United States v. Puget Sound Machinery Depot

• Decision Date: 09 May 1924
• Docket Number: 7696.
• Citation: 298 F. 353
• Parties: UNITED STATES v. PUGET SOUND MACHINERY DEPOT.
• Court: U.S. District Court — Western District of Washington

298 F. 353

UNITED STATES v. PUGET SOUND MACHINERY DEPOT.

No. 7696.

United States District Court, W.D. Washington, Northern Division.

May 9, 1924

Thos P. Revelle, U.S. Atty., of Seattle, Wash.

MacCormac Snow, of Portland, Or., and Chas. E. Allen, of Seattle, Wash (O. P. M. Brown, of Washington, D.C., of counsel), and Bronson, Robinson & Jones, of Seattle, Wash., for defendant.

CUSHMAN District Judge.

The United States sues upon a written contract made in August 1918, between the Fleet Corporation and the defendant, for the construction by the defendant, at Seattle, of 102 marine boilers. The Fleet Corporation, as a party to the contract is described therein as 'representing the United States of America'; the defendant is designated as 'the contractor.' All rights under this contract and the one hereinafter mentioned have been by the Fleet Corporation assigned to the plaintiff. The complaint alleges the construction by defendant of 27 boilers; that the same were accepted by the Fleet Corporation, as agent of plaintiff; that on January 6, 1920, the Fleet Corporation, as agent of plaintiff, notified the defendant of the cancellation of the contract as to 75 boilers, none of which were under construction; that at the date of the cancellation the defendant was in the possession of certain material purchased by the Fleet Corporation with money supplied by the plaintiff; that the material was to be used in the construction of such boilers; that the same was the property of the plaintiff; that plaintiff through its said agent demanded this material; that the defendant refused to surrender it, claiming to own it; that it was of the value of $417,120.95; that by such refusal the sale by plaintiff's agent of such material was prevented. Plaintiff also sues for $8,910 on an alleged overpayment on the boilers constructed, alleged to have been made through mistake.

Upon a contract between the same parties, similarly designated, made February 20, 1918, for the construction by defendant of 6 marine engines, plaintiff sues to recover $49,761.86 on account of certain material furnished by plaintiff's agent and used by the defendant in the construction of such engines. Upon this contract plaintiff also sues to recover $2,880.78 on account of an alleged overpayment occasioned by mutual mistake in the amount of certain vouchers furnished by defendant covering increased labor cost, for which provision was made under the contract. Defendant has answered, and a number of motions and demurrers to the answer have been submitted.

The motion to strike portions of paragraphs XIII and XVI of the amended answer will be granted, as the denials, evidently intended as denials under the Washington statute, are not 'of sufficient knowledge or information to form a belief' of the averments of the complaint to which they are directed. Section 264, Remington & Ballinger's Annotated Codes and Statutes of Washington.

The first affirmative defense to the first claim asserted amounts to a denial that the agency of the Fleet Corporation was disclosed or asserted for a period of more than three years. The execution of the contract, a copy of which is made a part of the complaint, having been admitted, the demurrer to this as a separate defense is sustained.

The second affirmative defense, which is one asserted against the first and second claims of the complaint, alleges that the contract provided that in case of dispute the matters should be referred to and determined by the Director General 'of the owner,' whose decision should be final. If after the delivery of a unit the contractor (the defendant) deemed itself aggrieved by the decision of the Director General, it might have a review by a board of three naval architects or engineers, to be selected by the parties in the ordinary manner in such cases.

The asserted defense is that the defendant had a right to have these disputes settled by such a board, although there was no Director General. Leaving out of consideration any question as to the right in such a case to specific performance of an agreement to arbitrate, it is clear that for want of a Director General this provision is clearly unenforceable, and the demurrer to the second affirmative defense is sustained.

To the second item of claim set out in the complaint defendant has interposed the affirmative defense that, when the defendant transmitted to the Fleet Corporation the written instrument set out in the complaint as a contract, defendant believed that the price of the furnaces was not clearly indicated, because the price called for was the 'market price,' and no time was fixed in the instrument at which the market price should control. The defendant accompanied the said instrument with a letter, stating that its understanding was that the market price in May 1918, was intended, that with this letter before it the Fleet Corporation executed the instrument, that in May, 1918, the market price for furnaces was $725 each, and that there was no mistake or error in defendant crediting the Fleet Corporation with such amount for each furnace, instead of $835, as claimed by plaintiff.

Plaintiff has moved to require the defendant to elect between this affirmative defense and the denials of the answer, the contention being that they are inconsistent. Plaintiff's contention is that the law of the state of Washington is controlling upon this question. The statute (section 273 Remington & Ballinger's Code) does not expressly prohibit the pleading of inconsistent defenses. It is true that the Supreme Court of the state held, in Seattle National Bank v. George R. Carter et al....