#### POCAHONTAS FUEL CO. v. THE UNITED STATES

[No. C-739.

Decided December 7, 1925]

*On the Proofs*

*Purchase order; provisional price.*— Where the plaintiff delivers coal in accordance with an order oí the Secretary of the Navy, the acceptance of which plaintiff refuses to sign, and said order states that the price named therein is fixed as advance payment and is contingent upon the cost of production plus a reasonable profit, the parties have entered into a contract for coal at a fair market value and the plaintiff is entitled to recover the difference between such value and the lower price named and paid.

*The Reporter’s*statement of the case:

*Mr. Oscar W. Underwood, jr.,*for the plaintiff. *Messrs. J. Marry Covington*and *H. R. Hawthorne,*and *Covington, Burling & Rublee*were on the briefs.

*Mr. Dan M. Jackson,*with whom was *Mr. Assistant Attorney General Herman J. Galloway,*for the defendant.

The court made special findings of fact, as follows:

I. Pocahontas Fuel Co., plaintiff herein, is a corporation organized and existing under the laws of the State of Virginia, having its principal office in New York City, N. Y. Plaintiff at all times referred to herein has been and now *232is engaged in the business of mining and selling coal from what is known as the Pocahontas coal field of Virginia and West Virginia, such coal being known as “ Pocahontas coal,” which is a steam and bunker coal of high quality.

II. On June 14, 1917, the Secretary of the Navy gave notice to plaintiff to be prepared to furnish its proportion of the total quantity of coal required by the Navy for the period ending September 30, 1917, the tonnage which would be taken from the plaintiff during that period then being estimated by said Secretary of the Navy at about 61,000 gross tons, delivery to be at Lamberts Point, Va. Said notice stated, among other things, that the price to be paid the plaintiff for such tonnage as it should be required to deliver would be determined later, but as an advance payment the Navy Department would allow the unit price of $2.335 per gross ton f. o. b. mines, any payments made at this rate to be subject to such increases or decreases as might later be decided upon. Said letter of the Secretary of the Navy, under date of June 14,1917, appears as Exhibit A to the petition herein and is by reference made a part of this finding.

III. In response to said letter of said Secretary of the Navy under date of June 14, 1917, two letters were written said Secretary in behalf of the plaintiff, one dated June 15, 1917, which was signed by Thomas F. Farrell, plaintiff’s manager of sales, and the other dated June 20, 1917, which was signed by plaintiff’s president. The two letters were as follows:

Sales Department,

Pocahontas Fuel Company, IncoRpoeated,

*New York, June 15th, 1917.*

Copy to Mr. Isaac T. Mann, president Pocahontas Fuel

Company, Inc., Washington, D. C.

The Honorable the Seceetaey op the Navy,

*Washington, D. G.*

SiR: We have your letter of June 14th, and in compliance with your order we have immediately issued instructions to our mines to provide for you the coal referred to therein.

We had already entered into contracts for all the coal which we have reason to expect our mines to produce up *233to April 1, 1918, and. if, due to Government requisitions, we do not have enough coal to fill these contracts we shall expect the Government to save us from all loss due to claims for breach of said contracts.

On this understanding we are entering your order, and we beg to assure you of our determination to do everything in our power to furnish the coal you call upon us for in a manner that will enable you to promptly load and despatch your steamers.

Very respectfully yours,

(Sgd.) T. F. Farrell,

*Manager of Sales.*

New Yore, *June %0th, 1917.*Honorable Josephus Daniels,

*Secretary of the Navy,*Washington, *D. G.*

Dear Sir: On the 14th instant your department made a requisition upon the Pocahontas Fuel Company (Pocahontas Fuel Company, Incorporated) for 61,000 tons of coal to be delivered to the United States Navy at Lamberts Point, Virginia, with the statement that the Government would pay the fuel company a conditional price of $2,385 per gross ton, f. o. b. mines, the final price therefor to be determined by the cost of production, with a reasonable profit added; and in response to this letter Mr. T. F. Farrell, manager of sales for the fuel company, wrote you on the 15th instant that instructions had at once been issued to the mines to provide the coal required, upon the understanding, however, that if such Government requisitions should prevent the fulfillment of previous private contracts the Government should save the fuel company “ from all loss due to claims for breach of said contracts.”

My attention has just been called to this correspondence, and I thought it due to myself, as well as to the Pocahontas Fuel Company, Incorporated, of which I am president, to frankly state before the matter goes further that the above-quoted letter of the 15th instant in reply to yours of the 14th does not wholly state the position of the fuel company. v The fuel company, and all of its officers, including myself, are perfectly willing to give any assistance, or render any service to the Government in its time of stress within our legitimate powers, and this we are not now hesitating and shall not hereafter hesitate to do; but on behalf of the stockholders of this company we desire to suggest, to the end that there may be no misunderstanding hereafter, that we look upon the price of $2,335 per gross ton as an ad*234vancement upon a final price to be determined not alone by damage suits to which the company may be subjected but by a consideration as well of market prices and loss of profits. Any other view might deprive those mines upon the Navy list of the right and benefit of private contract, and eventually compel them to bear the whole Government burden, while their competitors would enjoy the profits of unrestrained trade.

Yours very respectfully,

(Sgd.) Isaac T. Mann, *President.*

On July 3, 1917, the Secretary of the Navy replied to the president’s letter, as follows:

Jult 3, 1917.

SiR: This department is pleased to acknowledge receipt of your letter of the 20th ultimo, and I want to thank you for the manner in which you have acceded to this department’s request in the matter of furnishing your proportion of the Navy’s steaming coal requirements for the first quarter of. the fiscal year 1918, as outlined in my letter of the 14th ultimo.

The matter of relieving Navy suppliers from any commercial embarrassment which might result from the arrangements made by this department has been taken up with the coal-production committee of the Council of National Defense, and it is hoped that a satisfactory arrangement, with that end in view, may be arrived at at an early date. You may be assured, however, that every effort will be made to treat all suppliers equitably in this respect.

Respectfully,

(Sgd.) Josephus Daniels,

*Secretary of the Navy.*

Mr. Isaac T. Mann,

*President Pocahontas Fuel Oompany,*

*No. 1*Broadway, *New York City.*

IY. On August 9, 1917, there was forwarded to the plaintiff a formal order designated as Navy Order N-13. Said order covered deliveries required to be made during the-period fom June 14, 1917, to September 30, 1917, and recited that it was confirmatory of and supplementary to the letter from the Secretary of the Navy dated June 14, 1917, which, in full, was stated to be a part of this order, and further stated that the plaintiff would be called upon to furnish during said period approximately 61,000 gross tons of *235coal at Lamberts Point, Va., and approximately 6,000 gross tons at Savannah, Ga., conforming to the Navy’s specifications. (The Savannah portion of the order was soon recalled by the Navy, bnt the Lamberts Point portion was allowed to stand.)

A copy of said Navy Order N-13 is attached to the petition herein marked “ Exhibit B,” and is made a part hereof by reference.

V. Said Navy Order N-13, bearing date of August 9, 1917, was sent to the plaintiff in duplicate along with a letter of transmittal from the Paymaster General of the Navy dated August 16, 1917, which letter requested that the plaintiff sign and return the original order, but the plaintiff never has signed or returned either of the duplicates but retained both unsigned. The Paymaster General of the Navy subsequently again requested plaintiff to sign and return Navy order N-13, but the plaintiff did not comply with such request.

•VI. On June 15, 1917, “ McGowan,” who was the Paymaster General of the Navy, wired the plaintiff company, referring to the Secretary’s letter of the 14th, stating that the collier *Jason*would report to it at Lamberts Point on June 20 for loading, and requesting that it be prepared to give the vessel greatest possible dispatch, as prompt loading was urgent. This order was afterward modified by the substitution of another vessel at a different date, but on the 15th of June a request for the immediate delivery of a quantity of coal was telephoned from the navy yard at Norfolk, and accordingly on that day the first delivery was made. Plaintiff’s mines were distant 400 miles, but it had coal on the cars at Norfolk and thus was enabled to make this immediate delivery. Deliveries continued from time to time as requested to and including September 28, 1917, during which period plaintiff delivered to the United States Navy 75,084.40 gross tons of Pocahontas coal.

.YII. On August 21, 1917, the President of the United States, under the so-called “ Lever Act ” of August 10, 1917 (40 Stat. 276), issued a proclamation regulating the sale of coal between private parties and prescribing a scale *236of prices for the sale of bituminous coal. Pocahontas coal is a bituminous coal. This scale of prices was provisional only, subject to reconsideration and revision when the whole method of administering the fuel supply of the country should have been satisfactorily organized and put in operation. The price thus prescribed for run-of-mine Virginia and West Virginia coal, which covered the plaintiff’s Pocahontas coal, was $2 per net ton f. o. b. mines, which was equivalent to $2.24 per gross ton.

VIII. Plaintiff first billed the Navy Department on October 2, 1917, at the advance unit price of $2,335 jper gross ton f. o. b. mines for all the coal delivered from June 16, 1917, to September 28, 1917, sending the Navy Department on that date invoices covering the coal at that rate. On November 30, 1917, the supply officer of the Navy Department at Norfolk, Va., wrote the plaintiff telling it to redraft its invoices to the price of $2.24 per gross ton. Said supply officer therein inclosed all of the invoices which the plaintiff had submitted on October 2, 1917, except seven, on which seven, although billed at the rate of $2,335 per gross ton, as aforesaid, the Navy had prior to November 30, 1917, itself adjusted the same to $2.24 per gross ton and had sent sums to the plaintiff at the rate of $2.24 per gross ton. After the receipt of said letter of November 30, 1917, the plaintiff revised all of its invoices for. coal delivered between June 16, 1917, and September 28, 1917, except the seven which had already been adjusted to $2.24 per gross ton, as aforesaid, and sent them to the Navy Department along with a letter of transmittal dated December 11, 1917, which stated that the said price of $2.24 per gross ton was unsatisfactory to the plaintiff. Said letter of transmittal is as follows :

New Yore:, *Dec. 11, 1917.*

The Supply OeeiceR,

*U. B. Navy Yard, Norfolk, Virginia.*

Eequisitioned coal — Navy Order N-13 Deas Sir: Enclosed please find bills in duplicate and accompanying documents for the following vessels:

*237

You will note that we have invoiced the above coal at $2.24 per gross ton f. o. b. mines, and that we have not billed anything to represent the jobber’s commission of 16.8^ per gross ton which is allowed by the U. S. Fuel Administration for the reason that, although the Fuel Administration has ruled that we are entitled to said commission on at least part of the coal loaded into the cargoes described above, the question as to just what part of said coal is subject to the further charge of *16.8‡*per gross ton has not as yet been cleared up, and we, therefore, respectfully reserve the right to bill further at the rate of 16.8^ per gross ton on the proportion of the coal described above to which the Fuel Administration finds that the jobber’s commission is applicable. We also desire respectfully to protest that the price per ton which has been billed as per orders of the TJ. S. Fuel Administration, namely $2.24 per gross ton, is not just compensation, and that this company reserves the right to> receive any further payment for the coal covered by the invoices enclosed, and identified above, which may at any time be found to be just by a qualified U. S. authority.

The many difficult and complicated questions connected with the billing of the coal described above have delayed the submission of the invoices, and we therefore request that,, if practicable, they be paid in the near future.

Yours very truly,

George W. Woodruff, *Secretary.*

IX. Plaintiff at all times protested the price of $2.24 per gross ton and at no time acquiesced therein.

X. On November 10, 1917, the United States paid the'seven invoices referred to in Finding VIII, and on January' 2, 1918, and January 10, 1918, the United States paid the other invoices submitted with plaintiff’s letter of December *23811, 1917, all payments being made at the rate of $2.24 per gross ton f. o. b. mines. The plaintiff has, up to the present time, received from the United States upon its 75,084 gross tons and 40 hundredweight of coal, at the rate of $2.24 per gross ton, the sum of $168,188.20, in addition to which the plaintiff was paid various sums, included in its vouchers, as freight charges paid by it on the transportation of the coal from its mines to Hampton Eoads, at the rate of $1.40 per gross ton prior to July 1, 1917, and $1.50 per gross ton thereafter, aggregating $111,631.60. The dates of delivery, invoice numbers, gross tons, and ton-hundredweight delivered, the rate per gross ton received by the plaintiff, 'except that freights are not included therein, the amounts of the payments thus received by the plaintiff, and the dates such payments were received were as follows:

XI. On August 21, 1917, the President of the United States, by his Executive order which follows herein, delegated to the Secretary of the Navy his powers under the acts of March 4, 1917, and June 15, 1917, relative to the requisition of war materials for the use of the Navy.

*239EXECTmVE ORDER

By virtue of authority vested in me in the section entitled “ Naval Emergency Fund ” of an act of Congress entitled “An act making appropriations for the naval service for the fiscal year ending June thirtieth, nineteen hundred and eighteen, and for other purposes,” approved March 4, 1917, and in the section entitled “ Emergency Shipping Fund ” of an act of Congress entitled “An act making appropriations to supply urgent deficiencies in appropriations for the Military and Naval Establishments on account of war expenses for the fiscal year ending June thirtieth, nineteen hundred and seventeen, and for other purposes,” approved June 15, 1917, I hereby direct that the Secretary of the Navy shall have and exercise all power and authority vested in me in said sections of said acts, in so far as applicable to and in furtherance of the construction of vessels for the use of the Navy and of contracts for the construction of such vessels, and the completion thereof, and all power and authority applicable to and in furtherance of the production, purchase, and requisitioning of materials for construction of vessels for the Navy and of war materials, equipment, and munitions required for the use of the Navy, and the more economical and expeditious delivery thereof.

The powers herein delegated to the Secretary of the Navy may, in his discretion, be exercised directly by him or through any other officer or officers who, acting under his direction, have authority to make contracts on behalf of the Government.

Woodrow Wilson.

The White House,

*21*August, *1917.*

XII. On July 11, 1921, the plaintiff made formal demand in writing on the Secretary of the Navy for settlement of its account, but the Paymaster General of the Navy, in answering said communication on September 21,1921, stated that “ an examination of the records of the department indicates that the price paid for coal from June, 1917, to September, 1917, was in excess of that which was later allowed by the Fuel Administration, and therefore no price adjustment has been made, as the prices fixed by the Fuel Administration were regarded as representing just compensation at the time.” This was the first information received by the plaintiff from the Navy Department that $2.24 per gross *240ton was regarded by that department as just compensation to the plaintiff. It continued thereafter to press its' claim before the Navy Department by letters and personal calls, but the Navy Department refused settlement on any other basis.

XIII. The fair market value of the said 75,084 gross tons and 40 hundredweight of coal delivered to the Government by the plaintiff between June 14 and September 30, 1917, was f. o. b. mines $332,778.15, or $164,589.95 more than the plaintiff was paid therefor on that basis.

XIY. The legal rate of interest in New York, Virginia, and West Virginia is and at all times referred to herein was 6 per cent.

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

Downey, Judge,

delivered the opinion of the court:

The plaintiff, from June 16, 1917, to September 28, 1917, both inclusive, delivered to the U. S. Navy at Hampton Hoads 75,084.40 gross tons of Pocahontas coal, for which it has been paid at the rate of $2.24 per gross ton as the value thereof at the mines, a total sum of $168,188.20, in addition to which it has also been paid the freight paid by it for the transportation of said coal from the mines to the place of delivery, amounting to $111,631.60. Asserting that said coal was requisitioned by the Secretary of the Navy, acting for the President, recovery is sought of an additional sum as just compensation, measured by the prices it is alleged it could have sold said coal for in the market, and interest thereon as a part of just compensation. The acts of March 4, 1917 (39 Stat. 1193), and June 15, 1917 (40 Stat. 183), are pleaded.

The defendant denies that there was a requisitioning of the coal and asserts that it was delivered under an order placed by the Secretary of the Navy of date June 14, 1917, which defined the basis of compensation, and that upon that basis the plaintiff has been fully paid.

The order of June 14,1917, is pleaded as “ Exhibit A” and is made a part of the findings. It requested the plain-*241tiíf to be prepared to furnish, its proportion, estimated at 61,000 tons, of the coal required by the Navy for the period ending September 30, 1917, fixed an advance payment price of $2.335 per gross ton f. o. b. mines, subject to increase or decrease, the final price to be contingent on the cost of production.

The plaintiff’s sales manager, immediately upon receipt of this order on June 15, wrote the Secretary of the Navy (Finding III) stating that immediately upon receipt of his order of the 14th instructions had issued to the mines to provide the coal referred to, but stating that the entire product of the company’s mines up to April 1, 1918, was under contract and that it would expect the Government to save it harmless if any of the existing contracts were necessarily breached by reason of this Government “ requisition.”

A copy of that letter was forwarded to the president of the company, and immediately on its receipt he wrote the Secretary of the Navy (Finding III) stating he deemed it his duty, before the matter went any further, to say that the letter of the sales manager did not wholly state the position of the company, and “ to the end that there be no misunderstanding hereafter ” that “ we look upon the price of $2.335 per gross ton as an advancement upon a final price to be determined not alone by damage suits to which the company may be subjected but by a consideration as well of market prices and loss of profits.”

The Secretary of the Navy acknowledged receipt of this letter (Finding III), thanked its writer for the manner in which he had acceded to the department’s “ request,” with other suggestions rather indefinite in character.

On June 16, 1917, in response to a request from the navy yard at Norfolk for the immediate delivery of some coal, the plaintiff, having coal at that place intended for delivery on othex' orders, made its first delivery of 1,803 tons, and its second delivery was made on June 21.

Navy Order N-13, bearing date August 9, 1917, pleaded as “ Exhibit B ” and made a part of Finding IV by reference, was transmitted to the plaintiff by the Paymaster General of the Navy with a letter referring to it as “ confirming *242and. supplementing letters from the Secretary of the Navy, dated June 14, 1917, and July 12, 1917, which in full are a part of this order.” The letter of July 12, 1917, referred to a small quantity of coal for delivery at Savannah, Ga., as to which there was a cancellation, and hence it is not involved here. Compliance with this order was said to be obligatory, and subparagraph (b) treated of terms not necessary now to discuss. A blank was appended for the execution of an acceptance by the plaintiff, which it did not do, and when by a later letter asked to execute and return the acceptance it again did not do so.

One feature of the case, the demand for the inclusion of interest in any recovery allowed, is to be disposed of by the determination of the question as to whether there was a requisitioning of this coal. If the relations of the parties were contractual, there can be no award of interest. (See sec. 177, Judicial Code, 36 Stat. 1141, amended Nov. 23, 1921, 42 Stat. 316, and reenacted June 2, 1924, 43 Stat. 346.)

As bearing upon this question plaintiff distinguished this case from the *Consolidation Coal Company,*No. A-262, decided J anuary 26, 1925, and, on motion for new trial, April 20, 1925, 60 C. Cls. 608, in which just such a Navy order figured, by the fact that in that case there was an acceptance of the order whereas in this case there was no acceptance. But there are other considerations which it was not found necessary to discuss in the *Consolidation case.*There contractual relations were derived from the acceptance of Navy Order N-69, the same in form as herein, but because here there was no acceptance of the Navy Order, N-13, it does not necessarily follow that the relations of the parties were not contractual.

Before the issuance of Navy Order N-13 more than a third of the coal here involved had been delivered. Deliveries had commenced very soon after the receipt of the order of June 14, which all the facts show was accepted, with reservations as to the basis of compensation, and even if Navy Order N-13, unaccepted by plaintiff, was an attempted requisitioning, which is by no means conceded, it is difficult to conceive how established contractual relations could thtis be disrupted. The right of eminent do*243main existing in the sovereign is far-reaching, designed to enable the sovereign, without the consent of the other party, to acquire that which in its sovereign capacity it needs, .but we know of no rule permitting it, where those needs are being supplied under a contract, to abrogate those relations and, of its own motion, convert the subject matter of a contract being duly performed by delivery into the subject matter of a requisition. But Navy Order N-13 was not a requisition; it was an order, acceptance of which was requested and again requested. If a requisition, acceptance was unnecessary. *American Smelting Co.*v. *United*States, 259 U.S. 75. And if intended merely as an order to be accepted by the plaintilf, it could not by nonacceptance convert it into a requisition. If there is any inference to be drawn from its nonacceptance, it seems reasonable to conclude that plaintiff preferred that its status remain as already fixed. It was regarded by plaintiff, according to the evidence, as simply “'confirming ” the letter of June 14.

[Reverting to the order of June 14, 1911, which, it is to be said, was the only order in existence with reference to this coal for nearly two months and until the issuance of Navy Order N-13 of August 9, 1917, the order itself and the authority therefor are subjects for consideration.

It is to be observed not only that this order was neither in terms a requisition nor couched in such language as to justify such a construction, but also that at this time the 'Secretary of the Navy had no power to requisition. The acts of March 4, 1917, and June 15, 1917, are pleaded. The latter of these acts had not then been passed. The former gave certain powers to the President but did not authorize their exercise through some other agency as did the latter. Under neither act was there any delegation of power to the Secretary of the Navy until the Executive order of .August 21, 1917. It is true that this Executive order referred to the powers of the President under the act of .March 4, 1917, as well as that of June 15, 1917, -and assuming that the President might delegate his powers under the act of March 4, without express authority therefor, it .is plain that no power could be exercised thereunder by *244the Secretary of the Navy without such delegation. There-were features of that act which at the time of its passage-necessarily required the personal action of the President, before it could be operative for any purpose. The declaration of war probably obviated the necessity for a proclamation of national emergency by the President, but it could' hardly serve to broaden the act in any other respect. But this act contemplated a procedure in the matter of compensation and partial payment which finds no place in the; letter of June 14, and there is no reference therein to-this act.

Earlier than these acts is the national defense act of June-3, 1916, which in section 120 empowered the- President through the head of any department to place orders which should be obligatory. A large part of this section deals, with procedure by the Secretary of War and Army supplies, but its general terms are broad enough to include the-placing of an order for coal for the Navy. The difficulty in locating the authority for this order, whether under the-national defense act or not, arises because, while in some-of its phraseology it savors of an obligatory character, it. is an order by the Secretary of the Navy with no suggestion that he is acting for the President. In many instances the-President does act through the heads of departments and they, when acting, are regarded as acting for him, but when, the authority for the action emanates from the President it is customary to indicate that the action is by direction of or-by the authority of the President.

But whether this order was under the authority of the national defense act or not seems not necessary of determination, for, in any event, it was an accepted order fully performed, and if we must conclude that it was merely an order-for coal for the use of the Navy, placed by the Secretary, it was an authorized order, the acceptance and performance of which determined the relations of the parties to be contractual. The fact that the final price to be paid.for the-coal was in abeyance did not defeat the contract or convert the order into something else. See *Federal Sugar Refining*Company, No. B-147, decided January 19, 1925, 60 C. Cls.. 184.

*245There remains for determination the question of the price which the plaintiff is entitled to receive for its coal furnished under contract, and in that connection necessarily the question of whether it is entitled to receive more.than it- has ¡already been paid. Subsequent to the placing of this order, which had provided for an advance payment of $2,335 per gross ton, subject to adjustment, the President had fixed the tentative price of coal at the mine at $2.24 per gross ton, which for a time was continued under the Fuel Administration, and when the plaintiff rendered its bills at '$2,335 per gross ton some of them were restated by the Navy Department at $2.24 and the remainder of them were returned to the plaintiff to be restated at that figure and the plaintiff was paid $2.24 per gross ton and also the freight which it had paid for the transportation of the coal from the- mines to Norfolk. The terms of the order of June 14 as to advance payment were thus not complied with by the •Government.

This order stated that the price of the coal to be determined later would be contingent upon the cost of production with a reasonable profit added, and it is open to the •assumption that the Navy Department then expected the price of coal at the mine to be equal to or greater than '$2,335 per gross ton, else it would not have fixed that amount •as advance payment. The Government is not in the habit •of paying more under such circumstances than it expects ultimately to pay. This order was accepted by the sales manager of the plaintiff company to the extent at least of indicating that it would furnish the coal as requested, although there was a condition imposed upon the entering of the order predicated upon the fact that the plaintiff already had its output for a considerable time under contract, and the sales manager evidently conceived the possibility that the supplying of the Navy order would necessitate the breaching of some other contract. It does not appear that the sales manager had final authority to bind the plaintiff as to terms, but even if he had it appears that when the attention of the president of the company, who must be admitted the superior authority, was called to the matter and within five days after the receipt of the order and *246wiiihin such a short length of time that it was hardly to be assumed that coal would have already been delivered upon the order, he wrote the Secretary of the Navy indicating the desire of the company to comply with the order of the Secretary, but specifically reserving the question of price to be paid. The first delivery had been made on the 16th of June, the day after the receipt of the order, and four days beforethe writing of the letter by the president,, but this was a quite unusual occurrence, being the result of a hurried call from the navy yard at Norfolk which the plaintiff was able to comply with because it happened to have coal on the cars at that point which had been received for application on other orders, but which it was willing to divert in order to supply the apparently urgent needs of the.Navy, and it would, it seems to us, be an entirely too narrow construction to hold that this delivery antedating the president’s letter foreclosed the transaction on the basis of the Secretary’s order and the letter of the sales manager. If such were to be the construction, that condition at least would be applicable only to this first delivery, for the president’s letter indicating that he as the representative of the company and its stockholders was imposing the conditions indicated in his letter “before the matter goes further.” But upon the whole transaction we are of the opinion that the parties are to be deemed to have entered into a contract for the furnishing of this coal with the price in abeyance under such circumstances as entitled the plaintiff to be paid the fair market value therefor.

In the consideration of this matter the parties seem to have eliminated from their calculations the freights which the plaintiff paid for the transportation of the coal from the mines to the place of delivery, and which were repaid to the plaintiff, and to have considered the case purely from the standpoint of the value of the coal, exclusive of freight, which results in a f. o. b. mines price. Of course, the value of the coal at the place of delivery necessarily included the transportation expenses in getting it there; but to harmonize ourselves with the theory of the record we have found the value of the coal upon the basis stated, therefore offsetting as against that value the amount which the Gov-*247eminent paid, the plaintiff for the coal at $2.24 per gross ton, eliminating also from that side of the account the freights paid. This under the findings entitles the plaintiff to a judgment for $164,589.95, and we have so ordered.

Graham, *Judge;*Hay, *Judge;*Booth, *Judge;*and Campbell, *Chief*Justice, concur.