Case: MEDWIN BENJAMIN, D/B/A BENJAMIN'S FOR MOTORS; MEDWIN BENJAMIN, D/B/A MILL BASIN REPAIR COMPANY; AND MEDWIN BENJAMIN, INDIVIDUALLY v. THE UNITED STATES
Abbreviation: Benjamin v. United States
Decision Date: 1965-07-16
Docket Number: No. 538-52
Citation: 172 Ct. Cl. 118
Volume: 172
Reporter: United States Court of Claims Reports
Court: United States Claims Court
Jurisdiction: United States
Parties: MEDWIN BENJAMIN, D/B/A BENJAMIN’S FOR MOTORS; MEDWIN BENJAMIN, D/B/A MILL BASIN REPAIR COMPANY; AND MEDWIN BENJAMIN, INDIVIDUALLY v. THE UNITED STATES
Judges: Before Cowen, Chief Judge, Laramoke, Duepee, Davis and Collins, Judges.
Pages: 118–192

Head Matter:
(348 F. 2d 502)
MEDWIN BENJAMIN, D/B/A BENJAMIN’S FOR MOTORS; MEDWIN BENJAMIN, D/B/A MILL BASIN REPAIR COMPANY; AND MEDWIN BENJAMIN, INDIVIDUALLY v. THE UNITED STATES
[No. 538-52.
Decided July 16, 1965]
I. E. Wachtel, attorney of record, for plaintiff. Jean J. Provost, Jr. of counsel.
James F. Merow, with whom was Assistant Attorney Gem eral John W. Douglas, for defendant.
Before Cowen, Chief Judge, Laramoke, Duepee, Davis and Collins, Judges.

Opinion:
Davis, Judge,
delivered the opinion of the court:
In the years following the close of World War II, plaintiff's principal business was the purchase, restoration, and resale of new and used machinery. The War Assets Administration (WAA) and its predecessors sold him surplus government property having a value of three to four million dollars. This suit is one result of that activity. The petition contains 29 separate claims. Of these, 27 causes of action assert the defendant's failure to deliver certain machinery, the Government's misrepresentation of the condition of other equipment, or the furnishing of merchandise with missing parts. The major demands, however, are founded on (1) the alleged destruction of plaintiff's business by the Government when it levied execution on a government judgment against him (Cause of Action No. 29) and (2) the refusal of the defendant to allow dealer's discounts on part of the machinery plaintiff bought (Cause of Action No. 1). In view of their pecuniary importance, we treat these claims first.
CAUSE OK ACTION NO. 29
By late 1946, plaintiff owed WAA over $900,000 for war surplus property he had purchased. Stimulated by the concern of banhs which had also extended credit to him, plaintiff sought to reach a settlement with WAA by offsetting claims he had in connection with the purchased goods against his admitted indebtedness. For the next four years, he, with the help of a succession of attorneys, negotiated unsuccessfully with representatives of the United States Attorney in the Eastern District of New York, the Claims (now Civil) Division of the Department of Justice, and the WAA (and, later, the General Services Administration (GSA)). Although plaintiff did volunteer at one point to place his entire inventory in escrow as security for the indebtedness, his highest monetary compromise offer was $325,000, while the defendant refused to accept less than $500,000.
On January 8, 1951, plaintiff and his lawyer attended a meeting in New York with officials of GSA, as successor of WAA, and the United States Attorney's office. The Assistant United States Attorney handling the case stated that his instructions were to file suit against plaintiff and to request the court to issue a warrant of attachment tying up plaintiff's property. Faced with this unhappy prospect, plaintiff capitulated, agreeing to confess judgment in the amount of the defendant's claim ($934,498), plus interest (a total of $1,137,787). At tbe close of the meeting, those present all signed a memorandum declaring, without qualification, that plaintiff had agreed to confess judgment, and that another conference would be held at the Department of Justice on January 23, 1951, to discuss payment. The memorandum also stated that "if payment cannot be made or agreed upon, execution on the above-mentioned judgment will be levied. [T]here will be no disposition or distribution of assets until the matter is further discussed on January 23, 1951." Mr. Benjamin signed a confession of judgment on the following day.
During the meeting on January 23rd at the Department of Justice, plaintiff said that he could make a down payment of no more than $15,000, followed by monthly payments of $5,000. The defendant's conferees rejected these proposed installment payments, suggesting instead that Mr. Benjamin pledge or mortgage his assets as security. Although plaintiff had remitted $10,000 by the time of the conference, he made no subsequent payments and advised the Assistant United States Attorney that he did not intend to post security for his debt. Unwilling to negotiate any further, the United States Attorney, on February 21, 1951, caused judgment to be entered against plaintiff on his confession and initiated supplementary proceedings in the United States District Court for the Eastern District of New York to discover the extent of Benjamin's assets. As a result of its investigation, the Government filed a motion requesting the appointment of a receiver. On August 9, 1951, the court granted that motion and denied plaintiff's cross-motion to stay execution of the judgment. The receiver thereafter impounded and sold plaintiff's assets, receiving proceeds of $752,651 from which he transmitted $582,674 to the Government in payment of plaintiff's judgment.
Plaintiff's claim against the Government for the destruction of his business is based on -an alleged side-agreement made contemporaneously with his confession of judgment. According to this purported understanding, plaintiff confessed judgment on the condition that the defendant would defer all enforcement proceedings until after the adjudication of his claims against the United States on the surplus property he had bought. At the trial of this case, plaintiff testified that he had entered into such an agreement at the meeting on January 8,1951, but each of the other participants at that session categorically denied the existence of any understanding that the Government would postpone execution of the judgment. The trial commissioner recited this evidence but did not determine whether or not the parties had reached such an accord. His failure to make a finding in plaintiff's favor is suggestive but not conclusive.
In an effort to persuade the court to find such an oral agreement, plaintiff relies on the circumstances surrounding his confession of judgment as proof that an additional verbal agreement was in fact made. At the meeting on January 9, 1951, the day after he had agreed to confess judgment, plaintiff urged the Assistant United States Attorney to sign an acknowledgment that his confession was "made without prejudice and without waiving the rights of the Judgment Debtor to any and all such claims as [he] has." Government counsel refused, agreeing only to sign a statement that the confession would not be filed until after the January 23rd meeting at the Department of Justice. Two days later, plaintiff wrote the GSA regional counsel, affirming his "right to enforce any claims." The GSA reply on January 16th could not have been more explicit. Its letter stated, "[Y]ou are reminded that it was agreed during the conferences [of Januarv 8th and 9th] that the confession was not contingent upon our adjustment of any claims asserted by you, but was merely a frank and voluntary confession by you of the fact that the demanded sum was the amount properly due and owing to the Government. It was agreed, however, that separate and apart from the matter of your indebtedness to the United States, we would, in the normal course of business, administratively adjudicate any claims specified by you and that your confession of judgment would not bar you from the same consideration given to anyone asserting a claim against the General Services Administration." It is unclear whether plaintiff lodged any protest after receiving this letter.
These events following plaintiff's agreement to confess judgment reveal no more than his eagerness to continue processing his counterclaims and GSA's willingness to pass upon them; at the most, such circumstances may indicate that Mr. Benjamin supposed in his own mind that the parties had made an unrecorded side agreement. But this is not a case of "assurances" by government representatives "amount [ing] either to an outright promise or to a representation giving rise to an estoppel." Cf. George H. Whike Constr. Co. v. United States, 135 Ct. Cl. 126, 130, 140 F. Supp. 560, 563 (1956). Bather, the Government's consistent position during these exchanges was that it had an unqualified right to enforce the judgment, and its plain statements spelling out that view can hardly have misled the plaintiff. The testimony of the witnesses other than plaintiff is fully consistent with the documentary record.
Plaintiff counters with the argument that no businessman with his experience would have agreed to such an unqualified confession of judgment. The memorandum of January 8, 1951, cannot possibly reflect the full understanding of the parties, he urges, because, by its terms, the Government was to receive $934,498 plus interest and give him virtually nothing in return. The written agreement, however, was not as one-sided as plaintiff implies. Both before and after the events of 1951, plaintiff freely admitted that he was indebted to the United States in that amount. See finding 7; tr. 508, 516, 662, 667. Since he had no legal defense to an action by the Government, plaintiff may well have confessed judgment in an effort to forestall, for a limited period, action by an increasingly impatient United States Attorney's office— hoping to resolve the entire dispute, or to obtain better terms, at the January 23rd conference at the Department of Justice. The plaintiff may well have been bargaining for some weeks time in order to stave off an immediate attachment of his property. By upholding the agreement as written we are by no means construing it so as to confer all the benefits on one of the parties. Cf. Padbloc Co. v. United States, 161 Ct. Cl. 369, 376-77 (1963). Plaintiff's testimony stands alone, rebutted not only by the testimony of the others, but also by the contemporaneous documents and circumstances. We therefore concur with the commissioner in refusing to find that there was any side-agreement to defer execution of the judgment until after the determination of plaintiff's offsets. We hold, on the contrary, that plaintiff has failed to prove the existence of such an unrecorded understanding. It follows, of course, that the Government cannot be held liable for breach of an agreement it never made.
Assuming that plaintiff himself believed such an agreement to have been reached, we next consider whether this is a sufficient basis for holding that the district court judgment should have been set aside or left unenforced, and for awarding plaintiff damages for injury stemming from its enforcement. Belief from a valid judgment is granted only in very limited and unusual circumstances (e.g., duress exerted on the jury or court). See, generally, Bestatement, Judgments § 118-27. We have been directed to no decision permitting a judgment to be set aside merely because of unilateral mistake. Plaintiff claims, however, that the rule is different with respect to confessions of judgment. Even if, as plaintiff suggests, "they are in effect contracts which are merely recorded by the courts," it cannot be said that the "contract" is void because there was no "meeting of the minds". As has been pointed out, the judgment correctly reflected the objective understanding of the parties, as borne out by contemporaneous evidence. The secret subjective intentions of one of the parties are not controlling and do not afford a mechanism for avoiding contractual obligations. Even if the consent judgment is regarded merely as a contract, there is no basis for deeming it reformed or modified. The defendant had the right to levy and may not be held liable for the resulting destruction of plaintiff's business.
Plaintiff mates a number of subsidiary arguments to the effect that government representatives conspired to drive him out of business. He contends that throughout the protracted settlement negotiations, as well as after the confession, the defendant arbitrarily refused to give serious consideration to his claims; and that the Assistant United States Attorney improperly induced him to confess judgment by threatening to ask the district court to issue a warrant of attachment, when there were no grounds for such a request. Whatever merit these contentions may have, they would form the basis of a tort action, over which this court has no jurisdiction. E.g., Schillinger v. United States, 155 U.S. 163, 167-69 (1894); Locke v. United States, 151 Ct. Cl. 262, 270, 283 F. 2d 521, 525-26 (1960). Cause of Action No. 29 must therefore be dismissed.
CAUSE OE ACTION NO. 1
To expedite the disposal of war surplus property, WAA issued regulations allowing sales discounts on the basis of the distributive function performed by the buyer. Under that policy, the agency published a "Fixed Price Register", which listed the various types of merchandise offered for sale and established one set of purchase prices for dealers (i.e., wholesalers and retailers) and a higher set for ultimate consumers.
Plaintiff was classed as a dealer. He alleges that, prior to May 1947, be received not only the dealer's price on all equipment he bought from WAA, but also a 15% "dealer's discount". After that date, it is asserted, the Government refused to give plaintiff the additional 15% dealer's discount. It is difficult to find any language in the regulation entitling him to a dual discount on all purchases. On the contrary, the rule is laid down that "discounts may be granted on the disposal of surplus property only (i) when different price levels are established in order to compensate for the services rendered in the distribution of property to the various levels of trade." (emphasis added.) Finding 29(b). That is the very purpose of the dealer's rates established in the "Fixed Price Register"; since compensation for the dealer's distributive function is accorded by the special rate, a supplemental discount appears to be prohibited.
The trial commissioner found that WAA followed a course of conduct entitling plaintiff to rely on receiving both the dealer's price and a 15% dealer's discount. Assuming that the regulation's prohibition of such additional allowances could properly be waived by WAA officials having the authority to do so, we must disagree with the commissioner's finding that this was done. The evidence, in our view, does not establish that plaintiff was permitted to buy merchandise at less than the dealer's price. The general policy of WAA seems to have been to permit only one discount on each sale, in the form of a dealer's price. See Zink v. United States, 123 Ct. Cl. 85, 87-89 (1952); Handler Motor Co. v. United States, 121 Ct. Cl. 845, 849-50, 862-63 (1952). The only documentary evidence offered by plaintiff to prove that he was treated differently is a group of invoices representing purchases made by him from WAA, which disclose a specific deduction equal to 15% of the sales price. We have no way of knowing, however, whether this amount was subtracted in order to arrive at the dealer's price, or whether it was in fact an additional discount. We do know, though, that a number of sales on which plaintiff now asks for an extra allowance were negotiated transactions in which plaintiff understood the amount of the discount received and agreed to the final price. In such circumstances, this court has refused to alter the terms of the parties' agreement. Zink v. United States, sufra, 123 Ct. Cl. at 98-99. Moreover, a number of plaintiff's purchase orders prior to May 1947 — when WAA's alleged change of position took place — reflect the receipt of only one discount and tend to show that plaintiff was perfectly content to buy at the dealer's price. Since he has offered such tenuous proof to show that WAA, in his case, abandoned the policy set forth in the regulations and which appears to have been generally followed by the agency, we conclude that he has failed to prove the right to any additional discounts.
CAUSES 03? ACTION NOS. 2-28
Games o-f Action Nos. £, 8, 8 and 9. — These claims arise out of the sale to plaintiff, in 1946 and 1947, of four sets of identical Chrysler diesel engines. None of the engines came equipped with enclosing hoods, exhaust mufflers,, or steel extension bases. Asserting that he spent $400 on each machine to supply the missing items and to repair defects, plaintiff demands reimbursement for these expenditures. In addition, recovery is requested for the defendant's alleged failure to deliver sixteen of the 82 units purchased in the fourth group (as well as for the repair and replacement of parts missing from the merchandise contained in that shipment).
The first group of engines (Cause of Action No. 2) was purchased by plaintiff in May 1946 and received by him sometime in June of that year. The second set (Cause of Action No. 3) was shipped on July 30, 1946, and received shortly thereafter. Plaintiff's original petition in this court was filed on October 28,1952, over six years after he received these items and was first able to discover any defects or missing parts. Since an action for breach of warranty would normally accrue at that time, the claims would appear to be barred by limitations. 28 U.S.C. § 2501; e.g., Empire Institute of Tailoring, Inc. v. United States, 142 Ct. Cl. 165, 161 F. Supp. 409 (1958). Plaintiff suggests that there was an open account between the parties, subject to a final balance in the future. Though the use of an open account would prevent the statute from running until completion of the last transaction contemplated, the record indicates that, in plaintiff's dealings with the Government, each purchase was treated separately-. WAA repeatedly requested payment on individual transactions rather than the balance due on an "account". There was no agreement on, or practice of, a running account. Cf. Baggett Transp. Co. v. United States, 162 Ct. Cl. 570, 578-82, 319 F. 2d 864, 868-71 (1963). Again, although limitations would be stayed until after a final administrative determination of plaintiff's claims if one were mandatory, there was no such requirement here. These were commonplace, garden variety, claims on surplus sales in which the parties' agreements established no contractual tribunal to resolve legal or factual disputes. Suit could be brought in ordinary course, without waiting for prior administrative consideration or settlement. See Friedman v. United States, 159 Ct. Cl. 1, 7-13, 310 F. 2d 381, 384-88 (1962), cert. denied, 373 U.S. 932 (1963). Nor did the confession of judgment result in the accrual of new causes of action with respect to these claims. Though the quid, pro quo for plaintiff's confession may have been the Government's acknowledgment of his right to assert the present claims, the defendant did not, at the same time, agree to give up any of its possible defenses, one of which was the statute of limitations. There is no basis for deferring the accrual of Causes of Action Nos. 2 and 3 beyond the date of delivery of the goods, and we therefore must hold the claims barred.
The sales agreement for the third set of engines (Cause of Action No. 8) included a disclaimer of all warranties except as to title and as to tbe accuracy of the description of the merchandise. Unlike the previous sales, the invoice contained no representation that the equipment was in "Nl" condition (unused; excellent). But the absence of that warranty does not really bear on plaintiff's claim, as far as it relates to missing parts. If a Chrysler diesel engine normally included the parts that were allegedly missing, plaintiff did not receive the equipment as described in the sales document. Mr. Benjamin, in his testimony at the trial, characterized these parts as "missing" on numerous occasions, thus strongly implying that the engines generally came equipped with such items as enclosing hoods, exhaust mufflers, and steel extension bases. He also explained that the engines "would not work too well" without the missing parts. Plaintiff thereby sustained his burden of showing that the equipment supplied did not conform to the description in the sales agreement.
The only evidence offered by the Government on this point is the administrative ruling of WAA denying relief to plaintiff. The agency grounded its determination on information allegedly received from the Chrysler Company that the equipment was not manufactured with the parts claimed to be missing. We cannot accept that bare decision as competent proof of the truth of the manufacturer's alleged statement ; the recitation in that document is clearly hearsay, to the admission of which plaintiff strenuously objected. Tr. 1183-84, 1669. Thus, no proper evidence has been offered to rebut plaintiff's proof that these items were normally sold as part of the diesel engines.
The defendant contends that recovery is nonetheless precluded by the doctrine of res judicata. The merchandise with which we are now concerned was included in the district court judgment against plaintiff for Ms total indebtedness to the United States. The defendant argues that the present cause of action is barred because it was a compulsory counterclaim or offset (within Rule 13(a) of the Federal Rules of Civil Procedure) which Mr. Benjamin was required to assert before the district court. This contention ignores the actual understanding of the parties, and of the court, at the time plaintiff confessed judgment. The district judge, in his opinion denying plaintiff's motion to stay execution of the judgment, stated specifically that "he still has his right to prove his offset." The contemporaneous depositions of the parties confirm that understanding. Defendant now urges that plaintiff's right to offset the judgment was limited to proceedings before the G-SA, but the parties' agreement in no way intimates that that agency was to be plaintiff's sole recourse. His unqualified right to show his offsets or counterclaims was repeatedly asserted, and that right normally includes the right of access to the courts. It is also said that, assuming that court scrutiny, was permitted by the agreement, the district court rendering the original judgment against Benjamin was the only proper forum. The defendant's suggestion that Rule 60(b) of the Federal Rules of Civil Procedure (dealing with relief from judgment due to mistake, inadvertence, etc.) would be the vehicle for determination of plaintiff's claims does not convince us that the district court was ever available for that purpose. It surely cannot have been the intention of the parties to enable plaintiff to secure judicial relief only through invoking a procedural rule for correcting inadvertence (and the like), when in fact there was none. An ordinary suit in this court, or in the district courts under the Tucker Act, would still be available. For these reasons, plaintiff's right to pursue this and the subsequent causes of action is not barred by the defense of res judicata.
Plaintiff claims entitlement to $5,200 (or $400 per engine) as the cost of repairing the thirteen diesel engines (in Cause of Action No. 8) and replacing their missing parts. Since no description of the condition of the equipment ("Nl" or otherwise) was included in the sales agreement, the disclaimer of everything except title and description precludes recovery for repair expenditures (as distinguished from replacement of missing parts). Although plaintiff has made no effort to segregate the two types of expenses, his requests for reimbursement in 194T and 1951 included only $250 per engine (a total of $3,250) for missing parts replacement, which was found by the trial commissioner to be the appropriate measure of damages. We accept this finding and grant recovery of $3,250.
Plaintiff made the final purchase of 82 engines in February 194T (Cause of Action No. 9). By that time, he had already discovered the parts missing from the previously delivered 'equipment and lodged a complaint in that regard. See finding 37. Possibly, it was his accentuation of these deficiencies that enabled Mr. Benjamin to buy this last group of diesels for only $689 apiece, rather than the prices in excess of $800 which WAA had received in the prior sales. Since he knew exactly what he was getting, plaintiff has no claim for breach of warranty. See Helene Curtis Industries, Inc. v. United States, 160 Ct. Cl. 437, 445, 312 F. 2d 774, 779 (1963).
Plaintiff also contends that the Government failed to deliver sixteen of the 82 engines ordered. The only supporting evidence offered was (1) the sales document, which contained an ambiguous handwritten notation that 66 engines were received, and (2) a letter from one of plaintiff's employees to WAA, stating that sixteen engines were not delivered. That employee did not take the stand, and plaintiff, the only witness testifying on this matter, disclaimed any personal knowledge. On the basis of this scant evidence, we conclude that plaintiff has not borne his burden of proof on the nondelivery claim.
On these four claims, plaintiff's recovery is limited to $3,250 under Cause of Action No. 8.
Cause of Action No. I¡. — In December 1946, WAA sold a generator set to plaintiff for $3,230. Although its description and serial number were included in the sales document, the agreement did not state whether the equipment was new. Shortly after receiving the merchandise (which bore the correct serial number), plaintiff requested "an adequate allowance" from WAA, because he had expected a new gen erator and instead received a used one. The agency having denied his claim, plaintiff asks damages of $1,615 as the difference in value.
. According to plaintiff, the generator set was purchased on the basis of the government catalog's representation that such equipment was unused. This contention is based solely on plaintiff's testimony to that effect, which he himself had contradicted earlier in the trial. Tr. 130,143. The catalog, which offered the best possible proof, was never submitted in evidence. Plaintiff has failed to substantiate his claim that this was a catalog sale.
The only other possible ground for permitting recovery is plaintiff's testimony that he had bought hundreds of these generators from WAA, paying approximately $3,200 for those which were new and $1,600 for used ones. The sales agreement, however, contained no suggestion that the equipment was unused, and plaintiff does not contend that WAA sales personnel made any oral representations to that effect. In such circumstances, the court may revise the agreement to reflect plaintiff's subjective understanding only if it finds that the defendant should reasonably have known that plaintiff would not agree to buy a used generator at that price. Cf. Wender Presses, Inc. v. United States, 170 Ct. Cl. 483, 343 F. 2d 961 (1965); Allied Contractors, Inc. v. United States, 159 Ct. Cl. 548, 310 F. 2d 945 (1962). Although plaintiff may generally have purchased new and used generator sets at the prices he gave in his testimony, he has not shown that the amount offered by him in this instance was so out-of-the-ordinary as to put the defendant on notice and entitle him to recover the difference.
Cause of Action No. 5. — After purchasing 155 Delco generators in "Nl" condition, plaintiff discovered, when the shipment arrived, that they were not equipped with gas tanks, mufflers, tools, or spare parts. As in Cause of Action No. 8, supra, the Government's main defense is the manufacturer's statement that the equipment was not made with the parts allegedly "missing". In this instance, however, instead of merely submitting in evidence the GSA ruling denying the claim, the defendant offered the letter actually received from Delco, and plaintiff made no objection to its admission. On the other hand, Mr. Benjamin testified that he had examined a sample Delco generator at a special offering by WAA immediately prior to the present sale, and noted that it included each of the items subsequently determined to be omitted from the machines he bought. Faced with the manufacturer's contrary assertion, we believe that plaintiff must have been mistaken. Plaintiff's claim is denied because, on this record, he has missed proving that, as an experienced buyer and seller of such merchandise, he should not reasonably have known (or discovered) that the generators were manufactured without these parts. Cf. Dulien Steel Products, Inc. v. United States, 143 Ct. Cl. 484, 494 (1958).
Cause of Action No. 11. — In February 1947, plaintiff purchased ten generators, of which three were warranted to be in "Nl" condition (new and in- excellent condition), and seven as "E2" (used, but reconditioned and in good working order). When plaintiff received these machines, he discovered that only one of the ten met its warranty. A WAA representative investigating plaintiff's claim substantially confirmed his contentions as to the state of the generators. As a result, in May 1948 the agency offered to refund the purchase price plus freight charges of redelivery, if plaintiff would return the nine defective generators. The trial commissioner found that plaintiff was apparently unsatisfied with this proposal and unwilling to reship the goods, even after WAA, on numerous occasions, had advised him to follow this course of action. Although Mr. Benjamin now suggests that he advised the agency to transport the generators itself and that the agency refused, the record amply supports the commissioner's determination that it was plaintiff who prevented redelivery. See finding 69 and defendant's Exhibits 86,87, and 88. The WAA can hardly be held to blame for plaintiff's intransigence.
Plaintiff nevertheless contends that he is entitled, not only to the purchase price, but also to the additional amount he lost by not 'being able to resell "NI" and "E2" generators. This equipment, it is urged, was taken by the receiver ship in August 1951 along with plaintiff's other assets and, in that manner, "redelivered" to the defendant. Even if the measure of damages asserted by plaintiff is proper, the factual premise on which his argument is based is unsupported in this record. There is no evidence, documentary or otherwise, to indicate that the nine generators purchased in 1947 were still among plaintiff's assets when they were seized by the receiver four years later. The trial commissioner concluded that plaintiff reneged when WAA offered a full refund of the purchase price because he knew he could receive more by reselling the defective generators. Plaintiff has offered the court no adequate basis for setting aside the commissioner's finding that he resold this equipment sometime in 1948. See finding 70. He is not entitled to the full purchase price.
By rejecting the Government's offer to rescind the sale and refund the purchase price, did plaintiff completely forfeit his right to all damages? Ordinarily, plaintiff would remain entitled to the difference between the market value of the generators if they had been in the condition warranted and their actual market value. McCormick, Damages § 176 (1935); 5 Williston, Contracts § 1391 (rev. ed. 1937); e.g., Beer v. United States, 120 Ct. Cl. 690, 702, 100 F. Supp. 808, 810 (1951). We do not think that that result was altered by inclusion in the sales agreement of a provision that "seller's liability shall not exceed amount of purchase price." See findings 67, 35 (c). As we pointed out in another case involving the sale of surplus property under a contract containing a similar limitation, "To read the clause in [an] unlimited fashion — excusing all damages for any type of breach — would come close to (if not reach) the pit of voidness; the Government would in effect promise nothing although the other party would supposedly be bound." Freedman v. United States, 162 Ct. Cl. 390, 403, 320 F. 2d 359, 366 (footnote omitted) (1963). To avoid that consequence, we suggested that the clause be construed in accord- anee with its purpose, i.e., "to meet those instances in which (1) a need for the property develops after it has been declared surplus and offered for sale, or (2) a serious mistake has been made, such as a grave price discrepancy between the true value of the item and the amount bid." 162 Ct. Cl. at 896, 320 F. 2d at 362. The second category referred to cases (such as Freedman itself) where the Government sells merchandise at a price far below its true value, because unaware of its actual worth. It does not include sales in which the Government warrants goods to be of a certain quality and instead delivers inferior items. The clause protects the defendant against mistakenly selling gold at the going price for brass, and furnishes assurance that the vendee will not thus fall heir to a windfall. But this clause, alone, does not effectively exempt the Government from liability for breach of warranty; if that is to be done, it should be by explicit disclaimer of the kind often used in surplus disposals. Cf. Montreal Securities, Inc. v. United States, 165 Ct. Cl. 120, 329 F. 2d 956 (1964), cert. denied, 379 U.S. 826; Alloys & Chemical Corp. v. United States, 163 Ct. Cl. 229, 324 F. 2d 509 (1963). This interpretation of the liability-limitation clause accords with the dominant purpose of the damages remedy — to place the party against whom the breach was committed in the position he would have held had the contract been fully performed according to its terms. Cf. Acme Equipment Process Co. v. United States, 171 Ct. Cl. 324, 355-56, 347 F. 2d 509, 528 (1965), defendant's petition for writ of certiorari granted, 384 U.S. 917 (1966). That normal goal should not be obstructed without explicit authorization in the contract. We conclude, therefore, that plaintiff may recover, under the accepted standard of damages, for failure of the generators to conform to their warranty of description.
Since plaintiff attempted to demonstrate a larger amount of damages and had no occasion at the original trial to submit proof in accordance with this appropriate measure, he may do so, if he desires, in a subsequent proceeding before the commissioner under It ule 47 (c)
Causes of Action Nos. 13, 19, and 25. — The first of these claims (No. 13) involves forty propelling units sold to plaintiff in February 1947 by WAA's Birmingham office. During the next six weeks, but before inspecting the merchandise, plaintiff bought 250 identical units from the Memphis office, and they form the basis for claims 19 and 25. Although this equipment was warranted to be in "Nl" (new; excellent) or "N2" (new; good) condition, the shipment arriving from Birmingham was partially rusted (but unused). Plaintiff, after making this discovery, immediately wired the Memphis office, directing it to cancel shipment of the propelling units previously ordered because similar items received from another WAA branch were not "new". After several written exchanges, the Memphis office reluctantly acquiesced, crediting plaintiff's account for the full purchase price.
In Cause of Action No. 13, plaintiff asserts that he expended $7,000 in making necessary repairs on each of the forty units he received ($175 per unit). By this rehabilitation, he was able to resell each machine for $1,000, although, according to his testimony, the normal price of propelling units meeting the "Nl" or "N2" description was $1,500. In addition to the $7,000 repair cost, plaintiff also seeks damages of $20,000 (or $500 per unit, derived by subtracting $1,000 from $1,500), for breach of warranty. The sales agreement in each of these instances (finding 35 (c)) disclaimed all warranties, except as to title and as to "the accuracy ¡of the description of the property, provided however, that if the property is described as new, seller warrants only that it has not been used." The defendant contends that, under this proviso, the "Nl" and "N2" warranties were entirely satisfied through delivery of admittedly unused propelling units (even though rusted). We think not. The proviso makes it clear that the "N" designation warrants only that the equipment is unused (rather than new in the sense of "brand new", as distinguished from unused but old or out-of-date). That clause does not, however, bear on the meaning of "1" and "2", which were well-known code references signifying that the units were in "excellent" or "good" condition. See Beer v. United States, 120 Ct. Cl. 690, 692-93, 100 F. Supp. 808 (1951). The present case is thus unlike Handler Motor Co. v. United States, 121 Ct. Cl. 845 (1952), where the sales agreement stated only that the merchandise was new, and made no representation as to its condition. Moreover, the plaintiffs in Handler knew or reasonably should have known of the defects subsequently encountered. Since Mr. Benjamin had no reason to suspect that these units were corroded and failed to meet the standards ,of quality ("1" and "2") warranted in the sales agreement, he is entitled to recover the $7,000 expended in making necessary repairs. Though the agreement contained a provision limiting damages to the purchase price, for the reasons given in Cause of Action No. 11, supra, plaintiff may also receive credit for $20,000, which he lost by not being able to resell goods conforming to the warranty.
On the other hand, when plaintiff canceled the remaining two purchases from the Memphis branch (Causes of Action Nos. 19 and 25), he could not possibly have known that these propelling units would also fail to meet the warranty. The delivery of deficient items from the Birmingham office does not support the inference that all such equipment sold by WAA was inferior, even though it came from a different branch (and, presumably, a separate warehouse). In fact, the agency wrote plaintiff that, "We do not believe the basis for your action in cancelling this purchase is justified, especially since a representative of your firm made a prein-spection of the units . We have sold and delivered a number of these units and the purchasers are completely satisfied with them." In the first instance, then, it was plaintiff rather than the Government who breached these two contracts. But when WAA finally agreed to accept plaintiff's cancellation, the parties effected a mutual rescission.
In sum, plaintiff's recovery on Cause of Action No. 13 is $27,000, and Nos. 19 and 25 must be rejected.
Cause of Action No. lip. — Plaintiff bought 696 Hobart generators in March 1947, agreeing to pay $50 each. The sales agreement described the units as "Model 5J", manufactured by "The Hobart Bros. Co." Immediately after receiving these generators, plaintiff wired WAA that he did not want tliem because they were single — rather than two-bearing. After unsuccessfully attempting to arrive at an adjusted price, the agency denied plaintiff's claim. Plaintiff implies that he was misled when the WAA, in drafting the sales agreement, "carefully failed to disclose" the number of bearings. But the evidence indicates that it never occurred to agency representatives that plaintiff thought he was buying two-bearing generators; instead, they felt he had made a "fair offer". See finding 81. The same evidence shows that the price offered by the plaintiff did not put WAA on notice as to the misunderstanding. The result is not, as plaintiff argues, a lack of mutuality rendering the agreement void; rather, under the objective theory of contracts, we must disregard Mr. Benjamin's undisclosed and unknown subjective understanding and give effect to the written contract into which the parties actually entered.
Plaintiff contends in the alternative that the agreement's designation of the units as "Model 5 J" amounted to a guarantee that the generators were double-bearing. He claims that a letter from the manufacturer supports his position, but the gist of the manufacturer's letter is that the symbol "5J" indicates that the generators could be either single-bearing or two-bearing. See finding 82. Cause of Action No. 14 must therefore be denied.
Cause of Action No. IS. — The major claim presented here is another instance of equipment received by plaintiff which allegedly failed to comply with the warranty contained in the sales document — the 476 dough-mixing machines purchased in March 1947 were guaranteed to be unused, but of the 468 delivered all except seven were worn by use. Once again, WAA offered to refund the purchase price plus freight expenses, but plaintiff refused. Although plaintiff still claims entitlement to the purchase price on the ground that these machines were among the assets seized by the receiver, his self-serving testimony is insufficient to prove that assertion.
The issue of breach of warranty remains. The Government contends that this case is distinguishable from Cause of Action No. 11, sufra, and that plaintiff may not recover on the warranty because the present sales agreement contained the disclaimer, "Material sold as is, FOB location". Alpng with that disclaimer, however, the agreement specifically described the equipment as "unused" and contained a warranty as to the accuracy of the description. We think that the attenuated general disclaimer — "material sold as is" — was insufficient to overcome the specific description and the specific warranty of its accuracy, on both of which plaintiff is entitled to rely. Cf. Krupp v. Federal Housing Administration, 285 F. 2d 833 (C.A. 1, 1961). As in Cause of Action No. 11, supra, plaintiff is entitled to the benefit of his bargain; he may recover the difference between the value of the 468 machines had they come as warranted and their actual market value. Although plaintiff implies that the proper measure is the difference between the price he paid for the goods and their resale market value, that is strictly true only with respect to the eight units plaintiff never received ; he had no opportunity to resell these units and thus reduce his loss of $1,448.40 (i.e., the resale market value of eight unused machines less the purchase price). But the defendant is likewise incorrect in intimating that plaintiff's uncontradicted testimony as to the market value of unused dough-mixing machines is insufficient prima facie proof of such value. In the absence of any rebuttal evidence by the Government, plaintiff need show, in further proceedings, only the market value of the 461 used machines he received.
In this cause of action, plaintiff also requests reimbursement of the price he paid for seven used dough-mixing machines, which were purchased at the same time but never delivered. The commissioner has found, however, that Mr. Benjamin received a credit for tbat amount, and the finding is supported by the record.
Plaintiff is entitled to damages of $1,448.40 resulting from the nondelivery of eight unused dough-mixing machines. With regard to the 461 units which were received in used condition, he may, if he wishes, prove his damages in proceedings before the trial commissioner under Eule 47(c). His claim relating to the seven used pieces which came as warranted is dismissed.
Game of Action No. 17 — Of the four "N2" compressors purchased by plaintiff in March 1947, only one came in the condition represented. Two were badly dented, and the third one was used. Shortly thereafter, plaintiff filed a claim for $2,500 as his estimate of the cost of repairing the three defective machines so that they would substantially conform with the warranty. In at least five letters over the next fifteen months, plaintiff renewed his claim and requested that it be given immediate attention. In July 1948, WAA offered him an adjustment of $907, based on a report filed by one of its investigators who had inspected the damaged equipment. In addition to these conflicting contemporaneous estimates, there is plaintiff's testimony at the trial (in 1956) that it ultimately cost $2,500 to repair only two of the compressors and that the third one had to be discarded as worthless. We think, after taking into account the parties' contemporaneous evaluations of the defects, as well as the trial commissioner's finding that plaintiff should receive approximately that amount, that plaintiff is entitled to $2,500 on this claim.
Causes of Action Nos. 18 a/nd —Two diesel engines purchased by plaintiff in February 1947 were never delivered, and he sues to recover $989.90, which the Government concedes he lost as a result of its failure to carry out the agreement (Cause of Action No. 18). The defendant relies on a provision in the sales document limiting liability to the purchase price. As we pointed out in Freedman v. United States, supra, 162 Ct. Cl. at p. 396, 320 F. 2d 359, 362 (1963), that limitation is generally applicable where the Government discovers it needs the property offered for sale, or where the sale price is considerably below the value of the merchandise. It is now said that the two engines were withdrawn from sale because of military needs, and that liability is therefore restricted to the purchase price which has already been returned to plaintiff. But the only material offered in support of this allegation is a letter from WAA to plaintiff, asserting that the military agency which owned the equipment had discovered that it was still needed. Although the letter was submitted by plaintiff as part of a series of exhibits, such letters were admitted only for the purpose of proving that the correspondence had taken place, and not to prove the truth of the statements contained in any of the letters. Admission of the entire series for even this limited purpose was objected to at the time by government counsel. See Tr. 59-64, 86-87,117, 185-36, 170-71. The "evidence" on which defendant relies is thus without probative value. Since the Government has failed to prove that the purchase-price limitation was applicable here, plaintiff may recover damages of $989.90.
In Cause of Action No. 22, plaintiff purchased twenty-five 75-horsepower motors from WAA for $6,300. This equipment, also, was never delivered by the agency, apparently because it discovered that the motors on hand were only 7.5 horsepower. Although the Government undeniably made a material error in its offer, the error was wholly in the Government's favor; it did in fact intend to offer and sell 75-horsepower motors at the negotiated price. If the motors had been delivered, plaintiff could have sued for breach of the warranty of description, and the proviso limiting liability to the purchase price would have been unavailing. Refusal to deliver places the defendant in no better position. As proof of the market value of 75-horsepower motors, plaintiff testified that he had already contracted to resell the pur chased units to Dow Chemical Company for $31,250. Since the defendant has not contested this estimate of the market value, plaintiff is entitled to $24,950, the difference between that amount and the purchase price.
Came of Action No. %0. — This claim involves two motors purchased on July 8, 1946, -over six years prior to the filing of plaintiff's petition in this court. As was pointed out in the discussion of Causes of Action Nos. 2 and 8, supra, such claims are barred by the statute of limitations.
Cause of Action No. 6¿3. — Plaintiff purchased 7,553 diesel-engine starting motors in February 1948, but the shipment of these units included only 7,201 boxes. Plaintiff seeks damages for the alleged nondelivery of 352 units. The Government contends that there was no shortage, since a number of the boxes contained more than one motor. Plaintiff's testimony in this regard was somewhat contradictory. His main defense is that, after opening 25 crates containing one motor each, he presumed that every box had only a single motor in it and notified the defendant of the shortage. At this point, it is urged, the Government had a duty to tell plaintiff that two motors were included in some of the boxes. Instead, WAA simply rejected plaintiff's claim on the ground that there was no shortage, and he sold the entire shipment on the basis of 7,201 items. He has submitted no evidence as to the date of resale. It is clear that if Mr. Benjamin resold the motors (in the form he did) before WAA acted on his claim, the misunderstanding is his own fault. If the resale took place afterwards, the situation is that, by denying his claim, the agency had informed plaintiff of its belief that he had received the number to which the parties agreed. Plaintiff was put on notice to inquire further. When he thereafter resold the merchandise before fully ascertaining the facts, he acted negligently and must bear any resulting injury. By showing only that 25 of the boxes contained one motor each, plaintiff has failed to sustain his burden of proving either a shortage or that the defendant is to blame for the loss.
Games of Action Nos. and 87. — These claims involve similar issues relating to the nondelivery of equipment. In the first, the sales agreement under which plaintiff purchased two generators in February 1947 contained tbe provision, "Offered property subject to prior sale or withdrawal, prior to delivery to purchaser, without notice." Like the clause limiting liability to the purchase price, this provision does not enable the Government to cancel the agreement at its pleasure, on any ground. Rather, we think this clause was primarily intended to permit the defendant to cancel a sale if it discovered that the merchandise had already been sold prior to execution of the agreement or that it should not be sold at all. That has not been shown to be the case here. Some five months after the agreement was signed, a letter from WAA informed plaintiff that "this property cannot be shipped due to non-availability." Since the letter was admitted only to show the existence of the correspondence and not the truth of its contents (which were hearsay), the Government has failed to prove that the generators were in fact previously sold to another party or had been withdrawn from sale. Nor has the defendant shown that this is a case in which the agreement's limitation of damages to the purchase price is applicable. Plaintiff may recover $602, which the defendant concedes he lost by not being able to resell the generators.
Claim No. 26 concerns the nondelivery of six generators, for which plaintiff agreed to pay $2,477.34, with a resale value of $12,000. The sales agreement restricted liability to the price paid for the equipment, but no clause concerning "prior sale or withdrawal" was included. The sole reason given by the defendant for its failure to supply this equipment was "unavailability." Plaintiff is therefore entitled to the benefit of his bargain, or $9,522.66.
In Cause of Action No. 27, WAA agreed to sell plaintiff 25 engines in "N2" condition, but later withheld delivery when it discovered that they were reconditioned rather than unused. Although plaintiff asserts he is entitled to recover the purchase price, he has failed to prove that he ever paid for this equipment or that it was included in the district court judgment. Nor has plaintiff carried his burden of proving damages stemming from the Government's failure to deliver the engines. See findings 118-21.
defendant's counterclaims
The Government has filed two counterclaims. The first seeks to recover $75,255, for which plaintiff is allegedly indebted to the Maritime Administration of the Department of Commerce. Since plaintiff neglected to submit responsive pleadings to this counterclaim as was required (Rule 10 (a)), and the allegations are therefore to be deemed admitted (Rule 19(c)), the defendant claims automatic entitlement to an affirmative judgment of $75,255, less the amounts awarded plaintiff under the previous causes of action. Although we emphasized the importance of these rules in Alloy Products Corp v. United States, 157 Ct. Cl. 376, 381-83, 302 F. 2d 528, 531-32 (1962), the conclusion defendant draws from their application to this case is not a necessary one. Plaintiff admits the truth of the factual averments contained in the counterclaim (i.e. that he did owe the stipulated amount to the Maritime Administration), but contends that assertion of the claim at this time is nonetheless precluded by the legal defense of res judicata. Since plaintiff's 1951 confession of judgment "in favor of the United States" was for the "balance due and owing for go,ods sold and delivered to [him]", he urges that the present counterclaim involving a pre-1951 debt is barred as a split cause of action. As the Government has pointed out in its own argument that the district court judgment forecloses plaintiff's individual claims (an argument we have rejected above), all the evidence necessary to raise this issue was submitted at the trial ,of the case. The district court judgment and the related papers are part of the record. Since the defendant itself asserted res judicata in another context, it was aware of the existence of that type of defense and should not claim surprise. The equitable rationale underlying Rule 22(b) ("Amendments to Conform to the Evidence") dictates that plaintiff be allowed t,o amend his pleadings to assert res judicata. Cf. Erickson v. United States, 159 Ct. Cl. 202, 209-10, 309 F. 2d 760, 764 (1962). It follows that, since the subject matter of the Government's first counterclaim should clearly have been included in its action against plaintiff in 1951, its present claim must be denied. See Restatement, Judgments § 62.
The Government's second counterclaim is "in the nature of a set-off". Because a considerable portion of the 1951 judgment against plaintiff remains unpaid, the defendant urges that that indebtedness bars recovery here. Since we have already concluded that there is no basis for disregarding the district court judgment at this time, the set-off must be granted. The evidence before the court indicates that the receivership has paid a total of $582,674 into the district court on the $1,187,787 judgment. The amount of plaintiff's damages, including any received as a result of subsequent proceedings before the trial commissioner under Buie 47(c), will be far less than his present debt to the Government. Mr. Benjamin is therefore entitled to no affirmative monetary recovery. The case is remanded to the commissioner solely for the purpose of determining the total amount by which plaintiff's indebtedness to the United States is to be reduced. The amounts thus far ascertained are:
Cause of Action:
No. 8_ $3, 250. 00
No. 13_ 27, 000. 00
No. 15_ 1,448.40
No. 17_ 2, 500. 00
No. 18_ 989. 90
No. 21_ 168.75
No. 22_ 24,950. 00
No. 24_ 602.00
No. 26_ 9,522.66
$70,431. 71
Plaintiff is entitled to seek a determination by the commissioner of additional damages under Causes of Action Nos. 11 and 15, pursuant to Buie 47 (c). Following any such determination, if one is sought, his entire petition is to be dismissed since he cannot obtain any affirmative recovery in this action. Meanwhile, the petition is dismissed as to the causes of action other than Nos. 8,11,13,15,17,18,21,22,24 and 26.
FINDINGS OK FACT
The court, having considered the evidence, the report of Trial Commissioner Paul H. McMurray, and the briefs and arguments of counsel, makes findings of fact as follows:
1. Plaintiff is a resident of Miami Beach, Florida. Dur ing tlie period of time here involved plaintiff was in business in Brooklyn, New York, in bis own name and under the trade name "Benjamin's For Motors." His principal business was the purchase, repair, and rehabilitation of new and used machinery of various types and the resale of those items.
In addition to these activities, plaintiff had a substantial interest in Mill Basin Bepair Company, Benbro Fisheries Co., Inc., Factory and Home Supplies, Inc., Med Ben Holding Corporation, and Davis Machine Company, Inc.
2. In his amended petition plaintiff has set forth 29 counts or causes of action. The first 28 of these deal with individual transactions or groups of transactions, while the 29th is based upon alleged destruction of plaintiff's business by defendant in levying execution upon a judgment against plaintiff. By treating this latter claim first, greater clarity of presentation can be obtained.
CAUSE OP ACTION NO. 29
3. By order of Judge J. Warren Madden, acting in the capacity of Trial Commissioner, the trial of the 29th cause of action was limited to the issue of liability, leaving the question of damages for future determination.
4. Following World War II, plaintiff began purchasing from defendant merchandise offered for sale under the Government's surplus property disposal program. Plaintiff had been approved by War Assets Administration (WAA) for a line of credit in the amount of $15,000, but had succeeded in buying substantially more than this by representing to the Credit Department of WAA that he had claims of about $1 million against WAA on account of nondeliveries and other matters. By the end of 1946, when plaintiff had made total purchases from WAA and its predecessor agencies of between $3 and $4 million, he was in debt to WAA to the extent of over $900,000. About this time, the markets in which plaintiff had been reselling such surplus slowed, and he had about $2 million worth of surplus on hand which he could not easily sell.
5. When the banks which had extended credit to plaintiff expressed concern over the amount of his indebtedness to WAA, plaintiff, on the advice of the WAA main office, went to each regional office of that agency to which he was indebted and attempted to effect settlements of his claims against WAA. Plaintiff was advised by each office visited that his admitted debts and his claims for adjustment were separate matters, and that the existence of these claims was not an acceptable reason or excuse for plaintiff's failure to pay his admitted obligations. The procedure adopted and carried out by defendant made it necessary for plaintiff to make available to defendant a very large sum, without being given credit for any amount due plaintiff from defendant at that time.
6. The record is not entirely clear as to what ensued after plaintiff failed to obtain favorable action on the alleged claims against WAA. It is established, however, that plaintiff and his attorney conducted negotiations with the regional counsel of WAA in New York, where plaintiff's credit was handled. Under date of November 21, 1947, the regional counsel addressed a letter to plaintiff setting forth his understanding of a proposal which had been made on plaintiff's behalf by his attorney. Under this proposed arrangement plaintiff would confess judgment for the amount of his indebtedness to WAA, plus interest thereon, and as security for the payment of said sum would assign to WAA liquid accounts receivable equal to the amount of the indebtedness, and would also deliver to a reliable warehouseman the items of unsold surplus, delivering the warehouse receipts to WAA.
There was no reference in the letter of November 21,1947, to the claims asserted by plaintiff against WAA or to the manner of processing such claims.
The proposed settlement included the obligations of plaintiff's Benjamin's For Motors, and the following firms and individuals:
Benjamin Industrial Supply Co.
Sanford Benjamin
Sherwin J. Benjamin
Davis Machine Co.
Factory Home & Supply Co.
Knickerbocker Sales Auto Co.
Donald S. Sampson
Michael I. Winters
The Sanford A. Benjamin Co.
Peter Cavalla
Diesel Marine Division of Viking Shipyard Knickerbocker Equipment Co.
Abraham Mansdorf
Joseph P. Scott
Wizzer Motor Sales Co.
It was the understanding of the regional counsel that "the subject entities in whole or in part are directly or indirectly parties in interest to the disposal of certain war surplus for Benjamin's For Motors," and that "Mr. Medwin Benjamin is the individual proprietor of Benjamin's For Motors, and completely controls the assets of any of the above entities who have an interest in the purchase of the disposed war surplus."
7. As of the date of the proposed settlement, according to plaintiff's figures, there were outstanding WAA invoices totaling $1,172,544.80, against which plaintiff had made payments or been allowed credits of $216,911.57, leaving a net indebtedness of $955,633.23. Plaintiff had either formally made claims or asserted that he had claims against WAA totaling $220,294.11. If all of these claims could have been allowed, there would have remained at that time a net liability of plaintiff to WAA of $735,339.12.
8. On February 27,1948, the WAA regional counsel wrote plaintiff as follows:
My letters to you of November 21,1947, December 10, 1947, and February 10, 1948, embodied my understand ing of your proposals to secure payment of the indebtedness of Benjamin's For Motors to the War Assets Administration, acting in behalf of the United States Government.
To date you have failed to abide by or carry out a single item among those proposals and in addition have railed to exhibit any of the cooperative spirit necessary to the accomplishment of the plan submitted to us.
Under these circumstances, demand is made that by 5 P.M. Thursday, March 4,1948, you evidence your good faith by:
I. Delivering to this office cash, a certified check, cashier's check or Postal Money Order in the sum of $350,-000.00 to be applied against the indebtedness, or
II. Implementing your plan as set forth in the above cited letters. Such implementation shall be considered evidenced only if, by the time and date mentioned, you have actually and physically:
(a) Delivered to this office the assignments, certificates and acquiescence called for in items 4 (as amended)^,! and 8 of my November 21st letter.
(b) Entered into an agreement with a reliable warehouseman for the transfer noted in item 3 of that letter, and
(c) Made arrangements satisfactory to Mr. Raymond Shumacher, our auditor in charge at your office, for completion of the audit and placing in full effect the controls outlined in my letter of February 10th.
If by the time and date noted you have not satisfied either condition I or II above set out, the arrangement proposed by you will be considered terminated. Under such circumstances this letter shall be deemed a demand for payment by you at that time of your full indebtedness to the War Assets Administration. That indebtedness according to records available to us at this time is $964,040.01. The declaration herein of this sum shall not preclude our demand for additional amounts in the event further search reveals the existence of an indebtedness in excess of the figure stated.
9. Sometime in 1941 the Washington office of the WAA referred its claim to the Department of Justice for collection. Subsequent to February 1948, plaintiff was requested to come to the office of the United States Attorney in Brooklyn to discuss the subject matter of the letter set forth in finding 8. Plaintiff, accompanied by his attorney, contacted the U.S. Attorney and was advised that the U.S. Attorney had the claim against plaintiff for collection.
10. Shortly after the conference referred to in the preceding finding, plaintiff talked to Henry Singer, a practicing attorney in Brooklyn, who was representing plaintiff in another matter, and asked that he handle this claim against plaintiff.
11. On or about April 30,1948, plaintiff submitted an offer to compromise the Government's claim against him and his alleged claims against the Government for the sum of $225,-000, to be paid over a period of 6 months. This offer was to be: "In full settlement and discharge of the obligations of Medwin Benjamin, personally and as owner of Benjamin's For Motors and Knickerbocker Equipment Co., Sherman Benjamin, Sanford A. Benjamin and Factory and Home Supply Corp. " Plaintiff's alleged claims against the United States were not detailed or documented, but plaintiff did submit a schedule which stated that the WAA claims against plaintiff's various business organizations totalled $957,035.16, against which plaintiff asserted there were claims allowed and not yet credited totalling $81,159.96. In addition, plaintiff asserted that there were undetermined claims of $266,341.46, plus a claim of $330,103.89 representing an alleged dealer's discount of 12% percent on purchases of $2,640,831.12 (see cause of action No. 1). Without the discount claim, the indebtedness was $609,533.74. If such discount claims were deducted, the balance would be $279,-429.85. There were also attached to plaintiff's offer financial statements for plaintiff, Sanford A. Benjamin, Benbro Fisheries Co., Inc., Mill Basin Repair Company, Med Ben Holding Corporation, Benjamin's For Motors Radio Division, Inc., and Factory and Home Supplies, Inc. No definitive action was taken with respect to plaintiff's offer of settlement.
12. Certain further discussions ensued, which led plaintiff and his attorney to conclude that the original offer would not be accepted by defendant. Under date of December 16, 1949, plaintiff submitted a modified offer on behalf of the same firms, raising the amount to be paid over a period of 3 years to $325,000.
Defendant proceeded with an audit of the schedules of net worth submitted in support of plaintiff's offer and with an appraisal of plaintiff's physical assets.
13. The record is not clear as to whether any definitive action was taken on this amended offer. However, in August 1950 a conference was held at the Department of Justice in Washington at which both the Assistant U.S. Attorney from Brooklyn handling the case and Mr. Singer, plaintiff's attorney, were present. At that conference Mr. Singer was informed that the only compromise offer which would have a reasonable chance of acceptance would be an offer of $580,000, with $150,000 to be paid at once and the balance over a period of 3 years. Plaintiff's attorney countered with an offer of $510,000 payable on the same terms. He was advised that if he submitted such an offer promptly, accompanied by the $150,000, it might be accepted.
14. Henry Singer reported the results of the meeting to plaintiff. It was Mr. Singer's belief that the settlement figure was basically fair to both sides. Plaintiff told Mr. Singer that he [Singer] had accomplished the purpose which the plaintiff had sought from him; that plaintiff had obtained the Government's figure, and that it was plaintiff's plan to secure other attorneys who would be able to reduce the proposed settlement figure by 50 percent. After termination of Mr. Singer's services, plaintiff was next represented by ex-Governor Schultz of Florida.
15. Thereafter various attempts were made by plaintiff and attorneys representing him to obtain a more favorable settlement from the U.S. Attorney's office in Brooklyn and the Department of Justice in Washington. None of these was successful.
16. On January 8, 1951, plaintiff, accompanied by his attorney at that time, Daniel J. Hanlon, appeared by appointment at the General Services Administration (GSA) (successor to WAA) office in New York City. They conferred with the regional counsel and his assistant and with Mr. Siegel, the Assistant U.S. Attorney who was handling the claim against plaintiff. Mr. Siegel stated that he had been instructed to file suit against plaintiff, and that he intended to ask the court for a warrant of attachment which, if granted, would tie up plaintiff's property. Plaintiff's attorney replied that his client was prepared to confess judgment for the amount due defendant. Following a general discussion of the matter, a memorandum was dictated jointly by the persons present at the meeting, and signed by all of them. The memorandum is as follows:
At a meeting on Monday, January 8, 1951 at this office, called for the purpose of trying to arrange for a settlement of the Government's claim against Medwin Benjamin, doing business as Benjamin's For Motors, and other persons and corporations concerned therewith, the following were present:
Morris K. Siegel, Assistant U.S. Attorney, Eastern District
Eugene T. Brennan, Begional Counsel, General Services Admin.
Thomas F. Rowe, Jr., Staff Counsel, General Services Admin.
Daniel J. Hanlon, Attorney for Benjamin's For Motors
Medwin Benjamin
As a result of the discussion at this meeting, it was agreed by Mr. Hanlon, attorney for Mr. Benjamin, and Mr. Benjamin, in person, with the various Government counsel present, that Mr. Hanlon and Mr. Benjamin would appear at Mr. Siegel's office, 271 Washington Street, Brooklyn, N.Y., at 10 A.M. on the 9th day of January, and, at that time would confess judgment in the full amount claimed by the Government, which will include interest, costs and disbursements, and that said judgment is to be filed immediately.
It was further agreed that on Tuesday, January 23, 1951, all those present at this meeting or their duly authorized representatives will meet at the office of Mr. George Foley, Claims Division, Department of Justice, Washington, D.C., for the purpose of further discussing payment of the judgment. It is further agreed that if payment cannot be made or agreed upon, execution on the above mentioned judgment will be levied. It is further agreed that there will be no disposition or distribution of assets until the matter is further discussed on January 23,1951.
(S) Moréis K. Siegel
(S) Eugene T. Brennan
(S) T. F. Rowe, Jr.
(S) Daniel J. Hanlon
(S) Medwin Benjamin
Following the signing of this document, plaintiff inquired as to what its effect would be on any claims he might assert. He was advised that neither the execution of this memorandum nor a confession of judgment would have any adverse effect upon any meritorious claims he might have, but that he should assert those claims as promptly as possible.
17. On the following day, January 9, 1951, plaintiff appeared at the office of the U.S. Attorney in Brooklyn. He was there served with a summons and complaint in a civil action for recovery of $931,498.52, plus interest. On this occasion plaintiff or his attorney presented a document which he desired to have the Assistant U.S. Attorney sign. The statement was as follows:
The confession of judgment is made without prejudice and without waiving the rights of the Judgment Debtor to any and all such claims as Judgment Debtor had, has or may have for reduction of the indebtedness by virtue of claims for shortage, damage, discounts, allowances, breach of contract, breach of warranty, and any and all other claims that Judgment Debtor may have as an outgrowth of the Sales and Claims by the Government to the Judgment Debtor.
The Assistant U.S. Attorney refused to sign the document. He did, however, sign a letter to plaintiff which included the following statement:
This is to advise you that it is our present intention not to file the confession of judgment which you executed in the above entitled matter until January 24th, 1951, in order to afford you an opportunity to discuss payment of the judgment with the Department of Justice before that time.
The record is not clear whether the refusal to sign the document tendered by plaintiff, and the signing of the letter quoted above, preceded or followed the execution by plaintiff of a confession of judgment. Plaintiff signed a confession on January 9,1951, reading as follows:
WHEREAS, the United States of America, has instituted suit against me for the sum of $934,498.52 representing a balance due and owing for goods sold and delivered to me; and
WPIEREAS, a copy of the summons and complaint in the said action has been duly served upon me; and
WHEREAS, I have no defense to the above entitled action and admit all of the allegations of the complaint.
Now, TheRefoee, I, MedwiN BeNjamiN, residing at 136-15 Rockaway Beach Boulevard, in the Borough of Queens, State of New York and within the Eastern District of New York, doing business under the firm name and style of Benjamin For Motors at 21-24 Mill Avenue, in the Borough of Brooklyn, County of Kings, City and State of New York, and within the Eastern District of New York, do hereby confess judgment in favor of the United States of America and do hereby consent to the entry of a judgment against me in favor of the United States of America in the sum of $934,498.52, together with interest, costs and disbursements as prayed for in the complaint and that said judgment may be entered without further notice to me.
Dated: Brooklyn, New York. January 9, 1951.
(S) Medwin" Benjamin".
Witness:
(S) Daniel J. Hanlon, Atty.
18. Under date of January 11, 1951, plaintiff addressed the following letter to the GSA regional counsel:
This will confirm my understanding with you had on January 8,1951, at your office and on January 9,1951, at the office of Morris Siegel, Esq. at the office of the United States Attorney for the Eastern District of New York.
I was to furnish to you a memorandum in support of my claim for deductions and reductions in the amount of the indebtedness which I incurred to the W.A.A.
Below I furnish a resume of the figures, the details of these figures were submitted to the W.A.A. time and again and can be furnished anew if required.
As you know, when I signed a confession of judgment, I reserved the right to enforce any claims that I may have in reduction of the indebtedness claimed to be owing to the W.A.A.
May I remind you that at both these conferences on January 8th and 9th, 1951, our discussions were had in your presence and in the presence of Messrs. No we and Morris Siegel, Esq., my counsel, Mr. Hanlon and myself.
1.W.A.Á. Claim_ $957, 935.16
Claims of Debtor
2. Allowed but not yet credited_$81,159. 96
3. Not determined — not credited_ 266,341.46
4. Dealers discounts not credited 12%% on purchase $2,640,831 _ 330,103.89
5. Total claims_ 677,605.31
6.Balance allegedly due- $279,429. 85
I enclose my check for $5,000.00 in keeping with my promise and as evidence of good faith. This enclosure is, of course, again without prejudice to my rights on the claims by me repeatedly asserted.
Should you desire any further information, I shall be glad to furnish you whatever data I have available.
The regional counsel replied to plaintiff's letter under date of January 16,1951, as follows:
Receipt of your letter of January 11, 1951, is hereby acknowledged.
Lest there be any misunderstanding concerning the effect of your confession of judgment for the full amount claimed by the United States, you are reminded that it was agreed during the conferences referred to by you, that the confession was not contingent upon our adjustment of any claims asserted by you, but was merely a frank and voluntary confession by you of the fact that the demanded sum was the amount properly due and owing to the Government.
During our conference of January 8, 1951, you were advised that there was no basis for the alleged dealer's discounts and that our records showed that full credit had been given for all allowed claims. It was agreed, however, that separate and apart from the matter of your indebtedness to the United States, we would, in the normal course of business, administratively adjudicate any claims specified by you and that your confession of judgment would not bar you from the same consideration given to anyone asserting a claim against the General Services Administration. As explained to you, we are treating your indebtedness and your claims as separate and distinct matters.
In the light of the above, you are assured that upon specification by you of the general allegations in your letter, the claims will be administratively considered and, where determined proper, the necessary adjustments will be processed.
Please be advised that our Washington Office has confirmed our meeting on January 23, 1951 at 10 A.M. for the purpose of arranging for your payment of the judgment. The meeting will be held in the office of George Foley, Esq., Department of Justice Building.
The record is unclear as to whether plaintiff made any protest, written or oral, after receiving this letter.
19. A conference was held in Washington on January 23, 1951, as previously arranged. At that conference plaintiff and his attorney stated that plaintiff could not make more than a $15,000 down payment on his obligation, plus payments of $5,000 per month, but that, if he were successful in securing certain Navy contracts on which he was bidding, he could increase the amount of his payments. Defendant's conferees, recognizing that most of plaintiff's assets were nonliquid, suggested that he pledge or mortgage these as security for his obligation. The representatives of defendant refused to agree to any installment payments. It was therefore proposed that plaintiff pay $15,000 and furnish the additional security outlined, and that other action be deferred pending advice as to whether plaintiff was the successful bidder on the Navy contracts. It is not established by the record that plaintiff's claims against the defendant were discussed at the meeting on January 23, 1951.
20. No proof was offered at the trial with respect to the results of the bids on the Navy contracts, which plaintiff had indicated as a possible source of funds, were he the successful bidder. Plaintiff made no further payments on his indebtedness, and advised the Assistant U.S. Attorney that he would not put up any security for his indebtedness.
21. On February 21, 1951, the U.S. Attorney caused judgment to be entered against plaintiff on his confession, in the amount of $1,137,787. This includes the amount of the confessed judgment of $934,498.52, plus interest of $203,253.48 and costs of $35. On March 5, 1951, execution on this judgment was assigned to the U.S. Marshal, who levied execution of the judgment on plaintiff's assets at plaintiff's place of business, on the same date. Plaintiff thereupon paid $85,000 on account of his obligation, and agreed to make an assignment to the Government of an insurance claim for storm damage. During the first session of the trial of this case, in August 1956, counsel for defendant agreed that this insurance claim was worth "between $146,000 and $155,000." Following service of the execution, a Deputy Marshal was placed in charge at plaintiff's premises.
22. Shortly after February 21, 1951, the U.S. Attorney began examining plaintiff in supplementary proceedings. This is a procedure whereby the judgment creditor can examine the judgment debtor's assets. The examination was quite extensive, and after it had proceeded for some time the U.S. Attorney concluded that it would not be possible to obtain the plaintiff's assets without the appointment of a receiver. With the approval of the Department of Justice, he moved for appointment of a receiver. At this point plaintiff made a motion to vacate the judgment, which was denied with prejudice July 17, 1951. Plaintiff continued to oppose the appointment of a receiver, filing also a cross-motion to stay execution of the judgment on the ground that a settlement had been made for $350,000, and that its execution was contrary to the agreement of the parties. The motions were argued before Judge Abruzzo of the District Court for the Eastern District of New York. By decision dated August 9, 1951, Judge Abruzzo approved the appointment of a receiver but noted that plaintiff should be given an opportunity to prove any offsets against defendant to which he was entitled. The record does not establish that plaintiff appealed from either of these court orders.
23. The receiver impounded and sold various assets belonging to plaintiff. Through these sales he collected a total of $752,651.49, from which he has turned over to the defendant, as judgment creditor, the sum of $582,674.17. Aside from a cash balance of $9,543.22 still in his hands, the balance has been used to pay the expenses of the receivership. All of the trustee's accounts were approved by the U.S. District Court for the Eastern District of New York, after notice to plaintiff and his attorney.
CAUSES OF ACTION NOS. 1 THROUGH 28
24. Plaintiff filed claims with GSA at the end of August 1951; a number of these had previously been submitted shortly after receipt of the merchandise concerned. The claims were referred to the assistant regional counsel of GSA in New York, who had had prior experience in the WAA Claims Office. He assembled available material relating to the transactions upon which the claims were based, and prepared letters of decision for the signature of the regional counsel. Both of these individuals had been delegated authority to pass on such claims.
25. During the trial of this case, the files relating to plaintiff's claims were repeatedly tendered to plaintiff and his attorney by defendant. The offer was repeated about 2 months prior to the final trial session.
26. On February 27, 1952, plaintiff and his attorney at that time asked the receiver for permission to examine certain of plaintiff's business records. This request was stated to be for the purpose of enabling plaintiff to press the claims which had been made against GSA. The receiver granted the request, plaintiff and his attorney went through the records, and plaintiff took 59 envelopes containing various records and papers, stating that this was all he needed. He gave a receipt to the receiver for the material obtained. There is no evidence as to the size of the envelopes or the number of papers involved. The record does not show what portion of the material contained in the 59 envelopes is represented by the records which plaintiff has offered in evidence.
27. After the receiver had collected the accounts receivable and disposed of plaintiff's business, he transferred plaintiff's records to a warehouse in Brooklyn, on orders of the U.S. District Court. During his operation of plaintiff's business the receiver made no additions to or withdrawals from those records, and had no information which indicated that any records had been abstracted. At the warehouse, the right of access to the records was restricted. In March 1955 these records were transferred to the Federal Becords Center in New York, where close controls have been maintained concerning their use.
During the trial, defendant arranged to have tlie records, which were stored in 420 boxes, examined by Special Agents of the Federal Bureau of Investigation. The agents were instructed to look for any records which could be identified as relating to causes of action Nos. 2 through 28, or to certain other transactions referred to in plaintiff's testimony. The Special Agents, after a careful search, were able to locate only 34 pieces of paper falling within the pertinent categories. Reference will be made to these documents in discussing the specific causes of action.
CAUSE OF ACTION NO. 1
28. This cause of action is for discounts which plaintiff claims should have been allowed him as a dealer who complied with the applicable regulations relating to "prices and pricing methods." The claimed discount relates to prices paid for materials purchased from WAA. The following stipulation between the parties was entered on the record during the trial of this action:
It is stipulated by counsel for both sides that in connection with the sales transactions on which the plaintiff seeks a discount for commission, there would be excluded in any computation or calculation thereof any transaction where the goods have not been delivered to the plaintiff or where the plaintiff has not paid the invoice price.
As to those transactions where the plaintiff had not paid, if the sale is included in the judgment obtained by the Government in the United States District Court for the Eastern District of New York, such sale will be treated as a paid sale.
# *
29. (a) Various WAA regulations governed pricing methods with respect to differing types of surplus. Regulation No. 21, which was originally issued on June 18, 1946, governed the pricing of production equipment. This was defined as "machine tools, plant equipment, and attachments thereto " (§ 8321.1(b) (2)). As originally issued, it provided that sales of such equipment should generally be by fixed-price sales, although sealed-bid sales, spot sales, and negotiated sales might also be used (§8321.4). With respect to prices and pricing methods, the regulation stated (§ 8321.5(b)):
(b) Production equipment. (1) Sales of production equipment are likewise governed by fixed prices, a substantial portion being subject to the fixed pricing formula provided for in Part 8313. Production equipment subject to such fixed pricing formula normally moves predominantly from the manufacturer to an ultimate user or distributor at a uniform price without a discount.
(2) Production equipment which is not subject to the pricing formula provided for in Part 8313 is governed by fixed prices to ultimate users or distributors as follows:
(i) Much production equipment generally moves from the manufacturer to an industrial user without the intermediate distributive function of a distributor. Such equipment shall be disposed of at a single price for one minimum quantity and without a discount. (Example: large industrial equipment such as furnaces, mills.)
(ii) Certain production equipment is sold by manufacturers in accordance with a trade practice to industrial users and distributors, allowing a discount to the distributor.
(iii) Finally, some industrial equipment is sold by manufacturers only through the regular and established channels of trade. As a consequence, discounts will be permitted to each level of trade for the distributive function performed. (Example: small industrial tools.)
Nothing in that regulation or a subsequent amendment fixed the exact rate of discount which could be allowed by regional offices, subregional offices, and field offices, when one was allowable.
(b) An amendment to Kegulation No. 21, issued February 6, 1947, eliminated reference to spot sales, but continued to permit dispositions by fixed-price sales, competitive bids, and negotiated sales. With respect to pricing and pricing methods (§ 8321.5), this amendment provided:
(a) _ General. In fixed price sales, prices shall be established as close to the current market price as practicable, recognizing that they must be attractive enough to move the property in volume and compensate for any unusual features of the property which may add to the difficulty of reselling. Methods of distributing both production materials and production equipment vary in accordance with the nature of the property and the established commercial practices applicable to different types of property. As a consequence, pricing methods must likewise conform to such trade practices and distribution methods.
(b) Discounts. (1) Discounts may be granted on the disposal of surplus property only (i) when different price levels are established in order to compensate for the services rendered in the distribution of property to the various levels of trade; i¡:
(c) In relation to parts here material, no change of substance was made to this regulation by amendments of August 30,1947, and January 24,1948.
30. Regulation No. 13 was originally issued on October 18,1946. It covered the pricing of standard general purpose and special machinery. The pricing formula which was established was to fix percentages, based on the periods of active use of the machinery. These were to be applied to the original price for which the manufacturer had sold the machine. No discounts were provided from these prices.
31. Pursuant to the policy stated in Regulation No. 21, the head office of WAA issued what was known as a "Fixed Price Register." In the register prices were specified for various types of surplus materials and equipment. Depending on the custom of the trade, separate prices were established by Regulation No. 21 for different levels of trade. In some instances the distinction in price was merely between a user and a dealer, while in others separate prices were established for wholesalers, small retailers, large retailers, and possibly other levels of trade.
32. During the years 1945 through 1950, plaintiff was a dealer, distributor, and vendor of used and new machinery, production material and equipment, and machine tools, with the intention of continuing in that type of business.
The record shows that plaintiff purchased from the defendant substantial quantities of surplus goods for the purpose of resale. Defendant allowed plaintiff a discount in the form of the published or fixed purchase price for distributors.
Subsequent to June 27,1946, as required by WAA Eegulation No. 21, plaintiff followed the practice of attaching a certificate to all orders for purchases for purpose of resale to small independent purchasers. The certificate, required by the regulation for each order on which a discount was sought, was as follows:
It is hereby certified that the purchaser is and expects to continue to be a distributor of production materials or production equipment similar to those specified on this order to industrial users and other independent purchasers, and that in consideration of the receipt of the distributor's discount on the purchase of surplus property from the United States, in accordance with the War Assets Administrator's pricing and distribution policy, the purchaser agrees to use his best efforts to sell such property to small independent purchasers.
33. The record does not establish that plaintiff was ever given a discount in addition to that included in the dealer's price. Although certain purchase orders submitted in evidence contain a 15% deduction, it has not been shown that such deductions were made from the dealer's price, rather than in order to arrive at the dealer's price.
In addition to sales the prices of which were established by the "Fixed Price Eegister", plaintiff also entered into negotiated transactions with the WAA. On such sales, the negotiations of the parties fixed the amount of any discount.
CAUSES OE ACTION NOS. 2, 3, 8 AND 9
34. These four claims all involve Chrysler diesel engines. In each case plaintiff asserts the same parts were missing from the engines on receipt by him.
35. (a) On May 21,1946, plaintiff purchased from WAA (sales document 129775) 17 Chrysler diesel engines, model Ind-10-T-126, 80-85 HIP, 16 at $803.21 each, and the other at $803.92. These units were described as being in "Nl" condition, meaning unused and in excellent condition. This sales document contained the following provision:
No claims for variations from warranted descriptions will be recognized if not made within fifteen days after delivery to the purchaser by the seller at storage point, or by a common carrier at the original destination.
(b) On July 1, 1946, plaintiff purchased from WAA (sales document 286963) another group of IT identical engines at a unit price of $803.21. These were also described as being in "Nl" condition. The sales document contained the same requirement as to notification of variations from warranted description as set out in paragraph (a) of this finding.
(c) On December 30, 1946, plaintiff purchased from WAA (sales document 2508183) 13 additional identical engines at a unit price of $864.11. There was no representation in the sales document as to the condition of these items. This third sales document contained the following provisions:
(2) Seller makes no warranty, either express or implied, with respect to the property, except (a) Seller warrants it has the right to transfer title to the property; and (b) Seller warrants the accuracy of the description of the property, provided however, that if the property is described as new, Seller warrants only that it has not been used. Seller's liability under this paragraph shall not exceed amount of purchase price.
(3) Sales are subject to such adjustment upon the request of the Purchaser as the War Assets Administrator, or his authorized representative, in his sole discretion, may determine to be equitable under the circumstances, and any such determination shall be final. Bequests for such adjustment will be considered only if filed in writing in the office of Seller responsible for the sale within fifteen (15) days (or such additional period as may be allowed in writing by the Administrator or such representative) after removal of the property by Purchaser or delivery by a common carrier at the original destination.
(d) On February 12, 194T, plaintiff agreed to purchase from WAA (sales document 2508365) a fourth group of 82 identical engines at a unit price of $689.11. There was no representation in the sales document as to the condition of these units. This sales document contained the provisions quoted above in paragraph (c).
36. A notation appears on the back of the WAA sales memorandum covering the first sale referred to in finding 35(a), signed by the salesman, as follows: "Recommend sale on basis of engine not complete — no clutch and radiator
The first group of engines (cause of action No. 2) was received by plaintiff sometime between June 1 and June 26, 1946. They appear to have been shipped on May 31, 1946. There is evidence that in January and March 1947 plaintiff protested or made a complaint that the items received were defective and that there were some parts missing. Plaintiff repaired the defects and supplied the missing parts.
37. The WAA sales memorandum concerning the second sale listed in finding 35 (b) bears a notation, signed by the salesman, reading:
This sale is made on basis of cost to dealers less 15% and 20% and less cost of clutch & radiator. Sale price negotiated at $803.21 each. I recommend approval of this sale.
The units involved in the second sale (cause of action No. 3) were shipped on or about July 30, 1946, and received by plaintiff shortly thereafter. Plaintiff asserted a claim that these engines had "no enclosing hoods, no exhaust mufflers, no steel extension bases, and no radiator grills" on January 22, 1947. Plaintiff attempted to get an adjustment on the same basis as cited concerning the first group. Being unsuccessful he again repaired the engines and supplied the missing parts.
38. The items covered by the third of these purchase orders (cause of action No. 8) were shipped to plaintiff on December 30, 1946. Plaintiff's receiving report makes no reference to deficiencies in the engines. The evidence is not conclusive as to when plaintiff asserted a claim for missing parts on these engines, although plaintiff states that the claim was asserted on March 17,1947. The same repair procedure was followed with regard to this shipment as in the two prior purchases.
39. With respect to the final purchase of 82 engines (cause of action No. 9), described in finding 35(d), plaintiff's purchase order specified such engines "as previously shipped." The evidence indicates that plaintiff asserted a claim for missing parts for these engines prior to the trial of this case. Plaintiff also claimed that 16 of tbe engines ordered were never received, and no refund made or credit allowed.
40. (a) Plaintiff also purchased 15 identical engines from WAA by contract dated December 13, 1946 (sales document 2508103) at a unit price of $864.11. Although a similar claim for shortage of parts was asserted administratively, no claim concerning that purchase is asserted in this suit.
On July 21, 1947, WAA decided plaintiff's claim under sales documents 2508183 (Cause of Action No. 8) and 2508103. The WAA stated that, as a result of checking with the manufacturer and the owning agency, it had determined that the allegedly missing parts were not a part of this particular engine, with the exception of the radiator guards, which were shipped. Plaintiff was advised of this decision by letter dated July 31,1947, and there is no evidence of an appeal or other subsequent assertion of the claim until a claim executed September 18, 1951, was filed with the GSA regional counsel.
(b) On September 26,1947, WAA denied plaintiff's claim for short delivery on the purchase of 82 engines. The rejection of the claim was based on the records of the shipping agency, plus railroad bills of lading acknowledging receipt of the entire shipment. It was also noted that the claim was filed beyond the 15-day limit. Plaintiff was advised of the decision by letter dated October 2,1947. There is no record of an appeal or other reassertion of the claim until a claim was filed August 24,1951, with the GSA regional counsel.
(c) There is no evidence of any specific action on plaintiff's claims on the first two contracts, other than a letter dated February 6, 1947, advising that the claims were being investigated. Plaintiff reasserted these two claims to the GSA regional counsel in affidavits executed September 21, 1951, and August 24,1951, respectively.
41. Plaintiff has testified that the cost of supplying the missing parts of these engines was approximately $400 each. However, in the 1947 and 1951 claims he filed, plaintiff asserted that his cost for the replacement of missing parts was $250 each. No books or records were produced to support either estimate, but the contemporaneous claim for $250 appears accurate.
42. On June 24, 1952, the GSA regional counsel denied plaintiff's claims on sales documents 129775, 236963, and 2508183. On November 2, 1951, he had denied plaintiff's claim on sales document 2508365.
(a) The claim with respect to sales document 129775 was denied on the ground that there was "no evidence of misrepresentation on the part of the Government." The letter referred to (1) the absence of any contemporaneous claim or protest on plaintiff's part, (2) his subsequent purchases of identical engines at a higher price, and (3) the denial of his claim on the subsequent purchases.
(b) The claim with respect to sales document 236963 was likewise rejected, principally on the basis of the lack of evidence to support the claim. A detailed analysis was made of plaintiff's contentions, compared with material available in WAA files, and it was found that in most cases the file material directly contradicted plaintiff's allegations.
(c) The claim with respect to sales document 2508183 was denied principally on the basis of the adverse decision on the original claim (finding 40(a)). It also referred to plaintiff's prior purchases of identical engines as indicating that he must have known what he was buying.
(d) The claim with respect to sales document 2508365 was likewise denied. Again a detailed comparison of plaintiff's claims with WAA file data developed marked discrepancies in plaintiff's allegations, leading to the conclusion by WAA: " [W]e cannot credit many of your allegations with respect to this Sales Document."
43. Plaintiff has not established that the WAA failed to deliver sixteen of the 82 engines purchased under sales document 2508365 (Cause of Action No. 9). He has, however, sustained his burden of proving that the parts missing from the engines received were normally included in such equipment.
CAUSE OE ACTION NO. 4
44. On December 27,1946, plaintiff purchased from WAA (sales document 1563390) an item described as "Generator, Set, Portable, Diesel Engine, Driven, Skid mounted, GMC, Detroit, Mich., Model-50-60, Catalogue No. TM-5106, Serial No'. 671139938. Eated 50 to 60 KW, 1000-1200 rpm, 9'4" lg., 33" wide, 6'33%" high. Total weight Approx — 5,538 lbs. Automatic regulation with Manual Supervisory control with 63 gal. fuel tank attached. Uncrated — on wooden skids — unprosessed [sic]." The price for the unit was $3,230. There was no description in the sales document as to the condition of the unit, but plaintiff testified that the price alone indicated an unused condition, and that he had previously purchased many such items for $3,200 and sold them for $4,500. Although he initially testified that the government catalog gave no indication whether such merchandise was new or used, plaintiff later testified that this was a catalog sale and the catalog described the item as "unused." The sales document contained the same provision as quoted in finding 35 (c).
45. When this unit was received by plaintiff, it was found to be in good used condition. The receiving report of January 23, 1947, marked the generator as "used". Plaintiff protested receipt of a used generator instead of a new one, in writing, on the next day, January 24, 1947. Plaintiff, on January 27, 1947, wrote a letter to WAA at the shipping point, rather than at the selling office, requesting "an adequate allowance" to cover this difference between actual and assumed quality. Thereafter, as the WAA Credit Department sought to secure payment for the item, plaintiff repeatedly advised that he would not or could not make payment until action was taken by WAA on his claim.
46. Plaintiff submitted a claim executed December 5,1951, to the GSA regional counsel. In this he requested a 50 percent credit against the sales price. This claim was denied by letter dated June 24, 1952, quoted, in part, as follows:
Disregarding your failure to direct your claim to the proper office and your failure to present an executed claim form as suggested in a letter dated April 20,1957 [sic; should be 1948], written by the Philadelphia Office, Collection Manager, we have carefully examined our files relative to the sale which is the subject of your claim.
Examination discloses that the generator was sold at a "Site Sale." In sales of this type, prospective purchasers were invited and urged to inspect the property being sold.
The sales documents do not specify that the condition of the unit was "unused." It is significant that the generator sold and shipped to you bore a manufacturer's serial number, precluding the possibility that the unit delivered to your truckman was not the identical one purchased by you.
In view of the above, your claim is denied.
Plaintiff testified at the trial that he bought hundreds of these same motors from defendant and paid $8,200 for new ones which he sold for $4,500, and paid $1,600 for used ones which were sold for approximately $8,000 each.
47. The record does not establish that the purchase price agreed to by plaintiff should reasonably have put the WAA on notice that plaintiff thought the sale was of new equipment.
cause oe action no. 5
48. On November 19,1946, plaintiff purchased from WAA (sales document 2154921) 155 "Delco generators, Delco gasoline eng. 1 cyl. 750 watts, 12 volts, DC current" at a unit price of $60. On the sales document, under the heading "Disposal Type," the descriptive term "Nl" appears. This is a symbol which reflects defendant's statement or warranty concerning the condition of the units. It means that the item was unused and in excellent condition. This sales document contained the same conditions as stated in finding 35(c).
49. These generators had been previously sold under a WAA "special offering" which priced them at $94.50 each, and which stated: "Prospective buyers are urged to inspect property." Plaintiff testified that he had examined one unit, and found it equipped with gas tank, muffler, tools, and spares, but that the items delivered to him were not .so equipped.
50. Nine of the units so purchased were resold by plaintiff to Jack Hoffman Tires of Los Angeles, California, at $100 each, and were never delivered to plaintiff. The balance of the units were delivered to plaintiff on March 11,1947.
51. By letter dated August 11, 1947, plaintiff made claim for $22 per unit, the cost of adding the parts not included. WAA rejected the claim by letter dated August 18,1947, on tli© ground tbat it was untimely. The WAA decision contained the following additional statement, not communicated to plaintiff:
It is noted that the sales catalog lists these generators as "gasoline engine, condition unused." There is no mention made in the catalog or WAA-4 that the items claimed missing were included in the sale. The price paid was below the National Fixed Price and was agreed upon between Eegional Office and Washington Office.
The catalog listed these generators at $94.50 each, and plaintiff purchased then at $60 each. This price was apparently a negotiated sale, although plaintiff describes his offer as a bid price of $60 each.
52. (a). Plaintiff reiterated his claim with respect to these units in an affidavit executed August 24,1951, and delivered to the OSA regional counsel. The claim was denied by letter dated November 2,1951, on the basis of information received from the manufacturer. The manufacturer advised GSA. (successor to WAA), in a letter dated October 18,1951 :
in general this type of engine generator was made for a specific World War II application and it did not include the gasoline tank, mufflers, tools, and spares because it went into a combat vehicle and the accessories were a part of the vehicle.
This letter was admitted into evidence, without objection, at the trial of this case.
(b). Plaintiff has not established that the allegedly missing parts were normally included in Delco generators.
CAUSE OP ACTION NO. 6
53. On November 26,1946, plaintiff purchased from WAA (sales document 2157676) 10 generator sets, 30 KW, at $2,269.16 each. The condition of these was shown as "Nl", i.e., unused, excellent. The sales document contained the same conditions of sale as are quoted in finding 35(c).
54. Plaintiff caused these generators to be shipped directly to Auto Marine Engineers, Miami, Florida, at a price of $2,800 each, which amount was apparently paid to plaintiff. There is no evidence of a claim against plaintiff by Auto Marine Engineers, or of any adjustment given that firm by plaintiff.
55. On March 10,1947, WAA requested payment for these units. Plaintiff, the following day, wrote complaining that the units were supposed to be equipped with mufflers or silencers, but were not so equipped. The source of plaintiff's knowledge that they were not so equipped is not apparent, as the shipment of the generators was made directly to Miami as arranged by plaintiff. This claim was denied on April 14, 1947, on the ground that "these Generator Sets were not declared by the Advance Base Depot to WAA with mufflers or silencers and they were not offered for sale so equipped." Plaintiff thereafter paid for these generators.
56. Plaintiff claims that he replaced the missing mufflers at a cost of $75 per unit. There is no other evidence of any such shipment to Auto Marine Engineers, or of any such allowance to that firm.
57. Plaintiff reasserted this claim of shortage in an affidavit executed August 24, 1951, and thereafter delivered to the GSA regional counsel. By letter of June 24, 1952, this claim was denied, the letter stating in part:
A thorough examination of our files fails to disclose that there was any representation on the part of the seller that the units were equipped with mufflers or silencers. It is further noted that the units were not declared to War Assets Administration by the owning agency with the accessories you allege are missing. Therefore, they could not be offered for sale as being so equipped.
Plaintiff testified that the model displayed at the time of the sale was equipped with a muffler, but sales document No. 2157676 makes no reference to mufflers or silencers. On the record no recovery is warranted under this cause of action.
CAUSE OF ACTION NO. 7
58. On November 4,1946, plaintiff purchased from WAA (sales document 2262818) two generator sets at a price of $200 each. The sales memorandum described the condition of these units as "R4," which means "used, poor condition, needing repairs." This sales memorandum carried a notation on the -reverse side as follows:
This equipment cost the government 1000.00 each and was purchased in used condition. This equipment is in R-4 condition. Customer waives WAA inspection.
The sales document set forth the same conditions as are quoted in finding 35 (c).
59.These sets were shipped on January 14,1947, and were received by plaintiff no later than February 15, 1947. On March 7, 1947, plaintiff wrote WAA advising that on both units the fuel pump and injector were missing, and that on one the starter and generator were also missing. After a thorough investigation, which confirmed the fact that these parts were missing, WAA denied the claim on the grounds that:
(1) Sale of the subject Sets was made to your firm on a negotiated price basis representing an extremely low percentage of acquisition cost and you are presumed to have known substantially what condition the equipment was in and to have anticipated that certain repairs and replacements may be necessary.
(2) Your claim, as presented, was extremely untimely.
60. Plaintiff claims that the cost of repairs was $500, or 25 percent more than the cost of the two units to him.
61. Plaintiff submitted to the GSA regional counsel a further claim executed September 17,1951. By letter dated June 24, 1952, this claim was denied, the letter stating in part:
It is observed that you allege that the generator sets were represented to be in perfect condition and that there were no missing parts. This allegation is not supported by any evidence presented with your claim. Additionally, our records indicate that the units were described as being in a used, poor condition and requiring repairs. Sales memorandum copy No. 1, signed by you and being part of the records, further indicates that the units were purchased by the Government in a used condition and that you waived inspection.
A report from the depot from which the units were shipped to you reveals that the subject equipment was received and shipped in the same two boxes, which were not opened prior to shipment. It would therefore appear that the parts you allege were missing were not declared to the seller and were not included in the sale to you.
Recovery by plaintiff is not in order under this cause of action.
CAUSE OE ACTION NO. 10
62. Under date of January 16,1947, plaintiff executed an offer to purchase on a WAA form, and under date of January 17, 1947, issued its own purchase order. Both of these were in the amount of $7,260.96, and covered:
1 — General Motors Diesel Engine, Model 268.A-'Serial 6018, 600 H.-P., 8 cylinders, Bore 6%" x 7" stroke, 1050 to 1250 R.P.M., Lot #2039-B.-S, including New spare parts, completely reconditioned. New parts installed by General Motors Dorp., Cond. 02 [used, good], Wgt. 15000 lbs. O.V.L. 63-176.
Plaintiff thereafter received an invoice from WAA (sales document 2522615) indicating a sale to 'him on March 13, 1947, for $7,260.96 of one "Marine Diesel Engine, non-reversible, 2 cycle, Mfgd. by G.M.C. Cleveland Diesel Engine Division, Cleveland, O. Model 8-268A, Serial #6618."
63. On receipt of this invoice, plaintiff noted what he claimed was a variation between the unit ordered and the unit sold; on March 17, 1947, he called this to the attention of WAA, and repeated this advice on March 20 and April 3, 1947. In response to these letters he was advised that the item had been shipped on March 20 and that it was received by him on April 22,1947.
64. There is no evidence of any further claim by plaintiff with respect to this item prior to September 27,1951. Plaintiff's records reveal, on the other hand, that at some unspecified time, this unit was sold by a company wholly owned by the plaintiff for $14,000.
Plaintiff's records further disclose that the receiving report stated: "Note missing parts", and that an otherwise unidentified worksheet in plaintiff's files describes this transaction, with the notation: "Claim — Missing Parts."
65. Plaintiff has testified that the fair market value of the item he thought we was ordering was $15,000.
66. When plaintiff filed a claim with the GSA regional counsel on or about September 29, 1951, he requested an unspecified adjustment in price to reflect the claimed lower value of the unit he received. Under date of November 2, 1951, this claim was denied. Two grounds were stated in support of that decision: (a) plaintiff received a machine bearing tbe serial number of the machine he ordered; and (b) plaintiff failed to respond to inquiries from the WAA claims office on April 23 and May 19, 1947, as to whether or not he desired to prosecute any claim on this transaction. When plaintiff failed to respond to the inquiries from WAA, the file was closed.
Plaintiff's proof does not support recovery under this cause of action.
CAUSE OF ACTION NO. 11
67. Under date of February 7, 1947, plaintiff purchased from WAA (sales document 4079161) three generators at a unit price of $8,000, and on February 8, 1947 (sales document 4079162) seven similar generators at a unit price of $6,142.85. No statement as to condition appeared on the sales documents, but, in processing plaintiff's subsequent claim, WAA conceded that evidence in its files showed that the three were warranted to be in "Nl" condition, and the seven in "E2" condition. Only one was found by plaintiff to be in the "Nl" condition as warranted, and subsequently sold. The other nine did not meet the description stated in the sales documents. These sales documents set forth the same conditions as are quoted in finding 35(c).
68. By letter dated March 13,1947, plaintiff advised that starting equipment and other parts were missing. An inspection was made by WAA in June and July, prior to which time plaintiff had sold one of the units. The report of inspection substantially confirmed plaintiff's contention. By decision of May 25,1948, WAA agreed to repay to plaintiff the sum of $51,999.95, the purchase price of the nine remaining generators, plus freight charges on them, upon their being returned to WAA. Plaintiff indicated he was not satisfied with this proposal.
69. Testifying as a witness during the trial, plaintiff stated that one of the units, which cost $8,000 each, was not on hand when the inspection was made by defendant. He testified that it had been sold for $20,000.
Numerous attempts were made to secure from plaintiff the paid freight bills on these generators, and to induce plaintiff to resbip them to WAA. It appears that plaintiff not only refused to comply with defendant's request, but failed to state a reason for his refusal. Based upon what transpired, it is reasonable to assume that plaintiff preferred to retain the items, make necessary repairs, and resell them.
70. Plaintiff restated the claim listed in this cause of action to the GSA regional counsel under date of August 24, 1951. By letter dated June 24, 1952, plaintiff was advised that the prior offer had been withdrawn because of plaintiff's refusal to return the generators, but that "in the event you are prepared to return the 9 generators in the same condition they were in at the time of our inspection in June and July 1947, the Government is prepared to implement the claims decision." By that time, most of plaintiff's assets were in the hands of the receiver. But the inference is warranted that, prior to the initial claims decision on May 25,1948, plaintiff had already disposed of these generators, and therefore could not return, them.
CAUSE OE ACTION NO. 12
71. At the trial of this case plaintiff withdrew this claim.
CAUSES OF ACTION NOS. 13,19, AND 25
72. These three claims involve similar merchandise, and can be conveniently considered in one group of findings.
73. (a) Under date of February 13, 1947, plaintiff purchased from WAA's Birmingham, Alabama, office (sales documents 4100592, 4102574, and 4102571) 40 propelling units at $500 each (cause of action No. 13). The sales documents, which contained the provisions quoted in finding 35(c), made no representation as to the condition of the articles, but it appears that a national sales program (catalog) had offered these units in "NI" and "N2" condition, i.e., "unused, excellent," and "unused, good."
(b) Under date of March 26, 1947, plaintiff purchased from WAA's Memphis, Tennessee, office (sales document 2228910) 72 similar units at the same price (cause of action No. 19) ; and under date of February 25,1947, plaintiff purchased from the same office (sales document 4695390) 178 similar units at the same price (cause of action No. 25). These sales documents likewise contained no representation as to condition, but a national sales program announcement (catalog) had offered these units in "NI" and "N2" condition, i.e., "unused, excellent," and "unused, good."
74. All of the units purchased from the Birmingham office were shipped on February 27, 1947.' The first carload of them was apparently inspected by plaintiff on March 23, 1947, and found to be corroded, thus not living up to the "Nl" and "N2" warranties. Gn March 31 Mr. Benj amin wired the Birmingham office to withhold further shipments, only to be advised that the-total Order had been shipped.
75. Plaintiff also wired the Memphis office on March 31, referring to sales document 4695390 and requesting that all deliveries be withheld.
On April 10, 1947, he wired and wrote the Memphis office with reference to sales document 2228910, again requesting that deliveries be withheld." This was expanded in his letter in the following terms:
We have purchased the. very same units for which you bill us on the above-numbered sales document from other offices of the War Assets Administration, and upon receipt of the merchandise, we found that the units shipped us were not new. We purchased new units.
By letter dated April 15, 1947, the Memphis office wrote plaintiff suggesting that his basis for cancellation was not sound. Further, under date of May 7, the Memphis office advised plaintiff that no units had been shipped on either of its orders. Plaintiff apparently would not recede from his position, and on May 7,1947, he was given full credit for the purchase, price on sales document 2228910, and on June 30, 1947, similar credit on sales document 4695390.
76. A WAA inspector was sent to plaintiff's plant to inspect the 40 units delivered there under sales document 4100592. At the date of his inspection, sometime prior to the end of September 1947 or about six months after WAA received the complaint, plaintiff had only 25 of the 40 units still on hand. All of these were in their original shipping cases. Two units were opened at random and inspected; the inspector found them unused, but partially rusted as a result of long storage. He classified one as being in "N2" condition and the other as being "N3." Plaintiff refused to permit the inspection of any further units. The inspector pointed out that the units had been shipped from Montgomery, Alabama, 175 miles from the nearest ocean point, but had been held by plaintiff in Brooklyn, near the ocean. He stated that he could not determine how much of the rusting had occurred after receipt of the units by plaintiff. It is found, on the basis of all the relevant evidence, that the units received from the Birmingham office did not satisfy the "Nl" or "N2" representations.
It is plaintiff's contention that these 40 units could have been sold for $1,500 each, if they had been in the condition as represented by defendant. Plaintiff's evidence is to the effect that he made necessary repairs on thé 40 units at $175 each, amounting to a total expense of $7,000. He was then able to sell the units for $1,000 each. No evidence was offered by the defendant as to the fair market value of the units if they had conformed to the warranty.
77. Defendant denied plaintiff's claim'under th¿ 13th cause of action by letter dated October 1,1947.
78. By two affidavits executed August 24, 1951, plaintiff filed claims with the GSA regional counsel relating to the purchases comprising Causes of Action Nos. 19 and 25. By two letters dated June 24, 1952, these claims were denied. The claim relating to the Birmingham purchase was denied on the ground that the sales conditions only warranted that property described as "new" was "unused." The claims with respect to the two Memphis sales documents were denied on the ground that WAA records showed that plaintiff had been given full credit for the sales prices.
CAUSE OF ACTION NO. 14
79. Under date of March 13,1947, plaintiff purchased 696 generators from WAA at a unit price of $50. These were described in the sales document a,s "Generator, 6.5 KVA, 5 K W, 120 volt AC, 60 cycle, single phase, Hobart Model 5 J, 1800 RPM, 80% power factor. (Mfgr. The Hobart Bros. Co.)." This sales document contained the conditions quoted in finding 35 (c).
80. On April 23, 1947, plaintiff wired WAA as follows:
RECEIVED 5 KW GENERATORS HOBART TODAY THESE ARE NOT WHAT WE ORDERED WE ORDERED 2 BEARING THESE ARE SINGLE BEARING COST OE UNLOADING TERRIFIC MUST HAVE IMMEDIATE ADVICE FROM TOUR COMPANY FOR RETURN SHIPPING INSTRUCTIONS PLUS ADDITIONAL COST OF UNLOADING TWO CARLOADS WE DO NOT WANT THESE GENERATORS BECAUSE THE COST WOULD BE PROHIBITIVE IN MAKING THESE TWO BEARING OUTFITS.
Thereafter defendant's representative requested that plaintiff make an offer hi writing for the items in the condition received. Under date of April 25 plaintiff advised WAA that he was willing to accept the generators at $25 each.
81. The generators delivered to plaintiff did have only a single bearing. Though plaintiff felt certain he was purchasing a two-bearing unit, there was no misrepresentation by WAA in this respect.
(a) These generators had been listed in a WAA sales catalog, issued February 20, 1946. They had been described therein in the following terms:
5 KW, 120 V, single phase, 60 cycle, 1800 RPM, 80% PF, GENERATOR, Hobart Model 5 J. Hobart Bros., Troy, N.Y. Richmond, Virginia.
(Note: These generators are not equipped with a prime mover but are designed to be used with gasoline power unit number P197.)
(b) The evidence discloses that during the last quarter of 1946 the WAA Product Research Division had written numerous potential purchasers of these generators. It had advised them, in part, as follows:
The generator is designed with only one bearing, the free end is supported by the prime mover. However, the construction of the generator is such that a bearing can be put on the shaft and a cover plate made to hold the bearing. Any slight side thrust can be borne by the bearing against the shaft and the cover plate. The cost per cover will be small in relation to the selling price of the generator.
(c) The WAA salesman who handled the sale to plaintiff justified it in the following terms:
This is approx. 19%% of Gov. cost and 100% of present market value. This equipment has been advertised in numerous fixed price catalogs offer on sealed bid, offered at site sale and through products research without results. There was one of these units sold through products research for 75.00 for experimental purposes with the hope it would result in a sale for the entire lot this however did not materialize. The units are minus prime mover & front bearing & is a part to be used with a specific type of motor designed by and for the Army. This is believed good recovery for this material and consider it very fortunate to dispose of the entire lot. This sale is strongly recommended.
(d) About the same time the chief of the WAA Product Research Branch wrote to the chief of the Industrial Power Equipment Branch summarizing some of the efforts his office had mads to dispose of the generators and stating, in part, as follows:
Benjamin For Motors, 180 Clinton Street, Brooklyn, 2, New York, has made an offer of $50 each for the 696 generators. This is a fair offer for these generators, especially in view of the fact that additional designing and labor has to be performed before the generators will have a useful commercial life.
We make the recommendation that the offer made by Benj amin For Motors be accepted.
82. Under date of December 2, 1947, plaintiff's claim for a 50 percent price adjustment on these generators was denied.
In 1951 plaintiff communicated with the manufacturer of these generators. It advised plaintiff, in a letter dated August 16,1951, in part, as follows:
The prefix 5J is not a model number for our machines. It merely is a drawing number of the size of the generator frame and housing. We have made several 5KW power plants in the 5J frame — both of single bearing and two bearing design.
Unless you can give us the serial number of the machine you are inquiring about, we cannot tell you whether it was of a single bearing or two bearing design.
Taking a long chance, so that we can, perhaps, save further correspondence, I am enclosing a data sheet describing our Model PE-197.
This model was one we furnished a great deal of to the Government, and it was in the 5 J frame. If this is the model you are referring to, it was a two bearing-design.
By affidavit sworn to on August 24, 1951, plaintiff reasserted this claim to the GSA regional counsel, but asked for an additional $25 per generator, a total of $17,400. In this claim he asserted, in substance, that he had ordered two-bearing generators. By letter dated November 2, 1951, plaintiff's claim was denied on the basis that he had not proved his contention.
CAUSE OE ACTION NO. 15
83. Under date of March 6, 1947, plaintiff made two purchases of dough-mixing machines from WAA. One (sales document 5202792) covered seven used machines at a unit price of $38.25, and the other (sales document 5202793) covered 476 machines at a unit price of $68.95, the equipment covered in the second agreement was described as "unused". These two sales documents contained the conditions quoted in finding 35(c), and the statement, "mateRIAl sold as is, 3T0B LOCATION."
84. There were no deliveries made on sales document 5202792. Only 468 units were delivered on sales document 5202793, of which 7 were unused and 461 used. Plaintiff has been given credit for the items not delivered.
85. (a) Plaintiff advised WAA that units received under sales document 5202793 were not as represented. After investigation, WAA determined that the 961 units were not as represented, approved a credit of $35,309.09, and advised plaintiff accordingly by letter dated October 21, 1947. This figure covered the invoice price, freight, and trucking, and was to be credited to plaintiff's account upon the execution of a release and return of the items. However, plaintiff refused this offer.
(b) The market value of unused dough-mixing machines was $250. As a result of the Government's failure to deliver eight of the machines warranted to be unused, plaintiff lost $1,448.40.
86. Plaintiff filed a claim, executed August 24,1951, with the GSA regional counsel covering this matter. In this he admitted that he had never signed the release, and stated that "The merchandise is still in the possession of Claimant and has been held by claimant because of the failure of the Government to issue shipping instructions during the past four years." Under date of November 2,1951, the regional counsel advised that he was still prepared to give effect to the settlement, upon plaintiff's return of the machines to the Government. There is no evidence of any action by plaintiff on this offer. It is found that plaintiff has failed to prove that these machines were seized by the receiver.
CAUSE OE ACTION NO. 16
87. At the trial plaintiff requested that this claim be dismissed for failure of proof. It was dismissed in open court.
CAUSE OP ACTION NO. 17
88. Under date of March 24,1947, plaintiff purchased four compressors from WAA at a unit price of $2,2'95 (sales document 5865273). Each of these was described as being in condition "N2," i.e., "unused, good." The sales document contained the same conditions as are quoted in finding 35 (c).
89. On delivery it was discovered that only one of the four compressors was in the represented condition. Two, although unused, had covers which were dented, and, in one case, punctured, and the other was used and repaired. Plaintiff filed a claim for $2,500, as the total cost of repairing all three defective machines. After Mr. Benjamin had lodged at least five complaints during the next fifteen months regarding delay in processing his claim, these conditions were verified by a WAA inspector, who classed the two unused compressors as "N3," and the used one as "B2." Based on his inspection, the agency investigator estimated that it would cost about $150 to repair the dents in the two unused items; he also calculated the difference in price between a compressor in "N2" and "R2" condition as $757. Using these estimates, WAA, on July 23, 1948, approved a $907 adjustment of the claim. Plaintiff rejected this offer.
90. Plaintiff reasserted this claim to the GSA regional counsel on September 21,1951, but that agency responded by renewing the WAA offer of $907.
Plaintiff testified at the trial that it cost $2,500 to repair the two unused compressors, and that the third one was beyond repair.
91. Plaintiff's contemporaneous estimate of $2,500 as the amount required to repair the three compressors (finding 89) appears, in the light of all the evidence, to be a reasonable award for the three compressors which failed to meet the warranty.
CAUSE OF ACTION NO. 18
92. Under date of February 26, 1947, plaintiff purchased from WAA (sales document 1713351) two Waukesha diesel engines at $505.05 each. There was no warranty of condition in the sales document, which contained the same conditions as are quoted in finding 35 (c).
93. These items were never delivered to plaintiff, and WAA, having originally debited plaintiffs' account, later credited plaintiff with the full amount of the purchase price.
94. There is no evidence that plaintiff filed a claim on this transaction prior to 1951. Under date of August 24, 1951, he filed a claim with the GSA regional counsel alleging that he had never been credited with the purchase price. Under date of November 2, 1951, this claim was denied, on the ground that WAA records did show a credit to plaintiff for the purchase price.
95. In his petition plaintiff requested return of the purchase price. However, during the trial he asked leave to amend his petition and instead asserted a claim for "lost profits," i.e. the amount he lost by not being able to resell the engines he purchased. Defendant agrees that the evidence establishes that the resale market price of such an engine was about $1,000. Computed on that basis, plaintiff's damages as a result of the government's failure to carry out the agreement was $494.95 on each of the two engines, a total of $989.90.
CAUSE OP ACTION NO. 20
98.On July 8,1946, plaintiff purchased from WAA (sales document 2250063) two 200-horsepower Wagner motors at a price of $338.18 each. The sales document contained the same provisions as those quoted in finding 35(c). In addition, the sales agreement signed by the plaintiff provided: "Offered property subject to prior sale or withdrawal, prior to delivery to purchaser, without notice."
'97. These items were never delivered to plaintiff and his account was credited with the amount of the purchase price. Interagency letters indicate that the Army Air Force, the declaring agency, had inadvertently listed these items on two surplus declarations, and that they had already been sold and delivered on the other declaration.
98. There is no evidence that plaintiff filed any claim on this transaction prior to 1951. Nor is the 1951 claim in evidence. However, under date of June 24,1952, the GSA regional counsel referred to a claim requesting credit for the amount of the purchase price, and advised plaintiff that such amount had been credited to his account on December 26,1946.
99. In his petition plaintiff claimed the return of the purchase price. However, at the trial he conceded that his account had been credited with the purchase price and asked leave to amend his petition to assert a claim for loss of profits. Prior to the sales agreement involved here, plaintiff had sold a large number of these motors for $900 each.
CAUSE OE ACTION NO. 21
100. At the trial defendant admitted that plaintiff was entitled to recover $168.75 on this claim, which concession plaintiff accepted.
CAUSE OE ACTION NO. 22
101.On March 25, 1947, plaintiff purchased from WAA (sales document 2797820) 25 75-horsepower motors at $6,300 for tbe lot. This sales document contained the same conditions as are quoted in finding 35 (c) and also specified that the motors were "unused."
102. These motors were not delivered to plaintiff, but he was given credit for the entire purchase price.
103. There is no evidence that plaintiff filed any claim on this transaction prior to 1951. Under date of September 18,1951, he filed a claim with the GSA regional counsel, requesting that his account be recredited with the amount of the purchase. He also stated that the reason for nonshipment was that WAA had discovered that what it had were 7.5-horsepower motors, and asserted a further claim for " the sum of $14,625.00 representing the difference in valuation of the 75HP motors from the 7.5 HP motors." Under date of June 24, 1952, this claim was denied, on the ground that plaintiff had been credited with the purchase price, and that the agency had no authority to allow the other features of his claim.
104. During the trial, plaintiff asked leave to amend his petition to assert a claim for the amount he lost as a result of being unable to resell 75-horsepower motors. Mr. Benjamin offered uncontradicted testimony that such motors could have been resold for $1,250 each, or a total of $31,250. Plaintiff claims profit in the amount of $998 per unit for the motors purchased but not delivered — a total of $24,950.
CAUSE OE ACTION NO. 2 3
105. On February 12, 1948, Mill Basin Bepair Company, one of the companies operated by plaintiff and in the name of which the present action is brought, purchased 7,553 diesel starting motors from WAA (sales document 3229606) for a total of $28,870.47. All of these were noted as being "unused." The sales document contained the terms and conditions quoted in finding 35(c). This was in replacement of 'an earlier sale of the same motors to the same concern, on which purchaser had defaulted.
106. These starting motors were shipped to Mill Basin in 7,201 boxes, some of which allegedly contained more than one motor. On receipt of these Mill Basin opened about 25 boxes, and found only one motor in each of them. It sold the other boxes unopened, assuming that there was only one motor in each, and asserted a claim against WAA for a claimed shortage of 852 motors. This claim was in the amount of $1,845.45, the purchase price. After investigation WAA concluded that there had been no shortage, and so notified Mill Basin on or about May 25,1948.
107. There is no evidence of any further claim by Mill Basin or by plaintiff until 1951. At that time plaintiff submitted a claim to the GSA regional counsel for $1,345.45, the cost of the purportedly missing motors. This claim was denied by letter of November 2, 1951, in part, as follows:
Examination of our files discloses that you were not the purchaser on the subject sales document. This purchase was made by Mill Basin Ship Eepair Company, Inc.
A further examination of the files discloses the following:
(1) This sales document was prepared on a resale of the property after Mill Basin Ship Eepair Company Inc. had defaulted in its original agreement to purchase under Sales Document 3224745.
(2) The bill of lading which constitutes your Exhibit E does not reflect a shipment of 7,201 units, it evidences a shipment of 7,201 boxes.
(3) The Naval Supply Depot at the shipping point has reported that a physical count was made at the time of shipment and that 7,553 units were shipped. It has further reported that "the packages contained various amounts."
(4) By letter dated June 2? 1948 Mill Basin Ship Ee-pair Company, Inc. was notified of the denial of this claim and was given a copy of the claims decision setting forth the reason for such denial. There was no further correspondence on the matter prior to your letter of August 28, 1951.
In view of the above this office has no alternative other than to deny the claim.
108. In his petition, plaintiff requested only the return of the purchase price on the allegedly undelivered motors. However, at trial he asked leave to amend his petition to assert a claim for "lost profits". Plaintiff claims to have sold such motors at prices ranging from $15 to $35. However, plaintiff has failed to prove that he received less than the number of motors purchased or that he acted with due care to ascertain the number of motors he received.
CAUSE OF ACTION NO. 24
109. On February 19,1947, plaintiff purchased from WAA (sales document 4079738) two generators at $199 each. The sales document contained the terms and provisions quoted in finding 35(c).
This was a sealed-bid sale, and the listing for the sale also contained this provision: "Offered property subject to prior sale or withdrawal, prior to delivery to purchaser, without notice."
110. These items were never delivered, and plaintiff was advised that this was "due to non-availability." Plaintiff was credited with their cost.
111. There is no evidence that plaintiff filed any claim on this transaction prior to 1951. Under date of August 24, 1951, he did file such a claim with the GSA regional counsel, seeking return of the purchase price. This claim was denied on November 2, 1951, on the ground that credit had already been given.
112. In the petition, plaintiff claimed only the return of the purchase price. However, at the trial, he conceded that his account with WAA was credited with the amount of this sale, and he asked leave to amend his petition to assert a claim for damages resulting from his inability to resell the generators. Defendant agrees that, if this is a proper measure of damage, such generators could have been sold for about $500 each. The Government has failed to establish that this equipment was sold to another party prior to plaintiff's purchase or that it was withdrawn from sale.
CAUSE OF ACTION NO. 26
113. On September 2,1947, Mill Basin Repair Company purchased from WAA (sales document 5233315) six generators for $2,477.34 for the lot. The purchase document contained the terms and conditions quoted in finding 35(c).
114. Mill Basin was thereafter advised that these generators were not available and could not be delivered, and the purchase price was refunded.
115. There is no evidence of any further claim, by Mill Basin or plaintiff until 1951. At that time plaintiff submitted to the GSA regional counsel a claim for the refund of the purchase price, $2,477.34. This claim was denied on November 2, 1951, on the grounds that (a) full refund had already been made, and (b) the claim, if any, was not plaintiff's but that of Mill Basin.
116. In his petition, plaintiff claimed only the return of the purchase price. At trial plaintiff acknowledged that the purchase price had been refunded, but he asked leave to amend his petition to assert a claim for "loss of profits". Defendant concedes that, if this is a proper measure of damages, the evidence indicates that plaintiff could have sold these generators for about $2,000 each.
CAUSE OF ACTION NO. 27
117. Under date of February 19,1947, plaintiff purchased from WAA (sales document 5295314) 25 engines described as being in "N2" condition, at $2,800 each. This sales document contained the provisions quoted in finding 35 (c).
This was a site sale, at which these engines were listed at $2,800 each to dealers and $3,275 each to users. The announcement described them as: "Engine assembly: Twin diesel, 12 cyl. (6 ea. engine) mounted parallel mfg. by GMC, 24 M model 6046-M10-S
118. On April 30,1947, WAA advised plaintiff by telegram that, upon reinspection, it was found that these engines were in "B2" condition, and that he could have them for $1,960 each. Plaintiff replied, stating that he was only interested at $1,000 each, that he had already resold them, that his customer was threatening to sue him, and that he could not afford a loss of $25,000. WAA replied, under date of May 10,1947, in part, as follows:
These engines were offered you in the same good faith that you in turn offered them to your customer. The inventory was transferred from the George A. Fuller Company to War Assets Administration listing the engines in N-2 condition, as advertised in our Sale SIT-71. When your order was sent to the Owning Agency for shipment it was then that we were notified that there were no new engines available, but only engines in R-2 condition.
We regret that we have no new engines in our inventory that we may offer you.
119. Plaintiff testified that he had contracted with the Military Attache of the Pakistani government to buy these engines at $6,000 each. A review of plaintiff's files disclosed a telegram and a letter written to the Military Attache on March 1, 1951, offering him ten "like new model 6046 tank-twins " at a price of $8,200 each. The reply of the Attache was as follows:
We wish to thank you for your offer of new Model 6046 engines. At the present time we have no requirements for these engines but your offer will be kept on file for future use should the need arise.
The correspondence referred to in this finding, dated more than 4 years after plaintiff's transactions with WAA, constitutes all that was found concerning any dealings with the Pakistani Military Attache.
120. There is no evidence of any claim by plaintiff on this transaction until 1951. Under date of August 24,1951, he did assert a claim to the GSA regional counsel for the return of his purchase price, plus a claim for lost profits of $25,000. By letter dated June 24, 1952, this claim was denied on the grounds that plaintiff had never paid the purchase price and that there was no legal authority for paying lost profits.
121. In his petition plaintiff claimed only the return of the purchase price. However, at trial he asked leave to amend his petition to assert a claim for "loss of profits". There is no credible evidence as to the price at which plaintiff could have sold these engines. In addition, the purchase price was never paid, and it was not included in the district court judgment against plaintiff.
CAUSE OP ACTION NO. 28
122. In his proposed findings to the trial commissioner plaintiff withdrew this item.
CONCLUSION 03? 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 the plaintiff is not entitled to recover. The case is remanded to the trial commissioner, under Rule 47 (c), for further proceedings in accordance with the opinion. Causes of Action Nos. 1, 2, 8, 4, 5, 6, 7, 9, 10, 12, 14, 16, 19, 20, 23, 25, 27, 28, and 29 are dismissed, and, following the proceedings before the commissioner, the remainder of the petition is to be dismissed.
By the foregoing opinion of the court, it was found that plaintiff is entitled to a reduction in the amount of his indebtedness to the United States under Causes of Action Nos. 8,13,15,17,18, 21, 22,24 and 26 in the amount of $70,431.71. In addition, the petition was dismissed as to all causes of action other than Nos. 8, 11, 13, 15, 17, 18, 21, 22, 24 and 26.
The case was remanded to the commissioner solely for the purpose of determining the total amount by which plaintiff's indebtedness to the United States is to be reduced. It was specifically stated by the court that plaintiff is entitled to seek a determination by the commissioner of additional damages under Causes of Action Nos. 11 and 15, pursuant to Rule 47 (c).
By stipulation of the parties, filed with the court on January 24, 1966, it is agreed that the amount of damages allocable to Cause of Action No. 11 is $60,000. It is also agreed that the damages allocable to Cause of Action No. 15 includes $1,448.40, the amount set out in the court's opinion, plus $40,000.
On January 25, 1966, the trial commissioner of this court filed a memorandum report recommending that, in accordance with the above, and as stipulated by the parties, judgment be entered that plaintiff's indebtedness to the United States be reduced by the amount of $170,481.71, and that the entire petition be dismissed.
NOW, THEREFORE, IT IS ORDERED that judgment be and the same is entered that plaintiff's indebtedness to the United States be and it is hereby reduced by the amount of one hundred seventy thousand and four hundred thirty-one dollars and seventy-one cents ($170,431.71).
IT IS FURTHER ORDERED that pursuant to the opinion of the court of July 16, 1965, and the stipulation of the parties, that plaintiff's petition be and the same is dismissed in its entirety.
By the Court: Wilson Cowen,
Chief Judge.
January 28,1966.
Previously, the District Court had denied, on July 17, 1951, plaintiff's motion to vacate tlie judgment entered on his confession. This denial was expressly stated to be with prejudice.
Almost the entire remainder was used to pay the receivership's expenses, the major items being the fees of the receiver and his attorney. After discharging all its debts, the receivership has a cash balance of $9,6,43. The receiver's accounts have been approved by the united States District Court for the Eastern District of New Tort.
Tlie discussion, infra, of the Government's counterclaims discloses another advantage accruing to plaintiff as a result of his confession of judgment. The February 21, 1951, judgment was for plaintiff's entire indebtedness to the United States as of that date, and the Government was barred from subsequently asserting claims for additional amounts owing at that time (including one debt of over $75,000), but not counted in making up the sum for which judgment was confessed.
It goes without saying that we have no power to change the judgment, as a judgment, entered by the District Court for the Eastern District of New York. See Garfield Trust Co. v. United States, 160 Ct. Cl. 178, 312 F. 2d 751, cert. denied, 373 U.S. 923 (1963). That court has already refused to vacate the judgment (see footnote 1, supra). Our discussion of this point proceeds on the plaintiff's own assumption that the judgment reflects and embodies a contract with the defendant, and that we can deal with that contract as with other agreements made by private parties with the Government.
The WAA did make at least some effort to resolve plaintiff's claims. See findings 40, 51, 55, 59, 68, 75-77, 82, 85, 89, 106, 118. Moreover, there may well have been sufficient grounds for the issuance of a warrant of attachment in January 1951 because of fear that plaintiff would otherwise dissipate his assets; this was one of the major reasons given by the district court for its appointment of a receiver six months later.
In some eases, wholesalers and retailers were given the same discount, while in other instances wholesalers were allowed larger discounts.
These causes of action will be discussed in numerical order, omitting certain claims asserted in plaintiff's petition. At the trial, plaintiff withdrew his 12th, 16th, and 28th causes of action. The defendant conceded plaintiff's entitlement to $168.75 on his 21st claim, and plaintiff accepted that concession. As to Causes of Action Nos. 6, 7, and 10, plaintiff has not taken any exception to the trial commissioner's findings rejecting his claims. The court adopts these findings.
Claiming that Re was misled in this respect, plaintiff relies on Akol, et al. (Mandigo) v. United States, 166 Ct. Cl. 182 (1964), and Akol, et al. (Stanford) v. United States, 165 Ct. Cl. 444, 330 F. 2d 618 (1964), to support his contention that such misleading advice by government representatives will prevent the statute from running. Those cases, however, involved retired servicemen upon whom were conferred new rights under a special provision of one statute, the Career Compensation Act of 1949, 63 Stat. 802, 37 U.S.C. § 231. No general rule of the type advocated by plaintiff was laid down. Moreover, we cannot see that defendant's officials misled him into believing that suit would be precluded until the completion of administrative proceedings.
Although plaintiff did not specifically incorporate that objection in his briefs to the court, it is implicit in his entire line of argument on this phase of the case. Were we to conclude that the engines were not manufactured with the parts claimed to be missing, plaintiff would obviously not be able to recover. See Cause of Action No. 5, infra.
Even though plaintiff had previously bought and received identical engines, he did not necessarily have knowledge, at the time of the present purchase, that the parts were not included. There is no showing that he had, by then, examined the earlier equipment. That plaintiff did not lodge any "missing-parts" complaint until after the present transaction indicates the contrary, as does the fact that he paid more for these units than for the previous ones.
The trial commissioner reported plaintiff's testimony in this regard, without reaching any conclusion as to its accuracy.
The disclaimers did not cover the accuracy of the defendant's title or its description of the property. Similarly, the provision for "final" "adjustments" by the War Assets Administrator "in his sole discretion" (see finding 35(c)) did not govern breaches of warranty of title or description. The warranty of description is involved here.
under our holding on defendant's counterclaim, infra, the amount arrived at in such a proceeding would in effect serve only to reduce the district court judgment against plaintiff.
In subsequent causes of action, defendant lias also asserted that an "Nl" or "N2" warranty is satisfied by the delivery of unused (though defective) merchandise. The Government's contention must be rejected with regard to those claims as well.
The only additional evidence tendered by plaintiff on this issue is a claim he filed with GSA on August 24, 1951, stating, "The merchandise is still in the possession of claimant and has been held by claimant because of the failure of the Government to issue shipping instructions during the past four years." The trial commissioner made no finding as to the accuracy of this representation. It cannot be given much weight if we take into account that (1) the commissioner recommended denial of recovery on this claim, (2) the receiver had been appointed two weeks before the statement was made, and (3) plaintiff submitted no documentary evidence that the merchandise was taken by the receiver.
The present case is unlike Ships & Power, Inc. v. United States, 160 Ct. Cl. 769 (1963), dismissed by order, which involved a corporation managed by plaintiff. In that case, the disclaimer was considerably more extensive, and there was evidence indicating that plaintiff knew or reasonably should have known of the deficiencies of the property.
The commissioner concluded that Mr. Benjamin was entitled to receive .$2,595, comprised of (1) the full purchase price of the compressor allegedly beyond repair ($2,295) and (2) the commissioner's approximation of the cost of reconditioning the other two machines ($300).
In Freedman v. United States, the "serious mistake" and "grave price discrepancy" to which the court referred were, in the main, mistakes and discrepancies adverse to the Government's interests (not to the purchaser's). Otherwise, the limitations proviso would expand, contrary to the court's holding in that ease, to cover almost all breaches by the defendant, especially violations of warranties of description.
This finding is based on plaintiff's testimony. The only figure for which there is adequate verification is the amount of plaintiff's debt to WAA. In plaintiff's exhibit 45 a "discount" claim was asserted on purchases totaling $2,640,831.12.
The findings herein are limited to the basic documents. Plaintiff places the bonded warehouse deal at an earlier date, but his testimony and the documents are not clear. Plaintiff did say that in June 1947 the regional counsel "meant to imply" that plaintiff should proceed with the bonded warehouse arrangement. Plaintiff's exhibit 40, the proposed "Field Warehouse Lease" lists Med Ben Holding Corporation as the owner of the premises, whereas plaintiff's exhibit 39 apparently relates to a different transaction, since it is executed by R&N Holding Corp. The proposed Field Warehouse Lease included only a portion of the total area of which plaintiff was lessee. (See finding 11 for an additional list of firms operated by plaintiff.)
At the time he confessed judgment in February 1951 plaintiff had not made any substantial reduction in his net indebtedness. As shown in plaintiff's exhibit 43, it was ¡5955,633.23, on October 15, 1947, and $934,498.52 on January 9, 1951.
Despite an admitted liability to WAA of over $700,000 in late 1947, plaintiff made only nominal payments during the next three years.
A much discussed issue relates to whether an agreement was made between the parties at the conference on January 8, 1951, or the meeting at which the confession was executed on January 9, that execution of the judgment would not issue until plaintiff's claims against WAA (then GSA) were adjudicated. It is plaintiff's testimony that such an agreement was made, but all other participants at these conferences have denied that such agreement was made. It is found that plaintiff has failed to prove that any such oral agreement was made at that time.
As set forth la finding 11, this amount should be shown as $957,035.16. There appears to be a typographical error In plaintiff's letter of January 11, 1951, In setting forth this amount.
There has been full tender of Government flies, and all documents which government counsel considered relevant to the claims involved in this action have been produced. Any papers which may remain in plaintiff's flies are obviously not deemed by plaintiff to be of any value in support of plaintiff's claims. It appears reasonable to assume that such papers were contained in the 59 envelopes of papers removed by plaintiff in February 1952.
Because of the similarity of subject matter of these causes of action, findings relating to them are grouped here in order to avoid repetition.
Causes of action Nos. 8 and 9 were discussed in conjunction with Nos. 2 and 3.
Although defendant's counsel conceded at one point In the trial that eight of the units being shipped from Memphis, were received by plaintiff, the documents in evidence establish that no units were shipped to jdaintiff from the WAA facility located at that city. Furthermore,, credit memoranda are in evidence establishing that plaintiff was given full credit for all the units which were to be shipped from this location.
Cause of action No. 19 was discussed in connection witli cause of action No. 13.
Cause of action No. 25 was discussed in conjunction witli cause of action No. 13.
Mill Basin Repair Company was recognized as one of the agencies operated by plaintiff, andi financial statements furnished by plaintiff during negotiations for a compromise settlement of the defendant's claim against plaintiff included Mill Basin, among many others (see finding 11).