Poole Engineering & Machine Co. v. United States

63 Ct. Cl. 234, 1927 U.S. Ct. Cl. LEXIS 324, 1927 WL 2853
CourtUnited States Court of Claims
DecidedMarch 7, 1927
DocketNo. A-331
StatusPublished
Cited by1 cases

This text of 63 Ct. Cl. 234 (Poole Engineering & Machine 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
Poole Engineering & Machine Co. v. United States, 63 Ct. Cl. 234, 1927 U.S. Ct. Cl. LEXIS 324, 1927 WL 2853 (cc 1927).

Opinion

Moss, Judge,

delivered the opinion of the court:

On January 3, 1911, the plaintiff, Poole Engineering and Machine Company, entered into a contract with the United States Government for the manufacture for the use of the Ordnance Department of nine 12-inch barbette gun carriages in accordance with certain plans and specifications, at the price of $49,000 each to be delivered, the first carriage on or before January 3, 1918, and all of the nine carriages on or before July 3, 1918. Said contract provided that the steel castings necessary for the construction of the carriages would be furnished by the Ordnance Department beginning on or before April 3,1917, and to be completed on or before October 3,1917.

The Government failed to furnish the castings for the first carriage by April 3,1917, and also failed to furnish the castings required for all the carriages by October 3, 1917. Castings for the first carriage were not delivered until November 6, 1917, and the last of the castings for the whole number were not delivered until June 17, 1919, more than a year after the entire work was to have been completed.

It is alleged that the rates of wages prevailing during 1917 and the first half of 1918 were substantially lower than they were in the last half of 1918 and the first half of 1919, for the same character of labor. Plaintiff avers that but for .the delay by the Ordnance Department in furnishing the steel castings it-could and would have completed the contract within the specified time* and under the lower rates of wages, and that by reason of said delay ,it has been damaged-in the [241]*241sum of $150,000. It is also alleged by plaintiff that it was required to maintain its organization for the performance of its contract, and that the overhead expenses chargeable to this work after July 3, 1918, together with the proper share of administrative expenses, likewise chargeable to defendant’s delay, amounted to the sum of $15,000. This suit is for the recovery of the sum of these two items, $225,000.

On May 6, 1919, which was a few weeks before the completion of the work under the contract, plaintiff wrote a letter to the Chief of the Ordnance Department, calling attention to delays occasioned by the failure of the Government in furnishing the castings and also on account of changes in specifications provided for in the contract. In this letter particular reference is made to the matter of liquidated damages which might be claimed by the Government under the terms of the contract. It is further stated, “We simply want to go on record at this time that we intend to ask the Government to reimburse us up to our fair cost, otherwise we feel that we would be done a great injustice. We have all the facts and data in connection with this contract, and would be pleased to have you advise us how to proceed.”

It is interesting to note that, so far as this record discloses, the question of damages was never again mentioned by plaintiff. On receipt of the letter the question of a waiver of liquidated damages was taken up for consideration, and after an investigation by representatives of the Government it was determined that the Ordnance Department had been responsible for plaintiff’s delay, and the amount which had been retained from time to time as liquidated damages was paid to plaintiff. The final payment of the contract price, on the delivery of the last gun carriage, was made on July 10, 1919. Various other items constituting a claim for the extra cost of changes authorized by the contract and involving a substantial sum were paid at different periods, each being the subject of more or less correspondence, but at no time during the discussion and settlement of these various [242]*242items did plaintiff suggest that he would claim damages against the Government. The purpose of the letters from plaintiff to the Government prior to May 6, 1919, according to the testimony of Clay C. Bartlett, purchasing agent of plaintiff, on cross-examination, was to expedite delivery in order that the contract might be completed within the specified time, thereby relieving plaintiff of liability for liquidated damages. Obviously, there was no thought during the progress of the work of any claim for damages.

The vice president of the company, Dudley Shoemaker, testified on cross-examination that the question of damages was first considered “ when we closed our books and the comptroller of the company showed us how much our cost exceeded our estimates.” Certainly the books were not closed on this account until long after the letter of May 6, 1919. Plaintiff’s damages, if any, grew out of the contract. It was a part of plaintiff’s claim on account of work performed under the contract. Plaintiff should have definitely asserted its claim at or before the final payment. The letter of May 6, 1919, is not the assertion of a claim for damages. It is nothing more nor less than the declaration of an intention to request a reimbursement of its loss on account of increased cost of labor and overhead. Plaintiff’s conduct thereafter was such as to justify the assumption that even if plaintiff in good faith intended on May 6, 1919, to claim damages that intention had been abandoned. In the light of the statement of the vice president that the first thought of a claim for damages was when the books were closed, there can be little doubt as to the correctness of this assumption.

Plaintiff’s course throughout the whole transaction, as will presently be more fully shown, is clearly indicative of a feeling of uncertainty as to whether or not it had a valid and enforceable cause of action against the Government.

The evidence as to the amount of damages herein is unsatisfactory. Witnesses endeavored to give an estimate as to the proportion of the increased cost of labor and cost of overhead expenses properly chargeable to plaintiff’s contract. During this same period plaintiff had on hand several other [243]*243contracts with the Government, one of which involved the construction of two additional gun carriages of precisely the same type and class as those constructed under the first contract. It had ten times more work than it could handle, according to the testimony of one of plaintiff’s witnesses. The difficulty of distributing increased cost of operation to any particular contract is at once apparent. As illustrative of the indefinite and uncertain character of the evidence upon which plaintiff relies herein, it might be mentioned that plaintiff’s chief witness on this point, Allen O. Stehl, an accountant, estimated the amount chargeable to this contract on account of excess labor at $24,501.81; for excess cost of “shop overhead,” $68,039.41; and excess cost of “ general overhead,” $24,799.51, making a total of $117,340.79. This witness was introduced later and testified that in his first estimate he had included the excess cost on the two additional carriages mentioned above, and he therefore desired to reduce his total estimate to $95,984.77. This was accomplished by deducting from $117,340.79 two-elevenths of that sum. The witness stated that there was no way to determine the exact amount. Mr. Shoemaker, in response to a question on cross-examination concerning the proportion of “overhead ” cost chargeable to plaintiff’s contract, stated “ It is impossible for me to answer that question; it is impossible for anybody to answer it.

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Cite This Page — Counsel Stack

Bluebook (online)
63 Ct. Cl. 234, 1927 U.S. Ct. Cl. LEXIS 324, 1927 WL 2853, Counsel Stack Legal Research, https://law.counselstack.com/opinion/poole-engineering-machine-co-v-united-states-cc-1927.