Case Name: MORGAN ENGINEERING COMPANY v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1923-05-21
Citations: 58 Ct. Cl. 373
Docket Number: No. 342-A
Parties: MORGAN ENGINEERING COMPANY v. THE UNITED STATES.
Judges: Graham, Judge; Downey, Judge; Booth, Judge; and Campbell, Chief Justice, concur.
Reporter: United States Court of Claims Reports
Volume: 58
Pages: 373–379

Head Matter:
MORGAN ENGINEERING COMPANY v. THE UNITED STATES.
[No. 342-A.
Decided May 21, 1923.]
On the Proofs.
Dent Act: averments of petition; contract. — Where the proof does not show any agreement, express or implied, between the plaintiff and an officer of the Government authorized to make such contract, there can be no recovery under the Dent Act. No contract can be implied where no order has been given to manufacture, no time fixed for commencement of construction, and no price fixed for payment.
The Reporter’s statement of the case:
Mr. E. Hilton Jackson for the plaintiff. Howe, Swayze & Bradley were on the briefs.
Mr. Edw. D. Hays, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant. Messers. W. T. Rankin, W. F. Norris, and B. F. Brown were on the briefs.
The following are the facts of the case as found by the court:
I. The plaintiff is and was at the times hereinafter mentioned a corporation organized under the laws of the State of Ohio, and is and was engaged in the business of engineering and construction, and before the war with Germany was chiefly engaged in the manufacture of traveling cranes, rolling-mill machinery, shipbuilding machinery, and machinery for coast defense. The plaintiff had also been engaged in the construction of disappearing and barbette gun carriages for the United States for more than twenty-five years prior to> the war with Germany. The place of business of the plaintiff was at Alliance, Ohio.
II. The plaintiff is and was during the period hereinafter mentioned closely affiliated with the Canton Steel Foundry Company, of Canton, Ohio, also an Ohio corporation, a separate and distinct entity from the plaintiff, but during the period here involved the office of president, treasurer, sales manager, purchasing agent, and general manager in both cor porations was, respectively, held by the same individual. The books of account of the two corporations were and are kept entirely separate. The Canton company made most of the steel castings for articles manufactured by the plaintiff company.
III. Soon after the declaration of war by the United States with the German Empire the plaintiff began making gun mounts for the United States under contracts regularly entered into by the plaintiff with the United States. When an order was given by the United States to the plaintiff for a specified number of gun mounts the plaintiff proceeded to prepare for the execution of said order in advance of the execution of the formal contract. In all these cases a formal order was given for the specified work which was to be performed. To increase and facilitate the production of implements of warfare the United States in the month of December, 1917, began the construction of a plant at Alliance, Ohio, on property owned by the plaintiff. This plant was especially designed for the manufacture of 14" gun mounts and 16" howitzer mounts. Under a contract with the United States this plant was to be operated by the plaintiff for the United States upon a basis of cost, plus a fixed profit.
IV. Col. James B. Dillard was an officer of the United States Army acting under the authority of the Secretary of War and was, prior to June 15, 1918, executive assistant to the Chief of the Engineering Division of the Ordnance Department, and after that date was chief of that division. The Engineei’ing Division has charge of the designing of all ordnance material, preparation of drawings, and purchase and manufacture of material. It also has authority from the Chief of Ordnance to direct an issue of experimental orders by the Procurement Division, which the latter had no authority to modify.
V. In the spring and early summer of 1918 the officers of the Government charged with that duty adopted a program for the construction of 128 14" gun mounts and 70 16" howitzer mounts. This program was tentative in character :and was based upon an estimate of what might be the future requirements of the Government in the event the war should continue through the year 1920, the estimate or program calling for 80 14" gun mounts for the year 1919 and 48 14" gun mounts for 1920, 30 16" howitzer mounts for 1919 and 40 16" howitzer mounts for 1920. This program was communicated to the plaintiff by the officers of the Government about May 3, 1918. Colonel Dillard told the plaintiff through its officers that it would receive contracts for the construction of some of these gun and howitzer mounts if the war continued, and if the war had continued it would have received the contracts for some of these gun and howitzer mounts, as many of them as its plant could handle. No contract was entered into with the plaintiff by Colonel Dillard or any other officer of .the Government for the manufacture of any of the aforesaid gun and howitzer mounts, none of them were manufactured, and they were not required by the Government owing to the fact that the war ended November, 1918. In his conversations with the representatives of the plaintiff Colonel Dillard advised them to get ready for the manufacture of the aforesaid gun and howitzer mounts, but at no time was there any intimation to the plaintiff as to how many of these mounts it was to manufacture, nor as to when the manufacture of them was to begin, nor as to what the price for manufacturing them was to be. Nothing was said by either party as to the terms upon which the gun and howitzer mounts were to be manufactured. Colonel Dillard did not expect or suggest that the plaintiff should order material for these mounts.
The plaintiff, expecting to receive the contracts for the mounts, curtailed to some extent its commercial and general work, and in May, 1918, gave orders to the Canton Steel Foundry Company for the materials necessary for the production of said mounts. The plaintiff had prior to November 12, 1918, assembled certain of the necessary materials and had made commitments for certain other necessary materials for the production of these mounts. These materials were assembled and commitments therefor made by the Canton Steel Foundry Company for the plaintiff at its direction. On or about June 28,1919, the Canton Steel Foum dry Company made demand upon the plaintiff for the sum of $225,730.29, said sum purporting to be the cost of said materials assembled for the plaintiff and the cost incurred in the cancellation of the commitments made for other materials. The market value of said materials depreciated following the armistice, but to what extent does not appear, nor does it appear what the market value of the said materials was either before or after the armistice nor at the time they were sold by the plaintiff to the Canton Steel Foundry Company, the said materials having- been sold to the company by the plaintiff on June 1, 1920, for the sum of $102,148.08, which the steel company credited against the sum of $225,-730.29, leaving a balance on the books of the Canton Steel Foundry Company against the plaintiff of $123,582.21. Of this amount the sum of $88,014.21 represents the cost of the said materials assembled; the sum of $35,568 represents the cost of cancellation of the commitments for other of said materials.
VI. In June, 1918, the plaintiff was informed by Pliny E. Holt, chairman of the caterpillar advisory board, Ordnance Department of the United States War Department, that the United States intended to construct a large number of caterpillar gun mounts, and that the Government was developing a program for the construction of these mounts. At the request of Government officers expert engineers were furnished by various manufacturers, including the plaintiff, which experts after conferences with the Government officers in Washington proceeded to France for the purpose of conferring with the French engineers as to the best plan for the construction of caterpillar mounts. These engineers started for France about August 1, 1918, and returned about October 15, 1918, and no gun mounts wex-e manufactured by the plaintiff according to the design agreed upon by these engineers by reason of the fact that the armistice occurred on November 11, 1918.
Many conferences were held between the plaintiff and the officers of the Government during the summer of 1918 with reference to the construction of these caterpillar mounts. The plaintiff was told by the said officers that contracts would be given it for the construction of as many of these mounts as the plant of the plaintiff could handle. The plaintiff was advised by the said officers to get ready to manufacture these mounts, as it was expected that at least 200 of them would be constructed. There was, however, no contract entered into nor any order given by the defendant to the plaintiff for any specific number of caterpillar mounts, except one order for 50 mounts, which number was reduced to 8 when the armistice was signed. This contract and order do not enter into this suit, as the plaintiff has been paid in full for the same.
The plaintiff, expecting that the Government would construct the 200 caterpillar mounts aforesaid, which it would need if the war continued, prior to November 12, 1918, purchased and assembled the necessary materials for the production of said mounts. These materials were assembled by the Canton Steel Foundry Company for the plaintiff upon its order made July 2, 1918. On June 27, 1919, the Canton Steel Foundry Company made demand upon the plaintiff for the sum of $66,212.51, said sum purporting to be the cost of said materials ordered by the plaintiff for the production of 159 caterpillar gun mounts. The market value of the said materials depreciated following the armistice, but to what extent does not appear, nor does it appear what the market value of the said materials was either before or after the armistice, nor at the time the said materials were sold to the Canton Steel Foundry Company by the plaintiff in June, 1920, for the sum of $37,970, which the steel company credited against the sum of $66,212.51, leaving a balance on the books of the steel company against the plaintiff of $28,240.28.
It does not appear why the sale of these materials was postponed from November 11, 1918, to June, 1920.

Opinion:
Hay, Judge,
delivered the opinion of the court:
This is a suit brought by the plaintiff to recover from the United States the sum of $151,822.49, which it alleges is owing it by the United States. The plaintiff relies for its recovery of the aforesaid sum upon the provisions of the act of Congress approved March 2,1919, 40 Stat. 1272, and commonly known as the Dent Act. The provisions of the act so fas as applicable to this suit are as follows:
" Seo. 1. That the Secretary of War be, and he is hereby, authorized to adjust, pay, or discharge any agreement, ex press or implied, upon a fair and equitable basis that has been entered into, in good faith during the present emergency and prior to November twelfth, nineteen hundred and eighteen, by any officer or agent acting under his authority, direction, or instruction, or that of the President, with any person, firm, or corporation for the acquisition of lands, or the use thereof, or for damages resulting from notice by the Government of its intention to acquire or use-said lands, or for the production, manufacture, sale, acquisition or control of equipment, materials or supplies, or for services, or for facilities, or other purposes connected with the prosecution of the war, when such agreement has been performed in whole or in part, or expenditures have been made or obligations incurred upon the faith of the same by any such person, firm, or corporation prior to November twelfth, nineteen hundred and eighteen, and such agreement has not been executed in the manner prescribed by law.
" Sec. 2. That the Court of Claims is hereby given jurisdiction on petition of any individual, firm, company, or corporation referred to in section 1 hereof, to find and award fair and just compensation in the cases specified in said section in the event that such individual, firm, company, or corporation shall not be willing to accept the adjustment, payment or compensation offered by the Secretary of War as hereinbefore provided, or in the event that the Secretary of War shall fail or refuse to offer a satisfactory adjustment, payment or compensation as provided for in said section."
It appears that the plaintiff filed its claim, as provided for in the act, with the Secretary of War. The Secretary of War declined to pay the claim of the plaintiff or any part of it, hence the suit in this court.
The purpose of the Dent Act was to afford relief to persons who had made contracts with the United States during the war with Germany and prior to November 12, 1918, which contracts had not been formally executed as required by law, and which upon a fair and equitable basis could be so construed as to authorize the Secretary of War to adjust, pay, or discharge any agreement, express or implied, if entered into in good faith by an officer or agent acting under the authority, direction or instruction of the Secretary of War or the President.
The facts of this case do not in our opinion justify the conclusion that there was any agreement, express or implied, between the plaintiff and any officer of the United States with authority to make such a contract. Indeed, there has been no contract proved and the facts do not show that any contract was made between the parties. The plaintiff seems to have relied upon obtaining a contract for the construction of certain mounts. That reliance came from dealings which the plaintiff had had with the Government and from its knowledge that these mounts would be constructed by the United States if the war continued. The plaintiff was shown a program as to these mounts for the years 1919 and 1920, and acting upon this it, of its own accord and without having been ordered so to do, purchased materials for the manufacture of these mounts. It took this step with full knowledge that the war might end at any time, and that if it did end the United States would not need the mounts and would not enter into a contract for their construction. A contract can not be implied in a case where no order has been given for the manufacture of the machinery, where no time has been fixed for the commencement of its construction, and where no price has been fixed for its construction. Baltimore Ohio Railroad Co. v. United States, 261 U. S. 592.
The fact that the plaintiff was in the habit of assembling its material for construction in anticipation of Government orders does not alter the case. If it chose to rely upon what might happen, that was its lookout, and it can not be allowed to found a contract upon a custom. The plaintiff " went ahead without waiting for an order," and must abide by the result of its own actions.
The petition must be dismissed. It is so ordered.
Graham, Judge; Downey, Judge; Booth, Judge; and Campbell, Chief Justice, concur.