Case ID: us-ct-cl_136/html/0587-01.html
Source: Caselaw Access Project
Author: {"author": "Littleton, Judge,\n     Whitakee, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

L. B. SMITH, INC., A CORPORATION v. THE UNITED STATES THE WOLF COMPANY, A CORPORATION v. THE UNITED STATES
    [No. 50439]
    [No. 50440]
    [Decided October 2, 1956]
    
      
      Mr. Robert V. Smith for the plaintiffs. Messrs. Robert P. Smith, Joseph W. Kiernan, and Messrs. Smith, Ristig <& Smith were on the briefs.
    
      Mr. JohnF. Wolf, with whom was Mr. Assistant Attorney General George Cochran Doub, for the defendant. Mr. Herbert M. Canter was on the brief.
   Littleton, Judge,

delivered the opinion of the court:

The plaintiffs, L. B. Smith, Inc., and The Wolf Company, a wholly owned subsidiary of the Smith Corporation, are Pennsylvania corporations engaged, among other things, in the acquisition and resale of supplies and equipment from war contractors’ termination inventories. They brought this suit under the Fifth Amendment to the Constitution alleging that property was taken from them by the United States without due process of law and without the payment of just compensation.

The property alleged to have been taken was 18 fork lift trucks which were originally part of the termination inventory under a contract between Aetna Standard Engineering Company and the United States. It is plaintiffs’ position that on December 6, 1945, they had consummated with Aetna contracts of sale under which plaintiffs on that day acquired title to the 18 trucks, and that subsequently, defendant took the trucks and turned them over to the Reconstruction Finance Corporation (hereinafter sometimes referred to as the R. F. C.) for the use of the Reserve Moving & Erecting Company without making payment therefor to the plaintiffs. It is defendant’s position that when it took the trucks in question, title thereto was not in the plaintiffs under the facts and circumstances of record in this case. This is the issue.

On August 14, 1945, the Government terminated a contract between itself and the Aetna Standard Engineering Company, an Ohio corporation engaged in the production of war materials for the Government under contracts with various governmental agencies. The terminated contract in question was for the manufacture of model 19 HT Ross fork lift trucks, such manufacture being in accordance with a license agreement entered into between the Ross Carrier Company of Benton Harbor, Michigan, and the Aetna Company.

The contract between Aetna and the Government provided in the usual form in part:

Article 12. Termination at the Option of the Government. * * * (b) After receipt of a Notice of Termination and except as otherwise directed by the contracting officer, the contractor shall * * * (6) transfer title and deliver to the Government in the manner, to the extent and at the times directed by the contracting officer (i) the fabricated or unfabricated parts, work in process, completed work, supplies and other material produced as a part of, or acquired in respect of the performance of, the work terminated in the Notice of Termination, and (ii) the plans, drawings, information and other property which, if the contract had been completed, would be required to be furnished to the Government; (7) use Ms best efforts to sell in the manner, to the extent, at the time, and at the price or prices directed or authorized by the contracting officer, any property of the types referred to in subdivision (6) of this paragraph provided, * * * (Emphasis supplied.)

Procedures for the termination of such war contracts, including the disposition of termination inventories, are governed by the Contract Settlement Act of 1944, 41 U. S. C. § 101, the Surplus Property Act of 1944, 50 U. S. C. App. Supp. 1611, and the Joint Termination Eegulations issued November 1,1944, as amended.

Pursuant to § 12 (b) of the Contract Settlement Act, supra, Aetna filed with the Army Quartermaster Corps, the contracting agency, a Termination Inventory Schedule, which schedule included, among other things, approximately 100 substantially completed fork lift trucks all hut 22 of which were subsequently disposed of by declaring them to various Government agencies by the last week of November, 1945. The Termination Inventory Schedule tendered title to the Government as of the date of its submission but, as to the remaining 22 trucks, title was not accepted by the Government at any time prior to December 6,1945.

A Mr. Carroll was designated by Aetna as Termination Officer and was charged with the task of liquidating the inventory. The United States Joint Termination Regulations (hereinafter sometimes referred to as JTR) § 442 (1) empowered him as the duly authorized representative of the war contractor, Aetna, to sell any of the termination inventory at cost, without the approval of the contracting officer of the Government. While the contracting officer could at any time revoke or restrict the contractor’s authority to make sales, JTR § 432.4, there is no proof in the record that this was done at any time with respect to the 18 trucks in question. Sales at less than inventory cost required the prior approval of the contracting officer. It is easily understandable why the United States would desire that contractors dispose of their large inventories.

Efforts by Aetna after termination to dispose of the remaining 22 trucks were unsuccessful and it was decided by the contracting officer that they should be advertised in order to invite 'bids for their sale. The advertisements, appearing in selected newspapers, on November 16, and November 19, 1945, stated in part:

SALE OF TERMINATION INVENTORY
22 Ross Fork Lift Trucks Model 19 HT
These trucks are complete ready for use with following exceptions:
Painted Prime Coat only, Tool Kit, 2 Lifting Forks, Carriage Back, Lamp Guards
All parts necessary to complete trucks are available in Termination Inventory.
Sealed bids in duplicate for all or part of above trucks will be accepted by aetna-standard engineering co.¿ Youngstown, Ohio, until noon Nov. 26, 1945. Bids should be marked on outside of mailing envelope SEALED BID DEPT.
The right is reserved to reject any and all bids.
Material will be sold fob Plant location as is.
Prospective bidders may inspect material at the AETNA-STANDARD ENGINEERING 00., Ellwood City, Penna., between hours of 9: OQ A. M. and 4:00 P. M. Nov. 17 through 23. For further details consult Lt. H. H. Melcher at Aetna-Standard Engineering Co.
All sales shall be made in accordance with Joint Termination Begulations.

The call for bids was unsuccessful in that the offers were for less than inventory cost, or, in some cases, for no more than scrap value. Four of the trucks, however, were subsequently sold to the Koppers Company by December 1, 1945, for $3,500 each, the sale being negotiated by H. G. Coffey, vice president of Aetna though the purchase orders were processed by Mr. Carroll, the Termination Officer, as was the custom and proper procedure.

Mr. Smith, president of both plaintiffs, after learning of the Government’s advertisement, advised Aetna, through Termination Officer Carroll, on November 28, 1945, that he wanted to buy all of the trucks and, after inspecting them, offered Aetna $2,260 each which was approximately $1,000 below cost. The contracting officer of the Army Quartermaster Corps would not approve the acceptance of this below-cost offer whereupon Mr. Smith, in the name of L. B. Smith, Inc., placed on December 1, 1945, a definite order by telephone for 10 of the 18 trucks at inventory cost of $3,264.04 each, but requested that Carroll hold up processing the order until further instructions as he wanted time to negotiate with the contracting officer of the United States for all 18 trucks at less than inventory cost. Carroll accepted the order but agreed to withhold formal processing. Pursuant to this telephone understanding, Smith mailed his written order for the trucks dated December 1,1945, which was received by Aetna on December 3,1945. At the same time the order was placed for the trucks, Smith made a separate agreement with Carroll to completely assemble the trucks for not more than $200 per truck. Completion involved little more than putting on the forks, painting them and various other very minor items. These transactions were not made known to the contracting officer or his representatives at the plant, Lt. Melcher and his assistant Lt. Chosy. On December 3, 1945, Smith telegraphed a firm offer to the attention of Lt. Chosy for the entire 18 trucks for approximately $2,550 per truck which order was subsequently rejected by Chosy on December 5, 1945. On the morning of December 6, 1945, Smith notified Carroll to go ahead with his orders of December 1, 1945, for the ten trucks at inventory cost, and the separate order for their completion, and at the same time he placed an order for the remaining eight trucks for the Wolf Company at the inventory cost. A separate verbal order for the completion of these eight trucks at a cost not to exceed $200 per truck was also placed at that time. Written acknowledgments were immediately issued by Aetna and processing was commenced. On December 6, the sales were listed on the daily memorandum of sales by Aetna which was transmitted to Lt. Melcher and the contracting officer. This memorandum also included the sales of the aforementioned four trucks to the Koppers Company.

As far back as early November, 1945, the [Reconstruction Finance Corporation indicated an interest in the trucks but met with some difficulty in getting proper authorization from R. F. C. headquarters for probable acquisition until December 5,1945, when Lt. Melcher was advised by telephone by a representative of the Reserve Moving & Erecting Company, which had a storage contract with the R. F. C. at one of the latter’s nearby depots, that authorization for declaration of the 18 trucks to the R. F. C. for the use of the Reserve Moving & Erecting Company had come through. An R. F. C. request number was given to Melcher at that time for forwarding to the Jeffersonville Quartermaster Depot to have the declaration of the trucks to the E. F. C. effectuated. The next day, December 6, after an inspection of the trucks by representatives of the E. F. C. and the Eeserve Moving & Erecting Company, and after office hours, an agreement was reached between those representatives and the vice president of Aetna, Mr. Coffey, for the completion of the trucks at $50 each. It seems obvious that the trucks had already been sold at that time.

Lt. Melcher notified his superiors of this transaction on December 7, 1945, and also under that date received from an E. F. C. warehousing official a letter confirming the arrangements of December 6,1945, this letter stating in part:

Confirming arrangements made with you by a representative of this office on 6 December 1945, it is understood that you will declare surplus to EFC * * * 18 Eoss Fork Lift Trucks * * * presently located at Ell-wood City, Pa. plant of Aetna Standard Engineering Co.

The official declaration was made on December 11, 1945, and sent to Aetna with a transmittal letter dated December 21,1945, and received by Aetna on December 26. While Mr. Carroll had knowledge of the previous interest of the E. F. C. in the trucks, he was not informed in any way of the happenings of December 5 and 6 between Lt. Melcher, the E. F. C. and the Eeserve Moving & Erecting Company. All the trucks were subsequently picked up by or delivered to the E. F. C. — three being picked up by them on December 20, 1945, and the remaining 15 being received by them on January 2,1946.

Plaintiff, L. B. Smith, Inc., previously sued Aetna for breach of contract and was denied recovery by the Ohio courts their decision stating that while the Quartermaster Corps ordered the delivery of the trucks to the E. F. C. after a contract was entered into by the plaintiff and Aetna, the trucks had remained part of Aetna’s terminal inventory until actually delivered to the purchaser, and that until then they were subject to the paramount right of the Government to appropriate them. L. B. Smith, Inc. v. Aetna Standard Engineering Company, 86 Ohio App. 418, 92 N. E. 2d 818, appeal dismissed, 152 Ohio St. 452, 89 N. E. 2d 476. This decision is difficult to understand but it was apparently based on tbe Contract Settlement Act, supra, and the Joint Termination Regulations which provide that the contracting officer may (under certain circumstances) require any item of termination inventory to be transferred to the Government.

Aetna, as defendant in that case, admitted in its answer that it had accepted and acknowledged the order of the Smith company on December 6, 1945, but pleaded in avoidance of any contract liability that the contract was subject to the authority of the United States Government to dispose of the inventory. It was plaintiff’s position, rejected by the Ohio courts, that when the contract between Aetna and it was executed title passed to the plaintiff and, therefore, the trucks were not part of Aetna’s termination inventory when Aetna, in compliance with Government orders, delivered the trucks to the R. F. C.

Plaintiffs here contend that under valid contracts entered into between them and Aetna, title to the trucks passed to them on the morning of December 6, 1945, and the trucks were, therefore, no longer part of the termination inventory of the Aetna company subject to appropriation by the contracting agency, the Army Quartermaster Corps. We think plaintiffs are right in this. Plaintiffs also contend that the subsequent declaration and delivery to the R. F. C. constituted a deprivation of property without due process of law and without payment of just compensation in contravention of the Fifth Amendment of the Constitution of the United States. We also think they are correct in this contention. They seek to be justly compensated for the property so taken and claim that just compensation is the difference between the contract price and the retail market value of the trucks as of the day of the taking, less the cost of completing them.

The defendant, on the other hand, takes the position that title to the trucks never passed to the plaintiffs arguing that the agreements between Smith and Aetna were no more than contracts to sell trucks in a “deliverable state” rather than a contract of sale and relies on the Uniform Sales Act in force in Ohio at that time to support its contention. Defendant argues that since something had to be done to the trucks they were not in a deliverable state and, therefore, title to the goods could not pass until that thing was done to them. Defendant contends in the alternative that the contract between Aetna and the Government incorporated in it the provisions of the Contract Settlement Act of 1944, supra, reserving the rights of the Government to take possession of any termination inventory of a war contractor, and that so long as the trucks remained in possession of Aetna they were part of the termination inventory subject to those governmental rights. The defendant, in effect, argues that an authorized sale by the war contractor can pass title to the purchaser only by delivery.

Thirdly, defendant contends that the terms of the advertisement inviting bids, to wit, the trucks would be sold “F. O. B. Plant location as is,” precludes passage of title until the trucks were delivered to the carrier.

The controlling factor in this case is whether or not title to the trucks in question passed to the plaintiffs prior to their declaration by the contracting officer of the Quartermaster Corps to the B. F. C. If, as determined by existing principles of law relating to sales and passage of title, there was a passage of title to the plaintiffs there was a taking by the Government of property without due process and without just compensation and this is so despite the decision by the Ohio courts holding that the trucks remained part of the termination inventory of the war contractor, Aetna, until actually delivered to the purchaser. L. B. Smith, Inc. v. Aetna Standard, Engineering Co., supra.

The terms of the Contract Settlement Act, supra, and the Joint Termination [Regulations governing the disposition of termination inventories make no mention of a requirement to actually deliver to the purchaser before an item can be considered as severed from termination inventory. In fact, quite the contrary is true. Section 101 of the act declares its purpose in detail and subsection (e) states as one of the purposes “to assure the expeditious removal from the plants of prime contractors of termination inventory not to be retained or sold by the contractor.” (Emphasis supplied)

Section 112 relating to removal and storage of termination inventory and providing for the filing of a schedule of inventory on hand after termination of the contract by the Government declares in subsection (c) that

Within sixty days after the submission of any such statement by a war contractor, or such shorter period as may be prescribed under this chapter, or within such longer period as the war contractor may agree, the Government agency concerned (1) shall arrange, upon such terms and conditions as may be agreed, for the storage by the war contractor on his own premises or elsewhere of all such claimed termination inventory which the war contractor does not retain or dispose of, except * * *. (Emphasis supplied.)

Section 412.2 (2) of the Joint Termination Regulations sets forth the government’s policy relating to contractor inventory:

(2) The policy of the Government is to encourage war contractors to retain for use at the best price obtainable as large amounts as possible of all types of contractor inventory for their manufacturing, construction, maintenance, or repair purposes. The policy of the Government also is to authorize sales by war contractors under circumstances which will yield the best price obtainable by competitive bidding, or by negotiation in certain cases. (Emphasis supplied.)

The scope of the war contractor’s authority to sell is set forth in § 442 (1) of the Joint Termination Regulations:

(1) War contractors may retain or sell any contractor inventory at cost, without the approval of the contracting officer or the next higher tier contractor. (Emphasis supplied.)

Thus it can be seen that it was the clearly declared policy of the Government to permit the war contractor to sell or retain any part of his termination inventory without prior approval if the sale, or retention, was at inventory cost or higher. That authorized sales are binding upon the Government and cannot be repudiated or rejected by it is explicitly provided for by the regulations as follows:

§432.5 Finality of authorized dispositions. — Authorized retentions or sales of contractor inventory which meet the requirements of this Section IY, including dispositions which do not require the approval of the contracting officer, will be accepted by the Government as final and conclusive, in the absence of fraud. (Emphasis supplied.)

The act and the regulations do not provide that stock; remains part of the termination inventory until actual delivery to the purchaser as here contended by defendant and as held by the Ohio court in its decision in the case hereinbefore cited, but on the contrary the Act and regulations consistently refer to sales by the war contractor and make it plain that he has the power to sell. Those enactments conclusively indicate that Aetna had the power and authority to sell the trucks here in question unless that power was previously revoked. The record clearly shows that this authority was neither revoked nor limited prior to the dealings between Aetna and the plaintiffs, and since the authority could not be revoked retroactively, JTR §432.4, Aetna clearly had the authority to sell the trucks out of termination inventory at the time of the transactions between it and plaintiffs. A search of the legislative history of the Contract Settlement Act, supra, does not disclose any contrary intent on the part of Congress.

The Ohio court in holding as it did relied on section 12 (e) of the Contract Settlement Act, supra, and section 432.3 (2) of the Joint Termination Eegulations and pointed out that the provisions of those sections permit the Government to take possession of any contractor inventory if they so desire. Those sections, however, obviously refer to that which is contractor or termination inventory. If there has been a sale within the purview of existing law and by virtue of that sale there has been a passage of title, as there was here, the item of inventory sold cannot logically remain part of the war contractor’s termination inventory since it is owned by someone else. The Ohio court erroneously interpreted the law and regulations.

While delivery of the subject matter of a sale is in some instances necessary to pass title, it is not the only way of doing so. The words sell and sales used consistently throughout the Contract Settlement Act, supra, and the Joint Termination Regulations are legal words of art and, as such, should be given their proper legal meaning by application of existing rules.

Since the plaintiffs’ place of business is located in Pennsylvania and Aetna’s in Youngstown, Ohio, it must first be determined whether the laws of Ohio or Pennsylvania apply. The Federal courts follow the rule that the nature, validity and interpretation of contracts are to be governed by the law of the state where the contracts are made or are to be performed. People’s Outfitting Co. v. United States, 74 C. Cls. 419, 58 F. 2d 847, modified, 77 C. Cls. 297, 2 F. Supp. 847; Mutual Life Ins. Co. v. Cohen, 179 U. S. 262, 21 S. Ct. 106, 45 L. Ed. 181; Bank of the United States v. Donnally, 8 Pet. 361; Smith v. Union Bank, 5 Pet. 518, 8 L. Ed. 212. This statement of the law is also reflected in the conflict of law rules laid down by both the Pennsylvania and Ohio courts, Alropa Corporation v. Kuohwehm, 138 Ohio St. 30, 33 N. E. 2d 655 (1941), appeal dismissed, 313 U. S. 549; McCormick v. Taft et al., 61 Ohio App. 200, 22 N. E. 2d 510 (1938); First Nat. Bank in Greensburg et al. v. M. and G. Conroy, Inc. et al., 102 F. Supp. 494 (W. D. Pa. 1952); Faron v. Penn Mutual Life Ins. Co., 176 F. 2d 290 (3d Cir 1949); Chicago Pneumatic Tool Co. v. Ziegler, 151 F. 2d 784 (3rd Cir. 1946); and is indicative of the Restatement’s declarations on the problem. Restatement, Conflict of Laws §§ 328, 332, 334, 339. Since the last act in the consummation of the alleged contracts, the acceptance, was done at the Aetna company’s location in Ohio, the laws of the state of Ohio must govern the rights of the parties.

At the time of the transactions in question the Uniform Sales Act was in force in Ohio and its provisions must govern in determining the intentions of the parties to the contracts and whether title to property that was the subject matter of the contracts passed to the purchaser. Ohio General Code §§ 8398 and 8399.

The defendant in its contention that the agreements by Aetna to complete the trucks before delivery to the plaintiffs were part of the contracts to sell the trucks relies on Rules 2 and 4 of the Uniform Sales Act in support of its claim that title to the trucks did not pass to the plaintiffs on December 6, 1945, or at any other time. Ohio General Code § 8399, Rules 2 and 4. Those rules state:

Rule 2. When there is a contract to sell specific goods and the seller is bound to do something to the goods, for the purpose of putting them into a deliverable state, the property does not pass until such thing be done.
Rule 4. (1) When there is a contract to sell unascer-tained or future goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer, or by the buyer with the assent of the seller, the property in goods thereupon passes to the buyer. Such assent may be expressed or implied, and may be given either before or after the appropriation is made.

After tailing into consideration all the negotiations and discussions relevant to the sale and completion of the trucks in question, we are of the opinion (1) that the trucks were in a deliverable state when the contract for their sale was executed; (2) that there were two contracts entered into by each of the plaintiffs with Aetna — one for the sale of the trucks and one for their assembly or completion; and, (3) that, therefore, Rules 2 and 4 above do not apply to this case.

The advertisement for the sale of the trucks which appeared in various newspapers is the beginning point of the negotiations and its contents must be considered in determining the scope of any contract or contracts eventually executed. The advertisement showed the conditions under which Aetna would be willing to sell the goods, to wit, “sale OE TERMINATION INVENTORY * * * 22 Ross Fork Lift Trucks Model 19 HT * * * These trucks are complete ready for use with the following exceptions: * * * Sealed bids in duplicate for all or part of above trucks will be accepted by * * * Material will be sold FOB Plant location as isl* * (Emphasis supplied.) Thus, the publication notified those desiring to purchase that the trucks were not then completed or assembled and invited bids on the trucks in their partially completed state. Bids were not sought on completed trucks. Thus, the trucks in their partially completed state were the subject of all negotiations. If a contract was consummated, as we hold it was, the partially completed trucks were what was intended by the parties to be delivered. Therefore, for the purpose of these sales, the trucks were in a deliverable state even though they were only about 98% of the finished product that would have resulted had they continued on through the ordinary manufacturing stages to completion. Since the trucks were in a deliverable state and, hence, not unascertained or future goods, Buies 2 and 4 above are inapplicable.

Pursuant to the above advertisement, Mr. Smith began negotiations with Aetna, through Mr. Carroll, and subsequently made agreements with Aetna for the purchase of all 18 trucks at inventory cost price and executed purchase orders to that effect. This was enough. All discussions that Mr. Smith had with Aetna’s representatives concerned the price of the trucks and did not involve negotiations for the cost of completing them, at least until a purchase price for the trucks themselves was agreed upon. The purchase price agreed to was $3,264.04 per truck and purchase orders to that effect were issued by plaintiffs for the trucks. Aetna issued like processing orders. The Government had no further right to intervene. After this agreement on the cost of the trucks was reached, a subsequent agreement was made as to the amount it would cost plaintiffs to have the trucks completed by Aetna, it not to be in excess of $200 per truck. The plaintiffs issued separate purchase orders to have the work done and Aetna issued separate processing orders. The cost of completing the trucks was not recorded on plaintiffs’ orders nor on Aetna’s processing orders as the exact figure was not known. If it so desired the plaintiffs could have bought the parts from Aetna and completed the trucks themselves but they preferred to contract with Aetna to have them completed.

Inasmuch as Aetna invited bids for the trucks in their partially completed state — as is — and since separate orders were placed and accepted — one for the purchase of the trucks and one for their completion — the only conclusion possible is that the intent of the parties was for there to be two contracts, one for the sale of the trucks and one for their completion after such sale.

Eule 1 of the Uniform Sales Act provides that, unless a different intention appears, when there is an unconditional contract to sell specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment, or the time of delivery, or both, be postponed. Ohio General Code § 8399, Eule 1.

When the plaintiffs and Aetna entered into their contracts for the purchase of the trucks in question there were no conditions to delay the effectuation of the contract and no intentions were expressed as to when title to the trucks would pass. The goods were in a deliverable state and there can be no doubt that the subject matter of the contract was specific as there were only 18 trucks all to be allocated to the plaintiffs’ orders. By application of the above Eule 1 to the instant case it must be held that title passed the moment the minds of the parties met on the morning of December 6,1945.

Added weight is given to this conclusion by the terms, “F. O. B. Plant location”, contained in the advertisement which carries with it a connotation that the goods would not have to be moved from the plant for title to pass. In effect, it states that the purchasers would be responsible for the goods from the moment the contract is executed and would be responsible for removing them from the plant. Designations relating to shipment appearing on the purchase and processing orders are only shipping instructions and were not part of the contract as orally entered into and therefore have no bearing on the passage of title as contended by the defendant. A similar situation arose in Sadler Machinery Co. v. Ohio Nat., Inc., 202 F. 2d 887, where the parties orally agreed to the terms of a sale and the memorandum of the contract contained the notation “F. O. B. Cars Upper San-dusky, Ohio.” The court there held that the terms appearing in the memorandum of the contract had no bearing on the question of when title should pass and meant only that the seller was to load the machines for shipment without expense to the buyer.

It is held, therefore, that since Carroll had full authority to contract for Aetna and while acting for it entered into a valid contract of sale involving passage of title to the plaintiffs prior to the time the trucks were declared to the E. F. C. by the Army Quartermaster Corps, the trucks were not part of the termination inventory of Aetna at the time of the declaration. Subsequent acquisition of the trucks by the K. F. C. was a taking of the property of plaintiffs without due process of law and without just compensation.

The only problem remaining is that of just compensation.

Under the Fifth Amendment a property owner is entitled to receive just compensation for property appropriated by the sovereign. Olson v. United States, 292 U. S. 246, 54 S. Ct. 704, 78 L. Ed. 1236 (1934). Just compensation has been held to be the monetary equivalent of the property taken, and the determination of that amount which shall be such equivalent has been held to be a judicial function. Monongahela Navigation Co. v. United States, 148 U. S. 312, 325-328 (1893). The owner is entitled to be put in as good a position pecuniarily as it would have occupied if its property had not been taken. United States v. New River Collieries, 262 U. S. 341, 343 (1923); Seaboard Airline Ry. Co. v. United States. 261 U. S. 299, 67 L. Ed. 664 (1922) and cases cited.

This court in Dore v. United States, 119 C. Cls. 560 (1951), presents a statement of the principles involved in determining the amount that constitutes just compensation wherein, at 581, it states as follows:

In determining what is “just compensation,” each case must be decided upon its individual facts; no formula, no rigid rules exist for determining what is “just compensation” under all circumstances and in all cases. [Cf. United States v. Commodities Trading Corp., 339 U. S. 121, 123; Lord Manufacturing Co. v. United States, 114 C. Cls. 199; Monongahela Navigation Co. v. United States, 148 U. S. 312; United States v. Kimball Latmdry, 338 U. S. 1.] Courts are guided to their conclusions by certain broad principles, well known, often quoted, and often difficult of application in specific instances * * *. It is held, generally, that just compensation is the value of the property in a free, open market, [United States v. Miller, 317 U. S. 369] and that the value is determined as of the date of taking [Brooks-Scanlon Corp. v. United States, 265 U. S. 106]. Gain to the taker is held immaterial, loss to the owner being considered a good measure of value. [United States v. Miller, supra.] * * * When there is a free market at time and place of taking, the prevailing price therein is just compensation. [United States v. New River Collieries Co., 262 U. S. 341].
When the market upon which a commodity is bought and sold is a controlled market, there exists a strong presumption that the controlled price, -fixed pursuant to law, is fair and equitable and that such price is the proper measure of just compensation within the meaning of the Fifth Amendment. This is so because the basic price control legislation enacted in 1942 [Emergency Price Control Act of 1942, 56 Stat. 23, 24] * * * empowered the Price Administrator to establish such maximum prices as would in his judgment be generally fair and equitable and would effect the purposes of the Act, as stated therein ■* * *. (Emphasis supplied).

Plaintiffs contend that because at the time of the taking there was a controlled market, the measure of just compensation should be the OPA ceiling price on the date of the taking which was $5,200 per truck. The defendant contends that there was a free open market because bidders were offering below the cost price of the very trucks in question and the plaintiffs themselves had offered less than the OPA price they now seek to recover herein and also because sales had actually been made for less than the OPA ceiling.

It is conceded that there can be a market below the OPA ceiling, but simply because bidders were offering less than the maximum price permitted by the OPA would not in our opinion change the market from controlled to uncontrolled, nor would proof of sales at less than the maximum price. This proof might tend to indicate that the market value was not equal to the maximum price permitted and might go toward rebutting the OPA ceiling as the measure of just compensation, but the market would still be controlled since there is a price above which the goods could not be sold.

As the taking of plaintiffs’ property occurred during a period when a controlled market existed, there is a rebuttable presumption, indeed, a strong presumption, that the controlled OPA price is the proper measure of just compensation. Such, price will stand unless the defendant has overcome the presumption as strengthened by the evidence. We hold on all the evidence that the defendant has not done so in this case.

The only evidence offered by defendant to rebut the above presumption was evidence of four contemporaneous sales to Koppers Company of four trucks at $3,500. per truck, slightly in excess of cost, and of bids by the plaintiffs and others at less than cost and the OPA ceiling. Defendant feels the sales to the Koppers Company establish the price at which the trucks could have been sold on the market at that time and, therefore, is proof of the prevailing market value. Those sales cannot be held to be indicative of the then current market value as they were not ordinary market transactions. They resulted from the efforts of a war contractor to get rid of termination inventory as rapidly as possible so there could be final settlement with the Government on the terminated contract and a subsequent reconversion to peacetime production. In other words, the sales were for less than could have been obtained on the open market by a company with the proper sales facilities and business contacts putting forth their best effort to get the best possible price for their product.

The plaintiffs undoubtedly had such facilities and contacts as they were primarily sales organizations. It is reasonable to conclude that Aetna did not have good sales outlets for the trucks because they had never manufactured them before their contract with the Army and had never sold them to civilian purchasers. The sales by Aetna to Koppers under these circumstances would not establish the prevailing market value, nor do we think that the bids at prices less than cost are evidence of market value. The record shows that none of these bids were accepted and no trucks were sold at less than cost. Market value is established by actual sales, not by unaccepted offers.

A more nearly accurate indication of the market value at that time would be the price at which the Government contracted to purchase the trucks from Aetna, this being $4,542 per truck. We cannot reason, as the defendant insists we should, that market value was $3,500, which was just about the cost of manufacturing, when the Government contracted to buy for $4,542. If this was so, the Government was paying over $1,000 more per truck than they were worth on the market. It seems obvious that the Government was not paying more than the trucks were worth and this is borne out by the fact that the OPA set a ceiling price of $5,200 per truck on them. That ceiling, however, sets the maximum price at which the items could be sold at retail or otherwise. It does not follow, though, that the price of $4,542 per truck paid by the Army was the market value of the trucks in view of the fact that this was the price which the Government negotiated for the purchase of a large number of trucks. We think that the sales to the Army must be considered to have been on the ‘basis of wholesale since 450 trucks were involved in that contract. Individual sales on the market would necessarily be for more per unit than the per unit cost to the purchaser of 450 units.

Plaintiff, L. B. Smith, Inc., two months after the date of the taking, contracted to purchase two trucks identical to the ones in question from the Eoss Carrier Company. They had to wait several months for delivery and were required to pay the $5,200 per truck ceiling price for them. Though this sale did not take place at the time of the taking, it certainly indicates that the market for these trucks did not decrease. At any rate, the purchase is sufficiently contemporaneous with the date of the taking to strengthen the already “strong presumption” in favor of the OPA ceiling being the proper measure of just compensation.

Just compensation must take into consideration the purpose for which the property is to be used by the owner. The plaintiffs were, among other things, in the business of buying from war contractors’ termination inventory and reselling at a profit. They contracted to buy the trucks in question with the intention of reselling them at a profit and did so only after a survey of market conditions and a determination that the prevailing price was in line with the OPA ceiling. Just compensation must, therefore, allow for the profit that could be had if the goods were sold at prevailing market prices.

In United States v. New River Collieries, supra, the court held that the cost, profit or loss of the owner does not tend to prove market price or value at the time of the taking and permitted recovery by the plaintiff of the cost plus that profit which would have been realized, based on prevailing market prices had the Government not taken the plaintiff’s property. In the case at hand, had the Government not taken the plaintiffs’ property, it is highly probable they could have sold it for the prevailing OPA ceiling prices. That, then, would be the prevailing market price and the proper measure of just compensation.

Because the defendant did not offer sufficient evidence to rebut the presumption in favor of the OPA ceiling price of $5,200 per truck and because we think the record established that the plaintiffs could have sold the trucks for that price had an effort been expended in that regard, A. B. Alpirn v. United States, 126 C. Cls. 142 (1953), and for the reasons outlined above, we must conclude that the OPA ceiling price of $5,200 per truck is the proper measure of just compensation and the plaintiffs are entitled to that amount, as adjusted by a deduction for the contract cost price and completion costs of $50 per truck, plus interest at the rate of 4% per annum from the date of the taking, which date is the date of the declaration of the trucks to the B. F. C., December 11, 1945. Agreements between B. F. C. representatives and Lt. Melcher on December 6, 1945, did not constitute a declaration as Lt. Melcher on his own had no authority to declare the property surplus. This authority was vested in his superiors. Action by the superiors was not taken until December 11 when they issued a written declaration of surplus which purportedly transferred the trucks in question to the Beconstruction Finance Corporation.

Completion costs are determined to be $50 despite the fact that the plaintiffs’ contracts with Aetna provided that the cost was not to be in excess of $200, because Aetna actually completed the trucks for $50 per truck for B. F. C.

Accordingly, judgment will be entered for the plaintiff L. B. Smith, Inc. in the amount of $18,859.60 plus interest at the rate of 4% per annum from December 11, 1945, and for The Wolf Company for $15,087.68 plus interest at the rate of 4% per annum from December 11,1945.

It is so ordered.

Laeamoke, Judge/ and MaddeN, Judge, concur.

Whitakee, Judge,

dissenting:

I cannot agree on the amount allowed as just compensation, in view of the inability of the contractor to sell these trucks to anyone for more than the inventory cost, although much effort was put forth to do so.

Of the 100 trucks in the inventory all but 22 were taken by various Government agencies; but the majority opinion states, “Efforts by Aetna after termination [which was on August 14,1945] to dispose of the remaining 22 trucks were unsuccessful,” and so it was decided to publicly advertise them for sale in selected newspapers. This was done on November 16 and 19, but no bids for as much as the cost 'price of $3^6J¡,.0J¡. were received.

Later, however, 4 were sold to the Koppers Company for $3,500 each. This left 18. Plaintiff made several offers for these at less than cost, but, so far as the record shows, no other offers were received until the offer of the Reconstruction Finance Corporation on December 6.

The OPA price was a ceiling price, not a floor price. It set the top limit for what an article could be sold, but there was no assurance that this price could be obtained. In war time, prices were high, but when the war was over, many prices dropped sharply. These trucks must have been the sort of materials that were in great demand during the war, but for which there was not a widespread peacetime use; otherwise better bids for these trucks would have been received.

The Government paid $4,542 each for 78 of these trucks, but was not willing to pay this price for the 22, but finally agreed to pay the invoice price of $3,264.04 for them. Should we now require it to pay more? Plaintiffs were also willing to pay this price, thinking they could sell them at a profit. It is reasonable to suppose they could have, in view of the Government’s purchase of the 78 at $4,542. They should not be deprived of this profit.

A reasonable profit, it would seem, would be from 25 percent to 33% percent. Twenty-five percent would amount to $816; 33% percent, to $1,088. I think just compensation to the plaintiffs would be the average of the two, or $952 per truck. From this is to be deducted the cost of putting the trucks in condition, of $50 per truck, leaving a balance of $902. On this, of course, plaintiffs are entitled to interest for delay in payment, which should be at four percent per annum.

Jones, Chief Judge, joins in the foregoing dissent.

FINDINGS OP PACT

The court, having considered the evidence, the report of Commissioner C. Murray Bernhardt, and the briefs and argument of counsel, makes findings of fact as follows:

1. Plaintiffs are Pennsylvania corporations, The Wolf Company being a wholly owned subsidiary of L. B. Smith, Inc. During 1945 they were engaged, inter alia, in the acquisition and resale of supplies and equipment from war contractors’ termination inventories. L. B. Smith was, at material times, president of both corporations.

2. The Aetna Standard Engineering Company is an Ohio corporation (hereinafter referred to as “Aetna”), which had its principal offices at Youngstown, Ohio. During 1943, 1944, and 1945 said corporation was engaged in the production of war materials under contracts with various governmental agencies, including a contract for the manufacture of model 19 PIT Boss fork lift trucks. Aetna manufactured these trucks under a license agreement which it entered into with the Boss Carrier Company of Benton Harbor, Michigan.

3. William A. Carroll was, in 1945, Termination Officer in charge of Aetna’s newly organized Termination Department. As such he had full responsibility and authority to dispose of the latter’s contract termination inventory, including that resulting from the termination of Aetna’s contract for the manufacture of fork lift trucks referred to in finding 2. Carroll was fully acquainted with the Joint Termination Regulations governing the termination of war contracts, the disposition of termination inventory, and the settlement of claims.

4. Henry Melcher was a Lieutenant in the Army Quartermaster Corps detailed to Aetna by the Quartermaster Depot at Jeffersonville, Indiana. Prior to August 14,1945, Melcher was assigned as an expediter on Aetna’s fork lift truck manufacturing contract. Subsequent thereto his duties were to assist in plant clearance and the disposition of that part of Aetna’s termination inventory connected solely with the fork lift truck contract, which consisted of a large quantity of parts as well as about 100 fork lift trucks which were 94 percent complete. Melcher acted only on orders from his superiors at the Jeffersonville Depot. He had no personal authority to sell or transfer termination inventory, and in fact made no sales or transfers or other dispositions of termination inventory, though he could recommend to his superiors such sales or transfers. He worked in close liaison with Carroll, their offices at the Aetna plant being only one room apart. He was fully conversant with the Joint Termination Regulations.

5. Eugene Chosey was a Lieutenant in the Army Quartermaster Corps, detailed by the Jeffersonville Depot in mid-November 1945 to share offices with Melcher at the Aetna plant as Melcher’s assistant.

6. On August 14,1945, Aetna’s contract for fork lift trucks was terminated for the convenience of the Government. The contract was subject to the Contract Settlement Act of 1944 (41 U. S. C. 101), the Surplus Property Act of 1944 ( 50 U. S. C. App. Supp. 1611), and the Joint Termination Regulations issued November 1,1944, as amended. These statutes and regulations governed the procedures for terminating war contracts, including the disposition of termination inventories.

7. The contract between Aetna and the Government provided in part:

ARtiole 12. Termination at the Option of the Government. * * * (b) After receipt of a Notice of Termination and except as otherwise directed by the contracting officer, the contractor shall * * * (6) transfer title and deliver to the Government in the manner,_ to the extent and at the times directed by the contracting officer (i) the fabricated or unfabricated parts, work in process, completed work, supplies and other material produced as a part of, or acquired in respect of the performance of, the work terminated in the Notice of Termination, and (ii) the plans, drawings, information and other property which, if the contract had been completed, would be required to be furnished to the Government; (7) us'e his best efforts to sell in the manner, to the extent, at the time, and at the price or prices directed or authorized by the contracting officer, any property of the types referred to in subdivision (6) of this paragraph provided, * * *.

The record contains no evidence of orders issued by the contracting officer to Aetna after termination pursuant to Article 12 (b) (6) and (7) above.

8. Attached to Aetna’s Termination Inventory Schedule filed on November 5,1945, was the following certificate:

The attached Schedules constitute the contractor’s statement showing the materials claimed to be termination inventory which, if not otherwise disposed of, the contractor desires to have removed by the Government within 60 days from receipt hereof by the Government, or such shorter period as may be prescribed under the Contract Settlement Act of 1944, or such other period as may be agreed upon. Subject to such prior disposition, title to such material is hereby tendered to the Government and is warranted to be free and clear of all liens and encumbrances.

9. Of the approximately 100 substantially completed trucks in Aetna’s termination inventory at date of termination, all but 22 had been declared to various Government agencies by the last week in November 1945. At all material times they were stored at Aetna’s plant at Ellwood City, Pennsylvania. Aetna’s cost or inventory price of each truck was $3,264.04. During the same period a large quantity of Eoss fork lift truck parts had been disposed of to Government agencies and private purchasers. Subject to prior disposition, title to the 22 partially completed Eoss Fork Lift Trucks was tendered to defendant by Aetna on November 5, 1945. Defendant did not accept title at that time or at any time prior to December 6,1945.

10. The procedures followed by Aetna under Carroll’s supervision as its Termination Officer in the disposition of the Eoss termination inventory, as well as in the disposition of a large quantity of material and equipment representing inventory from other terminated war contracts, were in general as follows: The inventory itself was first screened by various Government agencies to determine what they wished for their own use or use of their contractors. Of what was then left Carroll would endeavor to have the suppliers of finished material accept a return of the material at cost price to Aetna. Aetna was allowed to retain any of the inventory it wanted for its own use, subject to its inventory or cost price being charged against Aetna’s termination payment. In the case of transfers to Government agencies, returns to suppliers, or sales to private purchasers, Carroll exercised full authority to make such transfers or sales for Aetna at inventory cost or higher, but had to secure the approval of the contracting officer at the Jeffersonville Depot to dispose of any inventory for less than cost. There is no indication that Carroll’s authority to make the aforesaid sales or transfers was restricted, limited or revoked at any time by the contracting officer at Jeffersonville Quartermaster Depot in charge of the Eoss Fork Lift Truck Contract, or his representative. Carroll also exercised authority from Aetna to approve the credit of any private purchasers on terms other than cash. In the case of all transfers or purchases to Government agencies or to private purchasers, whether below, at, or above cost, Carroll would process the necessary papers accomplishing the transfer. Inventory transferred to Government agencies would be shipped on Government bills of lading after shipping instructions were received by Carroll. Inventory would be sold to private purchasers on Aetna’s Order Form prepared under Carroll’s supervision and with his approval after he had received purchase orders from the customers. It would then be shipped to purchasers. Aetna’s Order Form, prepared in multiplícate, served sundry purposes, such as acknowledgment of the order, bill of sale, instructions to Aetna’s shipping department, billing information for Aetna’s accounting department, and as a directive to subordinates to remove the items disposed of from the termination inventory. Whenever inventory was disposed of in the foregoing manner, Carroll would advise Melcher and the contracting officer by means of a memorandum prepared daily, reflecting the dispositions during that day of items from the Boss termination inventory, such memorandum being submitted to Melcher and the contracting officer on the following morning. In addition, Carroll and Melcher occupied offices separated only by an intervening room, and they were in constant communication with each other concerning the liquidation of the Boss termination inventory.

11. All attempts to dispose of the 22 remaining trucks at acceptable prices having failed, either by transfer to Government agencies, return to Boss, or by negotiated sale, it was decided by the contracting officer in consultation with Aetna representatives to advertise in order to invite bids. The advertisements were prepared in the name of Aetna by Melcher or other representatives of the contracting officer and handed by Melcher to Carroll for transmission to selected newspapers. The advertisements, which appeared on November 16 and 19,1945, stated in part:

These trucks are complete ready for use with following exceptions:
Painted Prime Coat only — Tool Kit — 2 Lifting-Forks — Carriage Back — Lamp Guards.
All parts necessary to complete trucks are available in Termination Inventory.
Sealed bids in duplicate for all or part of above trucks will be accepted by AetNA-StaNdaRd ENGINEERING Co., Youngstown, Ohio until noon November 24,1945. Bids should be marked on outside of mailing envelope SEALED BID DEPT.
The right is reserved to reject any and all bids.
Material will be sold FOB Plant location as is.
Prospective bidders may inspect material at the Aetna-Standard Engineering Co., Youngstown, Ohio, between hours of 9:00 A. M. and 4:00 P. M. November 17 through 23. For further details consult Lt. H. H. Melcher at Aetna-Standard Engineering Co.

12. Up until November 26, 1945, the advertisements had produced bids which were in amounts less than inventory cost and, in some cases, equal to little more than the scrap value of the trucks. However, between November 26,1945, and December 1,1945, a sale was made of four trucks to the Koppers Company for $3,500 each, leaving 18 trucks unsold. Carroll did not negotiate this sale although he processed the purchase orders. Aetna’s part in the sale of the four trucks to Koppers Company was handled by H. G. Coffey, vice president of Aetna, whose precise role in Aetna’s disposition procedures is left somewhat obscure by the record. The sale of these four trucks was reported to Lt. Melcher and the contracting officer by the usual daily memorandum of sales dated December 6, 1945, listing, among other things, dispositions of Boss Fork Lift Truck inventory. This memorandum also included the sales of the 18 trucks to the plaintiff discussed in detail in subsequent findings.

13. Plaintiffs’ Mr. Smith learned belatedly as a result of a newspaper advertisement that Aetna had 22 partially completed Boss fork lift trucks for sale. Acting on this information he telephoned Carroll of Aetna on or about November 28, 1945. He advised Carroll that he wanted to buy all of the remaining trucks. After an inspection of the trucks at Aetna’s plant at Ellwood City, Pennsylvania, Smith directed a telegram to Carroll’s assistant at Aetna on November 28 in which L. B. Smith, Inc., offered to purchase 22 trucks for $49,700, or about $2,260 each. Since the offer was below cost, it was referred by Carroll to Melcher.

14. On December 1,1945, having learned from Chosey that his offer of November 28 for the trucks would not be acceptable and that only 18 trucks were left of the 22 (due to the sale of 4 to Koppers Company, ante finding 12), Smith placed an order with Carroll by telephone, for 10 of the 18 trucks at inventory cost of $3,264.04 each. The order was accepted by Carroll at that time and he was informed by Smith that a written order would follow immediately. Smith told Carroll that the latter was to hold up the actual processing of the order for 10 trucks until further instructions, because he wanted time to negotiate with the Jeffersonville Depot for all 18 trucks at less than inventory cost. Carroll consented to withhold the processing of the order.

15. On Monday, December 3, 1945, a written order dated December 1, was received by Aetna from L. B. Smith, Inc., for 10 trucks at $3,264.04 each, the inventory or cost price. Simultaneously there was also received from L. B. Smith, Inc., an order to complete the assembly of and to paint the 10 trucks. Carroll’s oral agreement with Smith of December 1 was that completion of the trucks would cost the purchaser not over $200 per vehicle, but this figure was omitted from the purchase order. These two orders of December 1 were not processed by Carroll when received for the reasons described in finding 14. In the meantime, Carroll had approved the credit of L. B. Smith, Inc., through a credit organization. It is reasonable to conclude that the information concerning the formal purchase orders of December 1 was not communicated by Carroll to Melcher, since Carroll’s instructions from Smith at the time had been to withhold processing the order until further advice from Smith.

16. On December 3, 1945, L. B. Smith, Inc., telegraphed an offer to Aetna, attention of Chosey, for all 18 trucks at a price of $45,900, or approximately $2,550 per truck, an increase of about $300 per truck over its earlier under-cost bid of November 28.

17. On December 5 Smith learned from Chosey that his offer of December 3 was not acceptable. On the morning of December 6 Smith gave Carroll an order by telephone to process his orders of December 1 for 10 trucks and their completion for the L. B. Smith, Inc., and ordered verbally from Carroll the remaining 8 trucks for The Wolf Company, all at inventory cost. In the course of the telephone conversation he supplied Carroll with a Wolf Company order number for the 8 trucks, and placed a verbal order for their completion at a cost not to exceed $200 per vehicle.

18. Thereupon, on December 6,1945, Carroll instructed his subordinates to write acknowledgments of the orders and to issue and process Aetna’s order forms to accomplish the sale at inventory or cost price of 10 trucks to L. B. Smith, Inc., and 8 trucks to The Wolf Company, in addition to separate orders for the completion of the 18 trucks. He directed his secretary to include these sales on the daily memorandum of sales made for distribution to Melcher, the contracting officer, and other interested parties. Simultaneously Carroll endeavored to apprise Melcher on December 6 of the disposition of the 18 trucks, but Melcher was elsewhere and not available. Prior to December 6 Carroll had retained in confidence the written order of December 1 of L. B. Smith, Inc., as requested, to enable Smith to pursue his negotiations with Army representatives to secure the trucks below cost. By telegram dispatched at 5:36 p. m., on December 6 The Wolf Company advised Aetna that it was mailing a purchase order for 8 trucks at $3,264.04 each. The written purchase order followed.

19. The Reconstruction Finance Corporation (hereafter “R. F. C.”) evinced an interest in having some of the fork lift trucks in the Aetna termination inventory transferred to it early in November 1945. Melcher was in frequent communication with the R. F. C. regarding the declaration of the trucks to that agency, but there had been some difficulty in securing authority from the R. F. C. headquarters. On December 5, 1945, Melcher was advised by telephone from a representative of the Eeserve Moving & Erecting Company, which had a storage contract with the E. F. C. at one of the latter’s nearby depots, that E. F. C. headquarters had approved a declaration of 18 trucks to the E. F. C. for the use of the Eeserve Moving & Erecting Company. At the same time Melcher was given an E. F. C. request number to forward to the Jeffersonville Quartermaster Depot to have the declaration of the trucks to the E. F. C. effectuated.

20. In the afternoon of December 6, 1945, representatives of the E. F. C. and the Eeserve Moving & Erecting Company conferred with Melcher at the Aetna plant and then proceeded with Melcher to Ellwood City, Pennsylvania, to inspect the 18 trucks in storage there. They then returned to the Aetna plant in the late afternoon and, after office hours, conferred with Aetna’s vice president Coffey, to reach an agreement covering the cost of completing the trucks. The agreement reached later that afternoon was incorporated in a letter from the Eeserve Moving & Erecting Company to Aetna instructing the latter to complete the 18 trucks at $50 per unit and deliver them when completed to the Eeserve Moving & Erecting Company, which latter was to pick them up at Ellwood City.

21. Under date of December 7, 1945, Melcher wrote the Jeffersonville Quartermaster Depot in part as follows:

1. Enclosed herewith list of items of Aetna-Standard Termination Inventory to be declared to EFC. The items in the quantities stated are necessary for completion of the 18 Fork Lift Trucks, also being declared to EFC.
2. The following statement was given to the writer by Mr. Hyatt, Cleveland Office, EFC and he asked that it be written in space twelve (12) on Form SPB-1.2:
“The items listed on this Declaration have been delivered to Eeconstruction Finance Corporation on authority of Eequest No. 5204, which agency wishes to retain them for use in care and handling of surplus equipment and materials under SPB Special Order 22.”
3. Trucks are now being completed by Aetna-Stand-ard through arrangements made with them by EFC.

Although Carroll had been generally aware for some weeks of the E. F. C.’s interest in the trucks, he apparently had no specific information as to the R. F. C. developments of December 5 and 6 until he saw a copy of Melcher’s foregoing letter of December 7 in the mid-afternoon of that day.

22. Under date of December 7, 1945, an R. F. C. warehousing official wrote to Melcher in part:

Confirming arrangements made with you by a representative of this office on 6 December, 1945, it is understood that you will declare surplus to RFC * * * 18 Ross Fork Lift Trucks * * * presently located at the Ellwood City, Pa. plant of Aetna Standard Engineering Co.
* * * Upon receipt of your declaration so prepared S. P. D. [Surplus Property Division of R. F. C.j will process documents necessary to complete transfer of the indicated lift trucks to RFC Warehousing Division.

23. The official declaration by the contracting officer at the Jeffersonville Depot of the 18 trucks was placed on Form SPB-1.2 entitled “Declaration of Surplus Personal Property to Disposal Agency” under date of December 11, 1945, and was sent to Aetna by the Contract Termination Branch of the Jeffersonville Depot with a transmittal letter dated December 21 and received by Aetna December 26, 1945. The letter of December 21 instructed Aetna as to required marking and packing.

24. Three of the trucks were picked up by the R. F. C. on December 20, 1945, from the Aetna plant in Ellwood City, Pennsylvania. The other 15 trucks were shipped by Aetna from Ellwood City to the R. F. C. and were received on January 2,1946.

25. At no time prior to the afternoon of December 6,1945, had the defendant through its agents executed a storage agreement covering the 18 trucks, executed a final termination settlement agreement, removed the trucks from their place of storage, or formally accepted Aetna’s tender of title to them.

26. The final settlement agreement of the War and Navy Department contracts with Aetna provides in Article 5:

ARTICLE 5. This Settlement Agreement, and the releases contained therein, shall not be construed as affecting any of the rights of the Contractor or the Government arising from litigation now pending in The Court of Common Pleas of Mahoning County, Ohio, entitled: “L. B. Smith, Inc., a Corporation, Camp Hill, Pennsylvania, Plaintiff, vs. The Aetna Standard Engineering Company, a Corporation, Youngstown, Ohio, Defendant,” and “The Wolf Company, a Corporation, Chambersburg, Pennsylvania, Plaintiff, vs. The Aetna Standard Engineering Company, a Corporation, Youngstown, Ohio, Defendant.” It is agreed that any claim which the Contractor may make against the Government, whether as a termination cost allocable to the Contracts, or otherwise, arising from said litigation shall be considered and determined when presented, and nothing contained in this Settlement Agreement, shall be construed to bar a recovery by the Contractor of any such cost arising from said litigation, nor as an admission of liability hy the Government for any such cost.

27. Plaintiff, L. B. Smith, Inc., had heretofore sued Aetna for damages for breach of contract in failing to deliver the 10 fork lift trucks it contracted for, and in that proceeding in the Ohio courts it was found that, after Aetna had accepted the order of L. B. Smith, Inc., for 10 trucks, the Quartermaster Corps ordered the delivery of the trucks to the R. F. C. L. B. Smith, Inc., v. Aetna Standard Engineering Company (86 Ohio App. 418, 92, N. E. 2d 818, appeal dismissed, 152 Ohio St. 452, 89 N. E. 2d 476). The court held that, pursuant to the Contract Settlement Act of 1944, the trucks remained part of Aetna’s terminal inventory until actually delivered to the purchaser, and that until then they were subject to the paramount right of the Government to appropriate. Plaintiff’s application fon certiorari to the Supreme Court of Ohio was denied. Carroll, the plaintiff’s witness here, testified in that case as a witness for the defendant, Aetna. The parties are in agreement that the evidence before the Ohio courts was substantially the same as that presented to this court in the case herewith reported.

28. In its answer in the Ohio proceeding referred to in finding 27, Aetna-Standard Engineering Co. admitted that on or about December 1, 1945, the plaintiff submitted its written purchase order for ten Eoss fork lift trucks and that receipt of the purchase order was acknowledged by it and, further, that after the issuance of the purchase order and its acknowledgment by Aetna, the Army Quartermaster Corps, by virtue of the authority vested in it by the Contract Settlement Act of 1944, 41 IT. S. C. 101, ordered the trucks to be delivered to the E. F. C. and that the trucks were subsequently so delivered.

29. The contract price per truck for the completed trucks to the Army Quartermaster Corps was $4,542 under the Aetna-Standard Engineering Company’s contract calling for the manufacture of 450 trucks.

30. On February 19,1946, plaintiff L. B. Smith, Inc., contracted with the Eoss Carrier Company for the purchase of two trucks identical to the ones in question. Plaintiff was required to pay the OPA ceiling price of $5,200 per truck and had to wait several months for delivery.

31. On December 6, 1945, the OPA retail ceiling price for the trucks in question was $5,200 per truck.

Plaintiffs’ Mr. Smith, a man with wide experience in buying and selling materials, including trucks, surveyed the market prior to bidding on the trucks in suit and determined that the market price of such trucks was equal to the OPA ceiling price of $5,200 per truck.

Mr. Smith had made tentative agreements for the sale of trucks at the OPA price of $5,200 per truck and it was for the purpose of selling the trucks to such prospective purchasers that Smith negotiated the contract of purchase with Aetna.

The reasonable market value of December 6, 1945 of fork lift trucks of the type in suit on the retail market was $5,200 per truck.

32. The additional work required to be done to complete the trucks purchased from Aetna by plaintiffs was done by Aetna at a cost of $50 per truck.

Plaintiffs were obligated under their contracts with Aetna to pay $3,264.04 per truck.

33. The fair and reasonable value of the interest of L. B. Smith, Inc., in the 10 fork lift trucks on December 6, 1945, was $18,859.60.

34. The fair and reasonable value of the interest of The Wolf Company in the 8 fork lift trucks on December 6, 1945, was $15,087.68.

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 plaintiffs are entitled to recover, and it is therefore adjudged and ordered that L. B. Smith, Inc., recover of and from the United States eighteen thousand eight hundred and fifty-nine dollars and sixty cents ($18,-859.60), and that The Wolf Company recover of and from the United States fifteen thousand eighty-seven dollars and sixty-eight cents ($15,087.68), both judgments with interest at the rate of 4 percent per annum from December 11,1945, all interest being allowed not as interest but as a part of just compensation. 
      
       This price was slightly more than cost which was $3,264.04 per truck.
     
      
       The term ‘‘contractor inventory” as distinguished from termination inventory is a much broader classification though it includes termination inventory. JTK § 411.3.
     
      
       The Wolf Company’s written purchase order received by Aetna subsequent to the telephone conversation during which the contract was made provided "Shipping Instructions later.” L. B. Smith’s written order provided for shipment via the Pennsylvania railroad. Each of these statements waB inserted on the respective processing orders by Aetna, Aetna also inserting thereon “E. O. B. Cars-Collect”.
     
      
       Tlie two actions, Involving Identical Issues, were joined for trial.
     
      
       Such as engines, transmissions, wheels, tires, lift forks, hydraulic cylinders, batteries, lamps, jacks, bearings, fabricated steel and steel plates, nuts, bolts, seats, and horns.
     
      
       Complete except for painting, attachment of forks, toolkit, carriage rack, and lamp guards, all of which were minor items which it Is reasonable to conclude could have been installed at a cost of $50 per vehicle. The trucks themselves, without these additions, were capable of locomotion. All of the parts were available in Aetna’s termination inventory and It was a relatively simple matter to attach them to the chassis.
     
      
       This conclusion is reached despite a conflict in the testimony between plaintiff’s witness Carroll who testified that Lt. Melcher was informed of the December 1st transactions and Melcher, defendant’s witness, who testified he was never so informed. It is highly improbable that Melcher would be notified of these orders if Smith was going to continue to negotiate with the Quartermaster Corps to get a lower than cost price on the entire 18 trucks resulting in an added expenditure to the Government. The Government through its agents Melcher and his superiors at the Army Quartermaster depot at Jeffersonville, would obviously not permit a lower than cost sale and thereby obligate itself to pay additional money when at least 10 of the trucks could be sold at cost thereby relieving the Government of any payment to make up cost price to Aetna as to those trucks. The officers were bound by the Joint Termination Regulations to get the best price possible on all sales. The conclusion is strengthened by the fact that the dealings between Smith and Carroll indicate at least an interest by Smith in all 18 trucks.
     
      
       On this point dissension exists. Defendant contends that plaintiff’s telegraphed offer of December 3 had been preceded by an offer by plaintiffs prior to December 1 for three different quantities of the remaining trucks at staggered prices per truck, but the absence of any documentary record of the earlier offer and its dependence on the nine year old unaided recollection of Lt. Chosey persuaded the Commissioner not to rely on it, particularly since it is of minor Importance in the rationale of the cases.
     
      
       By a curious circumstance, unexplained satisfactorily by the record but relevant in the context of subsequent findings, these order forms were dated December 7 by the typist, although bearing Aetna’s stamp and Carroll’s countersignature under date of December 6. Defendant contends that the papers were backdated one day by Carroll and hints at ulterior motives, but the evidence establishes no such plot between Carroll and Smith.
     
      
       It seems inconceivable that Melcher and Carroll could have been so mutually ignorant of the other’s respective activities in selling the 18 remaining trucks, particularly in view of the close coordination which their joint responsibilities naturally demanded. Although the record does not suggest a personal benefit to be derived by either in disposing of the trucks, in the absence of mere fortuity a competitive rivalry is conjectural.