Case Name: A. L. FERGUSON, AND A. L. FERGUSON AS EXECUTOR AND TRUSTEE OF THE ESTATE OF J. A. FERGUSON, AND A. L. FERGUSON AS EXECUTOR AND TRUSTEE OF THE ESTATE OF J. W. FERGUSON, TRADING AS THE RED STAR SPOKE CO., v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1925-05-04
Citations: 60 Ct. Cl. 649
Docket Number: No. C-670
Parties: A. L. FERGUSON, AND A. L. FERGUSON AS EXECUTOR AND TRUSTEE OF THE ESTATE OF J. A. FERGUSON, AND A. L. FERGUSON AS EXECUTOR AND TRUSTEE OF THE ESTATE OF J. W. FERGUSON, TRADING AS THE RED STAR SPOKE CO., v. THE UNITED STATES
Judges: 
Reporter: United States Court of Claims Reports
Volume: 60
Pages: 649–654

Head Matter:
A. L. FERGUSON, AND A. L. FERGUSON AS EXECUTOR AND TRUSTEE OF THE ESTATE OF J. A. FERGUSON, AND A. L. FERGUSON AS EXECUTOR AND TRUSTEE OF THE ESTATE OF J. W. FERGUSON, TRADING AS THE RED STAR SPOKE CO., v. THE UNITED STATES
[No. C-670.
Decided May 4, 1925]
On the Proofs
Contract; implied agreement;. laclo of authority m officer to eon-tract.- — See Jacob Reed’s Sons v. United States, ante, p. 97.
The Reporter's statement of the case:
Mr. Raymond, M. Hudson, for the plaintiff.
Mr. Louis R. Mehlinger, with whom was Mr. Assistant Attorney General William J. Dovovam,, for the defendant.
The following are the facts as found by the court:
I. A. L. Ferguson, personally, and A. L. Ferguson, as executor and trustee of the estates of J. A. Ferguson, deceased, and J. W. Ferguson, deceased, are a partnership trading as the Red Star Spoke Company under the laws of the State of Arkansas.
II.After some preliminary negotiations there was sent to the Red Star Spoke Company by the commanding officer of the Rock Island Ar.senal, who was acting for the Government and duly authorized thereto, a purchase order, No. 5598, directed to the plaintiffs and reading as follows:
“To furnish and deliver subject to the conditions below and on the back hereof the following, viz:
“ Inspection to be made at R. I. A.
“ Delivery to be made at the rate of one car or more per month, beginning at once. All transportation charges to Rock Island Arsenal must be prepaid and invoices rendered in duplicate. Emergency.”
Upon receipt of this purchase order plaintiffs replied under date of January 19, 1918, to the effect that in accepting the order for 100,000 artillery spokes it was to be understood that plaintiffs were doing so with the proviso that the acceptance was subject to the- contingencies of transportation, labor troubles, breakage of machinery, and other circumstances beyond their control; and, further, should higher prices be established by the Government the plaintiffs should have the benefit of such advances on any unfilled portion of the order. It farther stated that the letter should be made a part of the order.
III. A formal contract requiring bond covering purchase order No. 5598 was presented to plaintiffs, but was not executed.
IV. Subsequent to the receipt of said purchase order plaintiffs proceeded with the accumulation of raw material necessary in the .filling of said order. On the 9th of February, 1918, Col. Burr, commanding officer at Rock Island Arsenal, wrote to plaintiffs a letter, which was received by plaintiffs, in which he called attention to the fact that they were still awaiting reply to letters of January 22d and 31st to plaintiffs relative to delivery of the spokes called for in purchase order No. 5598, and asking for a reply by return mail. Again, on February 20, 1918, there still having been no deliveries, another letter was written to plaintiffs by Lt. Col. Ramsey, then commanding officer at the arsenal, in which this officer asked for prompt advice as to when they might expect delivery of the spokes called for in said purchase order which had been placed with plaintiffs on January 16. He added, “We have requested this information under dates of January 22d, January 31st, and February 9th. Therefore, we trust you will give us this information by return mail.”
V. Plaintiffs made their first shipment of spokes under1 said order on May 9,1918. This shipment contained 11,059 pieces. Major C. 11. Baxter, who was sent out by the commanding officer of Rock Island Arsenal, visited the plant of plaintiffs between May 4 and May 8, before any shipments had been made on account of the spokes mentioned in this purchase order. He urged the speeding up of production and riishing shipment. He stated to plaintiffs that they would be relieved from any loss, should the war cease, covering surplus material. It does not appear what authority Major Baxter had for these statements or that he was authorized to make any assurances to plaintiffs about surplus material. In the early part of June, 1918, Lt. Falkenberg visited plaintiffs’ plant, and at that time no other shipment had been made than the one above mentioned, on May 9. He urged speeding up production and delivery. Either this officer or Major Baxter expressed the view to plaintiffs that the requirements for the year 1919 would be approximately 50 per cent of the 1918 requirements of the class of materials being furnished by plaintiffs. It does not appear that either of these officers had any authority to make any contract with plaintiffs and their duties were to look after the matter of production.
VI. In the month of August, 1918, before the quantity of spokes called for in said purchase order had been shipped, plaintiffs requested the Rock Island Arsenal to authorize an overshipment under said purchase order, to which request the arsenal replied, on September 4, to the effect that they could overship on tbe order approximately 8,000 spokes for the 56" wheel and 2,000 for the 60" wheel, adding, “However, do not take this letter as authority to overship beyond these amounts. This overshipment should apply against the same purchase order as the original contract.” There were actually delivered, accepted, and paid for by the Government under said purchase order, and as authorized by the addition above mentioned, together with an unauthorized shipment of spokes to the value of $2,136.35, a total of 98,263 spokes for the 56" wheel at twenty-five cents each, and 19,916 spokes for the 60" wheel at thirty-five cents each, of the aggregate value of $31,836.36 for spokes accepted and paid for, as already stated.
VII. As late as December, 1918, before the last shipments had been made and accejated on purchase order No. 5598, plaintiffs solicited additional orders for artillery spokes from said arsenal, stating in their letter that they had accumulated a number of pieces and billets of different sizes mentioned, and asked that they be allowed to furnish the same. They stated that to turn the spokes and billets into commercial stock would be a considerable loss to them. In reply to this letter .the commanding officer at the arsenal stated to plaintiffs that the arsenal was unable at that time to use any more spokes and could not accept plaintiffs’ offer to make up additional quantities on said purchase order. The letter added: “ It is noted that you are a. few pieces short on 3%" x 3*4" size, but you may take this letter as authority to consider this purchase order completed.” On December 14, 1918, plaintiffs replied to the last-mentioned letter from the arsenal, stating that in accordance with that decision plaintiffs considered the purchase order completed and had entered the same on their records accordingly. It added, “ Should the arsenal be in need of artillery spokes in future we trust we will be given an opportunity to submit bids.” No further orders were given on behalf of the Government to plaintiffs to furnish any additional spokes.
VIII. On December 14, 1918, the date upon which plaintiffs advised the arsenal that purchase order No. 5598 was closed, as above stated, plaintiffs had on hand 104,871 pieces of surplus raw material which they had accumulated, at divers times between March 1 and September 1,1918, a large part of which was in anticipation of receiving future orders from the Government.
IX. On or about the 7th of April, 1919, plaintiffs wrote a letter to the commanding officer of the Nock Island Arsenal stating that after shipment of the artillery spokes' under said order, No. 5598, they had on hand a number of oak and" hickory billets, to the aggregate number of pieces above mentioned, and that these represented a total cost of about $16,000. They stated that in view of the fact that they had accumulated these billets for the particular class of work in anticipation of the Government’s future requirements, they felt that they should have relief from the loss, and that if there was any way in which the Government would entertain reparation of claim they would like to be advised of what course to pursue.
X. In May, 1919, a claim was filed on behalf of said Bed Star Spoke Company with the Claims Board for $8,114.17, which sum was alleged to be the difference between the estimated value of the said unworked surplus material and the value placed upon it by plaintiffs as commercial stock. This claims board made an allowance to plaintiffs, subject to approval by the Ordnance Claims Board at Washington, and submitted-its award to the said Ordnance Claims Board, which refused to approve the amount of the award and denied plaintiffs’ claim. Thereafter an appeal was taken by plaintiffs to the War Department Claims Board, appeals section, which board sustained the findings of the ordnance section and dismissed plaintiffs’ claim. (See decision War Department Claims Board, appeals section, vol. 7, p. 816.)
XT It does not appear that the Government made any contract with the plaintiffs other than the said purchase order No. 5598, nor does it appear that either of the officers who visited plaintiffs’ plant made any promises to plaintiffs or that they were authorized to make any promises to plaintiffs about any other material than that called for by purchase order, except substantially 10 per cent, which was authorized to be shipped, as above stated. Plaintiffs were paid for all the material which they furnished under the order at the prices mentioned therein.
The court decided that plaintiffs were not entitled to recover.
Appealed.

Opinion:
memorandum by the court
• The facts of this case fall far short of showing any contract, express or implied, on the part of the Government to pay plaintiffs for the material which they had on hand when their contract was completed. There was no written contract between the parties on this subject, nor did the officers who conferred with plaintiffs about the performance of the purchase order then in process of completion have any authority to make any other contract than the one in hand. They did not assume to make any contract. To entitle a plaintiff to compensation under an agreement it is •essential that the officer Avitli whom it was entered into should not merely haAre been holding under the Secretary of War or the President, but that he should have been acting within the scope of his authority. See Baltimore & Ohio Railroad Company v. United States, 261 U. S. 592, 596. This court has had occasion to pass upon a number of cases involving this question. See Jacob Reed's Sons case, ante, p. 97; Lewis Nixon case, 59 C. Cls. 684; Neal-Blun Company case, 59 C. Cls. 182.