Asheville Mica Co. v. Commodity Credit Corp.

239 F. Supp. 383, 1965 U.S. Dist. LEXIS 7486
CourtDistrict Court, S.D. New York
DecidedMarch 4, 1965
StatusPublished
Cited by7 cases

This text of 239 F. Supp. 383 (Asheville Mica Co. v. Commodity Credit Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Asheville Mica Co. v. Commodity Credit Corp., 239 F. Supp. 383, 1965 U.S. Dist. LEXIS 7486 (S.D.N.Y. 1965).

Opinion

RYAN, Chief Judge.

These suits were filed for a declaratory judgment (Federal Declaratory Judgment Act, Title 28 U.S.C.A. §§ 2201, 2202) and for damages and interest for alleged breach of contract. They involve interpretation of the price revision clause in Commodities Exchange contracts entered into severally between defendant and plaintiffs.

Plaintiffs seek as damages the difference between the prices allowed, as exchange values by defendant to the respective plaintiffs and the prices which should have been allowed, as exchange values, pursuant to the price revision clause, as it allegedly should have been interpreted. Defendant asserts counterclaims against two plaintiffs, Asheville and Schwab, for damages arising from their failure to deliver specified mica at an average exchange value of $4.00 per pound.

The suits come to us following remand by the Court of Appeals and after prior trial by one of our learned senior brothers. The three consolidated suits were presented, briefed and argued together.

The six plaintiffs are among the largest importers of mica into this country. For many years, before 1956, all held contracts with the General Services Administration (GSA) for the sale of mica. During the summer of 1956 plaintiffs entered into contracts with the defendant, Commodity Credit Corporation (CCC) for delivery over a two year period ending June 30, 1958 (the time of delivery was later extended to December 30, 1958) of block and film mica and mica splittings of Indian origin in exchange for surplus agricultural commodities. Except for variations in the quantity of mica to be delivered, and the value of the agricultural commodities to be -received, the contracts were identical in all material respects.

The principal controversy between the parties concerns the “exchange value” term of the contracts. The prices for the various grades and qualities of material were specified in section 2.m, of the bar[385]*385ter contracts, and CCC has paid the contractors in accordance with that schedule. Plaintiffs claim, however, that they are entitled to higher prices in accordance with section 2.b.(l) of the barter contracts.1

On December 2, 1957, one of the plaintiffs, Sigbert Loeb, entered into a new purchase contract with GSA. This contract reflected higher prices for most of the items than were specified in the contracts with the CCC. On January 16, 1958, another plaintiff, United Mineral & Chemical Corporation, also entered into a new purchase contract with GSA, which included these higher prices. Finally, during May 1958, three of the other four plaintiffs (all except Man-chard Trading Corporation) entered into new purchase contracts with the GSA, which contained basically the same price terms as the Loeb and United contracts.

Plaintiffs contend that pursuant to section 2.b.(l) they are entitled to the same increases in their contracts with CCC as were granted by GSA. Loeb and United allege that they should receive their increase as of the date of their new contracts with GSA. The four other plaintiffs contend that their increase is effective as of the date of Loeb’s new contract with GSA.

The Court of Appeals held that Loeb and United were entitled to an increase in prices from the CCC as of the respective dates of their new contracts with GSA. It stated that it was the intent of the parties to include new GSA purchase contracts within the scope of section 2.b.(l) in order to determine the functioning of the escalator clause. Therefore, it follows that the three other plaintiffs, who made new GSA contracts in May 1958, are entitled to receive price increases from CCC at least from the date of their new contracts. The Court of Appeals left to our determination, however, the issue whether the increase due these plaintiffs should be measured from December 2, 1957, the date of Loeb’s new contract with GSA. (If we find that December 2, 1957, should be used as a measuring date, Manchard would also be entitled to an increase.)

There are also three other issues which have been left for our determination on this remand.2 The first of these other issues is whether in determining the exchange value for each plaintiff pursuant to clause 2.b.(l), such determination should be made only in relation to types, colors, grades, and qualities of mica of Indian origin for which that plaintiff had prices established under its GSA purchase contracts in effect at the time of execution of the Mica Barter contracts.

The second of these remaining issues is — If the Court decides that plaintiffs [386]*386Schwab, Munsell and United are entitled to price adjustments from the date of their respective new GSA contracts, should these adjustments give effect to the special price provisions which were included in their new GSA contracts?

The third and last of these issues is— Are the plaintiffs entitled to interest on any recovery?

Plaintiffs Asheville and Schwab argue that the amount recoverable by defendant on its counterclaim has not been fixed by the Court of Appeals. We hold that the Court of Appeals fixed the amounts which might be recovered on the counterclaims as $2,451.34 against Ashe-ville and $18,254.14 against Schwab, but withheld entry of judgment awaiting final determination of their claims against defendant.

I. Should the exchange values of block and film mica of Indian origin accepted from each plaintiff on and after December 2, 1957, the date of Loeb’s new GSA purchase contract, have been determined on the basis of the prices set forth in Loeb’s new GSA purchase contract?

We find that plaintiffs are entitled to an increase from December 2, 1957, the date of Loeb’s new GSA contract. The depositions of the men who negotiated the barter contracts show that the parties intended to insure price uniformity between GSA and CCC for all sales of block and film mica of Indian origin to the two agencies.

The Court of Appeals, in its opinion (supra) considered the testimony of the contracting parties and concluded:

“Mr. McClain, Mr. Crim of the GSA, and the various officials of the plaintiffs all testified without contradiction that the purpose of the ‘escalator’ clause was to assure price parity among the various contractors, in view of the facts that the mica market was extremely sensitive, and that even a slight difference in price might result in the loss of supplies to contractors who could not meet it.” 2 Cir., 335 F.2d 768, 771.
“It seems clear that the purpose of the ‘escalator’ clause was to preserve price parity between the mica acquired by GSA and that by CCC.” 335 F.2d 768, 771.
“The CCC’s evidence falls far short of demonstrating that price uniformity between the GSA and CCC contracts was not an expectation of the parties * * 335 F.2d 768, 772.

These statements of the Court of Appeals, however, were only meant to substantiate its holding that the “escalator clause” in the CCC contracts encompassed new GSA contracts as well as existing GSA contracts. The Court of Appeals left for further trial the issue whether, by virtue of the “escalator clause”, each barter contractor is entitled to receive from CCC any price change for Indian mica provided to be paid in any contract made between GSA and any contractor. It wrote:

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239 F. Supp. 383, 1965 U.S. Dist. LEXIS 7486, Counsel Stack Legal Research, https://law.counselstack.com/opinion/asheville-mica-co-v-commodity-credit-corp-nysd-1965.