Deloro Smelting & Refining Co. v. United States

161 Ct. Cl. 489
CourtUnited States Court of Claims
DecidedMay 10, 1963
DocketNo. 92-59
StatusPublished
Cited by15 cases

This text of 161 Ct. Cl. 489 (Deloro Smelting & Refining Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Deloro Smelting & Refining Co. v. United States, 161 Ct. Cl. 489 (cc 1963).

Opinion

Davis, Judge,

delivered the opinion of the court:

This is a dispute over the price term of an unusual supply contract. In 1950, as part of the federal stockpile program, the United States desired to acquire and store cobalt metal. Plaintiff is a Canadian smelting company which has been, off and on for many years, a producer of this metal from the ore or concentrate. A French Moroccan corporation (Societe Miniere de Bou-Azzer & du Graara — called SMAG for short) had substantial deposits of cobalt ores in French Morocco. After considerable negotiation between the French and United States Governments, SMAG and plaintiff (Deloro), agreement was reached upon a project — later formalized in a contract signed in October 1950 by the plaintiff, defendant, and SMAG- — under which SMAG ores and (concentrates in Morocco were to be shipped to Deloro’s smelter in Ontario and refined there, with the resulting metal to be delivered to the defendant for stockpiling in the United States. SMAG was to forward the raw materials according to a specified schedule, with final delivery to Deloro to be on or before November 1,1952. Plaintiff, in turn, was to make scheduled deliveries to the defendant, with the full quantity of metal to be delivered not later than June 30,1953.

[492]*492The price the Government was to pay for the cobalt metal was composed of two elements: (a) a payment to SMA.G of French francs in an amount equivalent to one-half of the dollar price of the cobalt concentrates; and (b) a payment to plaintiff of a dollar sum for each pound of cobalt metal1 An escalation clause provided that, after a certain date, the latter payment was to be a fixed percentage of the domestic United States market price quotation for cobalt, published in the Engineering and. Mining Journal “as of the date of delivery of the cobalt metal” to the defendant. There was also to be an adjustment in the price by the use of the foreign exchange rate of Canadian for United States dollars current “at the date of delivery.” Over the life of the agreement, the cobalt market quotation increased in four steps, from $1.80, to $2.10, to $2.40, to $2.60; the Canadian dollar increased from below parity to above parity.

SMA.G made timely delivery of the cobalt concentrates, but plaintiff, for various reasons attributable to its own difficulties and its managerial election to favor its own economic interests at the expense of this contract with the Government (without, however, any bad faith or speculative purpose), failed to comply with its delivery schedule set forth in the contract, even as extended by the provisions for taking-account of excusable delay. Defendant knew, of course, of these failures, but it did not terminate further performance of the contract (as it had a right to do) because it felt that Deloro was the only producer able to supply the necessary stockpile metal without interfering with current supplies to American industry, and without an excessively costly program of reshipment of the concentrates back to the Eastern Hemisphere.2 In addition, the defendant felt that it had a commitment to the French Government to have the cobalt metal enter the United States stockpile by June 30,1953 (the final contract delivery date), or as soon thereafter as possible.

[493]*493For the shipments prior to February 1954, defendant’s accomiting and financial personnel paid plaintiff at prices computed by using the cobalt market price quotation and the exchange rate on the daite delivery was actually made, not the date on which delivery was due. In February 1954 defendant began to insist that the computations had to be made as of the date of the scheduled delivery, rather than the delayed dates of actual delivery. Since prices so calculated were, in the main, higher on the dates of actual delivery, defendant deducted sums from current invoices to make up for the asserted over-payments in the past. In April 1954 Deloro (which had contested the defendant’s theory) refused to make any further deliveries because of these disallowances, and informed defendant that it would not resume performance until payment of the $100,628.32 it believed owing for past deliveries, as well as a binding agreement by defendant to pay for future shipments on the basis of the actual delivery date.

When plaintiff thus ceased performance under this contract, it had delivered 1,303,925 pounds of cobalt metal, and 194,088 pounds were left to be delivered. Some 2,151,660 pounds of SMAG cobalt concentrates were in plaintiff’s hands awaiting treatment. Further negotiations ensued, but there was no settlement of the dispute. In March 1956 the Comptroller General, following his own earlier decisions, ruled that Deloro had no right to increase the cost of Government supplies by its own failure or refusal to deliver by the promised time. Both parties stood their ground. Late in 1956, Deloro took over the remaining cobalt for its own account. The Government brought suit in a Canadian court and plaintiff has sued here.

The commanding issue for us, as it has been for the parties since 1954, is the meaning to be assigned to the phrase “as of [or “at”] the date of delivery of the cobalt metal” in the price escalation and exchange-rate adjustment clauses of the contract. Is this the date of actual delivery, even though delivery was delayed by the plaintiff without justifiable excuse under the contract ? Or is it the date on which delivery was [494]*494due under the contract delivery schedule? Around this question the whole dispute revolves.3

This is another case (see W. H. Edwards Engineering Corp. v. United States, ante, p. 322) in which the evidence of the parties’ sub j ective intention is of little assistance. The critical issue was not broached until 1954 and there is no adequate showing of what the parties consciously thought about the point, if it was in mind at all, prior to that time. In this connection, we attribute little significance to the course of payments by defendant (in 1951, 1952, and 1953) using the date of actual delivery for the cobalt market price quotation or for the dollar rate of exchange.4 These payments were made, more or less routinely, by fiscal and accounting employees who had no procedures for determining whether the shipments were late and did not concern themselves with that problem. The defendant’s contracting officers were wholly unaware of the basis of the payments, of plaintiff’s filing of amended invoices (see footnote 4), or of the existence of any issue between the parties as to the proper method of calculation. If the Government officials whose actions are cited as revealing the defendant’s own construction of a contract are not significantly tied to the administration of contract performance, their conduct is meaningless as an aid to contract interpretation. When the canon of construction speaks of giving weight to the “parties’ ” own interpretation, it refers, so far as the Government is concerned, to a responsible officer assigned the function of overseeing the essentials of contract performance — not to any federal employee or officer whose work happens to be connected with the contract. Agency fiscal or finance offices are not ordinarily a significant part of the process of negotiating and performing contracts. Cf. United States v. Holpuch Co., 328 U.S. 234, 240-41 [495]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Salvatore Giove v. Department of Transportation
230 F.3d 1333 (Federal Circuit, 2000)
Wright Runstad Properties Ltd. Partnership v. United States
42 Cont. Cas. Fed. 77,294 (Federal Claims, 1998)
Dano Resource Recovery, Inc. v. District of Columbia
620 A.2d 1346 (District of Columbia Court of Appeals, 1993)
Iconco v. United States
32 Cont. Cas. Fed. 72,720 (Court of Claims, 1984)
S. A. Healy Co. v. United States
576 F.2d 299 (Court of Claims, 1978)
C. H. Leavell & Co. v. United States
530 F.2d 878 (Court of Claims, 1976)
Gresham & Co. v. United States
470 F.2d 542 (Court of Claims, 1972)
H. N. Bailey & Associates v. The United States
449 F.2d 387 (Court of Claims, 1971)
Hegeman-Harris & Company, Inc. v. The United States
440 F.2d 1009 (Court of Claims, 1971)
N. Fiorito Company, Inc. v. The United States
416 F.2d 1284 (Court of Claims, 1969)
United States Steel Corporation v. The United States
367 F.2d 399 (Court of Claims, 1966)
Tulelake Irrigation District v. The United States
342 F.2d 447 (Court of Claims, 1965)

Cite This Page — Counsel Stack

Bluebook (online)
161 Ct. Cl. 489, Counsel Stack Legal Research, https://law.counselstack.com/opinion/deloro-smelting-refining-co-v-united-states-cc-1963.