Moore & Tierney, Inc. v. Roxford Knitting Co.

• Decision Date: 01 July 1918
• Court: U.S. District Court — Northern District of New York
• Parties: MOORE & TIERNEY, Inc., v. ROXFORD KNITTING CO.

250 F. 278

MOORE & TIERNEY, Inc., v. ROXFORD KNITTING CO.

United States District Court, N.D. New York.

July 1, 1918

At Law. Action by Moore & Tierney, Incorporated, against the Roxford Knitting Company, which counterclaimed. Judgment for plaintiff.

1. WAR 4-- PRECAUTIONARY ACTS-- CONTRACTS-- BREACH-- DEFENSES.

Under National Defense Act, Sec. 120 (Comp. St. 1916, Secs 3115f-3115h), and Navy Appropriation Act March 4, 1917, c 180, it is the duty of a manufacturer, where the United States orders war supplies, to comply with the order, though that prevents him from carrying out earlier contracts with private persons; but where a manufacturer voluntarily enters into contracts with the United States, which prevent him from carrying out earlier contracts, he is not relieved from an action of damages for breach.

2. WAR 4-- PRECAUTIONARY ACTS-- EFFECT ON CONTRACTS-- BREACH.

Where a manufacturer, after communication with a member of the Advisory Board of National Defense, and being informed that the orders were obligatory, contracted to supply underwear for the navy, held, that the order must be deemed to have been placed in accordance with National Defense Act, Sec. 120 (Comp. St. 1916, Secs. 3115f-3115h), and Navy Appropriation Act March 4, 1917, c. 180, making compliance obligatory; so the manufacturer was not liable for breach of contracts with private persons, which he was unable to carry out because of the navy contract.

3. WAR 4-- PRECAUTIONARY ACTS-- EFFECT ON CONTRACT RIGHTS.

As great publicity was given to National Defense Act, Sec. 120 (Comp. St. 1916, Secs. 3115f-3115h), and Navy Appropriation Act March 4, 1917, c. 180, which authorizes the government in time of war to place compulsory orders with manufacturers and for supplies, manufacturers and private persons with whom they contract must be presumed to have contracted with reference to such laws.

4. WAR 4-- WAR-MAKING POWER-- AUTHORITY OF CONGRESS.

In view of the paramount war-making power of Congress, National Defense Act, Sec. 120 (Comp. St. 1916, Secs. 3115f-3115h), and Navy Appropriation Act March 4, 1917, c. 180, authorizing the government to place compulsory orders with manufacturers for needed supplies, are valid.

5. WAR 4-- 'WAR MATERIAL'-- 'STORES AND SUPPLIES.'

Within Navy Appropriation Act March 4, 1917, c. 180, allowing the government in time of war to place compulsory orders with manufacturers for war material, and defining 'war material' as including arms, ammunition, armament, stores, supplies, and equipment for ships, underwear for the crews of war vessels is part of the 'stores and supplies.'

Action to recover $14,090.08, purchase price of knit goods sold and delivered. Defendant counterclaims for alleged damages for nonperformance of balance of contract. Plaintiff answers to the counterclaim that orders of the United States government, which it was required to fill under the acts of Congress (National Defense Act June 3, 1916, c. 134, 39 Stat. 166, and Naval Appropriation Act March 1, 1917, c. 180, 39 Stat. 1168), made compliance with its contract on time impossible, and that the law gave precedence to such government orders, and postponed compliance under the contract with defendant, and that, defendant having declared the contract ended, it can recover for goods not paid for actually delivered, and is not liable for damages.

Thos. O'Connor, of Waterford, N.Y., and John T. Norton, of Troy, N.Y., for plaintiff.

Gallert & Heilborn, of New York City, and D. F. Costello, of Syracuse, N.Y., for defendant.

RAY District Judge.

At the time war was declared between the United States of America and the Imperial Government of Germany the plaintiff, engaged in manufacturing knit underwear, had a valid contract or contracts with the defendant, by the terms of which it was obligated to make and deliver to defendant certain quantities of woolen knit undershirts and drawers at agreed prices and at or within specified times. These contracts came into existence by way of accepted orders, which were subject to delays or nondelivery by strikes, accidents, or for any reason beyond the control of plaintiff. It was then engaged in the performance of such contracts, and intended in good faith to perform, but was prevented by the performance of certain government orders. The plaintiff is one of several manufacturers of such goods located at Cohoes, N.Y. Deliveries aggregating $14,090.08 were made and not paid for, and considerable quantities were not delivered. Defendant alleges $20,000 damages for nonperformance or alleged breach of contract.

May 22, 1917, one A. Frey, who was a member of a committee of the Advisory Board of National Defense, wrote each of these manufacturers at Cohoes, N.Y., including the plaintiff, informing them that the United States government was in need of and desirous of obtaining knit undershirts and drawers, inquiring as to the capacity of the mills of the manufacturers and the quantities they could furnish, at what prices, and also saying:

'I would request you not to write me that you are sold up and cannot furnish any of these goods. I am aware that this condition prevails with every one. * * * It is not the committee's intention to place the whole burden on any one mill, but to divide it according to production, and I would therefore request you to give this your prompt attention and advise me promptly how much of this it will be your pleasure to take, and at what prices.'

On receiving these communications, these manufacturers called a meeting at Cohoes, where the communications of Mr. Frey were considered and their nature discussed, and all agreed it was a requirement of the government of the United States, constituting an order, to which it was their duty under the acts of Congress hereafter mentioned to respond. Each manufacturer was left to figure out what amount it could furnish, and a committee was appointed to see and confer with Mr. Cromwell, chairman, etc., of the Advisory Board of National Defense, but who in fact was also acting for Mr. Hancock, Paymaster of the Navy, in charge of the purchase department, in obtaining and submitting information and making recommendations for navy supplies, etc. This committee did see him regarding the matter, and was advised by him that the requirement was obligatory.

The productive capacity of these mills was given, and later the committee recommended to the War Department the making of an agreement or contract with the plaintiff for certain knit shirts and drawers of the kind and quality desired by it, and which plaintiff's mill could make. This order or contract of June 6, 1917, did not demand the full capacity of the plaintiff's mill, and if there had been no further orders from or contracts with the government the plaintiff could have and would have filled this government order or contract, and also its contract with the defendant. Preceding this June 6th order Mr. Cromwell, on letter heading reading as follows: 'Knit Goods Committee of the Council of National Defense, 357 Fourth Ave., New York'--wrote as follows:

'New York, June 1, 1917.

'Messrs. Moore & Tierney, Cohoes, N.Y.-- Gentlemen:-- We are in receipt of your letter in relation to government underwear. A recommendation is going by this same mail to the Quartermaster's Department, at Philadelphia, that a contract should be issued to you for 36,000 shirts and 36,000 drawers, at $1.25 each, for delivery, freight and cartage paid to the New York depot, the goods to be made according to the specifications known as 'Alternate B,' on which your price was based. The committee is required to secure a very large quantity of this underwear. It is our wish to disturb the regular business of each manufacturer as little as possible, and therefore we will do our very best to secure the full amount of underwear needed without coming back to you for additional deliveries. Should the government requirements increase, we shall have to ask you for a larger part of your product between now and the end of the year.

'Yours truly,

Lincoln Cromwell, Chairman.'

July 2, 1917, Mr. Cromwell, signing as chairman, etc., wrote the plaintiff and the other manufacturers of knit goods mentioned as to the urgent wants and needs of the United States Navy Department for knit undershirts and drawers, and amongst other things wrote:

'The Knit Goods Committee has received an emergency call for the Navy Department,' etc.; and also, 'It is absolutely necessary that this underwear should be obtained;' and also, 'This underwear can be made by only a limited number of mills in the country. We have carefully apportioned it among the different mills, and know that we cannot secure the quantity needed unless we can receive from you 25,000 shirts and 25,000 drawers by October 1st and the same quantity additional by December 1st.'

Mr Cromwell was still acting for the Paymaster of the Navy, as stated. On the receipt of these letters another meeting of the manufacturers was held, and such letters were considered and construed as an order, within the meaning and intent of the acts of Congress referred to, and prices and quantities and deliveries were later agreed upon with the government agencies and formal written agreements were made. This order was for more than plaintiff could produce, and Cromwell was so notified, and July 20th Mr. Cromwell wrote they had telegraphed the Navy Department, suggesting that a certain quantity 'shall be canceled from your order,' and this was done. Nothing was said in the contracts or agreements or orders that these were orders placed under the acts of Congress, but it is established that the plaintiff so understood them and acted accordingly. The evidence of Paymaster Hancock plainly indicates that the ...