Case ID: us-ct-cl_60/html/0903-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

OHIO PUBLIC SERVICE CO. v. THE UNITED STATES
    [No. C-90.
    Decided June 1, 1925]
    
      On the Proofs
    
    
      •Contract, implied; authority; liability of Government. — Where an electric power company is engaged in furnishing power for several plants manufacturing war supplies for the Government and is urged by several officers of the War Industries Board, without authority to bind the Government, to construct a “ tie line ” from its plant to another electric power plant for transmission of electric current, the Government is not liable for the difference in,- cost when it was built and what it would have cost if it had been built a year later.
    
      The Reporter's statement of the case:
    
      Mr. Raymond M. Hudson for the plaintiff.
    
      Mr. George T. Stormont, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    
      The following are the facts as found by the court:
    I. Plaintiff is a corporation created and existing under the laws of the State of Ohio and engaged in the business of furnishing and producing electricity and gas.
    II. In the spring of 1918 electric energy was required and used for the operation of several plants engaged in war industries in the district of Ohio wherein was located the plant of the Massillon Electric &• Gas Company. A number of these plants were'engaged in furnishing supplies to the Government and were securing power from the Massillon Company. The result was that the plant of the Massillon Company was being operated up to, if not beyond, its regular capacity. Conditions were such that, in the opinion of engineer officers of the Army detailed with the War Industries Board, it was necessary to construct a “ tie line ” connecting the plant of the Massillon Company with that of the Central Power Company at Canton, Ohio, for the transmission of electricity to the Massillon Company for use by said plants engaged in Government work in case§ of emergency. The said Army officers recommended that this tie line be built.
    At about this time the said Massillon Company had in contemplation the erection of an auxiliary plant at Bolivar, Ohio, a short distance from its own plant, but found difficulty in financing the building of such a plant.
    III. On account of the seriousness of the situation relative to power, Mr. Frederick Darlington, chief of the power section of the War Industries Board, ordered a survey of the power conditions in that section with a view of ascertaining the amount of power needed by the various factories in the production of war supplies and for other purposes. This survey, commencing in January, 1918, was made by certain Army officers. A fire in the plant of the Massillon Company earfy in April caused a temporary shutdown of the plant. As a result of this, and because of the question of the company’s ability to finance the Bolivar project and of the time to get that plant into operation, if erected, the officers charged with making the survejr reported to Mr. Darlington that in their opinion it would be best to construct a high-tension line connecting the plant of the Mas-sillón Company with that of the Central Power Company at Canton, Ohio. Mr. Darlington communicated with representatives of the said Massillon Company and urged them to build a line as quickly as possible, stating that it was for the interest of the Army as well as for the War Department industries near Massillon, Ohio. Mr. Darlington, in the course of these interviews, both in New York and Washington, with Mr. W. O.' Custer, general manager of the said Massillon Company, explained to Mr. Custer that there was a bill before Congress called the “ power bill,” which had been drawn up by the War Industries Board and had the approval of the Secretary of War and the Secretary of the Navy, and carried an appropriation of twenty million dollars to furnish power to essential war industries. Pie stated to Mr. Custer that if the Massillon Company would build this tie line and Congress did make the appropriation under the bill mentioned, he would see that the Massillon Company would be reimbursed for any loss it sustained in building the line at that time. He further stated that he ivould regret if, on account of the Massillion Company’s failure to build the line, a situation developed to a point where he would feel it necessary to recommend to the Secretary of War or to the Secretary of the Navy that the plant of the Massillon Company be commandeered. Major Lacombe, one of the officers engaged in making said survey, in conversation with General Manager Custer, urged upon him that it was necessary to build the line sooner or later, as otherwise the said Massillon Company’s plant ivoulcl break down, and that the Government' needed the power at Massillon. He assured Mr. Custer that the Government would take care of the situation, and if he would build a line he would be reimbursed for his expenditure. He did not suggest any way in which this would be done, because he did not know. These conversations with Major Lacombe were before the work was started on the line. Major Shaw, another of the officers making the survey, told Custer that the line would have to be built and they would have to do it whether they wanted to or not.
    IV. Mr. Darlington notified the Central Power Company, •which was itself getting power from the said Massillon Company and was engaged in war industries, of the need that the tie line above mentioned be built, and advised the Central Power Company to lend financial aid to the Massillon Company to the énd that the Central Power Company would be sure to have the power which it needed. The said Massillon Company did get financial aid from the Central Power Company and built the tie line at a cost of $80,350.93. This line could have been built in the following year at a smaller cost, because the prices were higher in 1918 than they were in 1919. What it would have cost to build it in 1919 is estimated at $58,765.
    V. The said officers of the War Industries Board ivho made the statements hereinbefore shown to Mr. Custer were without authority from the Secretary of War to make any contract with the Massillon Company or to bind the Government by any representations they might make. Mr. Custer, of the Massillon Company, knew they could not refuse to comply with the request that the line be built, and also knew that the said Engineer officers did not have any authority to order the construction of the line. The onfy representation that Mr. Darlington made with reference to the Government’s paying for the same was that in the event the “ power bill” passed, and an appropriation ivas made, the Government would reimburse the Massillon Company for any losses it sustained. It does not appear that the “ power bill ” ever passed. It does not appear that Mr. Darlington had any authority to bind the Government by any representations that it would pay for the construction of said tie line, nor does it appear that he made any representations other than those already mentioned, to the effect that if a certain bill was passed, the Government would pay the losses, if any,, growing out of the construction of this line.
    VI. This claim was presented to the Board of Contract Adjustment of the War Department on or about May 27, 1919, and that board found that no agreement was entered into between the Massillon Electric & Gas Company and any officers of the Government acting under the authority, direction, or instructions of the Secretary of War for the purposes named in the said statement of the claim. This action of the board was approved by the Assistant Secretary of T\hir on April 9, 1920.
    VII. The suit is brought by the Ohio Public Service Company, which alleges that there was a merger of the said Massillon Company, with others, under the laws of the State of Ohio, whereby the plaintiif in this suit became the owner of the claim. It does not satisfactorily appear from the evidence that there was a merger and the proceedings relative to the same are not set out in the record.
    The court decided that plaintiff was not entitled to recover.
   MEMORANDUM BY THE COURT

The plaintiff, Ohio Public Service Company, seeks to recover the difference in cost of the construction of a tie line actually constructed in the latter part of 1918 and what it would have cost, supposedly, in 1919. The plaintiff sues, claiming that there was a merger of several corporations into the plaintiff or the name of the plaintiff in Ohio, but the evidence fails to show such a merger except by averment. The facts appear to be that a corporation, which for brevity may be called the Massillon Company, was furnishing power for a number of other plants in Ohio which were engaged in manufacturing war necessities. It became important, to the end that these plants should have the necessai'y power, that something be done to secure to the Massillon- Company a sufficiency of power, because its own plant was running at full capacity, and in case of any breakdown or in case of an} greater demand for power it would be unable to furnish it. As a matter of precaution, therefore, it was suggested that it required additional facilities, and these could be had by construction of a tie line between its own plant and one at Canton, Ohio. It seems that the plaintiff had already in contemplation the construction of another plant at Bolivar, Ohio, but for financial reasons this ivas not being built. A survey of the situation was made by the War Industries Board, and plaintiff was urged to build the tie line. Its financial situation stood in the way of completing this line, and Mr. Darlington, who was connected with the War Industries Board, urged the Central Power Company to help finance the situation for the Massilon Company. The line was built at the cost of approximately $80,000, and is being-used by the plaintiff. The suit is to recover not the $80,000 it cost but the difference between what it cost to build the line in 1918 and what it would have cost to build it in 1919. The value of the tie line itself is not shown. What if any service it was to the Government does not appear. There is nothing in the evidence to show any contract made with the plaintiff whereby the Government would pay this cost to the plaintiff or to the Massillon Company. We agree with the Board of Contract Adjustment, whose action was approved by the Assistant Secretary of War, that there was no contract binding upon the Government.

GRAHam, Judge, took no part in the decision of this case.