Ellicott Machine Corp. v. United States

72 F. Supp. 266, 109 Ct. Cl. 62, 1947 U.S. Ct. Cl. LEXIS 46
CourtUnited States Court of Claims
DecidedJuly 7, 1947
DocketNo. 40285
StatusPublished
Cited by1 cases

This text of 72 F. Supp. 266 (Ellicott Machine Corp. 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
Ellicott Machine Corp. v. United States, 72 F. Supp. 266, 109 Ct. Cl. 62, 1947 U.S. Ct. Cl. LEXIS 46 (cc 1947).

Opinion

Jones, Judge,

delivered the opinion of the court:

The plaintiff seeks a refund of a portion of the transportation and insurance charges on articles sold to defendant. The case involves the interpretation of a contract as modified by a change order.

On January 14, 1942, the plaintiff entered into a contract with the defendant to supply certain dredge parts to be delivered free of all charges on the dock at Cristobal, Canal Zone. In computing its bid, plaintiff calculated its shipping costs on the basis of transportation from its plant at Baltimore, Maryland, to New York by rail and then to Cris-tobal by steamer. Before any parts could be shipped the Port of New York was closed to shipments to the Panama Canal and it became necessary to use other routes.

On July 7, 1942 a change order was issued by defendant and accepted by the plaintiff by which the contract was modified to provide for the delivery of the dredge parts at the manufacturer’s plant in Baltimore instead of Cristobal, the change order further providing that the shipping costs to Cristobal, Canal Zone, which the plaintiff would otherwise have had to pay, be deducted from the payments made under the contract.

[78]*78The present controversy relates to the amount of the deductions for shipping costs made by the defendant under the contract as modified by the change order. Plaintiff urges that these were excessive, and asks for reimbursement. The defendant’s position is that the deductions were correct and plaintiff cannot recover.

There is no dispute as to the facts in the present situation, except as to the materiality of some of them. We have included in our findings those facts which we think are sufficient in the present instance.

A chronological review of the circumstances relating to the present issue begins with the issuance of an invitation for bids for furnishing dredge parts to be delivered free of all charges at Cristobal, Canal Zone. Such invitation was issued on December 30, 1941. At that time the United States was at war with both Germany and Japan, and German submarines were at large in the Atlantic, a background of which we take judicial notice. Pursuant to this invitation plaintiff submitted a bid for furnishing the articles delivered at the Canal Zone for the sum of $284,436.

For twenty years plaintiff had customarily made shipments to Cristobal from its plant in Baltimore to New York by rail and thence by the Panama Railroad Steamship Line to Cristobal. At the time plaintiff submitted its bid the Panama Railroad Steamship Line was making regular shipments from New York to Cristobal. By such route the freight rate was $1.49 per cwt. and war-risk insurance was $0.30 per cwt. and plaintiff calculated its shipping costs on this basis.

It is plaintiff’s position that the invitation for bids, which became a part of the contract, provided that shipments through New York should be routed via the Panama Railroad Steamship Line and that the parties contemplated that shipments should be made by the customary route via New York, and that plaintiff could not be compelled to ship from another port without an adjustment of the contract price for the increased cost of transportation.

We find nothing to support such contention, and we quote in part from the invitation for bids, as follows:

Quotations should include the above property packed and secured for ocean shipment and delivered BY [79]*79STEAMER OF AMERICAN REGISTRY, free of all charges, on dock at either Cristobal (Atlantic port) or Balboa (Pacific port), Canal Zone, Isthmus of Panama. Shipments through New York shall be routed via Panama Railroad Steamship Line.

While this clearly specifies that shipments through New York “shall be routed by the Panama Railroad Steamship Line,” this is but a designation of the ocean carrier to be used in case of shipments through New York. There is nothing that restricts shipments to a route via New York.

That the shipping route upon which bids were to be predicated was not limited to New York but was entirely optional to the bidder is also evident from the “Special Conditions” forming a part of the invitation. These Special Conditions included a reference to shipment through the Pacific Coast ports, as follows:

In view of shipping conditions now existing on the Pacific Coast, the requirement that shipment be made by steamer of American Registry is hereby waived if shipment is made through Pacific Coast ports.

Plaintiff’s bid was accepted on January 14, 1942, and a formal contract bearing that date was sent to plaintiff for its signature.

It appears that plaintiff was fully aware of the precarious delivery obligations it was about to assume, for instead of signing the contract, plaintiff returned it to the defendant unsigned, accompanied by a letter. This letter, dated January 20, 1942, and fully set forth in our Finding 6, requested that the contract be modified to provide that in the event of any increases beyond the freight rate of $1.49 and insurance rate of $0.30 such increases would be borne by The Panama Canal. In this connection it is to be noted that plaintiff was already protected against increases in the ocean freight rates by the Special Conditions as quoted in our Finding 3.

The General Purchasing Office of The Panama Canal by a letter of January 2, 1942, declined plaintiff’s request to modify the contract and returned the same to plaintiff. Promptly thereafter plaintiff signed the contract as originally presented, and returned it to the defendant. As we [80]*80see it, it then became plaintiff’s responsibility under the contract to make delivery at the Canal Zone through any available transportation route.

In April of 1942 and before the first shipment of parts was made, the Port of New York was closed to shipments to The Panama Canal because of the submarine menace. On April 22, 1942, plaintiff initiated correspondence with The Panama Canal, this being set forth in our Finding 9. Plaintiff reviewed the difficulties surrounding deliveries and suggested a modification of the existing contracts which it had with the defendant so as to provide for acceptance of parts at Baltimore instead of Cristobal, with appropriate adjustments for the shipping expenses. An alternative suggested by plaintiff was that of providing for shipments via New Orleans, plaintiff’s letter stating that such a modification would likewise call for adjustments in the price owing to differences in cost of transportation.

These communications were replied to by the contracting officer on May 6, 1942. In this letter plaintiff was advised that shipping space was obtainable on vessels sailing from New Orleans and that circumstances did not appear to require a modification of the contract.

On May 7,1942, plaintiff forwarded a shipment of dredge parts by rail from Baltimore to New Orleans, to be transported by ocean carrier from that port to The Panama Canal. By the time this shipment reached the docks at New Orleans, however, ocean passage was not available and thereafter the Port of New Orleans was sporadically closed and open, depending upon the activity of enemy submarines in the Gulf of Mexico. This shipment remained at New Orleans until subsequent to the change order. It was then released to the defendant who transported it at some later date to The Panama Canal.

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Bluebook (online)
72 F. Supp. 266, 109 Ct. Cl. 62, 1947 U.S. Ct. Cl. LEXIS 46, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ellicott-machine-corp-v-united-states-cc-1947.