276 F.2d 138 (4th Cir. 1960), 8024, Kirkland Distributing Co. of Columbia, S. C. v. United States

Docket Nº:8024.
Citation:276 F.2d 138
Party Name:KIRKLAND DISTRIBUTING COMPANY OF COLUMBIA, SOUTH CAROLINA, Appellant and Cross-Appellee, v. UNITED STATES of America, Appellee and Cross-Appellant.
Case Date:March 14, 1960
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

Page 138

276 F.2d 138 (4th Cir. 1960)



UNITED STATES of America, Appellee and Cross-Appellant.

No. 8024.

United States Court of Appeals, Fourth Circuit.

March 14, 1960

Argued Jan. 21, 1960.

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[Copyrighted Material Omitted]

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George E. Lewis, Asst. U.S. Atty., Columbia, S.C. (N. Welch Morrisette, Jr., U.S. Atty., Columbia, S.C., on brief), for appellee and cross-appellant.

Frank K. Sloan and Jack F. McGuinn, Columbia, S.C. for appellant and cross-appellee.

Before SOPER and BOREMAN, Circuit Judges, and PAUL, District Judge.

PAUL, District Judge.

The subject matter of this litigation is a contract between the Commodity Credit Corporation, an agency of the United States, and Kirkland Distributing Company, a South Carolina Corporation. It was initiated by an action brought by the United States in the District Court seeking to recover from Kirkland Distributing Company the sum of $27, 907.51. On March 23, 1959, the court entered an order giving judgment in favor of the United States for the full amount sued for. Thereafter, upon a petition for rehearing filed by the defendant the judgment of March 23, 1959, was vacated and on July 20, 1959, judgment was entered in favor of the plaintiff in the lesser amount of $12, 939.75. From this latter judgment both parties have appealed. In the discussion hereinafter the parties, as a matter of convenience and brevity, will be referred to as CCC and Kirkland, or as plaintiff and defendant respectively.

In April, 1954, the Commodity Credit Corporation, having on hand large quantities of nonfat dry milk solids, offered it for sale at a price of 3.5 cents per pound to be used as an ingredient of animal and poultry mixed feeds. The offer was made in the form of a circular or publication referred to as Announcement LD-6, which was distributed among producers of such feeds. This Announcement LD-6 set out in great detail the conditions under which the milk was to be sold and to be used by those who might purchase it. While LD-6 is too lengthy to be quoted in full herein, certain provisions pertinent to this case must be noted.

Among other conditions embodied in the offer of sale (Announcement LD-6) were the following:

'1. General. In submitting an order to purchase, the terms and conditions of this Announcement LD-6 shall become a part of the order to purchase and upon acceptance by CCC the order and acceptance shall constitute a valid and binding contract. * * *'

Another provision was that 'All orders to purchase milk and all confirmations of telephone orders must state: a. That the order is made subject to the terms of this Announcement LD-6.'

Another provision (par. 3) was to the effect that the milk sold by CCC would be U.S. Standard Grade or better. And that while CCC did not warrant the fitness of the milk for any particular use, nevertheless the purchaser might, within 10 days after delivery, reject any of the milk for failure to meet the quality specifications.

Paragraph 5 provided in part, and so far as is pertinent, as follows:

'5. Use Warranty: In submitting an order subject to the terms of this announcement, the purchaser warrants that the milk purchased as a result of the order will not be sold except in the form of animal or poultry mixed feeds which must be mixed before November 1, 1954. The purchaser further warrants that such mixed feeds will contain at least five per cent each of three commonly used feed ingredients other than dairy products, will contain not more than 7.5 per cent of milk purchased under this announcement, and will be mixed in the Continental United States. * * *.'

Paragraph 6, entitled Proof of Use, provided that:

'On or before November 30, 1954, the purchaser shall forward to the CSS Commodity Office from which he purchased the milk a certificate in a form acceptable to CCC in which

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he: (Specimen copy of such form was attached)

'a. Certifies as to the quantity of milk he has purchased through such office under this announcement.

'b. Certifies as to the quantity of such milk he has mixed as a component of animal or poultry mixed feed in accordance with the Use Warranty provided in paragraph 5 above.'

Paragraph 7, here quoted in full, is as follows:

'7. Price Adjustment: Disposition of the nonfat dry milk solids for the restricted use contemplated by this announcement has been authorized as a part of the program to support prices to producers of milk and butterfat. The sales prices for such uses are below the CCC published domestic sales price for unrestricted use of such milk and are in consideration of the restricted use to which the milk will be put and are contingent upon the milk being so used within the period provided herein. Regardless of the grade or quality of the milk delivered by CCC, the sales price for the milk delivered and not used in accordance herewith will be adjusted by adding to the sales price for restricted use a sum equal to the difference between such sales price and the CCC domestic sales price for unrestricted use for U.S. Extra Grade spray process nonfat dry milk solids current on the date of delivery by CCC for the State in which delivery is made, and the purchaser will promptly pay to CCC upon demand the balance due on the adjusted purchase price. With respect to any milk not put to the restricted use, as warranted in accordance with paragraph 5, prior to November 1, 1954, as evidenced by the certificate required by paragraph 6, or otherwise, and with respect to any milk with respect to which the purchaser fails to supply the certificate as required, it is agreed that it shall be conclusively presumed that such milk has been used or is to be used for other than the permitted restricted use and the purchase price shall be adjusted accordingly. Notwithstanding the conclusive presumption CCC may, in its absolute discretion, for good cause shown, grant an extension of time for the filing of the certificate as provided in paragraph 6.'

On four different dates during the month of August, 1954, Kirkland placed orders for milk, each of which orders stated that it was subject to the provisions of Announcement LD-6. The milk shipped under these orders aggregated 205, 789 pounds and was received by Kirkland during August, September and October. Kirkland...

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