Court Opinion

ID: 8591566
Source: CourtListenerOpinion
Date Created: 2022-11-23 15:49:49.244813+00
Date Added: 2024-06-11T16:54:30.507766
License: Public Domain

Laramore, Judge,
delivered the opinion of the court:
This is a suit by plaintiff, a Panama corporation, for an alleged breach of a contract by the defendant’s Maritime Commission, for the sale and delivery of a stockpile of surplus marine parts located at Yokohama, Japan. Plaintiff also claims “just compensation” on the theory that title passed to plaintiff, and defendant’s retention of the stockpile was therefore a taking under the fifth amendment.
The defendant, in oral argument, admitted the Government was not on solid ground when it said there was not a breach of the contract. Furthermore, the facts show beyond question that plaintiff’s bid of $10,000 was accepted by the defendant. In response to the invitation for bids on the stockpile of surplus material, the only bid submitted for a substantial part of the pile was plaintiff’s in the amount of $8,000. Captain Burger, the Far East representative of the Maritime Commission, notified the Commission at Washington the result of the bids. The Commissioner advised him that the result was disappointing, and while reminding him that it was imperative that the property be disposed of and removed by July 1, 1950, authorized him to negotiate *260with all bidders with a view toward obtaining a higher bid. Burger notified plaintiff, and after negotiations plaintiff did increase its bid to $10,000. By cable of June 24,1950, the Commission authorized Burger to accept the $10,000 offer. Plaintiff gave Burger four checks totaling $10,000, and a bill of sale dated July 11,1950, was executed.
On July 11,1950, the custodian of the property was advised as follows:
Sale of the following material has been made. You are authorized to deliver in accordance with terms noted hereon to purchaser or his authorized representative, obtaining receipt therefor.
Hostilities involving the Armed Forces of the United States began in Korea about June 25, 1950. On July 17, 1950, Burger was advised that if the stockpile was still in custody of the Commission to delay its release. As a result thereof the Maritime Commission did retain the stockpile and returned to plaintiff the four checks given in payment.
Since by the terms of the contract plaintiff had 15 days from July 11, 1950, in which to remove the stockpile and the time not having expired, plaintiff had done nothing wrong and was legally entitled to possession of the material purchased. When the defendant refused to release the material under these facts and circumstances, there can be no question but that the contract to purchase was breached by defendant.
The only question then is the amount of damages to which plaintiff is entitled.
The Commissioner of this court has found that there is no satisfactory evidence as to the scrap value of the material. Further, that the total weight of the items was not shown and that the only evidence as to the value of scrap in Japan during the period involved was from $1 to $50 a ton.
Obviously then, it is impossible for this court to determine damages on that basis. Obviously too, plaintiff has been damaged by defendant’s breach of the agreement, and in all fairness ought to be paid therefor. This makes our task more difficult but not insurmountable.
The only fair method we can find under the circumstances, while involved and perhaps a novel formula, is to make a *261comparison between the sale of the propellers and the remainder of the stockpile.
As of July 15, 1950, plaintiff entered into a sales contract with the Pacific Island Scrap Corporation for the sale of the five propellers contained in the stockpile for $11,773.15. The book value of said propellers was $41,595. This means that plaintiff would have sold $41,595 worth of material for $11,773.15, or approximately one-fourth of the book value. Assuming plaintiff could have done equally well with all the other items, he would have received approximately $56,000 for the entire stockpile. However, the propellers being more valuable were more easily sold than the hundreds of other items. In addition, sound business judgment tells us that the necessary expenses which would have to be borne by plaintiff for storage, handling, insurance, sorting, advertising, etc., would greatly reduce this theoretical profit. We believe one-half of the $56,000 would be a reasonable cost of the above expenses. This would make the figure $28,000 which plaintiff could expect to net from the sale of the items. Out of this $28,000 plaintiff would have to recoup his original investment of $10,000 before there is any profit involved. Since plaintiff’s purchase price was returned to him by defendant, the net due plaintiff would be decreased by this amount, i. e., $10,000.
We, therefore, conclude in the circumstances of this case that plaintiff has been damaged in the sum of $18,000 and judgment will be entered for plaintiff in that amount.
It is so ordered.
MaddeN, Judge; Whitaker, Judge; LittletoN, Judge; and JoNes, Chief Judge, concur.
FINDINGS OF FACT
The court, having considered the evidence, the report of Commisioner George H. Foster, and the briefs and argument of counsel, makes findings of fact as follows:
1. Plaintiff was incorporated under the laws of the Republic of Panama on November 1,1949.
2. The Republic of Panama accords to citizens of the United States the right to prosecute, in its courts, claims *262against the Republic of Panama, including the right to prosecute against it, in its courts, suits for damages for breach of contract and for just compensation for property commandeered, requisitioned, or appropriated.
3. Under date of May 28,1950, the defendant, represented by the United States Maritime Commission (hereinafter referred to simply as the Commission), issued an invitation for bids for the purchase of a stockpile of spare parts, described as Lot Nos. 1 through 105, inclusive, and located adjacent to No. 1 Graving Dock, Yokohama Shipyard and Engineering Works, Yokohama, Japan. The invitation for bids included a schedule of the material offered, two copies of the appropriate bid form, and one copy of the terms and conditions. It further provided that all bids should be addressed to:
Joseph H. Burger, Captain, USMS Chief, Far East Area U. S. Maritime Commission, APO 343, Yokohama, Japan
and that bids received would be publicly opened at 10:00 a. m. on June 10,1950.
4. The above-named Joseph IT. Burger was the representative of the Commission for the Far East Area. He was without authority to dispose of or sell property for the Commission except as directed and subject to the approval of the Commission’s officials in Washington, D. C. In accordance with prevailing law, regulation and practice, the Commission did not authorize Captain Burger to consummate public sale of the material involved until approval was first obtained from the Department of State and from the Supreme Commander for the Allied Powers (SOAP) in Japan. Captain Burger was authorized to dispose of the material only after “Washington” approval. Sale to the general public was authorized after offers were first made to agencies of the United States.
5. In March and April 1950, Burger, in accordance with instructions from the Maritime Commissioner, communicated with the Transportation Service of the Supreme Commander for the Allied Powers to see if it was interested in the stockpile. The response was negative. Captain *263Burger also communicated with the Japanese Government and there a slight interest in the five propellers in the stockpile was indicated but no offers were made. Captain Burger then asked the Office of the Supreme Commander for the Allied Powers if there would be any objection to the sale of the stockpile to the Japanese general public in view of the requirements that the proceeds must be in dollars and that conversion of yens to dollars would be required. He was advised that no objection would be offered to a sale, subject to commercial consideration; that a sale to anyone in Japan would be considered as an import into Japan and subject to the foreign exchange regulations and availability of foreign exchange; and if a sale were completed, payment would have to be in dollars.
6. Announcements of the invitation for bids were inserted in several newspapers and trade journals. Representatives of the Maritime Commission personally solicited bids from all American shipping lines in the area, specifically, the American President Lines, United States Lines, United States American Lines, and C. F. Sharp and Company. In addition, solicitations were made to several Japanese shipyards, including the Yuraga Dock Company, the Ishikawa-jima Yard, and the Yokohama Shipyard and Engineering Works. In all cases copies of the inventory of materials were made available to those solicited.
7. All of the bids received were opened as scheduled on June 10,1950. There was only one bid which was for a substantial part of the pile. That one was the bid submitted by plaintiff. Plaintiff, in its bid, offered to pay the total amount of $8,000 for Lots 1 through 95, inclusive. Two other bids were received relating to Lots 1 through 95, as follows:

*2648. Captain Burger notified the Commission at Washington the results of the bids. The Commission advised him that the amount was disappointing and while reminding him that it was imperative that the property be disposed of and removed by July 1, 1950, authorized him to negotiate with all bidders with a view to obtaining a higher bid.
The requirement for payment in dollars made a sale to Japanese more difficult. However, Captain Burger was informally advised that the Supreme Commander for the Allied Powers (SCAP) had indicated that payment in yens could be accepted, but, because of the time limit set by the Maritime Commission for the disposal of the property, Captain Burger deemed readvertising for sealed bids not feasible.
Captain Burger negotiated with Mr. Boyle of the plaintiff company, explaining the speculative value for certain items in the inventory for sale to steamship companies or repair yards. Boyd advised Burger that he was in the scrap business and was not qualified to value the items for use. However, he did increase the bid to $10,000.
9. By cable, dated June 19,1950, Burger advised the Commission that plaintiff’s final offer was $10,000 and that lack of response and interest in the stockpile convinced him a higher price could not be obtained. By reply cable, dated J une 24, 1950, the Commission authorized Burger to accept the $10,000 offer.
10. Plaintiff gave four checks totaling $10,000 to Burger and a bill of sale dated July 11, 1950, was executed. The property was sold “as is” “where is” without warranty by the defendant except as to title. The purchaser was to remove the property within 15 days of notice of award. One of the terms of the offer was the following:
The property sold shall not be imported into the United States unless the Secretaries of Agriculture and/ or Commerce Departments determine that the importation of such property would relieve domestic shortages or otherwise benefit the United States.
On July 11, 1950, the custodian of the property was advised as follows:
*265Sale of the following material has been made. You are authorized to deliver in accordance with terms noted hereon to purchaser or his authorized representative, obtaining receipt therefor.
11. As of July 15,1950, plaintiff entered into a sales contract with the Pacific Island Scrap Corporation, an American concern, through one of the latter’s Far Eastern representatives, for the sale of the five propellers contained in the stockpile (Lot Nos. 1, 3, and 6). They were sold as 114,860 pounds at the price of 10% cents per pound. Plaintiff made no further sales from the stockpile although it had endeavored to interest several potential purchasers. Pacific Island Scrap Corporation has not requested any damages from plaintiff in conneqtion with plaintiff’s inability to deliver the propellers covered by the July 15, 1950, sales agreement.
12. Hostilities involving the Armed Forces of the United States began in Korea about June 25, 1950. On July 17, 1950, Burger was advised by cable from the Maritime Commission as follows:
Please reply my 776 quote advise by return cable status of Yokohama stockpile. If still in our custody delay its release and consult with SCAP regarding Government use during present situation.
The record does not disclose the date of the cable designated “my 776” which was quoted in the above cable nor when, if at all, it was received by Burger.
13. Burger notified plaintiff immediately of the receipt of the above cable and that it looked as though the stockpile would be retained by the defendant. Mr. Boyle of plaintiff company was asked if the company would cooperate with the United States if the stockpile was required for emergency use and Captain Burger received the impression that the company would cooperate. However, Burger was advised of the sales contract with the Pacific Island Scrap Corporation as to which Mr. Boyle would consult his attorney.
On July 27, Burger was advised by the Maritime Commission to return plaintiff’s check as the stockpile was being retained by defendant.
*26614. Under date of July 29,1950, Burger advised Boyle that due to circumstances beyond its control the Maritime Commission found it necessary to retain the stockpile and returned pi aintiff’s four checks. Plaintiff had taken no steps to obtain possession of the property by July 18 when it was advised that the Government would probably retain possession, nor did it thereafter so attempt.
15. The schedule, attached to the invitation to bids, which listed the items for sale described the condition of most of the items as 100 percent. Most of the larger items were stored out in the open where, plaintiff’s inspections revealed, they had become slightly rusty. The remainder of the items were packed in several hundred cases, piled one on top of the other, in a warehouse. Plaintiff conducted a spot inspection of these containers. Most of the articles in the containers were new and properly protected for shipment and storage.
The stockpile in question included materials from many different areas and resulted from various original purchases and replacements over a period of several years. The schedule or inventory accompanying the proposal for bids contained “book values” opposite most of the items listed with the remaining items being marked “value unknown.” The term “book value” was used to represent the actual or the estimated acquisition cost of the item involved. The total of book value listed in cases where such value was stated aggregated approximately $225,000 for the items on which plaintiff bid.
16. There was no market in Japan in the vicinity of Yokohama for the articles for the use to which they were intended when manufactured. The articles were designed for the more or less standardized vessels then being operated by the Maritime Commission. They were not suitable for Japanese vessels. The book value of the five propellers was $41,595.
17. There is not satisfactory evidence as to the scrap value of the material. The total weight of the items is not shown. The only evidence as to the scrap market in Japan during the period involved is that it ran from $1 to $50 a ton.
*267CONCLUSION OP LAW
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that plaintiff is entitled to recover, and it is therefore adjudged and ordered that it recover of and from the United States the sum of eighteen thousand dollars ($18,000).