Court Opinion

ID: 9450401
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:46:09.573112+00
Date Added: 2024-06-11T17:32:18.055889
License: Public Domain

COWEN, Chief Judge
(concurring).
I concur in the result reached in the opinion of Judge DURFEE, but in view of the fact that this is a Congressional reference case, I feel that the opinion takes too restrictive a view of the equitable aspects of plaintiff’s claim. A 20-percent shortage in the weight of the steel sold to the plaintiff hardly makes the Government’s estimated weight approximate. Therefore, in the absence of other facts, I would find it difficult to hold that plaintiff has no equitable claim solely on the basis of the “as is, where is” provisions of the contract.
There are, however, other facts which, in my opinion, strongly support Judge DURFEE’s conclusion.
As noted in his opinion, section 22 of the contract provided that final adjustment of moneys due from the buyer should be made upon the actual weight of 'the steel delivered, as shown by the certificates of the carriers. Unless a claim for adjustment, based on the actual weight shown in the carriers’ certificates, was made on or before August 17, 1953, both the Government and the buyers agreed to be bound by the approximate weight stated in the contract under which title to the steel passed to plaintiff on June 5, 1953. There were cogent reasons for the inclusion of this provision in the contract. It was important to the Government that the rights and obligations of the parties be determined at an early date so as to minimize the Government’s loss by relieving it from continued responsibility for the steel inventory. If the parties had availed themselves of this provision of the contract, both plaintiff and Boston Metals would have received and paid for the steel upon the basis of the actual rather than the estimated weights. However, there was a drop in the steel market. In order to avoid a loss and to sell the steel at a profit, both plaintiff and Boston Metals assumed the risk of accepting the Government’s estimated weight as final and shipped out the steel over protracted periods of time. Boston Metals made its final shipment on November 21, 1955, nearly 2% years after the sale. It was then discovered that Boston Metals had received more than 2,116 tons of steel in excess of the estimated quantity for which it had paid. Plaintiff took even longer. The last of its steel was no't loaded until October 11, 1956, 3 years and 4 months after the date of sale. At that time, it became evident, not only that plaintiff had received 1,940.002 tons of steel less than the estimated quantity for which it had paid, but that the Government had delivered to the two purchasers 176 tons of s'teel for which it had received no payment. This loss to the Government resulted from the fact that both plaintiff and Boston Metals elected to finalize the contract on the basis of the estimated rather than the actual weights of the steel.
After title to the steel passed to plaintiff, it elected to use the Philadelphia Ore *646Dock Company as its warehouseman. Thereafter, the Government had no control or surveillance over the steel inventory. Throughout the 3-year period, plaintiff had the means for acquiring definite information about the quantity of steel contained in its two lots, but there is no evidence that it made any effort to inventory, survey, or otherwise determine the quantity of steel it had in its possession until April 1956. During that month, the Philadelphia Ore Dock Company, at plaintiff’s request, took a piece count which revealed that plaintiff was short about 2,000 tons of steel. Even then, plaintiff did not notify defendant about the shortage but waited until October 26, 1956, when it advised the Philadelphia Ordnance District that the shortage existed.
In the light of these facts, it seems to me that any equitable claim which plaintiff might have had was nullified by its long delay in ascertaining and giving the Government notice of the shortage. As a result, the Government was deprived of the opportunity to determine the cause of the shortage and to verify the extent thereof. To hold otherwise, would malee the Government the insurer of plaintiff’s inventory and its profit for a period of more than 3 years after the right of either party to claim an adjustment on the basis of the actual weight of the steel had terminated.