#### G. S. BRIGGS & COMPANY v. THE UNITED STATES

[No. B-108.

Decided June 1, 1926]

*On the Proofs*

*Contract; acceptance of articles returned.*— Where articles are delivered to the Government under contract and are accepted, thereafter the Government claims they were not in accordance with specifications, and the contractor requests their return and upon their return accepts them, the contractor can not recover any part of the contract price.

*Same; articles retained and used.*— Where the Government, after inspection, retains and uses articles delivered to it under contract, it is liable for the full contract price.

*The Reporter's*statement of the case:

*Mr. M. Walton Hendry*for the plaintiff.

*Mr. Joseph Henry*Oohen, with whom was *Mr. Assistant Attorney General Herman J.*Galloway, for the defendant. *Mr. Percy M. Cox*was on the brief.

The court made special findings of fact, as follows:

I. The plaintiff is a corporation duly organized under the laws of the State of Virginia, with its principal place of .business in the city of Norfolk, in said State, and during the *353times hereinafter mentioned, was engaged in the lumber business.

II. On September 14, 1917, the Government through its contracting officer, E. H. Cope, paymaster, United States Navy, naval operating base, Hampton Boads, Va., solicited bids for furnishing 15,000 railroad ties, No. 2 oak. They were to be used in the construction of railway tracks and sidings at the naval operating base at Hampton Boads, Va. Printed forms were furnished prospective bidders, entitled *“*Proposal for Supplies or Services,” appropriately filled out by the contracting officer, showing quantities of ties desired and place of delivery, and requiring bidders in returning their bids thereon to submit specifications of the ties they proposed to furnish. The plaintiff received one of these forms and returned it to the proper officer with its bid. The Government’s proposal and the plaintiff’s specifications and bid thereon were as follows:

Copy of the said proposal, as returned by the plaintiff, is included in Exhibit A to plaintiff’s petition and is by reference made a part of this finding.

III. Plaintiff’s bid was accepted and on September 25, 1917, the said contracting officer, E. H. Cope, paymaster, United States Navy, naval operating base, Hampton Boads, *354Va., furnished the plaintiff an order reading in part as follows:

ORDER EOR SUPPLIES OR SERVICES

Requisition No. 37 Bureau Y. & D.,

Naval OperatiNG Base, *Hampton Roads, Va., %5fh Sept., 1917.*

G. S. Briggs & Co. (Inc.),

*Norfolk, Va.:*

In conformity with your proposal, opening 20th Sept., 1917, which is accepted, you will please deliver at the place specified below, all charges prepaid, subject to the usual inspection at place of delivery (unless otherwise provided), the following supplies, to be delivered promptly and within the time proposed by you, viz:

The above ties to be delivered to supply officer, naval operating base, Hampton Roads, Va., within thirty (30) days from date of order.

Inspection at point of delivery only.

Total amount of order, $18,750.00.

$ ‡ ‡ ‡ H*

No formal contract will be entered into with you, but this acceptance is made on expressed and exact compliance with the conditions submitted in your proposal and those stated on the back hereof.

Respectfully,

E. H. Cope, *Paymaster, U. S. N.*

A copy of this order is included in Exhibit A to the petition and is made a part of this finding by reference thereto.

IV. The defendant, however, prepared a formal contract dated September 25, 1917, which the plaintiff received some time in October, the date does not appear, for his signature, *355and which was signed by G. S. Briggs, president, for and in behalf of the plaintiff, and by the said contracting officer, for and in behalf of the defendant. By its terms the plaintiff was required to furnish and deliver at its risk and expense, at such place in the naval operating base, Hampton Hoads, Va., as the officer in charge might direct, and within 30 days, 15,000 railroad ties, at the price set opposite thereto, described therein in words and figures as follows:

The above ties to he delivered to the supply officer, naval operating base, Hampton Roads, Va., within 30 days from date of contract. Inspection at point of delivery only.

A copy of this contract is included in Exhibit A to the petition and by reference thereto is made a part of this finding.

V. The first delivery of ties under the contract was a lot of 546 ties on or about October 9,1917, and thereafter from time to time, ending on or about November 19, 1917, the plaintiff delivered 14,841 ties, a total of 15,387 ties. Of this number the defendant returned to the plaintiff 6,211 ties and accepted and retained 9,716. Of the number so retained 3,396 were paid for by the defendant at the contract price of $1.25 each, a total of $4,245, and the residue, 5,780 ties, was paid for at the rate of 66.36 cents each (see Finding X), less $310 for cost of handling and returning ties not retained, or net $3,525.61, a total of $7,770.61.

For the 6,211 ties thus returned to it plaintiff has received no payment from the defendant.

VI. Shortly after the order of September 25, 1917 (Finding III), was given, and before the plaintiff had received and signed the formal contract mentioned in Finding IV, Mr. George S. Briggs, its president and representative, *356went to the naval operating base and had a conference with Lieut. T. A. Nicholson, who was in charge there of the construction of the railroad tracks. Lieutenant Nicholson was not a contracting officer. At the time of the conference the plaintiff had delivered six or seven carloads under the order, which contained, in part, red oak ties. Lieutenant Nicholson told Mr. Briggs that the market price on the white oak tie was considerably higher than on the tie that he was shipping, and objected to paying white oak prices for red oak ties.

As a result of this conference it was agreed by arrangement between plaintiff and defendant that the contract should call for oak ties, and not for white oak ties as named in the bid. In accordance with this arrangement the contract mentioned in Finding IV was drawn, which did not require the plaintiff to furnish white oak-ties exclusively.

VIL A portion of the ties delivered was rejected by the defendant.

The first information received by the plaintiff as to rejections was contained in a letter from the contracting officer dated October 27, 1917, which stated that 14 ties had been rejected on account of being undersized or of bad wood. On or about November 12, 1917, the contracting officer furnished the plaintiff notices of further rejections showing 303 ties rejected on account of being undersized or rotten, or both, 26 rejected on account of being undersized and unfit, and 71 as being “ not in accordance with specifications.”

On or about November 15, 1917, the said representative of the plaintiff, Mr. George S. Briggs, its president, went to the naval operating base at Hampton Hoads and was shown a large number of acceptances of deliveries which he was informed would be mailed to him in due course, and which showed the number of ties accepted and the number rejected, the rejections being few in number.

Thereafter, in the latter part of December, 1917, Mr. Briggs, upon' being informed that the officer in charge wished to see him, again went to the naval operating base at Hampton Hoads and interviewed Lieut. Commander Elliott C. Brown. Captain Chambers had been in charge of the construction work at the naval base, under the title of *357public-works officer, and in October, 1917, exact date not shown, but when most of the deliveries had been completed, Lieutenant Commander Brown had replaced him. At this interview Lieutenant Commander Brown informed Mr. Briggs that an inspector from the Pennsylvania Railroad had examined the ties and reported there were a lot of red oak ties among them. Lieutenant Commander Brown told Mr. Briggs that his ties were not of the kind contracted for and they would be loaded up and returned. Mr. Briggs, acting for the plaintiff, agreed to take back such ties as were shipped him and asked for permission to remove them himself, but was refused permission to do so. He requested their immediate return in order that he might dispose of them to other parties, and asked to be notified when they were shipped.

The defendant returned the 6,211 ties in two lots, one on January 7, 1918, and another January 14, 1918. The first and only notification plaintiff received of the two shipments was from the Virginian Railroad, which notified the plaintiff that the said lots were at the naval operating base awaiting instructions.

VIII. There is not sufficient evidence to show the several dates and amounts of all the deliveries to the naval operating base. The ties delivered consisted of white oak and red oak ties. No proof is offered of the exact number of each kind, nor does it appear that any attempt was made by the defendant to ascertain the separate numbers. It does appear that at least 11,013 of them had been passed by one or another of defendant’s inspectors upon delivery as satisfactory and that approximately 1,125 had been classified by them as undersized, rotten, or otherwise unfit. There appear to have been no rejections prior to the completion of all deliveries, on the ground that ties were red and not white oak. The evidence does not establish the fact that the ties retained by the defendant were not according to Pennsylvania Railroad specifications.

IX. It does not appear what proportion of the 6,211 ties returned to the plaintiff was returned by the defendant on account of their being red oak»instead of white oak, and *358what proportion was returned for other reasons. A portion of them — the number is not shown — had been used by the defendant, and an indefinite number was of white oak. The plaintiff sold these ties at once to three parties, the Norfolk & Western Railway Co. at 75 cents and 90 cents, the Pennsylvania Railroad Co. at 66 cents, 76 cents, and 86 cents, and the construction quartermaster, Norfolk quartermaster terminal, War Department, at $1.10 each, to avoid accumulation of railroad demurrage charges, part of them being accepted and part rejected, and was paid for those accepted. The proof as to the proportion of the said 6,211 ties which were accepted by said parties is not satisfactory.

X. An adjustment of the matter in dispute between the plaintiff and the Bureau of Yards and Docks, in connection with the tie contract, was undertaken in 1918, and finally resulted in the submission and acceptance of a basis of settlement, approved by the Bureau of Supplies and Accounts, a detailed statement of which is as follows:

“ STATEMENT SHOWING NUMBER OF TIES DELIVERED BY G. S. BRIGGS & CO. UNDER SUPPLY OFFICE CONTRACT NO. 27, REQUISITION 37, Y AND B

“ Number of ties delivered to naval operating base under above contract_15,387 “

“ Number of rejected ties returned to the contractor_ 6,211

“ Settlement due contractor for_ 9,176

“Number of ties already paid for as first class, see inclosure * B ’_ 3, 396

“Number of ties for ■which contractor should receive a lower price than that shown in contract_ 5,780

“ Ties under above-mentioned contract were shipped from four different points — Victoria, Va., freight rate 8 cents per 100 lbs.; Charlottesville, Va., freight rate 13 cents per 100 lbs.; Fredericksburg, Va., freight rate 14 cents per 100 lbs.; Kelford, N. C., freight rate 5.8 cents per 100 lbs. The average freight rate for these points is 10.2 cents per 100 lbs. “ Average switching charge per tie, 3 cents. “ Average freight charge per tie, 18.36, based on estimated weight of 180 pounds per tie. Average price per tie, 45 cents, this being the price the Pennsylvania Railroad was paying for ties of the quality furnished in September, 1917, the date of contract with G. S. Briggs and Co. See inclosure ‘ C.’

“ This makes the average price per tie 66.36 cents f. o. b. naval operating base. *359BECOMMENDED BASIS FOB SETTLEMENT WITH G. S. BEIGGS *&*CO.

“ 5,780 red oak ties, at $0.6636 each-$3, 835. 61 “ Less cost of handling and returning rejected ties to the contractor_ 310.00

“Amount of money due contractor on above basis— 3, 525. 61 *”*

XI. The plaintiff agreed to settlement of its claim on the basis shown in Finding X, under protest, reserving to itself any of its rights in the matter and leaving it free to make claim in the future for such balance as it might consider justly due.

On August 20, 1918, in accordance with this settlement, a check was issued by the paymaster, United States Navy, for the sum of $3,525.61, payable to the plaintiff, and was accepted by plaintiff.

The difference between the contract price on the 9,176 ties accepted and retained by the defendant, $11,470, and the amount paid therefor by the defendant to the plaintiff, $7,770.61, is $3,699.39.

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

Geaham, Judge,

delivered the opinion of the court:

This suit grows out of a contract for the delivery by plaintiff of 15,000 railroad ties at $1.25 per tie, to the supply officer, at the naval operating base, Hampton Hoads, Va. The ties were delivered to and accepted by the defendant. Thereafter the representative of the defendant claimed that a portion of the ties was not of the kind called for by the contract and the plaintiff agreed to accept the ties that were returned to it. Approximately 6,211 were shipped to it. The ties were received and afterwards sold at a price less than the contract price to the Norfolk *&*Western Railroad, the Pennsylvania Railroad, and the representatives of the War Department. Plaintiff is not entitled to recover any loss sustained by this resale.

The Government retained and used 9,176 ties, for a portion of which it paid the contract price, and for the remainder 66.36 cents per tie, under a settlement with plaintiff. Plaintiff received the amount paid under this settlement under protest and reserved its rights, and it is entitled to recover *360the difference between the sums so paid and the contract price on 9,176 ties (Finding V).

Judgment should be entered for the plaintiff in the sum of $3,699.39, and it is so ordered.

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