#### HENRY W. PEABODY & CO. v. THE UNITED STATES

[No. B-425.

Decided May 12, 1924]

*On the Proofs*

*Requisition; agreement to return in kind; just compensation; interest.*— The plaintiff was the owner of 500 reels of galvanized barbed wire which it had in storage for export trade. The Government took the wire and shipped it to France. The Government according to agreement to replace the wire in kind, returned 500 reels of barbed wire, but it was barbed wire dipped in asplialtum and not. galvanized. Both parties believed it to be galvanized wire. • Plaintiff shipped it to Singapore where the consignees refused to receive it because it was not galvanized and could not be used in that climate. It was sold in the market for less than the transportation charges. *Held,*that plaintiff is entitled to recover the cost of the galvanized wire, with interest from the date it was taken. .

*The Reporter’s*statement of the case:

*Mr. Raymond M. Hudson*for the plaintiff.

*Mr. Charles M. Nash,*with whom was *Mr. Assistant Attorney General Robert II. Lovett,*for the defendant. *Mr. William F. Norris*was on the brief.

The following are the facts of the case as found by the court:

I. The- plaintiff is a copartnership engaged in the general exporting business, with its main office in the city of New York, and is the owner of the claim herein sued on. The *674members of said copartnership have always borne true allegiance to the Government of the United States.

II. In April, 1918, the plaintiff bought of J. H. Larkin & Co., in New York City, 500 reels of galvanized barbed wire, then in storage in said Larkin & Co.’s warehouse, at $7.50 per hundred pounds, less 2 per cent and free storage to May 5, 1918, and on June 12, 1918, the plaintiff paid said Larkin & Co. for said wire $2,058. Said wire was purchased for export, and in the export market was worth the price paid by the plaintiff therefor.

III. In July, 1918, the United States, acting- through Maj. H. D. W. Riley, of the Engineer Corps, then production and inspection officer at the office of the Depot Quartermaster, with authority to purchase and ship supplies of this character, took said 500 reels of galvanized barbed wire for the use of the United States and shipped the same to France.

IV. Thereafter Major Riley tendered to the plaintiff a purchase order or voucher in payment for said wire at $5.35 per hundred pounds, which the plaintiff refused to accept, upon the ground that it was not sufficient in amount. Plaintiff demanded payment at $7.50 per hundred, the price which it had paid to Larkin & Co., for the wire, and Major Riley, being unwilling to pay at that rate, stated that he would replace the wire in kind, to which the plaintiff consented. Thereupon instructions were given for delivery to the plaintiff of. 500 reels of wire out of a lot which it was expected, would soon-be received by the Government at Jersey City, from the factory, and the plaintiff in turn gave instructions to Government officers that the wire when received should be immediately shipped to Chicago, consigned to it, care of Caldwell & Co., who were export forwarders. It was understood by both parties that this replacement wire would be galvanized wire.

Y. When this shipment of wire was received by the Government, its representatives, on September 11, 1918, reshipped 500 reels thereof consigned as directed by the plaintiff to it, care of Caldwell & Co., and on September 13, 1918, notified the plaintiff of the shipment and with such notification transmitted the bill of lading. With said letter *675there was also transmitted to the plaintiff a packing list, showing in appropriate columns, the quantity, style of package, weight, etc., and in the column headed “ Contents of each package,” the following: “ Barbed wire #12 A. S. & *W.*gauge wire with 4 pt. barb of 13 A. S. & W. gauge wire set approx. 3 in. apart, dipped in plain asphaltum paint.” No representative of the plaintiff examined the wire before its shipment, nor was it examined by Major Riley or any other officer in authority in the matter, but it was understood by all having to do with the transaction that it was galvanized wire. After Major Riley learned that this shipment of wire to tire Government, from which the reshipment was made was asphaltum dipped, it was his understanding that it. was galvanized wire dipped in black asphaltum paint to prevent reflection from the sun.

VI. The plaintiff had contracted the sale of the commandeered wire at Singapore, and immediately upon the arrival of the substituted wire at Chicago it. was reshipped by Caldwell & Co., consigned to that place and in due time arrived there. Plaintiff’s agent at that point paid transportation charges inland and ocean, to the amount of $1,399.36, in addition to which he paid for removal of the wire from the dock to a warehouse, $12.36, and for storage until the time of sale, hereinafter referred to, $58.00, a total of $1,469.72. Plaintiff had expected to fill its contract, with the 500 reels substituted for that taken by the Government, but after arriving' at Singapore it was discovered that it wasi not galvanized wire but black wire asphaltum dipped, and, being-unsuitable for use in that climate, the purchaser declined to receive it. •

When the plaintiff Avas informed of this condition by its foreign representative, it immediately notified Major Riley and stated that it was holding this wire in Singapore for the account of the United States. Major Riley thereupon directed the plaintiff to sell this wire for the best price it could obtain therefor and submit a claim to the Board of Contract Adjustment. The plaintiff thereupon sold said wire for the best price it- could obtain therefor and received as the proceeds of such sale $1,095.

*676VII. Plaintiff filed a claim with the Board of Contract Adjustment in the total sum of $2,900.15, which was disallowed by the board. There was no appeal to the Secretary of War.

DowNey, Judge-,

delivered the opinion of the court.

The plaintiff was the owner of 500 reels of galvanized barbed wire, which was in storage when, in July, 1918, the United States took it over for governmental purposes and shipped it to France. It had been purchased by the plaintiff, who was a large general exporter, for the purpose of export to Singapore, on order, and the plaintiff had paid therefor, in June, 1918, $2,058.

The duly authorized representative of the United States, by whose direction the wire had been taken over, tendered to the plaintiff a voucher on the basis of $5.35 per hundred pounds, which the plaintiff refused to accept and insisted that it should be compensated on the basis of $7.50 per hundred pounds, which was the price it had paid for the wire, and its fair value in export market. The procurement officer being unwilling to pay this price for the wire, which Avas in excess of the price the Government had been paying for such wire, indicated to the plaintiff that in lieu of payment he would replace, the wire in kind, and to this the plaintiff consented. The Government authorities Avere expecting the arrival at Jersey City at an early date of a large quantity of barbed wire purchased from a factory and which the procurement officer understood Avould be gaUanized wire. He therefore directed that 500 reels of such wire should be de-lrvered to the plaintiff, and the plaintiff in that connection gave directions that upon its arrival it should be shipped to Chicago in its name in care of an export forwarder, and when this consignment of Avire arrived 500 reels thereof were so shipped, and were by the forwarding agent at Chicago re-sliipped to Singapore.

Neither the Government’s representative nor the plaintiff knew that this wire was other than it was expected to be until after its arrival at Singapore, when it was found to be black wire asphaltum dipped, but not galvanized. "When the wire was reshipped from Jersey City, according to the *677shipping instructions given by the plaintiff, a railroad bill of lading was duly issued and within a day or two the plaintiff was notified that the wire had been shipped, the bill of lading was inclosed and also a packing list, in which the wire was referred to as “ dipped in plain asphaltum paint.” What, if any, attention the plaintiff paid to this description does not very fully appear, but it is quite apparent that if any attention was given to it, it was not taken as indicating that the wire was not galvanized, and indeed the Government officer in charge, when he learned that this consignment of wire which yas received at Jersey City was asphal-tum dipped, assumed that it was galvanized wire dipped in black asphaltum to remove the reflection of .the sunlight Avhen in use in the field. But however this may be, it appears that it was not discovered by either party to the transaction until after the arrival of the wire at Singapore that it was not galvanized, and being unsuitable for use in that climate unless galvanized, plaintiff’s customer refused to accept it.

The plaintiff being informed by its representative at Singapore of the facts as stated with reference to the wire, at once notified the Government officer in charge, stating that the Avire was held in storage at Singapore for the account of the United States, and Avas directed by the officer to sell the wire for the best obtainable price and file a claim, which it did. Plaintiff had to pay large transportation charges on the arrival of the wire at Singapore, and received as proceeds of this sale something less than its expenditures in that behalf.

The statement of the case indicates clearly that, in the first instance, there Avas a taking of plaintiff’s property by the United States for governmental purposes, Avhich entitled the plaintiff to just compensation therefor. The compensation tendered being unsatisfactory on the one hand and the demand on the other, the United States agreed to make compensation to the plaintiff by replacing the wire in kind, Avhich Avas acceptable to the plaintiff and which the representative of the United States undertook to do but in Avhich lie, through no fault on his part or upon the part of the plaintiff, failed to do.

*678Assuming in the first instance that .the plaintiff is entitled to compensation for the wire taken, measured by its fair value*, there would properly be for credit as against that amount anything which the plaintiff received through the sale of the wire actually delivered, but the facts are that the amount received by the plaintiff as proceeds of the sale of the wire shipped to Singapore was less than the amount of transportation charges paid by the plaintiff, so that there would seem to be no basis for any credit as against the amount determined to be just compensation for the wire taken.

On the other hand, while the plaintiff seeks to recover not only the value of the wire taken, but all expenses to which it was subjected on account of the mistake made, we are unable to find any basis for recovery on the part of the plaintiff aside from what may be determined to be just compensation for the wire taken.

It is shown that the plaintiff was a large exporter and that this wire had been purchased by it for export upon order, and that for export purposes it was worth the price paid by the plaintiff therefor.

Just compensation now made should include interest as a part thereof, from the time of the taking, and we have directed judgment accordingly.

Judgment for plaintiff in the sum of $2,778.30.

Hat, *Judge;*Booth, Judge, and Campbell. *Chief*Justice, concur.