Klebe v. United States
| Decision Date | 12 November 1923 |
| Docket Number | No. 78,78 |
| Citation | 263 U.S. 188,68 L.Ed. 244,44 S.Ct. 58 |
| Parties | KLEBE et al. v. UNITED STATES |
| Court | U.S. Supreme Court |
Mr. Daniel C. Donoghue, of Philadelphia, Pa., for appellants.
Mr. Assistant Attorney General Ottinger, for the United States.
Appellants, plaintiffs below, were the owners of a traction steam shovel, which they leased to the Bates & Rogers Construction Company for $25 per day. At the time of the lease and prior thereto the construction company was engaged, under contract, in certain work for the United States for which the shovel was procured and used. Article II, paragraph (c), of the contract under which the work was done provided that the construction company should be reimbursed for rentals actually paid for steam shovels, at rates which were named, the company being required to file with the contracting officer of the government a schedule setting forth the fair valuation of each part of the construction plant at the time of its arrival at the site of the work. This valuation was made final except upon a contingency which is not material here. The paragraph further provided that when the total rental paid by the government for any such part should equal its valuation, no further rental should be paid and title thereto should vest in the United States. At the completion of the work the contracting officer was by the contract given the option to purchase for the United States any part of the plant then owned by the construction company by paying the difference between the valuation thereof and the total amount of rentals theretofore paid.
A written instrument leasing the steam shovel to the construction company was executed by the plaintiffs and the construction company, which, among other things, recited that plaintiffs had made themselves acquainted with the provisions of article II of the contract between the construction company and the United States, which plaintiffs agreed should 'apply to and be enforceable against the said equipment furnished and leased hereunder, to the end that the United States government may have and exercise as to and against said equipment all rights provided for in said paragraph (c) in respect of plant or parts thereof owned and furnished by the party of the second part' (the construction company); the plaintiffs 'to be entitled as owner to receive any purchase price payments which upon any appropriation of said equipment by the United States government under said article II may be coming from said government.' The valuation of the shovel stated in the lease was $5,000. Basing his action expressly upon the provisions of the lease incorporating paragraph (c), and after $4,225 in rentals had been paid upon the shovel, the contracting officer, properly authorized to do so, exercised the option of the government and took over the steam shovel as its property. This was done a short time before the completion of the work. The plaintiffs were notified, but insisted that the lease did not authorize this action. The record shows that the government has been ready and willing at all times to pay the difference ($775) BETWEEN THE VALUATION OF THE SHOVEL AND The amount of rentals paid.
Plaintiffs insisted that the United States was not privy to the leasing contract and brought suit to recover the value of the shovel, viz. $5,000, upon the theory that it had been taken by the government for public use and that thereby an implied obligation arose on the part of the government to pay just compensation therefor. The court below, one judge dissenting, found that the property was taken under the express contract, creating a liability for $775 only, and, therefore, no implication of a promise could be indulged. JUDGMENT FOR PLAINTIFFS FOR THIS AMOUNT wAs rendered.
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