Reporter's Statement of the Case

of 30-caliber cartridges to 8-M/M cartridges, and was reported as $102,839.74. This overhead loss was produced by a change from full production of plaintiff's entire plant in the manufacture of .30-caliber cartridges to the slow increase of its production of 8-M/M cartridges, and partly due also to the insufficient supply of, or delay in getting, bronze bullets. It began the actual manufacture of 8-M/M cartridges about the middle of January, and by the middle of March had manufactured about 500,000. The office force and skilled labor had to be kept intact, whether fully engaged or not. The plaintiff had no record of its overhead losses from the middle of December, 1917, to March, 1918, but had such records from the first of March to August, 1918, by which time it had reached full production. These overhead losses for March, April, May, June, and July amounted to $68,559.77, an average monthly loss of $13,711.99. The losses for two and one-half months from the middle of December, 1917, to March, 1918, were estimated as two and one-half times $13,711.99, equal to $34,279.97, the two sums amounting to $102,839.74.

The direct cost incurred by plaintiff owing to the change of its entire factory, machinery, and equipment from .30caliber cartridges to 8-M/M production, exclusive of repairs and changes in United States Government material received from Kansas City, amounted to $37,517.56, made up of $20.120.14 for machine-shop labor, $838.11 for material, and $16,559.31 for overhead expenses.

This accountant had made another report, dated February 17, 1920, to the St. Louis District Claims Board dealing with a number of other claims by plaintiff in addition to the two items referred to in this finding.

The action of the St. Louis District Claims Board, taken some time after May 25, 1920, was favorable to plaintiff, and both items of the claim, aggregating $140,357.30, were allowed.

When this action was taken by the St. Louis District Claims Board it had before it an incomplete draft of the contract of February 26, 1918. The secretary of the plaintiff company explained this fact by stating that two drafts of the proposed contract had been prepared before the final

Reporter's Statement of the Case

draft was agreed to and executed. These two drafts did not contain all of paragraph 7 of Article III of the executed contract and that at the time the claim was drawn up a stenographer in plaintiff's office was told to make seven copies of the contract to attach to the statement, and by mistake she copied a draft of the contract that did not contain the paragraph in question.

The certified photostatic copy of the contract of February 26, 1918, "Defendant's Exhibit 2 Blose," showing the executed contract as described in Finding VI, is attached to these findings as Appendix A and is made part hereof by reference thereto.

XI. The claim was transmitted to the Ordnance Claims Board at Washington for action thereon, which board having procured a copy of the contract of February 26, 1918, disapproved the St. Louis Claims Board's conclusion and disallowed the claim. The plaintiff under the provision of the act of March 2, 1919, 40 Stat. 1272, filed the said claim with the Secretary of War and the Board of Contract Adjustment, which held hearings at which plaintiff was represented. On August 18, 1920, the appeal section of the War Department Claims Board (successor to the Board of Contract Adjustment) filed findings of fact, an opinion, and a final order rejecting the claim and denying relief. A certified copy of these findings, opinion, and order were introduced in evidence by plaintiff as Exhibit 1 to the testimony of Mr. Donnelly, the secretary of the plaintiff company, and are as they appear in Decisions of the War Department, volume 7, pages 359–366.

On September 8, 1920, the Secretary of War affirmed the decision of the board. The claim was again, on December 28, 1920, presented to the appeal section of the War Department Claims Board and a decision rendered denying relief.

XII. It does not appear who represented the Government in directing or in preparing the contract. There is a stipulation between the parties to the effect that if Lieut. Col. Charles N. Black, Capt. A. F. Hebard, Maj. E. A. Hamilton, and E. A. Shepherd were examined as witnesses they would testify to the same effect as they have expressed in letters, copies of which are in evidence. Col

Reporter's Statement of the Case

onel Black's letter is addressed to the attorney for plaintiff under date of August 16, 1921, acknowledging receipt of the attorney's letter, and he states that as he handled none of the details in connection with the contract mentioned he feared that he could not be of assistance in substantiating the claim. This same officer addressed a letter under date of June 14, 1922, to the president of plaintiff, in which he stated that, while he recalled that there was a contract, he had absolutely no recollection of any of its details and that as to this particular contract all the negotiations were carried on prior to the time he went to Washington, which was not until the 15th of January, 1918, and for this reason he would be less apt to have any detailed knowledge of the matter than had come up later, when he was actually engaged in the department.

Captain Hebard, who was the same officer who accompanied Mr. Olin when he signed the contract, stated in his letter to plaintiff's attorney under date of August 29, 1921, that his recollection was that he did not negotiate this contract in question and that, although he was familiar with its operation and possibly negotiated an agreement or two, so much time had elapsed that he was not in a position to talk on the subject except from the papers which were in Major O'Leary's office. He suggested that some information might be gotten from Colonel Shepherd. Under date of January 16, 1923, Colonel Shepherd wrote to plaintiff's attorney that he had no recollection or knowledge as to how or why the contract price for 8-M/M French Lebel cartridges on order from the Western Cartridge Co. in the fall of 1917 was increased beyond $45 per thousand. In another letter under date of May 15, 1922, addressed to plaintiff's attorney by Major Hamilton, it appears that this officer said that, on account of the large number of contracts with which he was concerned, he had no recollection of this one; that he thought Captain Holcombe had charge of the preparation of contracts for small arms; that he had no files or papers which would throw any light on the matter, and that he could only suggest that if the official files could be obtained and he examine them he could perhaps recognize some of the

Opinion of the Court

initials which might be found on the contract in question and in that way perhaps render some assistance.

The court decided that plaintiff was not entitled to re

cover.

CAMPBELL, Chief Justice, delivered the opinion of the

court:

Recovery is sought in this case under the provisions of the act of March 2, 1919, 40 Stat. 1272, known as the Dent Act, the claim being based upon an oral agreement alleged to have been made between plaintiff and authorized representatives of the Secretary of War. It presents some unusual features, one of which is that reformation of a contract in writing between the plaintiff and the United States is asked, not for the purpose of enforcing any of the provisions of this written instrument as thus reformed, but in order that proof by parole may be made of an alleged oral agreement entered into before the execution of the written contract. The facts establish the written contract dated February 26, 1918, a copy of which is attached to the petition as Exhibit B. A photostat copy of the original contract is made part of the special findings but, for convenience, reference will be made to Exhibit B. In this contract the plaintiff undertook to manufacture and deliver to the Government 80 million cartridges of the 8-millimeter French Lebel type, which, at the stated price of $47.50 per thousand, called for payments to the amount of $3,800,000. The number of cartridges was largely increased by one or more supplemental contracts. The contract and its four supplements were duly performed, the cartridges having been made and delivered and the plaintiff duly paid for them. It is not now claimed that anything further is due upon it.

When the plaintiff undertook to make the 8-M/M cartridges it was actively engaged in the manufacture of .30caliber ball cartridges for the United States under contracts calling for large quantities of this kind. To suspend or curtail the manufacture of the latter and adapt its plant equipment to the making of the 8-M/M cartridges necessitated changes and rearrangement of tools, appliances, and ma

Opinion of the Court

chinery and a consequent expense. It is for this transformation expense that suit is brought. The petition alleges that officers representing the Secretary of War agreed with plaintiff's officers that these transformation expenses would be repaid to it and that it proceeded with the work of transforming its plant and machinery in reliance upon this agreement, the terms of which are stated in the petition as follows:

"The petitioner further states that the officers and agents of the Secretary of War in good faith agreed on behalf of said Secretary of War and the United States to repay to petitioner its reasonable necessary expense directly incurred by it in the transformation and preparation of its said factory and appliances for the production of said 8-M/M cartridges but that payment of such expense to petitioner was never provided for in any written agreement executed in the manner prescribed by law."

The written contract does not provide for the repayment to the plaintiff of "its reasonable necessary expense directly incurred" in the transformation of the plant or machinery, and, on the contrary, has the following provision, in which, for convenience of reference, we italicize six words that plaintiff asks to be stricken out, namely:

"The United States agrees to place at the disposal of the contractor for the purpose of this contract machinery procured from the plant of the Brass and Metals Manufacturing Company, Kansas City, Missouri, under Army Requisition dated December 28, 1917 (R 413.8/1064); and the contractor agrees at its own expense to care for and maintain said machinery in good working order (reasonable wear and tear excepted) and to deliver the same to the United States upon the termination of this contract.

"The contractor agrees to make the necessary changes in the rearrangement of its plant, machinery, and tools to accommodate such of the additional machinery furnished by the United States as is utilized for the purposes of this contract, and to adapt said plant, machinery, and tools, and said additional machinery to the purposes of this contract, and to replace the same at the termination of the contract in condition for the manufacture of caliber .30 ball cartridges without cost to the United States."

When plaintiff's claim under the Dent Act was presented to the Secretary of War, through the Board of Contract