and bond to this office.
    Respectfully.
    Legal Section,
    E. A. Hamilton,
    
      Major, Ord., N. A.
    
    3 Ends.
    Contract in quintuplícate.
    Bond in duplicate.
    Form No. 591.
    By.A. M. Holcombe,
    
      Major, Ord., N. A.
    
    Major Holcombe, when examined as a witness, remembered nothing about the letter or its inclosures, but identified his signature and was satisfied that it was sent by him in the regular course of transmitting contracts for execution. He had no knowledge of the final draft of the contract of February 26, 1918.
    Mr. Donnelly, the secretary of the plaintiff company, states that he does not remember the details of the receipt of the five copies of the contract of February 26, 1918, as plaintiff had a total of 22 contracts with the Government; he does remember seeing the above letter and placing the company seal on the contract, signing as a witness and sending the same back to Washington. It was the practice of the company to send such contracts back to the War Department immediately. This witness does not remember ever having seen the two paragraphs comprising sheet 3 (Z>). On the 14th day of March, 1918, he wrote Mr. Olin, the president, calling the latter’s attention to certain proposed changes in the contract. What the changes were or the letter of March 14, 1918, does not appear in evidence.
    VIII. In March, 1918, Mr. Olin, the president of the plaintiff company, with Captain Hebard, visited Colonel Black’s office with another contract for small-bore cartridges for him to sign, and while there Colonel Black said he had the 8-M/M contract that was ready for signature and he took it from the upper right-hand drawer of his desk, handed it to Mr. Olin, who signed the duplicate copies and original about 6 o’clock in the evening. The copies thus bore the signature of the secretary and the corporate seal. He did not read any of them; he said he thought the paper was a rewritten copy of the second draft that he and Don-nelly had gone over and made interlineations on in ink. The contract thus signed was the agreement of February 26, 1918, Appendix A to these findings. He says he did not know the two paragraphs of sheet 3 (&)' were included in the paper he signed and that he did not learn of that fact until at or near the time when the contract was performed. At the time this witness testified Colonel McRob-erts, the contracting officer, was dead.
    There were four contracts supplemental to the contract of February 26, 1918; the first dated May 21, 1918, was signed by Lieutenant Colonel Black for Colonel McRoberts, contracting officer and by F. W. Olin, increasing the number of 8-M/M cartridges to be furnished by 21,917,000, to be delivered on or before September 15, 1918; the second, dated June 5, 1918, signed by the same parties, to expedite payments to the contractor; the third, dated June 14, 1918, signed by Lieutenant Colonel Williams for Colonel Mc-Boberts, and by Mr. Olin, extending the time of delivery in the prime contract from July 1, 1918, to September 15, 1918; the fourth, dated July 19, 1918, signed by Lieutenant Colonel Williams, contracting officer, and by Mr. Olin, providing for an overrun of 10 per cent instead of 5 per cent as in.the prime contract. In each of these supplemental contracts is a provision that all terms of the prime contract should remain in force and effect except as changed by the supplements.
    The contract of February 26, 1918, and the four supplemental contracts were fully performed prior to September 15, 1918, and the contract price was fully paid and received without objection or protest by plaintiff.
    IX. After a fixed-price contract was determined upon, the Government purchased the Kansas City plant and allowed plaintiff the free use of such part as was suitable. There were in all 167 machines; of these 70 were removed by the Government to a shop used by plaintiff in St. Louis, Mo., and 11 cartridge machines were removed to plaintiff’s plant at East Alton, Ill. The cost to the Government of the Kansas City plant and removal is not shown. The cost was considerable.
    X. Plaintiff’s claim, consisting of two items and several other claims not involved in this suit, was first presented to the St. Louis District Claims Board. The date when presented is not shown by the evidence. At the request of the St. Louis District Claims Board, the St. Louis District Ordnance Office had an investigation made of the two items of the claim filed by plaintiff, one for the cost of transforming plaintiff’s plant, machinery, and tools to adapt them to the manufacture of 8-M/M French Lebel cartridges, and the other for loss or damages suffered by plaintiff because of the change of its plant and machinery from the manufacture of .30-caliber cartridges to 8-M/M cartridges. Mr. Courtney, senior accountant of the cost section of the St. Louis District Ordnance Office, was designated to perform this work. He made a revised report dated May 25, 1920, to F. W. Pike, supervisor of the cost section of the St. Louis District Ordnance Office, and he procured his data in the main from plaintiff’s books. His report consisted of two items, designated as Exhibit 1 and Exhibit 2. Item one was for the total direct cost of changing the plaintiff’s entire plant, machinery, and tools from .80-caliber cartridge production to 8-M/M cartridge production, and was reported as $37,517.56, composed of items stated below.
    The other item was for the entire overhead loss incurred by plaintiff by reason of the change from the manufacture of .30-caliber cartridges to 8-M/M cartridges, and was reported as $102,839.74. This overhead loss was produced by a change from full production of plaintiff’s entire plant in the manufacture of .30-caliber cartridges to the slow increase of its production of 8-M/M cartridges, and partly due also to the insufficient supply of, or delay in getting, bronze bullets. It began the actual manufacture of 8-M/M cartridges about the middle of January, and by the middle of March had manufactured about 500,000. The office force and skilled labor had to be kept intact, whether fully engaged or not. The plaintiff had no record of its overhead losses from the middle of December, 1917, to March, 1918, but had such records from the first of March to August, 1918, by which time it had reached full production. These overhead losses for March, April, May, June, and July amounted to $68,559.77, an average monthly loss of $13,-711.99. The losses for two and one-half months from the middle of December, 1917, to- March, 1918, were estimated as two and one-half times $13,711.99, equal to $34,279.97, the two sums amounting to $102,839.74.
    The direct cost incurred by plaintiff owing to the change of its entire factory, machinery, and equipment from .30-caliber cartridges to 8-M/M production, exclusive of repairs and changes in United States Government material received from Kansas City, amounted to $37,517.56, made up of $20,120.14 for machine-shop labor, $838.11 for material, and $16,559.31 for overhead expenses.
    This accountant had made another report, dated February 17, 1920, to the St. Louis District Claims Board dealing with a number of other claims by plaintiff in addition to the two items referred to in this finding.
    The action of the St. Louis District Claims Board, taken some time after May 25, 1920, was favorable to plaintiff, and both items of the claim, aggregating $140,357.30, were allowed.
    When this action was taken by the St. Louis District Claims Board it had before it an incomplete draft of the contract of February 26, 1918. The secretary of the plaintiff company explained this fact by stating that two drafts of the proposed contract had been prepared before the final draft was agreed to and executed. These two drafts did not contain all of paragraph 7 of Article III of the executed contract and that at the time the claim was drawn up a stenographer in plaintiff’s office was told to make seven copies of the contract to attach to the statement, and by mistake she copied a draft of the contract that did not contain the paragraph in question.
    The certified photostatic copy of the contract of February 26, 1918, “ Defendant’s Exhibit 2 Blose,” showing the executed contract as described in Finding VI, is attached to these findings as Appendix A and is made part hereof by reference thereto.
    XI. The claim was transmitted to the Ordnance Claims Board at Washington for action thereon, which board having procured a copy of the contract of February 26, 1918, disapproved the St. Louis Claims Board’s conclusion and disallowed the claim. The plaintiff under the provision of the act of March 2, 1919, 40 Stat. 1272, filed the said claim with the Secretary of War and the Board of Contract Adjustment, which held hearings at which plaintiff was represented. On August 18, 1920, the appeal section of the War Department Claims Board (successor to the Board of Contract Adjustment) filed findings of fact, an opinion, and a final order rejecting the claim and denying relief. A certified copy of these findings, opinion, and order were introduced in evidence by plaintiff as Exhibit 1 to the testimony of Mr. Donnelly, the secretary of the plaintiff company, and are as they appear in Decisions of the War Department, volume 7, pages 359-366.
    On September 8, 1920, the Secretary of War affirmed the decision of the board. The claim was again, on December 28, 1920, presented to the appeal section of the War Department Claims Board and a decision rendered denying relief.
    XII. It does not appear who represented the Government in directing or in preparing the contract. There is a stipulation between the parties to the effect that if Lieut. Col. Charles N. Black, Capt. A. F. Hebard, Maj. E. A. Hamilton, and E. A. Shepherd were examined as witnesses they would testify to the same effect as they have expressed in letters, copies of which are in evidence. Colonel Black’s letter is addressed, to the attorney for plaintiff under date of August 16, 1921, acknowledging receipt of the attorney’s letter, and he states that as he handled none of the details in connection with the contract mentioned he feared that he could not be of assistance in substantiating the claim. This same officer addressed a letter under date of June 14, 1922, to the president of plaintiff, in which he stated that, while he recalled that there was a contract, he had absolutely no recollection of any of its details and that as to this particular contract all the negotiations were carried on prior to the time he went to Washington, which was not until the 15th of January, 1918, and for this reason he would be less apt to have any detailed knowledge of the matter than had come up later, when he was actually engaged in the department.
    Captain Hebard, who was the same officer who accompanied Mr. Olin when he signed the contract, stated in his letter to plaintiff’s attorney under date of August 29, 1921, that his recollection was that he did not negotiate this contract in question and that, although he was familiar with its operation and possibly negotiated an agreement or two, so much time had elapsed that he was not in a position to talk on the subject except from the papers which were in Major O’Leary’s office. He suggested that some information might be gotten from Colonel Shepherd. Under date of January 16, 1923, Colonel Shepherd wrote to plaintiff’s attorney that he had no recollection or knowledge as to how or why the contract price for 8-M/M French Lebel cartridges on order from the Western Cartridge Co. in the fall of 1917 was increased beyond $45 per thousand. In another letter under date of May 15, 1922, addressed to plaintiff’s attorney by Major Hamilton, it appears that this officer said that, on account of the large number of contracts with which he was concerned, he had no recollection of this one; that he thought Captain Holcombe had charge of the preparation of contracts for small arms; that he had no files or papers which would throw any light on the matter, and that he could only suggest that if the official files could be obtained and he examine them he could perhaps recognize some of the initials which might be found on the contract in question and in that way perhaps render some assistance.
    The court decided that plaintiff was not entitled to recover.
   Campbell, Chief Justice,

delivered the opinion of the court:

Recovery is sought in this case under the provisions of the act of March 2, 1919, 40 Stat. 1272, known as the Dent Act, the claim being based upon an oral agreement alleged to have been made between plaintiff and authorized representatives of the Secretary of War. It presents some unusual features, one of which is that reformation of a contract in writing between the plaintiff and the United States is asked, not for the purpose of enforcing any of the provisions of this written instrument as thus reformed, but in order that proof by parole may be made of an alleged oral agreement entered into before the execution of the written contract. The facts establish the written contract dated February 26,1918, a copy of which is attached to the petition as Exhibit B. A photostat copy of the original contract is made part of the special findings but, for convenience, reference will be made to Exhibit B. In this contract the plaintiff undertook to manufacture and deliver to the Government 80 million cartridges of the 8-millimeter French Lebel type, which, at the stated price of $47.50 per thousand, called for payments to the amount of $3,800,000. The number of cartridges was largely increased by one or more supplemental contracts. The contract and its four supplements were duly performed, the cartridges having been made and delivered and the plaintiff duly paid for them. It is not now claimed that anything further is due upon it.

When the plaintiff undertook to make the 8-M/M cartridges it was actively engaged in the manufacture of .30-caliber ball cartridges for the United States under contracts calling for large quantities of this kind. To suspend or curtail the manufacture of the latter and adapt its plant equipment to the making of the 8-M/M cartridges necessitated changes and rearrangement of tools, appliances, and machinery and a consequent expense. It is for this transformation expense that suit is brought. The petition alleges that officers representing the Secretary of War agreed with plaintiff’s officers that these transformation expenses would be repaid to it and that it proceeded with the work of transforming its plant and machinery in reliance upon this agreement, the terms of which are stated in the petition as follows:

“ The petitioner further states that the officers and agents of the Secretary of War in good faith agreed on behalf of said Secretary of War and the United States to repay to petitioner its reasonable necessary expense directly incurred by it in the transformation and preparation of its said factory and appliances for the production of said 8-M/M cartridges but that payment of such expense to petitioner was never provided for in any written agreement executed .in the manner prescribed by law.”

The written contract does not provide for the repayment to the plaintiff of “ its reasonable necessary expense directly incurred ” in the transformation of the plant or machinery, and, on the contrary, has the following provision, in which, for convenience of reference, we italicize six words that plaintiff asks to be stricken out, namely:

“ The United States agrees to place at the disposal of the contractor for the purpose of this contract machinery procured from the plant of the Brass and Metals Manufacturing Company, Kansas City, Missouri, under Army Requisition dated December 28, 1917 (R 413.8/1064) ; and the contractor agrees at its own expense to care for and maintain said machinery in good working order (reasonable wear and tear excepted) and to deliver the same to the United States upon the termination of this contract.
“ The contractor agrees to make the necessary changes in the rearrangement of its plant, machinery, and tools to accommodate such of the additional machinery furnished by the United States as is utilized for the purposes of this contract, and to adapt said, plant, machinery, and tools, and said additional machinery to the purposes of this contract, and to replace the same at the termination of the contract in condition for the manufacture of caliber .30 ball cartridges without cost to the United States.”

When plaintiff’s claim under the Dent Act was presented to the Secretary of War, through the Board of Contract Adjustment, it was rejected because of the quoted provisions in the written contract. Plaintiff’s petition also avers that the provision in question is in the written contract by “ inadvertence and mutual mistake,” and invokes the equity jurisdiction of the court to reform the contract. The specific change asked is the elimination of the six italicized words, namely “ said plant, machinery and tools and,” where they appear together in the second paragraph of section 7 of Article III.

Plaintiff’s claim, by Exhibit A to its petition, comprises two items, and the second of these items appears to be for expense, including overhead, directly incurred in the transformation and preparation of its machinery and plant for the production of the 8-M/M cartridges. The larger item refers to factory overhead loss growing out of the change of factory and includes loss for some months after the execution of the written contract occasioned by a diminution of production as compared with the production, under the former contract and partly to loss occasioned by delays in procuring bullets. It is very doubtful whether this item could come within the description of “ necessary expense directly incurred,” which is alleged to be the agreement that was made.

But, as already stated, the plaintiff asks that the contract be reformed. As an incident to granting proper relief under a written contract, the Court of Claims is authorized to reform it in accordance with the familiar principles in cases of mutual mistake so as to make it speak the real intention and agreement of the parties, and having done this to proceed to judgment upon the instrument as reformed. See Cramp case, 239 U. S. 221, 231; Milliken Imprinting Company case, 202 U. S. 168, 174; Boston Iron Works case, 34 C. Cls. 174. But whether the court’s jurisdiction in this branch of equity jurisprudence extends to reformation where no relief is sought or claim made upon the instrument when and as reformed, is a question not here decided, the view we take of the facts rendering it unnecessary to pass upon it. See comments in the Jones case, 131 U. S. 1, 18, upon the limitations upon the equity jurisdiction of the Court of Claims.

The instant case, like the Cramp case, supra, is brought under the jurisdiction conferred upon the Court of Claims as in other cases. The Harvey case, 105 U. S. 671, referred to by plaintiff, was brought under a special act' of Congress which authorized the court to proceed in accordance with the principles of equity jurisprudence and with the latitude of a court of equity. See explanations of that case in Cramp case; Old Settlers case, 148 U. S. 427. It is said in the Cramp case: “ In cases within the general jurisdiction of the Court of Claims it has jurisdiction to reform a contract for the purpose of determining whether the claim, if established, is a valid one against the United States.” Milliken case, supra. As already stated, plaintiff does not seek relief under the contract if it be reformed. The reformation is for the purpose of enabling it to prove by parole an independent agreement, as to which we will speak later. Upon its brief is thus stated its contention: “ Plaintiff’s claim is based upon the oral promises and agreements of the Ordnance Department and upon the implied agreement arising from its compliance with its instructions. The written contract of February 26, 1918, is brought into the case to clarify its ambiguity or for equitable reformation. Plaintiff’s claim is not based upon said contract.” It seeks to set up an alleged Dent Act claim. And in this connection it may be noted that in authorizing relief in certain cases the Dent Act was not intended to change or nullify contracts that were duly executed in writing. It was intended to remedy irregularities and informalities in the mode of entering into agreements, not in writing. It does not enlarge the authority of the agents by whom they were made. The officer whose agreement is relied on must have been acting within the scope of his authority. It was not intended by the act that an officer in one branch of the military service or one of inferior rank could bind the Government by an agreement as to matters relating to an entirely different branch of the service or within the control of his superior officers and as to which he was without authority. To authorize relief under it there must have been an agreement — a meeting of the minds. See Baltimore & Ohio R. R. case. 261 U. S. 592.

The claim here asserted was first presented to the St. Louis Claims Board, a subordinate of the War Department Claims Board, and was recommended for payment, but the action of this St. Louis board was taken without any knowledge of the quoted paragraph 7 of the written contract, and its conclusion was forwarded to the War Department Claims Board at Washington for its approval, which was necessary to give effect to the allowance. The board at Washington disapproved the action of the subordinate board because of the written contract. The claim was also jjresented to the Secretary of War under the Dent Act and upon a full hearing before the Board of Contract Adjustment and its successor, the appeal section, War Department Claims Board, the claim was rejected and this action was affirmed by the Secretary of War. A certified copy of the findings of fact and conclusions of this board was introduced by plaintiff as Exhibit 1 to the testimony of its secretary and is the same that appears in the published reports of the board. See Decisions of the War Department, volume 7, pp. 359-366.

We have no doubt as to the correctness of the board’s conclusion. The language of the contract is unambiguous and the words used must be given their plain and ordinary meaning. Parties are presumed to know the effect of the language they embody in their contracts. See Calderon v. Atlas Steamship Co. 170 U. S. 272, 280. Speaking of the written instrument there considered, it was said in the Bratoley ease, 96 U. S. 168, 173: “ If the contract did not express the true contract it was claimant’s folly to have signed it.” But plaintiff contends that there should be an elimination from the contract of the six words in paragraph 7 which we have italicized. The rule unquestionably is that “ the mistake must be mutual and common to both parties to the instrument.” Moffett, etc., v. Rochester, 178 U. S. 373-384, which repeats the rule stated in Hearne v. Insurance Co., 20 Wall. 488, 490, that it must appear that both have done what neither intended. Plainly, the court may not reform an instrument where only one party executed it by mistake, for thereby the court would be setting up a contract which the other party had not made.

The evidence falls far short of the clear, convincing, or satisfactory proof necessary to justify the court in reforming the written instrument. The rule is that in such a case the testimony should be clear and convincing. See Maxwell Land-grant case, 121 U. S. 325, 381. Adams v. Henderson, 168 U. S. 573, 579. In the preliminary negotiations looking to the procurement of the 8-M/M cartridges, urgently called for by General Pershing, which were had between certain officers of the Ordnance Office and the president of plaintiff company, the question of plaintiff’s compensation was considered. The price per thousand for the cartridges, subject to fluctuations, was agreed upon and this price did not include the cost of the change in machinery that would be necessary to transform it from the .30-caliber on which it was employed to the 8-M/M cartridges, but how that expense would be compensated for was not settled or agreed upon at any time. Major Holcombe thought it would be taken care of under the terms of the cost-plus proflt clause of the existing contract for the .30-caliber cartridges. Colonel Eames thought it could not be provided in a special-price contract, and all, including plaintiff’s president, concur that the details as to the basis or method of compensation were never settled.

These officers were not authorized to make contracts binding upon the Government and it was not until the letter of December 10, 1917, signed by General Crozier, Chief of Ordnance, and addressed to plaintiff, that the latter was authorized to proceed with the necessary preparations for and the manufacture of the 8-M/M cartridges. The “ acceptance of this order ” by wire was requested, and plaintiff did proceed with the necessary preparations. The terms stated in this letter had been arrived at in conferences before its date, between Colonel Eames, assisted by Captain Clark and by Captain Holcombe with Mr. Olin, president of plaintiff. The details were left to be worked out later and the only way in which these details were worked out is as shown in the written contract. The letter of December 10 states that a formal contract would be prepared and forwarded and two or more drafts of it passed between the parties and were changed, in one or more features, before the final draft was executed. This at least shows that the final draft — the executed contract — was not a mere formal proceeding.

The letter of December 10 also stated it was understood that if pending orders and contract with plaintiff for .30-caliber cartridges were placed on a cost-plus basis of payment then the contract for the 8-M/M cartridges would be placed upon the same basis. And notwithstanding it had at that time cost-plus profit contracts involving approximately 179,000,000 .30-caliber cartridges, it does not appear that at any time the plaintiff objected to the written contract, or any provision in it, upon the ground that it was not a cost-plus profit contract. The facts show that the policy of making cost-plus profit contracts was being questioned in the latter part of December and that in January a reorganization occurred in the Ordnance Office resulting in the appointment of Colonel McRoberts as contracting officer, and that he did not favor cost-plus contracts. It does not appear in evidence that plaintiff’s officers ever asked that the written contract include the compensation it now claims. After it had received, considered, and suggested changes in one of the drafts sent to it, the plaintiff received at its office for execution the copies of the instrument as finally prepared. These were transmitted on or about March 5. The secretary of the company received them, placed his name on them as such, and affixed the company’s seal. He then returned them to Washington, probably to the Ordnance Office. What consideration he gave to the contract is uncertain, but on March 14 he wrote to the company’s president about some proposed changes in the contract. What these were does not appear. Nor does the exact date of the execution of the contract by the plaintiff’s president appear. He signed it in the office of Captain Black, who was connected with the contracting officer’s department and signed it for Colonel McRoberts, the contracting officer.

The'contract as signed carries the basic price of $47.50 per thousand cartridges, subject to adjustment according to fluctuations in copper, spelter, and powder, as stated in the letter of December 10, and subject, further, to changes in the price as affected by labor costs above or below stated wages and the cost of completed bullets at $15 per thousand f. o. b. East Alton, Ill. Instead of the rental of a plant mentioned in the letter of December 10, the Government purchased a large plant at Kansas City, removed it to St. Louis at its own expense, and turned it over to the plaintiff for the purposes of this contract, without charge therefor. The sheet 3 (b) in the contract, being the second paragraph in section I, provides that plaintiff shall make the necessary changes in the arrangement of its plant to accommodate so much of this additional machinery as it utilized and to adapt the same to the purposes of the contract, and, further, to replace it at the termination of the contract in condition for the manufacture of .30-caliber ball cartridges “ without cost to the United States.” These provisions in sheet 3 (5) are not objected to. What is objected to are the six italicized words mentioned, which requires plaintiff to adapt its own plant, machinery, and tools to the purposes of the manufacture of 8-M/M cartridges — the very things it undertook by its contract to make. We have referred to the vagueness of the testimony as to what plaintiff’s officers understood about the contents of the contract. It called for large expenditures, aggregating approximately four millions of dollars. It bears internal evidence of careful preparation. It gives notice in terms that certain changes in the written form were made. The very sheet upon which the names of the contracting parties are signed stated that changes had been made before execution, and among them in mentioned paragraphs 1 and 8 “ on pages 3 (a) and 3 (&).” There is no term in the letter of December 10 that, in addition to the price mentioned for the cartridges, the Government would pay the direct cost of transforming the machinery, and there are substantial changes in the written contract from the undertakings expressed or implied in this letter. The added expense of furnishing machinery free of charge to plaintiff, as well as the benefits accruing to it from the use of this machinery and from other provisions of the written contract, would furnish sufficient consideration for the omission of a provision looking to reimbursement for the expenses now claimed, even if, in the first instance, there had been an agreement by authorized agents that such reimbursement would be made. The president of plaintiff says he did not read it, and when asked what was his mental attitude in regard to its identity of terms he said he thought the contract was similar to or a copy of what he had previously been over. But, as already suggested, the copy he had previously been over did not contain other parts of sheet 3 (5) that are not now objected to, and those parts were also absent from the former draft. At whose instance were these inserted? A few weeks before the signing of it he had asked Major Holcombe about the contract and was told by that officer that he had nothing further to do with its preparation. To say the least, the company’s officers were careless. If, however, it could be said that plaintiff’s officers executed the contract through mistake, where is the evidence that the mistake was mutual? There is no evidence as to who actually prepared, or directed the preparation, of the contract, or who settled or agreed upon its terms for the United States. Presumably it was the contracting officer, Colonel McRoberts, whose name was signed to the instrument by Captain Black, and, being dead, Colonel McBoberts could not be called to testify. Nor was Captain Black called to testify, the parties contenting themselves with a stipulation to the effect that this officer, Captain Black, would testify to the same effect as is expressed in his letter to plaintiff’s attorney, under date of August 16, 1921, when, replying to the attorney’s letter, he said that as he handled none of the details in connection with the contract he feared he could “ not be of assistance * * * in substantiating the claim,” and in his letter of a later date to the president of plaintiff company, in which he again disclaims any recollection of the details, stating as a reason that the negotiations were carried on prior to January 15, 1918, at which time he went to Washington.

The officer is plainly mistaken in his suggestion if he means that all negotiations were concluded prior to January 15. The contract was signed by him for Colonel McBoberts about two months after that date. Captain Black’s name also appears on three of the supplemental contracts. Whether if all these papers had been submitted to Captain Black, they may have enabled him to recall any of the incidents of the preparation or execution of the contract, we can only surmise.

Major Holcombe, who was in the office of the contracting officer who preceded Colonel McRoberts, was examined and disclaims any knowledge of the preparation of the contract. He admits forwarding the final drafts of it to the plaintiff’s factory in a letter signed by him for Major Hamilton on March 5, but this was done as a more or less formal matter by him without knowing the terms or details of the contract. In these circumstances, where is there any basis for the claim that the contract was executed under mutual mistake ? Certainly it does not appear that any responsible agent of the Government prepared or directed its preparation or executed it under mistake as to any of its terms. Four supplemental contracts were executed in the following few months making some one or more changes in the original, and each of them declared that the latter was to continue in all its terms except as altered by the supplements. In addition it is difficult to understand how the mere elimination of the six italicized words would authorize the introduction of parole evidence in view of the well-settled rule upon the subject which is stated in Seitz v. Brewers’ Refrigerating Co., 141 U. S. 510, 511, as follows:

“ Undoubtedly the existence of a separate oral agreement as to any matter on which a written contract is silent, and which is not inconsistent with its terms, may be proven by parol, if under the circumstances of the particular case it may properly be inferred that the parties did not intend the written paper to be a complete and final statement of the whole of the transaction between them. But such an agreement must not only be collateral, but must relate to a subject distinct from that to which the written contract applies; that is, it must not be so closely connected with the principal transaction as to form part and parcel of it. And when the writing itself upon its face is couched in such terms as import a complete legal obligation without any uncertainty as to the object or extent of the engagement, it is conclusively presumed that the whole engagement of the parties, and the extent and manner of their undertaking, were reduced to writing.”

It certainly comports with ordinary business transactions to say that when a manufacturer undertakes to deliver articles at a stated compensation the expense of adapting his machinery to the manufacture of those articles is so closely connected with it as to be included in the price stated. And it is an unusual proposition that a maker of one kind of cartridges shall undertake to make a distinctly different kind involving changes of his tools and dies or rearrangement of machines for a price per thousand specifically stated and then be entitled to further reimbursement because of these changes when the contract is silent upon that score. Its brief states that “ plaintiff asks no reformation by inserting in this contract the provision that the Government should pay these costs,” and frankly admits there was no reason why it should not have been inserted. But if it was a material part of the agreement for the making and delivery of the 8-M/M cartridges it should have found its place in the written instrument.

Our conclusion is that the petition should be dismissed. And it is so ordered.

Graham, Judge; Hat, Judge; DowNey, Judge; and Booth, Judge, concur.