#### PINTSCH COMPRESSING COMPANY v. THE UNITED STATES

[No. B-191.

Decided March 15, 1926]

*On the Proofs*

*'Bailment for hire; compensation for damaged condition.*— Where the Government rented tanks from the plaintiff for a stated consideration, and directed them to be delivered to a third party, who rendered them unfit for use, the plaintiff is entitled to recover from defendant the value of the tanks at the date they were received.

*The Reporter’s*statement of the case:

*Mr. Gaesoor L. Aiello*for the plaintiff. *Messrs. Frederic J).*McKennCy, *John S. Flammery*and *G. Bowdoin Oraighill*were on the briefs.

*Mr. Joseph Henry*Gohen, 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 a corporation organized under the laws ■of the State of New Jersey for the purpose of manufacturing Pintsch gas for distribution in tanks to railroad companies for use in lighting passenger equipment and was so engaged at the time here involved.

II. In February, 1918, Maj. James Prentice, U. S. Army, was commanding officer at Camp John Wise, San Antonio, 'Texas. By reason of a failure of the railroads to deliver gas for balloons from contractors at Kansas City it became *859necessary, in the emergency, to seek another source of supply and, after formal investigation, Major Prentice ascertained that the Walker Refining Company, at Austin, Texas, could and would furnish a limited supply of suitable gas if Major Prentice could provide tankage and procure the railroads to transport it.

Major Prentice thereupon, by telegraph, indicated to the ’plaintiff company a desire to rent four tanks and requested that company to wire the rate of hire and earliest possible Mate of delivery.

III. The plaintiff company indicated its willingness to furnish the tanks desired, fixed a rental therefor at $75 per tank per annum and did deliver four tanks, two being-shipped from El Paso, Texas, and two from Kansas City, Mo. At the request of Major Prentice that the plaintiff fix a value on the tanks, it fixed a value of $1,000 per tank.

IV. The tanks were not delivered by the plaintiff to Major Prentice or to Camp John Wise, but by his direction were • delivered to the Walker Refining Company at Austin. This was to permit the tanks, then empty, to be charged by the 'Walker Refining Company before shipment to the camp.

V. In June, 1918, Major Prentice was ill and in the base hospital at Port Sam Houston, Texas, and had been succeeded by Maj. D. H. Bower at Camp Wise. Major Bower, stating that he was acting at the suggestion of Major, then ■ Colonel Prentice, wrote the plaintiff suggesting that an ar-rangement should be entered into by which the Walker Refining Company should rent the tanks, which had been theretofore delivered, in order that they might be protected • by insurance, which the Government officers could not do, but stating that if the plaintiff should prefer that the Gov«ernment retain these cylinders and pay rent for the same 'instead of the plan suggested, arrangements would be made for the submission of vouchers for rent quarterly. This suggested arrangement was not agreed to by the plaintiff. Vouchers were sent with this letter to the plaintiff covering rental on these tanks at the rate of $75 per annum per tank ■- calculated -from March 27 to June 30, 1918, inclusive, and it -was stated in the letter transmitting the vouchers for sig- . nature that, “ Our records show that these tanks were turned *860over to the Government service on March 27, 1918.” Thereafter the United States continued to pay rental for these tanks and paid rental at the stated rate up to and including* June 30, 1920, the total amount of rent paid being $680.

VI. When these tanks were delivered by the plaintiff as above recited they were in good condition and fit for service. During their use in storage and shipment of gas from the plant of the Walker Refining Company to Camp John Wise they had been damaged, principally by overcharging, to such an extent that they were rendered useless for plaintiff’s purposes.

VII. In November, 1919, the plaintiff was informed by the chief of the training and operations group, Air Service. Washington, that the United States did not desire to further utilize the tanks and was asked to direct where they should be returned. The plaintiff replied that the question was as to-its reimbursement for the value of the tanks “ which were spoiled while in Government service.” It was then informed that the commanding officer at Brooks Field, San Antonio, Texas, was being written to directing the appointment of a board of officers “ to examine the tanks rented by you to the Government and to make a report thereon, after which the Government will be in a position to settle your claim.” And stating that, “ an investigation by a board of officers is necessary as a preliminary step to any settlement.” Such a board was appointed, and in July, 1920, that board recommended as follows: *“*The board therefore recommends that the Pintsch Compressing- Company, Jersey City, N. J., be requested to accept the offer of the Walker-Refining Company and sell to that company the cylinders at the price of $400 each; and that the difference between the-$400 and the original price of $1,000 for each cylinder be considered the proper charge against the Government and that this difference of $2,400 be paid by the Government.”

The Walker Refining Company agreed by letter to the appraisal section, War Department Claims Board, dated October 12, 1920, to purchase the four tanks at $400 each,, but imposed a stipulation that they be billed to it on January 1, 1921. The plaintiff company declined to accept this. *861settlement on this basis and declined to execute a release of the United States on the payment of $2,400, but indicated that it would accept such an award and execute such a release if payment was first made by the Walker Refining Company of said $400 per tank. In a letter to the appraisal .section of the War Department Claims Board the plaintiff stated that “ until the actual receipt of the money from the Walker Refining Company to cover the purchase of these holders, we can not see our way clear to sign the acceptance of the award sent us on July 30, 1920.” The War Department Claims Board, Air Service, wrote the Walker Refining Company informing it of the position taken by the plaintiff company, stating that there was justice in the contention and urging that the Walker Refining Company take steps to expedite payment, but the proposed purchase of the tanks by the Walker Refining Company was never consummated.

VIII. On December 10, 1920, the plaintiff was notified by the Air Service section, War Department Claims Board, that its claim had been referred by that board to the Air Service section and that that section had held that the War Department was “ without authority to compensate jour company for any damages suffered due to distortion of the tanks used by the Walker Refining Company in fulfilling its contract for the delivery of gas to the Government at Camp John Wise. Your claim has therefore been disallowed.” Plaintiff thereupon requested permission to present its claim to the appeals section of the War Department Claims Board, and on June 24, 1921, the War Department Claims Board informed plaintiff as follows:

“ Your letter of January 13th, requesting permission to present the above case to the appeal section. War Department Claims Board, was duly presented with the record to Colonel J. A. Hull, vice chairman of the War Department Claims Board, who has given the same careful consideration.

*“*I am now directed by Colonel Hull to advise you that your request can not be granted, and the action of the Air Service section must stand as final for the War Department Claims Board. The case has already been fully reviewed, first by the appraisal section and later by the Air *862Service section, both reaching' the conclusion that the facts do not support the claim of your company against the Government, and that your remedy is solely against the ■ Walker Refining Company, which company used the tanks-: on a rental basis in performing its contract with the Gov- - ernment to deliver gas to Camp John Wise. The damage • having been caused by the Walker Refining Company, there is no basis for claim against the Government.”

IX. At the time that these tanks were procured by Major-Prentice from the plaintiff company an emergency existed . necessitating the procuring of a supply of gas for use in balloons at Camp John Wise, and Major Prentice was duly authorized to take the action that he did.

The value of the tanks when they were delivered by the • plaintiff as above recited was $1,000 each.

The court decided that plaintiff was entitled to recover..

Downey, Judge,

delivered the opinion of the court:

During the war an emergency arose by reason of the inability of the railroad companies to deliver to Camp John Wise, San Antonio, Texas, the supplies of balloon gas contracted for in Kansas City, and the commanding officer,. duly authorized so to do, sought a means of supplying the need. He found that the Walker Refining Company, at Austin, Texas, could supply a limited quantity of suitable ■ gas and was willing to do so if the officer in charge could furnish suitable tanks, which it did not have, and secure • transportation.

To accomplish this purpose the officer solicited the plaintiff company to rent four of its tanks, which it consented to do and fixed the rental at $75 per tank per year. Being requested by the officer, for purposes of his own other than purchase, to fix a value on the tanks, the plaintiff fixed such value at $1,000 each.

The tanks were delivered by plaintiff, and by direction of the officer in charge they were delivered at the plant of the Walker Refining Company. Since delivery was thus made it is suggested that delivery not being made to the United States, but to the Walker Refining Company, responsibility therefore rests on that company to which the tanks, it is contended, were rented. The basis of’ the contention is disposed *863of by the simple fact that delivery was directed by the officer in. charge to be made to the Walker Refining Company,, not because it had rented the tanks, but in order that the tanks might be charged before shipment to the camp. It-would have been a foolish procedure, in an emergency, to-first ship empty tanks to the camp and reship them, with, attendant delay, to the plant which was to charge them.

The tanks were used for the intended purpose so long as needed, and the United States paid the rental therefor for a period of more than two years. When they were no-longer needed the plaintiff was so informed and asked to-direct where they should be shipped. But in the meantime the tanks had been damaged by overcharging, so that they were rendered unfit for use in plaintiff’s business, and. plaintiff demanded compensation to the extent of the alleged value of the tanks.

A board of officers was appointed to examine the tanks and report on the claim and the report of that board is set-out in the findings. Attempts were made by Government, representatives to consummate the recommendation of that-board by procuring the Walker Company to purchase the-tanks at $400 each, the United States to pay to plaintiff $2,400 or $600 per tank, thus making up the valuation of $1,000 each, but the purchase by the Walker Company could not be accomplished. Reasons not necessary to review in detail appear in the findings.

The real question is as to the liability of the United States for the value of the tanks. The record leaves no room for doubt that the United States rented the tanks. It also-satisfactorily appears that they were so damaged that they could not be returned to the plaintiff in serviceable condition, for its uses. It is true that the United States made no contract to compensate the plaintiff for the value of the tanks if they were not returned in good condition, but the law imposed that obligation. The contract was one. of bailment for hire imposing the obligation to return the rented property in as good condition as when received, natural wear excepted, and, failing in this, to compensate to the extent of the value of the property when received.

*864The rights and obligations of the parties seem to be so clearly defined that lengthy discussion is rendered unnecessary. We have concluded that the plaintiff is entitled to recover the ascertained value of the tanks and have directed judgment accordingly.

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