Eichberg v. United States Shipping Bd. Emergency Fleet Corp.

• Decision Date: 06 June 1921
• Docket Number: 3447.
• Citation: 273 F. 886
• Parties: EICHBERG v. UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION.
• Court: U.S. Court of Appeals — District of Columbia Circuit

273 F. 886

EICHBERG v. UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION.

No. 3447.

United States Court of Appeals, District of Columbia.

June 6, 1921

Submitted March 7, 1921.

Appeal from the Supreme Court of the District of Columbia. [Copyrighted Material Omitted]

Ernest W. Roberts and Clinton Robb, both of Washington, D.C., for appellant.

J. E Laskey and C. W. Arth, both of Washington, D.C., for appellee.

VAN ORSDEL, Associate Justice.

This is a suit for damages resulting from an alleged breach of contract. The contract consisted of the following proposal submitted on August 2, 1917, by appellant, hereafter, for convenience, referred to as plaintiff:

'United States Shipping Board Emergency Fleet Corporation, Washington, D.C.:

'We will furnish two (2) schedules per month, as per attached sheet, at prices set opposite each item. Prices understood to be f.o.b. loading point, inspection at loading point as required; payments to be arranged at the time of inspection.

'Stock to be sound, square edge, water oak or white oak, and to be inspected spected according to the rules of the Hardware Manufacturers' Association for sound and square edge timber, except that 1' shall be allowed and paid for in excess of the sizes specified, and further, in case of any flitches, the stock shall be measured as an average of both faces inside the bark.

'It is possible that, after the writer returns to Alabama, and has organized the necessary crews to get this matter out, we may find that we can produce a greater quantity than herein submitted. In such a case we will be pleased to advise you of the fact and get out a greater number of schedules if required.

'Yours truly,

National Timber Company.'

Defendant Fleet Corporation, on August 3, 1917, through its purchasing agent, telegraphed plaintiff as follows:

As per our conversation yesterday, you may proceed to make arrangements to get out enough timber for twenty schedules as per list furnished. Writing you to-day.

R. E. Wood, 'Emergency Fleet Corporation.'

The letter referred to was as follows:

'August 3, 1917.

'Mr. M. H. Eichberg, National Timber Company, Mobile, Ala.My Dear Mr. Eichberg: Timber Schedules. We desire yor to get out 20 schedules as per the list you recently furnished us, at the rate, if possible, of 4 schedules per month. Mr. Haynen will see you in Mobile within the next few days.

'Yours very truly,

R. E. Wood, General Purchasing Officer.'

It is alleged that, in pursuance of this agreement, plaintiff expended 'large sums of money in securing and proving additional necessary machinery, materials and labor for performing said contract,' and that defendant, on the 21st day of August, 1917, without any just cause, canceled in writing said contract, to plaintiff's damage in the sum of $117,786.27.

Defendant pleaded (1) that the Fleet Corporation is a governmental agency, and its acts were the acts of the United States; and (2) that

'defendant did not promise as alleged. ' Plaintiff demurred to the first plea, which demurrer was sustained by the court. Under leave of court, two efforts were made to amend this plea; but in each instance the court, upon demurrer of plaintiff, ruled out the amended plea. Whereupon defendant elected to proceed with the cause upon the pleadings as they stood. The court then made the following order:

'Upon consideration of the motion of plaintiff filed herein by his attorneys, it is ordered that this cause be and the same is hereby referred to the auditor of this court, to audit and state the accounts and dealings between the parties herein.'

No objection was interposed by defendant to the order of reference. The case was heard by the auditor upon the testimony of witnesses produced on behalf of both plaintiff and defendant. In a full and complete report, he found for plaintiff in the sum of $116,346.13, with $11,138.10 interest. On filing the report, exceptions thereto were filed by defendant on the following grounds:

(1) That the Shipping Board is an agency of the United States, and this is, in effect, a suit against the United States.

(2) That, under the act of Congress and the order of the President, the Shipping Board is an agent of the United States, and plaintiff contracted with it, knowing that the United States was the principal, and alone liable upon the contract.

(3) '(a) Because the alleged schedules of damage are wholly computed of speculative, prospective, and uncertain profits, not flowing from any labor or investment of capital, as in the said report and schedules appears, but from mere estimates of the difference between cost and sale price, without evidence or assumption of the ownership or availability of material.

'(b) Because the said schedules of expectant profits and damages take no account of materials on hand or available, or the value thereof at the time of the alleged breach of contract, and without inclusion of reductions of alleged damages, or proof of any efforts to reduce the same.

'(c) Because the defendant was wholly dependent upon the floating of logs through unnavigable streams, particularly the Escambia river, which frequently, particularly during the periods covered by the contract, was so low in water flow as to provide at intervals less water than 18 inches above the sand bars therein, of all of which exceptant is informed by the independent evidence of witnesses, who it expects to testify thereto, and by the specific admissions of the plaintiff.

'(d) Because the plaintiff's stock of timber was wholly inadequate to produce the requisite timber, whereby he was dependent upon two small sawmills near Bluff Springs and McDavid, Fla., and not to exceed six hewers of timber, which the defendant expects to prove by documentary evidence in its possession and by the evidence of circumstances, and the independent evidence of witnesses, as well as the admissions of the plaintiff, by which evidence of the character set forth the defendant expects to establish that the losses of the plaintiff do not exceed the sum of six thousand ($6,000) dollars.

'(f) Because the plaintiff's evidence wholly fails to establish any binding or definite subcontracts, or any responsibility or liability or loss on account of same.'

Exception (e) relates to the defective character of the timber at plaintiff's source of supply, and sets forth the rejection of certain timber under inspection. Exception (g) is in effect that the contract was conditional upon plaintiff's securing the approval of the American Bureau of Shipping for the substitution of water oak for white oak, which, it is alleged, plaintiff represented could safely and practically be done; that the contract was made relying wholly upon this statement and representation; and that plaintiff failed to secure the approval as agreed, and as a result defendant, on August 22, 1917, canceled the contract.

When the exceptions were filed, counsel for plaintiff moved the court to confirm the report of the auditor and enter judgment thereon 'for want of proper and sufficient exceptions in law to said report. ' This motion was denied, and the court struck out exception No. 1, and ordered exceptions Nos. 2 and 3 calendared for trial by jury. Objections were made by plaintiff to the submission of the case to a jury, which were overruled. When the jury was impaneled and sworn, certain stipulations of fact made at the hearing before the auditor were introduced by counsel for plaintiff, the chief of which was that the contract was made and canceled by duly authorized agents of the Fleet Corporation.

Counsel for plaintiff then introduced the letters between the parties, above set out, and read the auditor's report, after which they moved the court for a directed verdict for plaintiff for the full amount found by the auditor. Counsel for defendant moved the court to direct a verdict for defendant, setting forth the grounds of exception to the report, whereupon the following colloquy occurred between the court and counsel for plaintiff:

'The Court: Do you care to reopen this case, and call any witnesses, and take testimony?

'Mr. Roberts: No, sir, we do not.

'The Court: All right, then; I will deny the motion of the plaintiff and grant the motion of the defendant, and grant you the right of appeal.'

A verdict was accordingly directed, and from the judgment thereon this appeal was taken.

The propriety of the reference to the auditor need not be considered, since no objection to the reference was made by defendant. The power of a court, with consent of the parties, to refer a case pending before it 'is incident to all judicial administration, where the right exists to ascertain the facts as well as to pronounce the law. ' Conventio facit legem.' In such an agreement there is nothing contrary to law or public policy. ' Newcomb v. Wood, 97 U.S. 581, 583 (24 L.Ed. 1085). Reference by consent may be made either by written stipulation of the parties or by order agreed to in open court. The reference here was without objection, which may be treated as equivalent to consent.

Section 254, D.C. Code, providing for the reference to an auditor of actions at common law grounded upon account or involving open accounts between the parties, came into the Code in substantially the form of a prior existing rule of court, which was based upon a statute of Maryland of 1785. The authority for compulsory reference under the rule and judgment upon the report of the auditor in the absence of proper exceptions was upheld by this court in Simmons v. Morrison, 13 App.D.C. 161.

The statute, however, applies only to actions at law wherein a mutual accounting between the parties is involved. This is not such a case. Hence, if the...