Price Fire Water Proofing Co v. United States

• Decision Date: 19 February 1923
• Docket Number: No. 257,257
• Parties: PRICE FIRE & WATER PROOFING CO. v. UNITED STATES
• Court: U.S. Supreme Court

261 U.S. 179

43 S.Ct. 299

67 L.Ed. 602

PRICE FIRE & WATER PROOFING CO.

v UNITED STATES.

No. 257.

Argued Jan. 22, 23, 1923.

Decided Feb. 19, 1923.

Mr. S. S. Ashbaugh, of Washington, D. C., for appellant.

Mr. Alfred A. Wheat, of New York City, for the United States.

Mr. Justice BRANDEIS delivered the opinion of the Court.

By the Dent Act (Act March 2, 1919, c. 94, 40 Stat. 1272 [Comp. St. Ann. Supp. 1919, §§ 3115 14/15 a-3115 14/15 e]), the Secretary of War was authorized to adjust and discharge, upon a fair and equitable basis, agreements, express or implied, made prior to November 12, 1918, in connection with the prosecution of the war, 'when such agreement has been performed in whole or in part, or expenditures have been made or obligations incurred upon the faith of the same by any such person, firm, or corporation prior to November twelfth, nineteen hundred and eighteen, and such agreement has not been executed in the manner prescribed by law.' If an adjustment offered by the Secretary was refused by the claimant, the Court of Claims was given jurisdiction to award fair and just compensation. But it was expressly provided that neither the Secretary nor the court should include in the award 'prospective or possible profits on any part of the contract beyond the goods and supplies delivered to and accepted by the United States and a reasonable remuneration for expenditures and obligations or liabilities necessarily incurred in performing or preparing to perform' the contract.

The claimant herein owned an establishment for fireproofing and waterproofing cloth. In 1917, an arrangement was made by which, after January 1, 1918, the plant, with increased facilities, was to be operated. by the claimant, wholly on cloth to be delivered to it from time to time by the government. Payment was to be made at an agreed rate per yard. No agreement was executed in the manner pr vided by law. Thereafter many orders for finishing goods were given. There were serious delays and irregularities on the part of the government, both in delivering the goods for finishing and in removing them from the premises after the work had been done, and upon the signing of the Armistice all unfinished orders were canceled. For all goods finished the claimant was paid at the agreed price. But by the action of the government prior to November 12, 1918, and by its cancellation of the orders, it was subjected to large and unanticipated expenses. A claim for these expenses and the losses incurred was duly presented to the Secretary of War. An adjustment offered by him was rejected, and thereupon claimant brought this suit in the Court of Claims for $641,313.64. The petition set forth ten distinct causes of action. On nine of these the court made the allowances set forth in the margin,¹ which aggregate $47,700.08, and judgment was entered below for this amount. The tenth cause of action, on which $590,000 was claimed, was for loss to commercial business. On this no allowance was made. A motion for a new trial was asked for by claimant (on which ground does not appear) was overruled. Whether the court erred in disallowing the claim on the tenth cause of action is the sole question for decision on this appeal.

The facts found by the court bearing especially on this cause of action were these:

'When in the latter part of 1917 this arrangement was made, the plaintiff's plant, its processes, business, and good will as a going concern, were valuable, but what the value thereof was is not shown to the satisfaction of the court on the present record. 'When government work ceased in November, 1918, the

plaintiff had no other business upon which it could continue the operation of its plant, and it became idle. The cessation of hostilities left the government with large quantities of goods on hand of the kind produced by the plaintiff company and by other concerns producing for the government the same general character of goods. These goods...