Imperial Agriculture Corp. v. United States

147 Ct. Cl. 532, 1959 U.S. Ct. Cl. LEXIS 132, 1959 WL 7607
CourtUnited States Court of Claims
DecidedDecember 2, 1959
DocketCong. No. 8-56
StatusPublished
Cited by1 cases

This text of 147 Ct. Cl. 532 (Imperial Agriculture 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
Imperial Agriculture Corp. v. United States, 147 Ct. Cl. 532, 1959 U.S. Ct. Cl. LEXIS 132, 1959 WL 7607 (cc 1959).

Opinion

Littleton, Judge (Ret.),

delivered the opinion of the court:

This case is before the court pursuant to Senate Eesolution No. 252, of May 9, 1956, which provides that the court report to the Senate on the legal or equitable merits of the plaintiff’s claim to recover for losses incurred by it in a transaction with the United States.

The plaintiff’s claim is, in substance, that the United States made a contract with the plaintiff under which the plaintiff was to grow, from seed purchased from the Government, a jute-like crop named kenaf, and the Government was to purchase from the plaintiff, at a stated price per pound, the seed produced from the crop; that, because of a plant disease which infected the crop, the yield of seed was so small that plaintiff suffered a heavy loss in the transaction; that the Government knew or had reason to know, at the time it made [534]*534its contract with the plaintiff, that kenaf was susceptible to the disease and did not disclose that information to plaintiff, and thereby induced plaintiff to enter into the contract, which resulted in the loss.

We assume that if the United States, in order to obtain a quantity of seed which it desired for the production on American soil of a needed crop of a kind not hitherto grown in this country, made a contract for the growing of such a seed crop, and did not disclose to the other party pertinent information, which it possessed, to the effect that the growing of such a crop was subject to the perils of a plant disease which might well destroy the crop, and if, in fact, the disease did infect the crop and cause the other party to the contract to suffer loss, the United States would be, at least morally, and on the basis of fair dealing, obligated to compensate the other contracting party for its loss.

The instant case does not, however, present the situation which we have assumed. The contract between the plaintiff and defendant was made on July 6,1951. It is important to determine what the United States knew, or had reason to know, at that time, of the disease which, later in 1951, damaged plaintiff’s crop.

In August of 1950, Harold D. Lynn, a research specialist in the United States Department of Agriculture, had grown an experimental crop of kenaf in Cuba. He was using strains from 36 different countries in an attempt to learn which was the most desirable strain. His crop was a good one. An abnormality, in the form of a discoloration of leaves, appeared, but only in less than one percent of the crop. In December of 1950, Lynn planted another crop of kenaf in Cuba, and no signs of the previous abnormality affected this crop. Lynn was not a plant pathologist, an expert in plant diseases.

As stated above, kenaf was a substitute for hemp or jute. Because of the hostilities in Korea, the United States did not want to continue to be dependent upon India and Pakistan for jute. To grow the substitute, kenaf, in this country, a large supply of kenaf seed had to be acquired. A great deal of seed was produced in Cuba, but competition for the purchase of it by concerns from all over the world depleted the [535]*535supply and increased the price inordinately. The Government desired to have seed produced by growers under contract to sell their seed to the Government at a price agreed upon in advance. The proposed project was to be in charge of Commodity Credit Corporation, (CCC), an agency of the United States.

Plaintiff, on March 28, 1951, before the Government had announced or even developed its proposed program, sent a letter to CCC stating that it was producing hard fibers elsewhere in the world and had available technicians, and knowledge of the production of these fibers; that if CCC was considering the production of kenaf under contract, plaintiff would be interested in discussing the subject. The Government’s reply to this letter said that no definite decision as to whether there would be a Government-sponsored program for the production of kenaf had been reached. The writer of the reply stated that he would be glad to discuss kenaf production with representatives of the plaintiff. On April 10 by telephone and by letter of April 11, plaintiff expressed its desire to be considered if there should be a program for the production of kenaf.

Sometime before May 1,1951 identical telegrams were sent to plaintiff and seven others, advising that a meeting would be held May 1 at the Everglades Experiment Station in Florida, to discuss domestic kenaf production. The telegrams were sent by E. D. Bell of the United States Department of Agriculture. The meeting took place. It was presided over by a Mr. Blank, manager of the Palm Beach Development Company, a Chamber of Commerce type organization. Some 35 people were at the meeting. Bell explained the reason for the Government’s need of kenaf seed, and informed the group that the Government wanted to ascertain how much of such seed could be produced in Florida in 1951 if the growers would get a guaranteed price of from 60 to 90 cents, probably about 15 cents, per pound. Inquiry was made as to whether the Government would finance the production and Bell stated that it would not. A representative of the only grower in attendance which had produced kenaf in Florida, one crop duringthe 1949-50 growing season, at Vero Beach, spoke concerning expected yields. Plaintiff’s [536]*536representative at the meeting also spoke and stated that his company produced many agricultural products such as tobacco, rubber, palm oil and ramie and thought it worthwhile to be represented at a meeting where such an important new crop as kenaf was being discussed.

On May 25, 1951, plaintiff wrote the Government that it planned to grow at least 500 acres of kenaf for seed in Florida subject only to its ability to obtain suitable land, which it would promptly attempt to obtain. It requested information as to when a contract for seed production would be available. July 2, plaintiff advised the CCC that it had obtained 450 acres of land on which it would grow kenaf seed. June 25 the CCC issued, and July 27 published in the Federal Register its notice on the kenaf program for the 1951 crop. July 6,1951 plaintiff and CCC entered into a contract by the terms of which CCC agreed to sell 9000 pounds of kenaf seed at 98.5 cents per pound to plaintiff, and plaintiff agreed to plant the seed on approximately 450 acres of land in Florida. CCC agreed to purchase the seed produced from plaintiff’s planting, if it was of a specified quality, up to a maximum of 135,000 pounds, and CCC was to have an option to purchase any excess over that amount. The price to be paid by CCC was to be 75 cents per pound, with a slight discount for seed slightly varying from the stipulated quality.

Plaintiff planted 9126 pounds of seed obtained by the CCC in Cuba, on five different tracts totaling 425 acres in Florida. The planting began on July 21.

October 23 plaintiff inquired whether the Government intended to exercise its option to purchase that part of the plaintiff’s crop of seed which would exceed 135,000 pounds. November 20 plaintiff was advised that the Government would exercise the option. After an excellent early growth, almost immediately after the first bloom appeared on the crop on one of plaintiff’s tracts, the county agricultural agent observed an unidentified disease on the crop in two widely separated spots in the field. By November 15 the effect of the disease on the crop was so serious that plaintiff’s local manager requested plaintiff’s research director to come to Florida.

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

Related

Paul v. United States
20 Cl. Ct. 236 (Court of Claims, 1990)

Cite This Page — Counsel Stack

Bluebook (online)
147 Ct. Cl. 532, 1959 U.S. Ct. Cl. LEXIS 132, 1959 WL 7607, Counsel Stack Legal Research, https://law.counselstack.com/opinion/imperial-agriculture-corp-v-united-states-cc-1959.