#### COAST COALING COMPANY v. THE UNITED STATES

[No. D-243.

Decided February 15, 1926]

*On the Proofs*

*Purchase order; agreement; requisition; interest.*— See *Liggett & Myers Tobacco Oo. case, ante,*p. 693.

*710*The Reporter's*statement of the case:

*Mr. Frederick DeG. Faust*for the plaintiff. *Sherley, Faust ds Wilson*were on the briefs.

*Mr. Ralph O. Williamson,*with whom was *Mr. Assistant Attorney General Herman J. Galloway,*for the defendant.

The court made special findings of fact, as follows: '

I. The plaintiff is and was during the period involved a corporation organized in the year 1913 under the laws of the State of New York for the purpose of conducting the business of coaling ocean-going steamships by means of certain patented mechanical apparatus.

II. By a series of agreements dated November 27, 1912, January 30, 1913, and June 9, 1913, the plaintiff acquired from the Michener Stowage Co. and John H. Michener, jr., the license to manufacture and use certain machinery for loading coal on vessels, patents on which the grantors owned.

III. The plaintiff commenced immediately thereafter to manufacture coaling elevators under this license. These elevators were about 75 feet high, in operation were lashed to the ship to be coaled, one end on the coal barge or bin at the side of the ship, the other leading to the coal bins of the ship. They were of steel construction, and the form of their construction was that of an endless chain to which were attached buckets which filled and dumped themselves. An electric motor furnished the power.

IY. The company during its existence had built 12 of these elevators complete, and 'four were in process of completion. It also owned a barge equipped with a derrick used for the purpose of moving its apparatus as needed.

Y. On April 10, 1918, the following telegram was received by plaintiff:

WASHINGTON, D. C., *April 10,1918.*

The Coast Coaling Co.,

*17 Battery Pie., New York:*

Notice is hereby served that option is placed on all mechanical coal elevators your company whether in use or in process of manufacture including such floating equipment now used port of New York in connection therewith period you will therefore make no arrangements for' sale rental or other disposal of any of said equipment until release granted *711by Navy period please furnish immediately complete inventory all such equipment to include all spare fittings repairs parts and extra electrical machinery period this inventory to show age of machines present location and condition with regard to state of repair fitness for service and description with respect type period this option to take effect immediately with understanding that upon receipt information as called for regarding such equipment this department will without undue delay definitely advise what part of equipment will be retained for use by Government.

FeaNkliN D. Roosevelt,

*Acting Secretary Navy.*

Plaintiff’s president went to Washington, D. C., immediately and conferred with “ the Navy Board.”

On April 18, 1918, plaintiff wrote the following letter:

[Special delivery]

Apexl 18th, 1918.

Paymaster J. C. Hiltoh,

■ *United States Navy*Department,

'Washington, *D. G.*

DeaR Pavmastee HiltoN i Referring to your demand for commandeering our coal-loading apparatus, equipment, etc., I beg to give you herewith a detailed statement as to the value thereof:

12 elevators fully constructed, at $6,800 each_$81, 600

4 elevators which are now 80% complete, to he finished im-med.ately, at $7,400 each_ 29,600

Trimming mechanism which was ordered and partly installed on the S. S. *Leviathan*(formerly the S. S. *Vaterlanct)*which, to the best of my knowledge, consists of 67 units, at $800 per unit_ 45, 600

Barge *Atlas*with derrick and equipment_ 10, 000

Tools, consisting of necessary loading equipment, as wheelbarrows, etc_ 800

Patterns_ 400

Total_ 168,000

which I trust fully meets the demand which you made upon Mr. Downey and myself at the conference we held with you last Tuesday morning at my office.

I am, yours very truly,

(Signed) Herbert Coppell,

*President.*

*712YI. Crossing this letter came Navy Order No. 2242. It was as follows:

Navy Order Number N-2242

Bureau of Construction and Repair

Navy DepartmeNt,

Bureau or Supplies AND AccouNts,

*Washington, D. 0., April 18,1918.*

The Coast CoaliNG CompaNY,

*17 Battery Place, New York Gity.*

SiR: 1. Pursuant to the provisions of the acts of Congress, naval appropriation act approved March 4, 1917, and the urgent deficiency act approved June 15,1917 (quoted in part on reverse hereof), and acting under the direction of the President of the .United States, an order is hereby placed with you under the conditions stated in subparagraph B (subpara-graph A is eliminated), to furnish and deliver material needed by the Navy as listed below. Compliance with this order is obligatory, and no commercial orders shall be allowed by you to interfere with the delivery herein provided for.

*(á)*The price herein stated has been determined as reasonable and as just compensation for the material to be.delivered; payment will be made accordingly. If the amount is not satisfactory, you will be paid 75 per centum of such amount, and further recourse may be had in the manner prescribed in the above-cited acts. Please indicate conditions under which you accept this order by filling in and signing certificate below, returning original copy of order, If you state the price fixed as reasonable is not satisfactory, 75 per cent only of the unit price will be paid. If payment in full is accepted it will be considered as constituting a formal release of all claims arising under this order.

*(b)*As it is impracticable to now determine a reasonable and just compensation for the material to be delivered, the fixing of the price will be subject to later determination. You are assured of a reasonable profit under this order; and as an advance payment you will be paid the unit prices stated hereon, with the understanding that such advance payment will not be considered as having any bearing upon the price to be subsequently fixed. Any difference between the amount of such advance payment and the amount finally determined upon as being just and reasonable will be paid to you or refunded by you, as the case may be. The unit price stated herein will not prejudice any future price determination or be considered as a precedent in determining such increases or decreases as may be later decided upon as proper.

*713*(c)*The order must be accepted and filled in any event, and if placed in accordance with subparagraph *(a),*you are only' required to indicate below whether the price stated and fixed is satisfactory or is not satisfactory. If not satisfactory, a separate letter of comment and qualification must accompany the original order that is to be signed by you and returned. If order is placed under subparagraph (6), original is to be signed and returned. The duplicate copy may be retained by you in either case.

2. Deliveries are required to be made, in whole or in part, as soon as possible and before the expiration of the time limit as stated herein. Delivery of all items except *(d)*will be made at New York as directed by the aide for supply, third naval district, within 10 days, the time allowed for deliveries counting from the date of receipt of formal order advising the items are required.

3. Dealers’ bills are to be sent to aide for supply, third naval district, who is authorized to prepare vouchers in payment. Payments will be made only by the Bureau of Supplies and Accounts, Navy Department, Washington, D. C.

*(a)*In forwarding bills, the original bill must bear the following certificate: “ Prices are certified to be those as stated in Navy Order No. 2242; payment not received.”

4. If this order is based on deliveries f. o. b. works, your material can not be shipped except under orders from the naval inspecting officer for your district, and then only under a Government bill of lading to be furnished by that officer, in which case transportation charges must not be prepaid.

5. The conditions appearing on the reverse side hereon are made a part of this order.

*(a)*4 portable Michener patent type “ D ” coal handling elevators, complete in every respect and ready for service; Each

equipped with 550-volt D. O. motors and starting boxes- $3, 500 (5) 4 portable Michener patent type “O’’ coal handling elevators, complete in every respect and ready for service; equipped with 550-volt l3. C. motors and starting boxes- 3, 500

(e) 4 portable Michener patent type “C" coal handling elevators, complete in every respect and ready for service, but without motors or starting boxes_ 3, 000

*(d)*4 portable Michener patent type “D” coal handling elevators, unassembled. To be assembled by the companies concerned and completed in every respect and ready for service, equipped with 550-volt D. O. motors and starting boxes_ 5, 500

(e) Miscellaneous equipment: 29 round chutes, 2 swivel single chutes, 4 double head chutes, 32 sets lengths wire rope, rigging, 0 square chutes (total)- 1,500

(†) 1 derrick barge *(Atlas)*complete in every respect and ready for service_'-15, 000

*714The completion and delivery of item *(d)*will be. prosecuted with the greatest possible dispatch, failing which the Government reserves the right to take over the material and complete construction of the elevators for its own account.

With respect to the points for inspection of the material and equipment covered by this Navy order, definite detailed advices will be furnished by the officer or officers authorized by the Navy Department to make the inspéction.

The fulfillment of this Navy order will be considered as canceling the Navy’s option on the material and equipment of the supplier contained in despatch of the Acting Secretary of the Navy, dated April 9, 1918.

By direction of the Secretary of the Navy.

S. McGowaN,

J. C. H.

*Paymaster General of the Navy.*

The above order is accepted subject to the conditions in subparagraph B above. The price therein stated and fixed as being reasonable is satisfactory.

By.

Witness:

This order also contained extracts from the acts of March 4, 1917, and June 15, 1917, conditions for inspection, delivery, etc., as more fully appears by the order which is hereby made a part of these findings by reference.

Plaintiff thereupon wrote defendant as follows:

Aebil 22nd, 1918.

Paymaster General Samuel McGowan,

*United, States*Navy, Washington, *D. G.*

Deae Sxe : We have to acknowledge with thanks your message of the 19th instant, reading as follows:

“ Your two special-delivery letters will receive careful consideration period prompt attention much appreciated.”

We have to-day received your order N-2248, dated April 18, 1918, and in accordance therewith we have accepted the same under the conditions stated in subparagraph (5)— subparagraph *(a)*being eliminated by you, but inserting in said acceptance the word “ not ” before the word “ satisfactory ” in order that our attitude in the matter of price may not be misunderstood. We return the order herewith duly signed by us.

*715In forwarding this acceptance we desire to call your attention to our statement of valuation sent you on the same date, April 18th, and to say that this was, in the circumstances, prepared somewhat hastily, and that we should like it to be considered susceptible of change should any of the valuations appear to be inadequate, which as we now understand from your present order is quite in accordance with the purpose of the subparagraph in which our acceptance is given.

We also wish to call your attention to the item of trimmers included in our statement of valuations but inadvertently omitted from our inventory previously submitted and to say that, while these are not included in your present order, it is our purpose to ask acceptance thereof along with our other property that is being taken over.

Yours very truly,

The Coast CoaliNg Company, INC., (Signed) Herbert Coppell, *'President.*

P. S. — I may add that, in furtherance of the matter, I shall be glad to go to Washington at any time on receipt of word from you. H. C.

VII. At the time of the alleged taking under the telegram and Navy Order 2442 the plaintiff had contracted for coaling defendant’s ships and was working on the job. All of its equipment except four uncompleted elevators at the Brooklyn Navy Yard was at Army docks at Hoboken and was therefore under the control of the defendant. With the exception of the uncompleted elevators, title to the equipment passed to the defendant under the telegram and Navy order without the formality of transferring physical possession.

VIII. Defendant’s representative inspected the items in the Navy order, and on May 31, 1918, the following letter was written:

Navy Department,

BuREAU OP CONSTRUCTION AND REPAIR,

'Washington, *D.*(7., *May*SI, *1918.*

Refer to No. 14113-A24.

To: Bureau of Supplies and Accounts.

Subject: New York coaling gear, Michener elevators.

References:

*(a)*Navy Order N2242.

(&) Your letter, May 21, 1918, *#*N2242, 504 — 14, 503-8, 421-12.

*7161. Ref erring to reference *(b)*this bureau recommends that *(a), (b),*(<?), and (/) of N2242 be accepted; items (e) and *(d)*should be rejected, as it is not considered advisable to retain them.

2. The elevators in items *(a)*and *(b)*of N2242 have been inspected by a representative of this bureau and seven (7) of the eight (8) have been in satisfactory use at the piers, and there is good reason to believe that the one not tried out will be just as serviceable.

(Signed) Taylor

As a result of this at a date prior to June 13, 1918, Commander Pigman, the Navy officer in charge of coaling at the Hoboken docks, requested plaintiff to take back equipment under items C and I) of Navy Order 2242, and plaintiff on that date wrote Commander Pigman as follows:

J UNE 13th, 1918.

Paymaster G. W. PigmaN,

*United States*Navy, *Stenech*Building,

Hoboken, *N. J.*

Dear Sie: Referring to Navy Order N-2242, under which you have commandeered certain coaling equipment of the above company, I note that you wish to be relieved of the following items which are part of said Navy order:

Item (c), consisting of four (4) portable Michener patent type C coal-handling elevators, complete in every respect and ready for service, but without motor or starting boxes.

Item (d), consisting of four (4) portable Michener patent type D coal-handling elevators, unassembled. To be assembled by the companies concerned and completed in every respect and ready for service, equipped with 550-volt d. c. motors and starting boxes.

The equipment covered by item (e), I understand, is now on your Hoboken piers and will be returned to the Coast Coaling Company against receipt which they will hand you.

The equipment covered by item *(d)*has never been in your hands, and the title of same has been reverted to the Coast Coaling Company.

It is understood that you are accepting the other items on Navy Order N-2242, with the possible addition of some extra parts.

Yours very truly,

(Signed) HebbeRt Coppell,

*President.*

*717Thereafter in June of 1918 plaintiff’s representative inspected the elevators named in item C and found them on one of the Hoboken piers with their gears, mechanism, and chains stripped of parts, exposed to the weather, and badly rusted. These facts were told to Commander Pigman, and he was further told that for that reason plaintiff would not accept their return. These elevators had been in excellent - condition at time of delivery. The return of' equipment under item D was accepted by plaintiff.

IX. In 1914 plaintiff had a contract with the Hamburg American Line to install trimmers on the *Vaterland.*Trimmers are disk-shaped mechanisms for leveling coal in the bunkers ‘ of a ship. Work was started about the date of the declaration of war. Because of hostility against the German Government, fear for the safety of plaintiff’s workmen caused work to be stopped and material for trimmers was left on board the ship. Later the United States took over the *Vaterland*and renamed her the *Leviathan.*In response to requests of plaintiff as to the whereabouts of this trimmer material, the chief constructor of the Navy wrote plaintiff as follows:

NAVY DEPARTMENT,

Bureau oe Construction and Repair,

*Washington, D. G., June 7,1918.*

Refer to No. O-TPX-IO.

Subject: *Leviathan,*coal-trimming mechanism.

References:

*(a)*Your letter, April 26, 1918.

(5) Your letter, May 13, 1918.

Inclosure (herewith) : (A) Inventory of parts.

Gentlemen : Your communications, references *(a)*and *(I)'),*were referred to the industrial manager, New York Navy Yard, who has forwarded an inventory of the trimming parts taken from the *Leviathan*and now on the piers, a copy of which is inclosed.

The industrial manager of the New York Navy Yard has been requested by the bureau to arrange with you for a continuation of this work, and all subjects in connection with this project can be referred to him.

Respectfully,

D. W. Taylor,

*Chief Constructor, U.*A. *N., Chief of Bureau.*

Coast Coaling Company,

*52 Williams St., Neto York, N. Y.*

*718X. Plaintiff’s representative inspected this material and found that it corresponded with the inventory in the hands of the company. Plaintiff interviewed Naval Constructor Rock, who, it was informed, was in charge of the installation of trimmers, and on June 12, 1918, received this letter from him:

Navy YaRD, New Yoke,

*Hull Division, June 1£, 1918.*

No. 892-C.

Coast CoaliNg CompaNy,

*17 Battery Place, New York City.*

Subject: *Leviathan,*coal-trimming mechanism.

1. In accordance with instructions received from the Bureau of Construction and Repair, it is desired to install a partial coal-trimming device in No. 4 bunker of the TJ. S. S. *Leviathan.*

2. As your company has no means of installing this apparatus without utilizing mechanics of the necessary trades from other work in this port, it is considered desirable that the installation be made under your supervision only, and that the necessary work be done by one of the numerous firms with which the Navy Department has contracts. The question of the cost of installing this device would be entirely in the hands of the Navy. The cost of the apparatus itself should be made separate from the cost of doing the actual work.

3. Please inform the industrial manager if the procedure outlined above is satisfactory to your company, and what is considered by your company to be a fair price for the apparatus itself. You are aware that a large amount of material taken from the *Leviathan*is now in the hands of the navy yard. This material can all be used on this partial device, and it is not believed that additional material will be necessary.

(Signed) Geo. H. Rock.

In response thereto plaintiff wrote the following:

JtjNe 18th, 1918.

Naval CoNstehctok Rock,

*Hull Division, Na/oy Yard,*

*Brooklyn, N. Y.*

Subject: Coal-trimming mechanism (U. S. S. *Leviathan).*

Dear Sir: Referring to your letter of the 12th instant (892-C), and to the conversation had with Mr. Crisp and Mr. Nickerson (the latter conversation per telephone), I *719have to say that this company will be pleased to undertake the supervision of the installation of trimming mechanism in Bunker No. 4, according in a general way to the procedure outlined in your said letter.

As to the cost of the apparatus, this is being dealt with separately, under an inventory and valuation heretofore requested of us by the Government, and duly submitted; and, under these circumstances, we do not now submit a separate price.

It is understood that the installation will be made at the Army piers in Hoboken and that you will furnish the necessary plans, etc., for the direction of the work.

We will provide a mechanical foreman to superintend the work, and the writer will give the necessary time for inspection. The charges for such superintendence and inspection would be based upon the time required and the rates paid, such charges to include overtime, if paid, and any requisite expenditures and disbursements connected with the conduct of the operation. To these charges it would be our purpose to add a reasonable percentage for our profit, the rate of which percentage we will be prepared to discuss and fix now, or we will leave it for adjustment hereafter, if you so prefer.

Placing our services at your disposal, we are, dear sir,

Yours very truly,

Coast CoaliNg & ENGINEERING Co.

By---,

*General Manager.*

XI. Several other letters relative to terms for installation passed between these parties, but nothing was done in connection therewith until early in August, when plaintiff was requested to remove this trimmer material from Pier 5, where it reposed. This pier was under the control of Army authorities. Plaintiff informed Commander Pigman, who was in charge of naval fuel organization in Ploboken, and Lieutenant Commander Crisp, at Brooklyn Navy Yard, of this order and that it considered this trimming mechanism the property of the United States and that it would not touch it. An attempt was made to find room near the piers but without avail, and later before the 15th of August, 1918, Lieutenant Commander Crisp took the mechanism to Brooklyn Navy Yard and plaintiff saw no more of it.

On September 10,1920, the Navy Department wrote plaintiff to take back the trimmers which it (the Navy) had not used, which plaintiff refused to do.

*720XII. On January 2, 1919, the Navy Department wrote plaintiff giving its determination of price as follows:

In reply please refer to No. 504^d, 5Oh-14, 503-8, N-2242.

Navy DepartmeNt,

Bureau of Supplies and Accounts,

*Washington, D. 0., Jcmuary 2, 1919.*

The Coast CoaliNG CompaNY,

*52 Williams Street, New York Oity.*

Subject: Final price determination on Navy Order N-2242.

Sirs: Navy Order N-2242 covering Michener portable patent type C and D coal-handling elevators, derrick barge *(Atlas)*and miscellaneous equipment, is hereby modified to apply under the terms and conditions of subpara-graph *(a)*thereon, subparagraph *(b)*being eliminated. The price now fixed as fair and just is as follows:

Item *(a).*4 portable Micbener patent type D coal-handling elevators, complete in every respect and ready for service; equipped with 550-volt T>. C. motors and starting boxes, $3,400_$13, 600. 00

(6). 4 portable Michener patent type O coal-handling elevators, complete in every respect and ready for service; equipped with 550-volt D. O. motors and starting boxes, $2,900_ 11, 600. 00

(e). 4 portable Michener patent type C coal-handling elevators not taken over by the Navy.

*(d). 4*portable Michener patent type D unassem-bled coal-handling elevators, not taken over •by the Navy.

(e). Miscellaneous equipment:

29 chutes, round, 14 at $13.50 each_ $189. 00

15 at $17.00 each_ 255. 00

2 chutes, swivel, single, $40.00 each- SO. 00

4 chutes, double head, $80.00 each- 320.00

6 chutes, square $10.00 each_ 60. 00

32 sets rope, wire, lengths (rigging), 2 to set, consisting of—

(а) 64 dead eyes at $15.00 each_._ 960. 00

(б) 32 sets rope, wire, lengths, $10.00 a set_ 320. 00

2,184. 00

*(†).*1 derrick barge (Atlas) complete in every respect and ready for service_ 7, 000. 00

Total to be paid the Coast Coaling and Engineering. Company_ 34, 384.00

This price supersedes the provisional price originally fixed. If the price now fixed is less than the provisional price, credit for the difference is due the Government, and check therefor should be drawn at once in favor of Navy disburs*721ing officer and mailed to Bureau of Supplies and Accounts, Navy Department, Washington, D. C. If credit is due the contractor, an itemized bill, prepared as directed in the Navy order, should be forwarded to office named in Navy order for preparation of public bill.

Settlement will be made on receipt of contractor’s invoices, provided the original of this letter, in supplement of above noted Navy order is signed and witnessed in spaces below and returned to Bureau of Supplies and Accounts, Navy Department, Washington, D. C. Even if the prices as now fixed agree with prices on the original Navy order, this letter should be returned properly executed in order to complete the Navy’s records.

Respectfully,

Samuel McGowaN,

*Paymaster General of the Navy.*

The plaintiff filled in the blank spaces of the appendage to this letter so that it read as follows, on its return after being signed:

“ Navy Order N-2242 is hereby accepted subject to the conditions named in subparagraph *(a)*of the original Navy order, *without waiver of claim for delivery of and compensation for items (c) and,*(d).

“ The price fixed above as fair and just is *not*satisfactory.

“ Coast CoaliNg Company, Inc.,

“ By Heebert Coppell, *President.*

“ Witness:

“ Geo. W. Pxcht.”

XIII. Plaintiff brought its suit in this court March 25, 1924, asking the following compensation:

4 portable Micbener patent type D coal-handling elevators, complete in every respect and ready for service; equipped with 550-volt d. c. motors and starting boxes, at $6,800 each_$27,200.00

4 portable Michener patent type C coal-handling elevators, complete in every respect and ready for service; equipped with 550-volt d. c. motors and starting boxes, at $0,800 each_ 27,200.00

4 portable Michener patent type O coal-handling elevators, complete in every respect and ready for service, but without motors or starting boxes, at $6,800 each_ 27, 200. 00

1 derrick barge *(Atlas)*complete in every respect and ready for service. 15, 000. 00

*72257 coal trimmers_$28,471.90

Loss from destruction of business- 300, 000. 00

Expenses of development_ 67, 902.11

Total_ 492, 974. 01

Less 75% of price fixed and paid by United States as set forth in paragraph 11 of this petition- 25, 788.00

Balance due plaintiff_ 487,186. 01

together with interest at the rate of 6 per cent per annum from date of alleged taking.

. Item, D of the Navy order is not claimed, as it was returned and accepted by plaintiff. It does not appear that there is any claim under item E of the Navy order.

XIY. The 12 elevators were reasonably worth, at the time of the alleged taking, $6,800 each, or a total of $81,600; the derrick barge *(Atlas)*and equipment, $10,000, and the 57 coal trimmers $11,790.31. The amount of $25,788 has been paid plaintiff on account.

No proof has been made as to the value of plaintiff’s business, and no proof has been made as to the item of $67,902.11 set out in plaintiff’s petition.

The court decided that plaintiff was entitled to recover, in part.

IÍay, Judge,

delivered the opinion of the court:

After a careful consideration of the evidence the court is of opinion that the value of the property turned over to the United States by the plaintiff is the amount found in the report of the commissioner, and judgment is therefore awarded for the sum of $65,812. The court being of the opinion that the trimmers were not taken by the Govern: ment under the so-called requisition order, and that the negotiations between the parties did not constitute a contract either express or implied for the sale of these trimmers, will not allow that part of the plaintiff’s claim.

The plaintiff further claims interest at 6 per cent on the ■reasonable worth of the property, which we find to be *723$65,812. This it claims because its property was taken or requisitioned by virtue of the act of March 4, 1917, 39 Stat. 1193, and the act of June 15, 1917, 40 Stat. 182.

In this case there was no taking or requisition by the United States of plaintiff’s property. The order of the Navy Department was an offer by it to purchase the property of the plaintiff, and this order was accepted by the plaintiff. Certain prices were stated in the order as being those that would be paid for the property, but it was provided : “ That it was impracticable to determine a reasonable and just value of the material delivered, and the fixing of the price will be subject to later determination.” The property was delivered to the Government, and the plaintiff not being satisfied with the price fixed by the Government took 75 per cent of the amount offered, and is now claiming interest.

This question is fully discussed in the opinion of Chief Justice Campbell in the case of *Liggett & Myers Tobacco Company*v. *United*States, decided this date, *ante,*p. 693. In that case the court refused to allow interest, and that decision will be followed in this case, and the allowance of interest is refused.

GRaham, *Judge;*Downey, *Judge;*Booth, *Judge;*and Camtbell, *Chief*Justice, concur.