Priebe & Sons v. United States

• Decision Date: 06 May 1946
• Docket Number: No. 45922.,45922.
• Parties: PRIEBE & SONS, Inc., v. UNITED STATES.
• Court: U.S. Claims Court

65 F. Supp. 457

106 Ct. Cl. 789

PRIEBE & SONS, Inc., v. UNITED STATES.

No. 45922.

Court of Claims.

May 6, 1946.

J. Arthur Miller, of Chicago, Ill. (Campbell, Clark & Miller, of Chicago, Ill., and Morris, Kixmiller & Baar and Allen H. Gardner, all of Washington, D. C., on the brief), for plaintiff.

S. R. Gamer, of Washington, D. C., John F. Sonnett, Asst. Atty. Gen., for defendant.

Before WHALEY, Chief Justice, and LITTLETON, WHITAKER, JONES, and MADDEN, Judges.

LITTLETON, Judge.

The only question presented in this case is whether plaintiff is entitled to recover $14,482.90 liquidated damage deducted by defendant under the express terms of a contract by reason of the failure of plaintiff to have certain quantities, totalling 114,829 pounds, of dried eggs manufactured, inspected, tested, accepted and ready for delivery or shipment in part at Manning, Iowa, and in part at Sleepy Eye, Minn., on the contract date of May 18, 1942. Six certain lots of the eggs at these two points were not ready for delivery until May 20, 21, and 22, respectively, and the stipulated liquidated damage of 10 cents a pound was accordingly charged and deducted from amounts otherwise due plaintiff. This contract called for 200,000 pounds but the balance of 45,945 pounds is not here in question.

In 1941 the Government through the Agricultural Marketing Administration (herein referred to as AMA) and the Federal Surplus Commodities Corporation (herein referred to as FCC), agencies of the Department of Agriculture, entered upon a program of purchasing, through contracts, dried or powdered eggs. Plaintiff commenced its dried egg business almost at the inception of this program and did a very large amount of such business under such contracts with FCC before and after April 23, 1942, the date of the contract for dried eggs involved in this case. Plaintiff was familiar with the program, the details of the Government operations in connection therewith, and the relationship of the program to the war effort.

The contract in suit was entitled "Announcement FSC-553, Purchase of Dried Egg Products."

The detailed facts, about which there is no dispute, concerning the making on April 23, 1942, of the written contract in suit and the terms and conditions thereof are set forth in findings 3-5. Plaintiff fixed the delivery date of May 18, 1942, for the 200,000 pounds of dried eggs (herein sometimes called powder) called for by the contract under par. 1(c) thereof, which required that the seller state "The beginning date of the delivery period during which the vendor agrees to make delivery (N. B. Par. 7 — Delivery)." Paragraphs 3 and 4 related to inspection and grading and the chemical analysis to be used in the examination and testing of samples (finding 3). Paragraph 4 required that inspection of the powder must be by the AMA and made it incumbent on plaintiff to arrange for such service. In addition it was provided that "Inspection and weight certificates shall be issued at the expense of the vendor. Inspection and weight certificates shall be dated not more than 30 calendar days prior to the delivery date specified in the offer. The lots delivered to the FSCC must be the lots sampled and inspected by the AMA, and the grading certificates tendered the FSCC must name the manufacturer of the product, his identifying production lot number for the barrels in question, and the date of manufacture." Inspection certificates were issued and dated on the day defendant completed the analysis of samples at its Chicago Laboratory and plaintiff was immediately notified by wire whether the samples had or had not met the required test and was given the number of each certificate for each lot so inspected. There was no delay in inspecting, weighing, taking samples of each lot and analyzing them. The AMA inspector weighed and took samples of each of the six lots here involved on the first or second day after completion of manufacture and these samples were tested and analyzed as promptly as was possible. The final inspection certificates for the powder here involved were issued from 4 to 7 days after the date on which samples of each lot were taken. Plaintiff does not claim that inspection certificates should or could have been issued earlier.

Paragraphs 7 and 9 of the contract provided, so far as here material, as follows:

"Par. 7. Delivery: The date specified in the offer, pursuant to item C, shall be the first day of a 10-day period within which the FSCC will accept delivery, the particular day within the period being at the FSCC's option. Save for the exception noted below, failure to have specified quantities of dried egg products inspected and ready for delivery by the date specified in the offer will be cause for invoking the provisions of paragraph 9 below. The only exception against invoking the provisions of paragraph 9 shall be when sampling and inspection by the Agricultural Marketing Administration had been requested for a date at least 10 days prior to the date specified in the offer, pursuant to item C and the sampling and inspection services were not forthcoming.

"Dried eggs tendered for delivery must be accompanied by the original and two copies of the inspection and weight certificate issued by the Agricultural Marketing Administration and other affidavits and statements stipulated in this announcement.

* * * * * *

"Par. 9. Delays — Damages: Payment: Inasmuch as the failure of the vendor to deliver the quantity of the commodity or commodities specified in the contract in accordance with the terms of this announcement will, because of the urgent need for the commodity by the purchaser arising from the present emergent conditions, cause serious and substantial damages to the purchaser, and it will be difficult, if not impossible, to prove the amount of such damages, the vendor agrees to pay to the FSCC liquidated damages as stated in this paragraph. The sum is agreed upon as liquidated damages and not as a penalty, and shall be in the amount set forth below for each pound of dried egg product undelivered in accordance with the terms of this announcement.

                Liquidated
                damage sum
                Contracted delivery (date specified
                 in offer)
                Within and including 50 days of acceptance
                 date ................................................... $0.10
                

* * * * * *

"The parties have computed, estimated, and agreed upon this sum as an attempt to make a reasonable forecast of probable actual loss because of the difficulty of estimating with exactness the damages which result. However, if the President of the Federal Surplus Commodities Corporation determines that the failure to make delivery as herein agreed results from unforeseeable causes and without the fault or negligence of the vendor, the President of the Federal Surplus Commodities Corporation, upon request of the vendor, may extend the time for making delivery for such time as he deems reasonable under the circumstances and in view of the urgent needs of the purchaser. The President may delegate to any officer or employee or agent of the Federal Surplus Commodities Corporation the power herein given to determine whether the failure to deliver is due to unforeseeable causes beyond the control and without fault or negligence on the part of the vendor, and the determination of the President of the Federal Surplus Commodities Corporation or such officer or employee or agent in this respect shall be final and conclusive on the parties concerned."

The liquidated damage of $14,482.90 at the agreed rate of 10 cents a pound was imposed and deducted from the contract price in making payments to...