Opinion of the Court poses a counterclaim for $88.83 alleged to be due under two contracts executed by the parties in 1926, wherein the defendant was to be allowed a cash discount of one and five per centum for prompt payment of sums due the plaintiff thereunder. The amounts and facts with respect to the above are in nowise controverted by the parties. Plaintiff's case turns upon the issue as to whether under the contract involved the furnishing of steel by the defendant constituted a sale or bailment, plaintiff contending that the transaction was a sale and not a bailment. The fundamental legal question involved has long since been established. In the case of Powder Company v. Burkhardt, 97 U.S. 110, 116, the Supreme Court said: "The plaintiff in error contends that the present is the case of a bailment and not a sale or a loan of the goods and money to Dittmar. It is contended that the question of bailment or not is determined by the fact whether the identical article delivered to the manufacturer is to be returned to the party making the advance. Thus, where logs are delivered to be sawed into boards, or leather to be made into shoes, rags into paper, olives into oil, grapes into wine, wheat into flour, if the product of the identical articles delivered is to be returned to the original owner in a new form, it is said to be a bailment, and the title never vests in the manufacturer. If, on the other hand, the manufacturer is not bound to return the same wheat or flour or paper, but may deliver any other of equal value, it is said to be a sale or a loan, and the title to the thing delivered vests in the manufacturer. We understand this to be a correct exposition of the law. Pierce v. Schenck, 3 Hill (N.Y.), 28; Norton v. Woodruff, 2 N.Y. 153; Mallory v. Willis, 4 id. 76; Foster v. Pettibone, 7 id. 433." Other cases are cited in briefs of counsel but they disclose no deviation from this established rule. The perplexing problem is the application of the facts in unusual and border-line cases to the law. The deciding factor deducible from the cases is, we think, succinctly stated in the above case, "if the product of the identical articles delivered is to be returned to the original owner in a new form, it is said to be a bailment." Opinion of the Court The second paragraph of article III of the contract reads as follows: "The United States agrees to furnish f.o.b. contractor's plant without cost to the contractor the steel necessary for the manufacture of the articles, whenever the contractor shall call for same. It is agreed that material furnished by the United States shall be in accordance with the requirements under the specifications." Under this stipulation it is manifest, it seems to us, that the contractor was obligated to return the identical article in a new form. There is nothing in the record antagonistic to this conclusion, no proof that the contractor was to do more than fabricate the furnished steel into booster casings and return the same to the defendant. Emphasis is laid upon the meaning of "manufacture ", "furnish", "advance ", etc. However important resort to this source of information may be in certain cases, we think the issue here is to be determined by what all the provisions of the contract indicate to be the intention of the parties, and what the provisions of the same really accomplished in the way of mutual obligations. The plaintiff was to receive a consideration of $0.0455 for each casing delivered. This is the one and only provision as to compensation, and it is of course apparent that it was predicated upon the fact that the raw material from which the casings were to be made was to be furnished by the Government, an expensive and costly article, at the time difficult to obtain, and a material which the record clearly shows was subject to large wastage in the way of cuttings and trimmings possessing a much reduced value when thus accumulated. If the contract terms conveyed title of the furnished steel to the plaintiff the stated consideration it was to receive under the contract is increased, and 1,560 pounds of steel at no time used by the plaintiff in its manufacturing process becomes its property substantially as a gift. Provisions of the contract concerning delays in delivery, default in performance, with the right of the defendant to recoup losses occasioned by the happening of the stated events, do not, we think, alter or change the relationship of Syllabus the parties with respect to the steel to be furnished by the defendant. Provisions of this character in Government contracts are usual, and their purpose obvious; they, like cancellation clauses, operate when the event occurs, and have reference to defaults and the exercise of granted privileges. Surely it may not be said that a failure to deliver the casings on time, or an absolute default in performance of the contract, precluded the defendant from asserting title to an article to be converted into casings which had not been so converted by the contractor but which had been delivered to it to so convert. The defendant agreed to furnish the raw material in accord with the specifications of the contract calling for its manufacture into booster charge casings, a new form of article involving, so far as the record advises, no new or added elements, nothing more than an evolution of casings from the steel supplied for the purpose, and the transaction, in our opinion, was a bailment of the steel and not a sale. We need not discuss the counterclaim. The findings correctly set forth the facts, and if we are correct as to what has been said above, judgment for the counterclaim follows as a matter of course. Judgment for the United States for $88.83. It is so ordered. WHALEY, Judge; WILLIAMS, Judge; LITTLETON, Judge; and GREEN, Judge, concur. AMERICAN TOBACCO CO. v. THE UNITED STATES [No. J-236. Decided November 14, 1932] On the Proofs Interest on withholding drawbacks, act of March 3, 1875; date of allowance by legal authority.-Payment of plaintiff's claims for drawback on exportation of tobacco previously imported and upon which import duty was paid was suspended pending investigation as to legality of certain payments of drawback made in the past. After some delay suit was instituted against plaintiff under the act of March 3, 1875, to recover the payments so placed under investigation. The suit failed for want of proof and the collector was thereafter instructed to make, and imme Reporter's Statement of the Case 66 Held, diately made, payment of the drawbacks so suspended. The Reporter's statement of the case: Mr. Marvin Farrington for the plaintiff. Messrs. James L. Gerry and Walter W. Graves were on the briefs. Mr. Bradley B. Gilman, with whom was Mr. Assistant Attorney General Charles B. Rugg, for the defendant. The court made special findings of fact as follows: I. Plaintiff is a corporation organized under the laws of the State of New Jersey. II. In 1915 plaintiff and certain of its branches were manufacturing and exporting cigarettes. Some such exported cigarettes were made in part from imported tobacco on which import duty had been paid. It was the plaintiff's practice to file claims for refund of import duty (less 1%) paid on the tobacco used in the exported cigarettes, as provided for in par. O of the Tariff Act of 1913. III. In 1915, upon investigation, it was discovered that the plaintiff and its branches were in the practice of removing from domestic trade deteriorated and unsalable cigarettes and sending them out of the country for destruction in order to collect such drawbacks. Pending this investigation the liquidation of certain drawback entries (claims for refund) was suspended. The question as to whether refund should be paid upon the sending out of the country of such cigarettes was submitted to the Attorney General for an opinion, and on October 24, 1916 (31 Op. A.G. 1), he advised the Secretary of the Treasury that such cigarettes. were not "exported" within the meaning of the tariff act and that no drawback was legally allowable. IV. Believing that, under this opinion, drawback had been illegally collected in the past by the plaintiff and its Reporter's Statement of the Case branches, the Secretary of the Treasury, by letter of March 30, 1917, acting under the provisions of the act of March 3, 1875, authorized the collector of customs at New York "to suspend all payments of drawback to the American Tobacco Company or any of its branches until further advised." There was some delay by the Government in bringing suit as directed by the act of March 3, 1875, and by letter of February 18, 1918, the collector was authorized to pay drawback whenever the amount of the refund claimed exceeded the amount of the Government's claim. V. On or about July 27, 1920, the Government started suit against the plaintiff in the District Court of New Jersey to recover drawback paid by mistake on goods so sent out of the country for destruction. This suit was discontinued for want of proof on January 6, 1925. By letter of January 23, 1925, the collector was advised of the termination of the suits against the tobacco companies and instructed to take action "looking to the payment of drawback withheld from these firms under the act of March 3, 1875." VI. Pursuant to these instructions the claims were finally liquidated and paid in full. No interest on the principal amounts of the claims was paid. On January 21, 1927, the Secretary of the Treasury received a demand from the plaintiff for the payment of interest claimed to have accrued upon the claims for drawback. This demand was referred to the General Accounting Office, which by decision of August 31, 1927, disallowed it. On November 2, 1927, the Comptroller General reviewed and affirmed his earlier decision. VII. This suit for interest under the act of March 3, 1875, was instituted in the Court of Claims on April 25, 1928.. On February 15, 1930, the petition was amended, eliminating all claim for interest on drawback with regard to certain tobacco exported to Singapore. VIII. The suit is now for interest claimed to have accrued upon 38 claims for refund (drawback entries) set out as plaintiff's exhibits B-1 to B-38. The progress of these claims toward settlement in the customs office is correctlyshown upon the following table: |