Document: 337 U.S. 198 69 S.Ct. 1009 93 L.Ed. 1308 UNITED STATESv.PENN FOUNDRY &MFG. CO., Inc. No. 253. Argued Jan. 7—10, 1949. Decided May 31, Mr. Melvin Richter, Washington, D.C., for petitioner. David G. Bress, respondent. Justice BURTON delivered the opinion of Court. 1 This is an action in Court Claims by respondent, Penn Foundry and Manufacturing Company, Inc., against United States loss anticipated profits alleged to have been caused latter's cancellation a contract gun mounts Navy. The occurred few days after had awarded respondent on February 23, 1942. question presented whether findings fact made are sufficient sustain its judgment requiring pay such loss. 75 F.Supp. 319, 110 Ct.Cl. 374. We hold that they not. so because (1) absence any finding readiness capacity perform certain contractual obligations upon which were contingent (2) presence affirmative preclude drawing inference from other findings. 2 record includes only pleadings accompanying exhibits filed court's special fact, conclusion law, opinion, refusal grant new trial. do not before us report Commissioner or testimony he court relied. While additional claims original petition while originally contested binding force contract, errors specified present proceeding right recover $80,000 as damages profits. granted certiorari possible relation result this case under many war contracts cancelled States. 335 857, 130. T e show following: 3 In 1911, bought manufacturing plant consisting six buildings Waynesboro, Virginia. main buildings, each 57 x 100 feet, built 1890 referred respectively machine shop, foundry blacksmith shop. At one time manufactured circular saws and, at another, did work brake shoes. Since 1931, used minor engagements, more than four five employees. It idle some years when, late 1940 early 1941, respondent's officers became desirous engaging National Defense Program. Most those then businesses near Pittsburgh, Pennsylvania. One stockholder director was real estate business Waynesboro. He local manager when it operation continued thereafter statutory agent company. 4 January, engaged man assistant president 24, 1942, engineer general manager. April, submitted proposal Navy manufacture 500 3-inch 50-caliber mounts. July, representative Gun Mount Section Department inspected plant. Following conference September, asked Government furnish information financial ability, commitments subcontractors, detailed study tool operations, predicated award 150 October December, slightly modified proposals. December 22, prices, quantities, delivery schedule, payments options accepted satisfactory agreed secure letter surety company indicating bond nature required Navy's Bureau Supplies Accounts would be furnished. 5 received 'letter intent,' dated 29, signed Paymaster General contracting officer approved Under Secretary stated place order with two complete May, three June, minimum rate ten per month. also authorized purchase materials spare parts, subject confirmation Government's purchasing officer, proceed production anticipation placing their production. However, date January 7, held up authorization expenditures until furnished firm commitment act performance bond. 10, intent. necessary failure promptly submit might termination 3, representatives thought connection size reinsured that, unless change setup, reinsurance declined. added, however, if either suggested plans relative refinancing accomplished key personnel could obtained execute disclose difference reaction represent tive letter. There no requirement regard ever met. 6 Much following Nos. 5—8 vital issue us: 7 '5. On 16 17, plaintiff's visited inspectors Philadelphia Inspection District instruct inspection requirements. there except watchman No all being performed time. 19, specialist War Production Board His duties assist factories naval ordnance. manager, who called his office, talked Johnson (the president), Waynesboro purpose. Reports these visits given Department. prepared undertake character proposed indefinite successfully Plaintiff's incapable cast steel forgings plan, shown Government, subcontract castings, well parts work. Plaintiff contacted producers, willing castings but plaintiff. reason suppose plaintiff subcontractors. planned use around mechanics, skilled, semi-skilled, unskilled, machining assembling expected former railroad shop mechanics residing bulk construction difficult exacting Manufacturers experienced somewhat similar large organizations trained seven months year receiving notice first produced. train unskilled regular employee another Ohio. assisting expectation sever become A between terms executed 8 '6. mailed LL96553, mounts, amount $2,087,555, award, telegram follows: 9 'NOTICE OF AWARD CONTRACT NOS 96553 FORWARDED IN ERROR RETURN FOR CANCELLATION NO TO YOU ACKNOWLEDGE REFERRING SYMBOL SPF— 10 'RAY SPEAR PAYMASTER GENERAL NAVY 11 'On March 5, 12 'As apparent you cannot insure faithful will issued you, Letter Intent LL—NOs—96553 (SPC), 29 hereby cancelled. 13 'Since authority has incur expenses Intent, can liability Intent. 14 'Please return copies unsigned, 15 '7. * evidence does incurred reliance intent contract. '8. If permitted net profit less $80,000.' (Emphasis supplied.) pages 378—381. 17 bound foregoing testing law entitled unearned v. Causby, 328 256, 267, 66 1062, 1068, 90 1206; Seminole Nation, 299 417, 422, 283, 287, 81 316; Esnault-Pelterie, 201, 205, 206, 159, 161, 162, 123; Crocker States, 240 74, 78, 36 245, 246, 60 533; Stone 164 380, 382, 383, 71, 41 477. 18 restricted scope sought reached eliminated questions contract.1 argues existingstatutes regulations, cancel option without incurring cancellation.2 practice inserting, supplies, express provision permitting developed extent we should recognize provisions constituting part formal follow 1942.3 necessary, support disposition making case. 19 further claimed established reasonable certainty fact. ultimate 8, says 'If $80,000.4 evidentiary primary facts computation total payment full fixed $2,087,555. Accordingly, gross receipts remote speculative estimate kind often encountered long recognized breach basis estimating them certainty.5 instant stands alone. Its sufficiency open argument costs seeks indirect light thrown below. even may resorted help interpret, although supplement, materially strengthen position. For example, reciting handicaps supplying say nothing profit, says, 326, page 387: 20 'We think consideration tolerance during here question, treated contractors actually producing defense material, contractor good faith best perform, indication plaintiff, allowed probably succeeded profit. 21 hand, must said problems difficulties active, going concern had, adversely affected whole o what jury conclude about 4% price, 22 contributes emphasis burden them. points rule thumb means suggests profits, circumstances case, 'about *.' 23 Whether reexamination below cure uncertainty tell. limited us, amount, any, rests rough rather facts. not, decide issue. More fundamental need proof highly material willingness, deliver quantities times specified. 24 1. contract.—In actual tenders essential receive Without realize See Restatement, Contracts §§ 284, 280(1), 281, 318(c), 395, 397 (1932). goes deeper damages. number cases where recovery emphasized demonstrated capacity, claimant, which, performed, claimant Purcell Envelope Co., 249 313, 39 300, 63 620, adequate cause so, recently purchase, four-years' supply envelopes wrappears Post Office $2,460,556.22. affirmed awarding $185,331.76 said, 316, 301, 620: 'The Company already arrangements fulfill ready fully according terms.' Again, 302, 'There charge default inability And finally, 321, (of Claims) expressly declares showed fulfilled requirements Postmaster wrappers also, Hinckley Pittsburgh Steel 121 264, 276, 875, 880, 30 967; Smoot's Case, Wall. 36, 44, 107; Speed, 77, 84, 449. 25 writ erred failing make proved thereon. error fail inding proof, clear wholly absent statement capable performing constitute render remains inferred 26 2. precludes required.—The proof. Finding quoted full, supra, 202, 203, 1011, 1012, tells story. add inescapable deliveries July one-third due, way, preliminary stage. 27 'At complet organization employees.' 379. 28 insistence bond: 6, 322, 380. met meeting requirement. As devastating findings, entitle compensation says: 381. reasonably completed. depend. striking due own lack obligations. To below, read itself missing role fails utterly. contains regarded implying come into direct conflict contrary. 31 possibility, securing gratuitous extensions concessions numbers justified hope tha ultimately produce, inexperienced labor rehabilitated plant, products Such justify money equal dependent concessions. Even assuming willingness obligations, missing. 32 accordingly reversed remanded direction enter favor 33 Reversed. 34 REED JACKSON concur reversal dissent opportunity meet 35 DOUGLAS, whom BLACK, MURPHY, RUTLEDGE agree, concurring. undisputed parties reduced terms. Both intent'1 'official award'2 state 'formal contract' contemplated. That circumstance raises neither nor surmounted. 37 During period relevant here, (apart exceptions inapplicable type involved case) 'standard clauses price contracts' 'in form substance' inserted most contracts.'3 They provided event 'for convenience Government' paid costs, including proper allocation overhead termination, plus allowance 6% 7% purchases unfinished goods, reimbursed cost.'4 38 'Standard substance entered since ship-construction contracts, separate problem. undertaken modify outstanding insertion clauses. incorporate clause amendment contracts. doubted administratively feasible initiative contractor.' see Acting Secretary, Oct. 1943, id., 270—271. 40 policy Navy, revealed official communications Congress, matter take judicial notice. heretofore amplified reports War. Tempel 248 121, 130, 56, 59, 162. like reports, rules regulations agencies5 Congress,6 equally reliable authoritative Respondent, carried showing saved application policy. falls exempt class. usual customary written formalized agreement reduced. how escape clause. 42 Yet showing, 'clear proof,' Behan, 338, 344, 81, 83, 168, requires, free relieved promisor here. least probability provision, failed threshould carry rested it. brief footnote consummated is, our view, doubtful soundness.' same brief, Claims' holding sent Award Department's created 1943 (1942).' opinion: mistake vitiate occurred.' 325, 385. specification urged, certiorari, 'Only specifically brought forward considered.' Rule 38, 2, Title II, First Powers Act c. 593, 55 Stat. 839, § 50 U.S.C.App. 611, U.S.C.A.Appendix, 611; Executive Order 9001, 611 note, C.F.R.Cum.Supp. 1054—1056. Contract Settlement 1944, 358, 58 649, U.S.C. 101 et seq., U.S.C.A. seq.; August 1946, 864, 902, 106 Regulation Settlement, C.F.R. 1944 Supp., 8006.3(c), p. 3065; History Terminations Settlements, (July, 1947). comparable legislation affecting supplies World I, June 15, 1917, 182; 1919, 94, 1272, 80 note; DeLaval Steam Turbine Co. 284 61, 52 76 168; Barrett 273 227, 47 409, 71 621; College Point Boat Corp. 267 12, 45 199, 90; Russell 261 514, 43 428, 67 778. James Forrestal, Hearings Subcommittee Termination Senate Committee Military Affairs S. 1268, 1280 S.J.Res. 80, 78th Cong., 1st Sess. 270—273 (1943), (p. 271): commenced summer 1941 affect procurement. terminations contemplation. Contractors were, nevertheless, questioning terminate fair defining rights deemed facilitate urgently needed procurement minimize changing needs. endeavoring problem safeguard interests both adopted respect ship (a problem), today.' memorandum Industrial Readjustment Branch, 11, Navy— clauses.' Appendix id. 553 (1944). review judgments one. discussed Luckenbach S.S. 272 533, 536—540, 186, 187, 188, 394. proceedings causes set forth 13, 1925, 229, 939, 3(b), amended 1939, 140, 53 752, 288(b), 288(b). provided: '(b) Claims, shall competent Supreme Court, party, require, certified determination assigned, power authority, effect, appeal. event, include papers conclusions decree, settled 'In review, addition assigned effect substantial fact; sustained facts; issue.' controlled repealed Judicial Code, effective September 1, 1948. 1255, merely: 'Cases reviewed methods: '(1) By claimant; Reviser's Notes said: 'Provisions 'errors issue,' omitted unnecessary.' H.R.Rep.No.308, 80th A107 (1947). After discussing Howard Stillwell & Bierce Mfg. 139 500, 503, 147: 'But realized prevented breach, included recovered every objection remoteness, implied itself, made, presumed within mutual understanding into. , u.S. 345—347, (84, 85, 168); (Western Union) Tel. Hall, 124 444, 454, 456, 577, (580, 581, 479); Philadelphia, Wilmington Baltimore Railroad Howard, How. 307 (14 157).' Anvil Mining Humble, 153 540, 550, 876, 879, 814; Cincinnati Gas Western Siemens 152 200, 523, 525, 411; 449; Masterton Mayor Brooklyn, Hill, N.Y., Am.Dec. 38; 331 intent' indicated manner approve proposal, 'thereby execution *' award' acceptance commence 'without waiting contract.' Memorandum Sen. 1280, Sen.J.Res. Sess., 551, 553, 177 Pownall 334 742, 68 1294, 92 1694, 227 Alexander Wool Combing 1694. H.R. 3022, 27. II Act, empowering President authorize department agency exercising functions prosecution effort prescribed him 'to amendments modifications hereafter relating making, performance, amendm nt, modification whenever deems Dec. 27, Fed.Reg. 6787, Supp. 330, delegated various agencies 'by agreement' amend settle 'claims' 'may utilized accomplish things hereunder, irrespective modified, amending modifying accrued thereof.' Lilly Grand Trunk R. 317 481, 488, 347, 352, 87 Labor Atkins 398, 406—407, 1265, 1270, 91 1563. Ludecke Watkins, 160, 166—170, 1429, 1432—1434, 1881.

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