Russell Motor Car Co v. United States Freygang v. Same Albert Anderson Mfg Co v. Same

Citation261 U.S. 514,67 L.Ed. 778,43 S.Ct. 428
Decision Date09 April 1923
Docket Number740,480,Nos. 485,s. 485
PartiesRUSSELL MOTOR CAR CO. v. UNITED STATES. FREYGANG et al. v. SAME. ALBERT & J. M. ANDERSON MFG. CO. v. SAME
CourtUnited States Supreme Court

Mr. Lyman M. Bass, of Buffalo, N. Y., for appellant Russell motor co.

Messrs. George A. King and Wm. B. King, both of Washington, D. C., for appellants Freygang and others.

Messrs. Arthur H. Russell, of Boston, Mass., and Chapman W. Maupin, of Washington, D. C., for appellant Anderson Mfg. Co.

[Argument of Counsel from page 515 intentionally omitted] Messrs. Solicitor General Beck, of Washington, D. C., Assistant Attorney General Lovett, and Alfred A. Wheat, of New York City., for the United States.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

These cases, here on appeal from the Court of Claims, differ in details of fact, but are controlled by the same principles of law, and depend alike upon the construction and application of the same statutory provisions.

The salient facts in the case of the Motor Car Company are as follows: That company, on May 14, 1918, entered into a contract, numbered 1498, with the United States, acting through the Secretary of the Navy, to make 250 anti-air craft gun mounts, at an agreed price of $7,860 each, to be delivered at stipulated periods; the last being the 60 days ending April 30, 1919.

Prior to the making of the foregoing contract, viz. in November, 1917, a similar contract, numbered 949, had been entered into by the same parties; the last period for delivery being the 60 days ending January 15, 1919. The actual work under contract 949 was begun about March, 1918, and some time later, and after the making of contract 1498, at the request of the company, the Secretary consented to allow all shipments of mounts to be applied upon contract 949 until its completion. Deliveries under that contract were finished in June, 1919.

On November 18, 1918, the Navy Department expressed a desire that the manufacture of gun mounts under both contracts be greatly decreased and that the company resume production of peace-time products as soon as possible, 'so that the minimum of economic disturbance will be felt during the transition.' In its communication the Navy Department requested that immediate arrangements be made for the reduction and eventual stoppage of production of materials under these contracts and the substitution therefor of commercial products, and that the company 'initiate preparations for the cancellation along the lines indicated.' On November 23, 1918, the company was notified that the Secretary had authorized the cancellation of contract 1498, directed to cease work in connection therewith not later than December 2, 1918, and informed that a just and fair settlement would be made as provided by contract and in accordance with the statute covering such cases. Extended negotiations followed, in an effort to bring about a settlement, and the Secretary finally fixed the sum of $444,847.68 as just compensation for the cancellation of the contract. Seventy-five per cent. of this amount was paid and accepted by the company, expressly without prejudice to its rights.

The Court of Claims, after hearing the case, found that just compensation for the cancellation of the contract was the sum of $495,250.34, which amount included a number of elements and items not necessary to be set forth. The court further found that, if the company had been permitted t complete the contract according to its terms, it could and would have earned a profit, in round figures, of $960,000, but held that the action of the Secretary of the Navy in canceling the contract was within the authority conferred by the statute, presently to be mentioned, and that the company consequently was not entitled to an award including anticipated profits.

The statute upon which this determination rested was the Act of June 15, 1917 (40 Stat. p. 182, c. 29), making deficiency appropriations for the military and naval establishment on account of war expenses, and for other purposes. This act contained a provision authorizing and empowering the President, within the limits of the amounts appropriated:

'* * * (b) To modify, suspend, cancel, or requisition any existing or future contract for the building, production, or purchase of ships or material.' Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3115 1/16 d.

The President was authorized to exercise the authority conferred upon him by the act and expend the money therein and thereafter appropriated 'through such agency or agencies as he shall determine from time to time.' The authority so far as it concerned the Navy, was by him delegated to the Secretary of the Navy in an order dated August 21, 1917,

'in so far as applicable to and in furtherance of the construction of vessels for the use of the Navy and of contracts for the construction of such vessels, and the completion thereof, and all powers and authority applicable to and in furtherance of the production, purchase and requisitioning of materials for construction of vessels for the Navy and for war materials, equipment, and munitions required for the use of the Navy, and the more economical and expeditious delivery thereof.'

The word 'material,' the act provided, should include stores, supplies and equipment for ships and everything required for or in connection with the production thereof, and in our opinion included the articles contracted for in this as well as in the other two cases. The act provided that whenever the United States should cancel, modify, suspend, or requisition any contract just compensation should be made therefor to be determined by the President. If the amount so determined should be unsatisfactory, the person entitled to receive it could accept 75 per cent. thereof and bring suit to recover such further sum as added to the 75 per cent. would make just compensation. By the terms of the act the authority granted to the President or delegated by him was to 'cease six months after the final treaty of peace is proclaimed between this government and the German Empire.'

The Motor Car Company contends that subdivision (b) of the statute above quoted applies to private contracts alone and affords no authority for the cancellation by the government of its own contracts. The Court of Claims held otherwise and whether its holding or the company's contention is correct presents the principal question for our consideration.

It must be apparent, we think, that the words of the provision, 'any existing or future contract,' read with literal exactness, include all contracts, whether private or governmental. But it is pointed out that the power to 'requisition' cannot apply to a governmental contract; and this may be conceded, since the government cannot requisition what it already has. Then it is said that inasmuch as the application of the word 'requisition' must be confined to private contracts, the other words associated with it must be likewise restricted by virtue of the maxim 'noscitur a sociis.' That a word may be known by the company it keeps is, however, not an invariable rule, for the word may have a character of its own not to be submerged by its association. Rules of statutory construction are to be invoked as aids to the ascertainment of the meaning or application of words otherwise obscure or doubtful. They have no place, as this court has many times held, except in the domain of ambiguity. Hamilton v. Rathbone, 175 U. S. 414, 421, 20 Sup. Ct. 155, 44 L. Ed. 219; United States v. Barnes, 222 U. S. 513, 518-519, 32 Sup. Ct. 117, 56 L. Ed. 291. They may not be used to create but only to remove doubt. Id. Moreover, in cases of ambiguity the rule here relied upon is not exclusive. The problem may be submitted to all appropriate and reasonable tests, of which 'noscitur a sociis' is one. Here we have one word which it may be conceded applies only to private contracts, but the other three words, standing alone, it likewise must be conceded, naturally...

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    ...1512(c). Both of those canons come into play only to resolve ambiguity, not to create it. See Russell Motor Car Co. v. United States, 261 U.S. 514, 520 (1923) (“‘Noscitur a sociis' is a well-established and useful rule of construction, where words are of obscure or doubtful meaning, and the......
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    ...1512(c). Both of those canons come into play only to resolve ambiguity, not to create it. See Russell Motor Car Co. v. United States , 261 U.S. 514, 520, 43 S.Ct. 428, 67 L.Ed. 778 (1923) (" ‘Noscitur a sociis’ is a well-established and useful rule of construction, where words are of obscur......
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  • Forfeiture by Cancellation or Termination - Charles Tiefer
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    ...The contract, we must assume, was entered into with the prospect of its cancellation in view." Russell Motor Car Co. v. United States, 261 U.S. 514, 523-24 (1923). 110. Id. at 524. 111. 267 U.S. 12 (1925). 112. The government could limit its compensation to the reliance interest even in sit......
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