
    EDWARD B. TURNEY, TRUSTEE v. THE UNITED STATES
    No. 48724.
    Decided September 30, 1953.
    Defendant’s motion for new trial overruled December 1, 1953.
    
      
      Mr. Thurman Arnold for the plaintiff. Mr. Reed Miller, Messrs. Arnold, Fortas <& Porter and Messrs. Davidson <& Niholoric were on the briefs.
    
      Mr. Monroe Oppenheimer for the intervenors. Mr. Isa-dore G. Alh was on the briefs.
    
      Mr. Thomas O. Fleming, with whom was Mr. Assistant Attorney General Warren E. Burger, for the defendant.
   MaddeN, Judge,

delivered the opinion of the court:

The plaintiff sues for just compensation under the Fifth Amendment or, in the alternative, for damages for breach of contract. The claim arises out of the alleged taking by the Government of a large quantity of radar equipment.

Leyte Air Depot was established at Tacloban on the island of Leyte in the Philippines to support the American forces after they had landed on that island in October 1944, in the course of retaking the Philippines from the Japanese. The depot was stocked with military equipment, a portion of which was “roll-up” equipment, that is, equipment which had been at other depots and had been brought to Leyte when the other depots were closed.

On April 30, 1946, Congress enacted the Philippine Ke~ habilitation Act which, among other things, authorized the transfer to the Philippine Government of certain surplus property of the United States then located in the Philippines. On July 4, 1946, the Republic of the Philippines came into existence.

On August 28, 1946, the Pacific Air Service Command declared surplus to the Foreign Liquidation Commission certain property, which had cost the United States $5,455,-423.15, and which was described as follows:

1. a. The AAF supplies on hand at the Leyte Air Depot consist of the following categories:
(3) That declared in bulk on SPB-3 $ $ $ ‡ $
2. a. * * * A suitable description of this property would be as follows: “All AAF supplies located at the Leyte Air Depot, * * *.

On September 11,1946, the United States and the Philippine Government entered into an agreement for the transfer of the surplus property, pursuant to the Act of Congress of April 30, 1946. The property transferred to the Philippines by this agreement included the Leyte Air Depot.

Paul B. Ranslow was a bombardier and Vernon E. Childers was a pilot in the Air Force during the Second World War. After .their discharge from the service they went into the export-import business in China. In the summer of 1946, Ranslow, then in the Philippines, learned that certain property at the Leyte Air Depot would be sold as surplus. He asked Childers, who was in Shanghai, to contact K. H. Khoong and his son C. Y. George Khoong, residents of Hong Kong, to see if they were interested in bidding for the property. They were, and furnished most of the money for the purchase which was later made. In late August 1946, Rans-low and Childers made a bid of $400,001, for the supplies and buildings at the Leyte Air Depot. The Foreign Liquidation Commission, which was selling the property for the account of the Philippine Government, submitted this bid and two others to the President of the Philippines, who rejected all the bids because he did not want the hangars and Quonset Huts at the depot sold. On September 3, 1946, Ranslow and Childers submitted another bid in the same amount for the property and material at the base, excepting the buildings referred to above. Their bid was the high bid, and was accepted. On September 5 a sales contract, naming the United States as the seller and Banslow and Childers as the buyer, was made. Article 2 of the contract said:

Article 2. The property is sold “as is”; the United States makes no guaranty, warranty, or representation, express or implied, as to the kind, size, weight, quantity, quality, character, description, or condition of any of the property, or its fitness for any use or purpose, or otherwise, except warranty as to title; this is not a sale by sample.

On October 5, 1946, the final payment of the $400,001 was made. Banslow and Childers had contributed $20,000 each, and the Khoongs $360,000. We are uncertain as to who contributed the odd dollar. It was agreed between them and the Khoongs that a corporation was to be formed and that Banslow and Childers were each to receive 15% of the profits and were to manage the properties without salaries. In November 1946 Banslow and Childers, named in the title papers as purchasers, assigned their rights and interests in the property to the corporation which was then in the process of being formed, the corporate charter being dated December 4, 1946.

Late in December 1946, classified military radar was discovered by the corporation’s employees among the supplies at the depot. It had, apparently, been left at the depot by the Air Force by mistake, since on July 19,1946, the Pacific Air Service Command had issued a directive relative to surplus declarations which said:

(6) Under no condition will any radar equipment be declared to the disposal agency.

Neither the buyers nor those who made the sale for the Government were aware, when the sale was made, that there was radar equipment among the supplies at the depot.

Childers, who was in Shanghai, was immediately notified about the radar. He, because he could not speak Chinese, asked George Khoong to assist him in selling it to the Chinese Nationalist Air Forces. He contacted the American Military Attache’s staff in Nanking and advised them that he was negotiating with the Chinese Air Forces for the sale of the radar but he wanted clearance from that staff before be sold it as be did not want to be held responsible if the radar fell into the hands of the Chinese Communists. The Military Attache notified the United States military authorities about the radar and representatives of the Air Force visited the depot and inspected the radar. A conference was held with Banslow. He refused to allow agents of the United States to enter the depot to demilitarize the radar. He agreed to let an agent of the Air Forces return to the depot and take part in the preparation, then in progress, of an inventory of the material.

Later, the Air Force offered to exchange commercial type communications equipment for the noncommercial military radar, on a ton-for-ton basis. This offer was refused. Childers, for the corporation, offered to exchange the radar for items such as machine and hand tools except electronic equipment, which Childers might select from another depot. The Air Force refused this offer. Childers refused to allow the removal of the key components from the radar sets, which removal would have eliminated the security classification of the material, until arrangements had been made for reimbursement of the corporation.

On July 24,1947, General Acheson, the Commanding General, 4th Air Depot, left word at Banslow’s office that the United States desired to repossess the radar, by negotiation if possible, if not, by securing the aid of the Philippine Government in seizing the radar. That aid would have been necessary because the materials were located on soil under the sovereignty of the Philippine Government, since July 4, 1946, an independent nation. Kanslow advised General Acheson that any attempt to seize the radar would be resisted but that the corporation would resell the radar to the Government for a reasonable price. General Acheson responded that the War Department did not desire to repurchase the radar, but was only interested in reclaiming it because it had been inadvertently sold.

Mr. Abello, Chief of the Executive Offices of the President of the Philippines, became aware that the United States Army desired to repossess the radar. On July 30, 1947, he wrote the corporation asking the price at which the corporation would sell the radar materials to the Philippine Gov-eminent. On the same date, at the suggestion of representatives of the United States, he placed an embargo upon the exportation from the Philippines of any of the materials at the Leyte Air Depot.

Eanslow offered to sell the radar to the Philippine Government for $100,000. Mr. Abello refused the offer, saying the price was much too high. Mr. Davis, an official of the American Embassy in Manila, advised Eanslow and Childers that if they would give written assurance that the radar would be segregated from the other material at the base, and would not be disposed of, either in or outside the Philippines, until the dispute concerning it was settled, Mr. Davis would advise Mr. Abello that the Embassy had no objection to the exportation of the materials other than the radar. Eanslow and Childers gave the written assurance, Mr. Davis transmitted it to Mr. Abello, and on September 3 the embargo was lifted, as to the material other than the radar.

On August 30, Mr. Abello, Mr. Davis, and General Eubank of the United States Army agreed that an officer or enlisted man of the Army would be designated who should act as an agent of the Philippine Government in supervising the segregation and security of the radar. It is probable that at some time in September, one or more members of a Graves Eegistration Unit of the Army were at the depot performing that function. By orders dated October 10, 1947, Captain Eoyce was ordered to proceed to the depot on or about October 13. He did so, with a team of enlisted men who segregated the radar. On November 11, 1947, Captain Eoyce and the corporation made a written agreement that the radar equipment at the depot would be returned to the United States Government and that a full receipt for the material would be given to the corporation. The corporation stated in the agreement that it intended to make a claim against the Government for losses in connection with the equipment. The Army made a shipment of 46 boxes on November 25, 1947, and of 266 boxes on December 10,1947. The two shipments weighed 73,655 pounds, gross weight.

We now discuss the facts relative to the rights of the interveners, the Khoongs. In September 1947, the Khoongs, then in China, made an offer by cable to purchase for $80,000 the 60 percent interest of Childers, Banslow, Lee and Chang. We have said above that Childers and Banslow each were given a 15 percent interest in the property. The Khoongs had also given Lee and Chang each a 15 percent interest, in. l'eturn for their assistance to the Khoongs in borrowing the money which the Khoongs put into the deal. The offer was accepted and on October 23, 1947, a formal contract was made between Leyte Supply Corporation as seller, and Powell Khoong as buyer transferring “the entire property belonging to the sellers located at” the depot.

On October 30,1947, a special meeting of the stockholders of the corporation was held in Manila. The Khoongs were not present, and Banslow voted their stock by proxies. It was decided to liquidate the corporation. The minutes of the meeting recite that the corporation had been able to dispose of the supplies and equipment acquired by it. They make no mention of any exception as to the radar or any claim against the United States for the taking thereof. The stockholders voted to amend the corporate charter so that it would expire on December 7, 1947, and to designate Edward Turney, the plaintiff herein, as liquidating trustee. In the enumeration of the liquidating trustee’s powers there was a specific authorization as follows:

To prosecute and defend any and all suits, actions, and other proceedings in the Courts, tribunals, departments and offices of the Government of the Bepublic of the Philippines and to compromise, settle and adjust the same and the subject-matter thereof;

but there was no authorization to prosecute any suit, action, or other proceeding in this court or any other tribunal of the United States.

The Khoongs, as intervenors, assert that they bought the radar material from the corporation in whose shoes the plaintiff stands, before the Government took it, and that, therefore, the taking was from them and they alone are entitled to the compensation. The plaintiff asserts that the Government had taken the property before the sale to the Khoongs, and that, therefore, the claim against the Government resulting from the taking was not included in the sale of the property, and, indeed, could not have been lawfully assigned to the Khoongs even if that had been intended by the parties. He relies on 31 U. S. C. 203, 35 Stat. 411, which invalidates assignments of claims against the Government.

The plaintiff also asserts that it was the intention of the parties to the sale from the corporation to the Khoongs that the radar and the claim against the Government in relation to it was not intended to be included in the sale. We consider first this latter assertion. There is a direct conflict in the evidence concerning the intention of the parties. Since the Commissioner of this court has resolved that conflict in favor of the intervenors, and we have reached a contrary conclusion, we discuss the evidence in some detail.

On behalf of the plaintiff, it was testified that the Khoongs were kept fully advised as to all the activities of the corporation, including the controversy with the Army concerning the radar. We believe this testimony. George Khoong, who, after the discovery of the radar, carried on the negotiations with the Chinese Air Forces for its sale to them, must have known why it was not possible to continue, or resume, that negotiation. Assuming that the negotiations had been broken off before the Army intervened, and for the reason that the asking price was too high, persons like the Khoongs would of course have tiled again, since the Chinese Air Forces were their only potential customer for this material.

The Khoongs must have known of the embargo on the materials other than the radar, and the reason for it. It was in effect for more than a month, and must have greatly disrupted the deliveries on the sales which the Khoongs were making of materials other than the radar. We are unable to think of any reason why the Khoongs would not have been informed about it or why they would not have insisted on knowing the reason for the disruption of their business.

The Khoongs must have known that there was no prospect of getting the radar equipment back into the open market. After the events recited above, George Khoong made a week’s visit to the corporation’s headquarters and a two-day inspection trip to the depot during September 1947. The radar was at that time segregated and the corporation’s written assurance that it would not be sold was in effect, as he must have known. No person of intelligence would have expected that anything would emerge from this sequestration, except a possible claim against the Government.

If the corporation intended to sell the radar equipment to the Khoongs, and the Khoongs intended to buy it, they both knew that the transaction was in direct violation of the written assurance which the corporation had given to both the Philippine and the American Government. We think that persons like the Khoongs, who were in the precarious business of securing export licenses and finding approved purchasers in a war torn country, would have anticipated nothing but disaster from engaging in a transaction in violation of the assurances given. There is no slightest indication in the record that Kanslow and Childers, who acted for the corporation in the sale to the Khoongs, had any tendency to violate assurances given.

We think that the Khoongs did not regard the radar as an asset, but only as a potential source of trouble. Their wish was for the Army to take what it was going to take of the radar and clear out so that they could go on disposing of the other property. Whether in law the corporation was, at the time of the sale to the Khoongs, the owner of tangible property or of a law suit, in fact it had a troublesome controversy with a powerful adversary on its hands, and we think that the Khoongs at that time and in their circumstances would not have taken one end of that controversy as a gift. The radar, in view of the Army’s attitude, was unsalable. A potential law suit, in a distant country, was not in the Khoongs’ line of business.

In the agreement finally made between the corporation and the Army, dated November 11, 1947, and quoted in Finding 39, appeared this language:

Every effort will be made to consummate this transaction without delay and prior to the turnover of the buildings at this location by the Leyte Supply Corporation to Powellsons.

The Powellsons were the Khoongs. We think that this language obviously inserted at the instance of the corporation, tends strongly to corroborate the oral testimony that the Khoongs’ anxiety was to have the Army take its radar and get out before they took over what they had bought. This language was written shortly after the sale to the Khoongs. It has significance also in that the corporation was making no secret of its sale of the materials at the base to the Khoongs. If that sale had been regarded as transferring the radar equipment, and thus being in violation of the written assurances given two months before, both to the American Army and to the Philippine Government, it is unlikely that it would have been thus publicly disclosed.

The corporation’s agreement of sale with the Khoongs contained the following provision:

(5) If the sellers, for any reason whatsoever, cannot transfer the property under sale to the buyer by this agreement, the sellers hereby irrevocably agree to pay to the buyer US $20,000. — as penalty.

The corporation could not and did not transfer the radar equipment to the Khoongs, yet the Khoongs never at any time claimed that this provision of the contract was applicable.

Kanslow and Childers testified that it was not the intention of the parties to include the radar equipment which was the subject of the controversy with the Army in the sale to the Khoongs. They testified in detail about the conversations with the Khoongs making the understanding plain. We have recited the circumstantial evidence which, we think, corroborates their testimony. We have also adverted to the three writings which tend to contradict it. The language of the contract of sale to the Khoongs, “the entire property” of the sellers located at the depot would, in the absence of an agreed contrary intent, have carried the radar equipment, assuming that it had not, at that time, yet been “taken” by the Government. But the property was in controversy, both parties knew that they would never be able to export or otherwise market it, and, regardless of its technical legal situation, practically it had become nothing more than a claim against the Army. This circumstance makes the language “the entire property” sufficiently equivocal to permit the showing of the actual intent of the parties.

The corporate minutes of the meeting at which the dissolution of the corporation was approved said that the corpp-ration had been able to dispose of the supplies and equipment acquired by it. No mention was made of the radar, or of any claim concerning it. The statement about the disposition of the property was true, as a practical matter, since all the property that the Army would not take would go to the Khoongs, and there would be no further necessity for the corporation, with whatever taxes or other burdens its continued existence might entail. The minutes also, as we have seen, specifically authorized the plaintiff, as liquidating trustee, to prosecute and defend suits in Philippine tribunals, but made no mention of a suit in this court or any tribunal of the United States. We do not know the reason for the omission. Whether there was some real or supposed merit, in Philippine law, in saying what was said, we do not know.

Our conclusion from all the pertinent evidence is that the sale from the corporation to the Khoongs was not intended to include and did not include the radar equipment which was repossessed by the United States.

The Government asserts that the surplus property sale at the Leyte Air Depot did not pass the ownership of the radar equipment to Itanslow and Childers. If it did not, the corporation never acquired title to it and the plaintiff can not recover. The Government relies on the directive of July 19, 1946, of the Pacific Air Service Command, relating to the declaration of property to be disposable surplus, which said:

Under no condition will any radar equipment be declared to the disposal agency.

This directive was not disclosed to the public. The directive was violated, and the radar equipment here in question was, apparently inadvertently, declared surplus along with the other property at the Leyte Air Depot. In the contract of sale of the lot of property, the United States expressly disclaimed any responsibility as to what might turn out to be in the lot, but it warranted the title to the lot.

Section 25 of the Surplus Property Act of 1944, 50 U. S. C. App. 1634 said:

A deed, bill of sale, lease or other instrument executed by or on behalf of any Government agency purporting to transfer title or any other interest in property under this Act shall be conclusive evidence of compliance with the provisions of this Act insofar as title or other interest of any bona fide purchasers for value, or lessees, as the case may be, is concerned.

We have no doubt that title to the radar equipment passed to Ranslow and Childers. The statute just quoted shows that Congress was not willing to permit the disposition of surplus property to be handicapped by uncertainty as to whether Government agents exceeded their authority in treating it as disposable surplus. In United States v. Jones, CCA 9, 176 F. 2d 278, the court so held, and discussed at length the legislative intent.

If, then, Ranslow and Childers acquired the property, it passed to the corporation by their transfer. It was later repossessed by the Government. Our discussion above of the controversy between the plaintiff and the intervenors shows that, in our opinion, it was repossessed from the corporation in whose shoes the plaintiff stands.

We now consider whether the repossession was a “taking,” covered by the Fifth Amendment. We think that it was. The relations, at the time, between our Government and the Philippine Government, were close. Our armed forces had just liberated the Philippines from the Japanese. Our Government had given one hundred million dollars worth of surplus property to the Philippines, including the property at the Leyte Air Depot, and had sold the property for the account of the Philippine Government. When we requested that Government to place an embargo upon the exportation of any of the property, it, naturally, readily complied. That put irresistible pressure upon the corporation to come to terms with the United States Army, the terms being that the radar equipment would be segregated in charge of the Army and would not be disposed of until a final agreement was reached as to its disposition. The final agreement turned the property back to the Army in exchange for a receipt, and with a reservation of the right to sue for its value. We think that the taking occurred on October 13, 1947, when the Army officially took possession of the property. The plaintiff is entitled to recover its fair value as of that date, with interest added as a part of just compensation.

The Government urges that the just compensation provision of the Fifth Amendment does not apply in foreign countries. The plaintiff points out that the Fifth Amendment has been applied to the taking of the property belonging to a resident alien and situated in he United States, Russian Volunteer Fleet v. United States, 282 U. S. 481; and to the property, located abroad, of an American citizen. Wiggins v. United States, 3 C. Cls. 412. He urges that cases such as Ross v. McIntyre, 140 U. S. 453, in which it held that an American convicted by a consular court in Japan could not complain that he had been denied a constitutional right to trial by jury, do not mean that other constitutional rights, such as the right to just compensation for property taken, which can, without inconvenience or practical difficulty, be applied to a taking abroad, should not be so applied. There is no decision directly in point. We think the plaintiff’s contention is sound.

We must determine the value of the property taken. The Commissioner of this court valued it at $1,120 per long ton, which value, applied to the 73,655 pounds of property taken, gave a total of $36,825.

Our Commissioner’s figure of $1,120 per long ton was taken from the Pacific Air Service Command’s directive of July 19, 1946, quoted in Finding 7. The directive said that “Noncombat bulk declarations will be made at $1,120 per long ton of supply.” This was apparently a suggested price which the Foreign Liquidation Commission should try to get, in its sale of surplus property.

The plaintiff contends that the procurement or replacement value of the radar equipment, properly discounted, was its fair value. The procurement value was, apparently, the cost of the equipment to the Government, and was used by it in its internal accounting. In the case of pilferage, damage, or loss, the responsible person was charged with that value. That value, as to the equipment seized or rendered valueless by the seizure was $441,889.79. The plaintiff says that the corporation, in reselling all the property at the depot, tried to get 80 percent of the procurement value, sometimes getting more than that, and almost never got less than 50 percent of that value. It therefore takes the intermediate figure of 65 percent and claims $287,228.36 as the fair value.

The Government urges that the applicable classification under the directive of the Pacific Air Service Command, shown in Finding 7, is “demilitarized combat material” which was to be declared at 10 cents a pound. So computed, the value would be $7,365.50.

We think that the plaintiff’s estimate of fair value is far too high. There was, apparently, an over supply of commercial type communications material in the area. This is shown by the corporation’s refusal to exchange the radar equipment for the commercial type equipment on a ton for ton basis (See Finding 22) and its willingness to exchange for any other items except electronics equipment. There was no real prospect of a favorable sale of the radar equipment, after the embargo upon its exportation. We have, then, a situation in which property is of relatively small value to the owner, because its resale has been made impossible by the Government, but is of value to the Government, which is currently procuring such property at market prices. We recognize that, generally speaking, it is the loss to the owner rather than the benefit to the taker that is controlling. If the Government had taken the property merely for the purpose of getting it back under its control in order to prevent it from falling into unauthorized hands, and had not received financial benefit from the taking, it might not be unfair to limit recovery strictly to the loss to the owner. In this case, the Government has not disclosed to us what it did with the things taken, and we may assume that it used or kept them for the same purpose for which it procured them in the first place. It, by instigating the embargo and by its other acts prevented the property from getting on the market. Then it took the property, and thereby relieved itself from having to buy similar property at market prices. We think the owner is, in such a unique situation, entitled to be compensated for some of the advantage which the Government has gained by first destroying the owner’s market and then seizing the property.

Our conclusion is that, in the circumstances, just compensation for the property as of October 13,1947, is $75,000. The plaintiff may have a judgment for that sum and for interest at 4 percent from October 13,1947, as a part of just compensation.

The petition of the intervenors is dismissed.

It is so ordered.

Howeul, Judge, and LittletoN, Judge, concur.

Jones, Chief Judge,

dissenting in part:

At the time the contract of sale was made neither the buyer nor the seller had any knowledge that radar equipment had been left in the Leyte Depot. Certainly the Government had no thought of declaring the forbidden radar equipment surplus property and subject to sale, and the purchaser had no thought of securing property, the sale of which was forbidden. There was therefore a mutual mistake of fact. Althoff Mfg. Co. v. Althoff, 123 Pac. 326.

In addition under applicable military regulations the radar equipment could not have been declared surplus, and the officials in charge had no authority to make a declaration of surplus that would include such equipment. Federal Crop Ins. Corp. v. Merrill, 332 U. S. 380.

We think the plaintiff should recover on a weight basis the average value of the non-military equipment located at the Leyte Air Depot. The Commissioner who heard the testimony found this value to be $36,825 at $1,120 per long ton. The evidence supports such a finding.

I would limit plaintiff’s recovery to that amount.

Judge Whitaker joins in this dissent.

FINDINGS OP FACT

The Court having considered the evidence, the report of Commissioner George H. Foster, and the briefs and argument of counsel, makes findings of fact as follows:

1. Plaintiff, Edward B. Turney, was appointed liquidating trustee of the Leyte Supply Corporation (hereinafter sometimes referred to as the “corporation”) on October 30,1947, at a stockholders’ meeting whereby the corporate charter was changed from the term of fifty years to a term ending December 7,1947.

The corporation was organized pursuant to the laws of the Republic of the Philippines.

2. Under the laws of the Republic of the Philippines, citizens of the United States of America are accorded the right to prosecute claims against the Republic of the Philippines in the courts of said Republic.

3. Intervening plaintiffs, K. H. Powell Khoong and his son, C. Y. George Khoong, are Chinese citizens and residents of Hong Kong, British Crown Colony.

4. The liberation of the Philippine Islands from the Japanese began in October 1944 when American troops under the command of General MacArthur landed on the Island of Leyte.

Leyte Air Depot, hereinafter sometimes referred to as the depot, was established at Tacloban, Leyte, to support the American forces and was stocked with military equipment, a portion of which was “roll-up” equipment, that is, equipment which had been originally at Hollandia or Biak, and which had been brought to Leyte Depot as those rear depots were closed out.

5. On April 30, 1946, the United States Congress enacted the Philippine Rehabilitation Act, 60 Stat. 134, which, among other things, authorized the Foreign Liquidation Commissioner to transfer, under such terms and conditions as he deemed appropriate, to the Philippine Government, and certain of its agencies, certain property located in the Philippine Islands and declared surplus to the Foreign Liquidation Commissioner under the Surplus Property Act of 1944, of not more than an estimated value of $100,000,000. Military weapons, munitions and toxic gas were expressly prohibited from being so transferred.

6. On July 4, 1946, President Truman by Proclamation No. 2695, 11 Fed. Reg. 7517, 60 Stat. 1352, pursuant to the Philippine Independence Act of March 24, 1934, withdrew and surrendered all rights of possession, supervision, jurisdiction, control, or sovereignty of the United States in and over the territory and people of the Philippines, and on behalf of the United States recognized the independence of the Philippines.

7. On July 19, 1946, the Pacific Air Service Command, United States Army, issued a directive entitled “Determination of Disposition Levels and Disposition of Excess and Surplus Property” which provided, in pertinent part, as follows:

1. Purpose and Scope. — This directive establishes the authority and method for determining disposition levels and disposing of excess and surplus property by ASAC Commanders. The basic purpose is to expedite completion of the disposal of excess and surplus property within the Pacific Air Command, United States Army.
* * * * *
4. Disposition of Excess and Surplus Property.
a. General.
(1) * * * All excess items in noncombat property class will be reported surplus to the Field Commissioner, Foreign Liquidation Commission for disposition. * * *
b. Declarations.
(1) Surplus items will be reported on Form SPB-3 * * * either by item or by bulk by class or subclass. * * * Though itemized declarations are preferable, declarations of property in bulk are acceptable to the Foreign Liquidation Commission.
(2) Bulk declarations will be made by class or subclass * * *.
(6) Under no condition will any radar equipment be declared to the disposal agency. (Emphasis in original.)
c. Procedure for Reporting on Form SPB — 3.
(2) (b) Bulk Declarations. * * *
Col. g — “unit cost” — Non-Combat bulk declarations will be made at $1,120 per long ton of supply. When the items contained in a bulk declaration are known, the property should be valued on the stock list price of items.
(c) Combat items may be declared in bulk form using the stock number, description and the phrase “demilitarized combat materiel”. These items will be declared at $0.10 per pound.
# # % *

8. On August 28,1946, the Pacific Air Service Command, United States Army, declared the following surplus to the Foreign Liquidation Commissioner in Manila:

1. a. The AAF supplies on hand at the Leyte Air Depot consist of the following categories:
(3) That declared in bulk on SPB-3 # * * * • #
2. a. * * * A suitable description of this property would be as follows: “All AAF supplies located at the Leyte Air Depot, * * *
* * * # *

The bulk declaration of the property listed on the SPB-3 forms had cost the United States Government $5,455,423.15.

, 9. Ají “Agreement Between the United States and the Philippines for the Sale of Certain Surplus War Property,” entered into pursuant to the authority of the Philippine Rehabilitation Act, effective as of September 2, 1946, contains the following pertinent clauses:

Article 1. Property sold AND graNted. That by these presents the United States sells and grants and the Philippines buys and accepts all that property owned by the United States on the effective date hereof but surplus to its needs in the Philippine Islands, except aircraft, ships (other than as specified in Article 6, paragraph a, hereof), and non-demilitarized combat material, subject, however, to the limitations following:
(1) That the property has been or will be declared surplus by the United States owning agency, pursuant to the said Surplus Property Act, and * * *.
Article 2. TraNSfer op possession
a. That the right to possession of the property sold under Article 1 hereof shall, after declaration to the Foreign Liquidation Commissioner for disposal as surplus, pass to the Philippines at the earliest practicable date upon either (1) the surrender by the United States and the acceptance by the Philippines of physical or constructive possession, * * *.
c. That after the right to possession with respect to specified property has passed to the Philippines pursuant to paragraph a, all responsibility, risk of loss, and liability for the care, custody, protection and maintenance of such property shall be upon the Philippines, including rents and liabilities for the storage thereof and damages and claims of any nature arising out of or incident to the ownership of such property, and the Philippines shall indemnify and hold the United States harmless from any such responsibilities, risks, liabilities, rents, damages and claims. * * *
ARTICLE 4. Warranties.
That the United States warrants title to the property transferred, and that in lieu of any other warranty or undertaking as to the kind, size, weight, quantity, quality, character, value, description, condition, or fitness for use thereof, it is understood that if a material disparity is found to exist between the property transferred to the Philippines hereunder and the consideration given therefor by the Philippines hereunder, the two Governments will consult together to fix an appropriate adjustment in the price paid.
Article 5. Consideration.
a. * * * there is hereby delegated to the President of the Republic of the Philippines authority to control the use and disposition of such property and * * *.

This agreement was executed by Manuel A. Poxas, President of the Philippines, on behalf of the Republic of the Philippines, and William E. Yogelback, Central Field Commissioner for the Pacific and China, Office of the Foreign Liquidation Commissioner, on behalf of the United States, ■on September 11, 19461

The Leyte Air Depot was included in the property thus transferred to the Philippines.

10. Paul B. Ranslow and Vernon E. Childers, American .citizens, went to Shanghai, China, in 1945, following their discharge from the Army Air Corps to enter into the export-import business. Mr. Ranslow went to the Philippine Islands in the summer of 1946 and learned that certain surplus property then located at the Depot would be sold.

Mr. Ranslow asked Mr. Childers, who was still in Shanghai, to contact Powell and George Khoong to see if they were interested in bidding on the property.

In late August Messrs. Childers and Ranslow submitted a bid to the Foreign Liquidation Commission, Manila, in the amount of $400,001 for:

* * * the U. S. Army Air Corps property, materials and buildings constituting the Leyte Air Depot at Tac-loban, Leyte.

Two other bids were received, one of which was in the amount of $400,000. These three bids were rejected by President Roxas, to whom the Foreign Liquidation Commission had submitted them for action, because he did not want the hangars and quonset huts which were located at the depot, to be included in the contemplated sale.

11. On September 3, 1946, Mr. Banslow submitted a bid, in the name of Childers and Banslow, to the Foreign Liquidation Commission in the amount of $400,001.

* * * for all U. S. Army Air Forces property and materiel constituting the Leyte Air Depot, excepting the Butler type hangers and any and all Quonset Huts which may be on the base.

. The Central Air Transport Corporation submitted a bid for $375,000 and Elizalde and Company submitted a bid for $300,000. The three bids were submitted to President Boxas for approval.

12. On September 5, 1946, a Sales Contract was entered into “by and between the United States of America, hereinafter called ‘United States,’ acting through the Central Field Commissioner for the Pacific and China” and Childers and Banslow, “the buyer.” The Sales Contract stated, in part, as follows:

Article 1. The United States agrees to sell and the Buyer agrees to buy all that property located at U. S. Army Air Forces Air Depot, Tacloban, Leyte Island, Philippines, listed on Forms SPB-3, the numbers and designations of which appear on Schedule A which is attached hereto and by this reference incorporated herein, it being understood by the parties that no fixed installations hangars or quonset huts are included.
Article 2. The property is sold .“as is”; the United States makes no guaranty, warranty, or representation, express or implied, as to the kind, size, weight, quantity, quality, character, description, or condition of any of the property, or its fitness for any use or purpose, or otherwise, except warranty as to title; this is not a sale by sample.
Article 8. This contract shall be interpreted in accordance with the laws of the District of Columbia, United States of America.

13. On October 3, 1946, Messrs. Childers and Banslow entered into a “Contract for Assignment of Profits” with Powell Khoong and Peter Chang, of which the following is pertinent

Childers AND Banslow have contracted with Foreign Liquidation Commission, Manila, to purchase all surplus materials, for the purpose of resale, at the Leyte Air Depot located at Tacloban, Philippine Islands. Khoong and Chang hereby agree to assist in financing said purchase by paying the balance of the contract and in addition advancing certain sums as a loan for the purpose of financing operations. In consideration of the above sums, this contract of assignment of profits is hereby entered into. It is further agreed that Childers and Banslow will form a corporation to take title to the above-mentioned property and to handle the operation of the said depot and to dispose of the property located on said depot by sale. It is further agreed that this contract will be assigned to the corporation to be formed by Childers and Banslow and the rights and obligations of Childers and Banslow to be assumed by the corporation.

The parties also, on October- 3, 1946, had entered into a “Memorandum of Working Arrangement,” of which the following is pertinent:

Sales of the materials from the Base shall be made by Khoong or Chang or Childers or Banslow or by any other representative jointly appointed by said parties frovided however, that sales of materials of more than 100,000.00 United States currency, Army List Price Value must have the approval of Khoong, Chang, Childers and Banslow jointly.

14. Messrs. Childers and Banslow contributed $20,000 each and the Khoongs contributed $860,000.00 of the total purchase price of $400,001.00.

It was agreed that Childers and Banslow would each receive 15% interest in the corporation which was to be formed in return for managing the properties without salaries from the corporation. Of the 70% interest retained by the Khoongs, they gave 15% interest each to T. N. Lee and Peter Chang for the assistance they rendered the Khoongs in borrowing money to be applied as a part of their contribution toward the purchase price.

15. On October 5, 1946, the final payment of the sales contract price of $400,001 was made. Childers and Banslow received Vendor’s Shipping Document BP-489 from the Foreign Liquidation Commission which was then functioning as an agency of the Philippine Government because the Philippine Government was not, at the time, in a position to take over the administration of the surplus property which had been transferred to it under the terms of the agreement signed on September 11, 1946, but effective as of September 2, 1946.

The Vendor’s Shipping Document evidenced the constructive delivery to Messrs. Childers and Ranslow of “All Air Corps property located at Leyte Air Depot not previously sold including the following surplus declarationsand such surplus declarations were listed.

This document contained the statement: “Philippine Government Sale,” and across the face of the document there was stamped, “Philippine Republic Sales.” It contained no reference to any radar equipment.

16. By a document executed on November 28, 1946, dated as of October 30,1946, Messrs. Childers and Ranslow assigned their rights and interests in the Vendor’s Shipping Document to the corporation which corporation had not yet received its corporate charter, although the Articles of Incorporation had been filed with the Office of the Securities and Exchange Commission on October 26,1946.

On December 4,1946, the corporation was issued a certificate of incorporation pursuant to the laws of the Republic of the Philippines. The term of existence stated in the charter was for 50 years after date of incorporation.

17. Late in December 1946 personnel employed by the corporation discovered classified military radar at the depot. This radar had been left at the depot by the United States Air Force apparently through mistake. Under applicable military regulations, radar equipment could not be declared surplus. The radar was not listed on any documents shown to or furnished Messrs. Childers and Ranslow at any time prior to the execution of the contract and no representations were made that the radar was present. Mr. Ranslow on his inspection trip of the depot prior to the submission of his bid did not discover the existence of the radar and its presence in the depot was not known at the time of the sale by the buyers.

18. Mr. Childers, who at the time of the discovery of the radar was in Shanghai, was immediately notified and he then visited the depot and inspected the radar. There being no immediate prospect of a sale in the Philippines of this military radar, Mr. Childers (who could not speak Chinese) in the early part of 1947, requested George Khoong to assist him in selling the radar to the Chinese Nationalist Air Forces.

Mr. Childers contacted the American Military Attache’s staff in Nanking, China, and represented to them that, although he was negotiating with the Chinese Nationalist Air Forces for the sale of the radar which had been found at the depot, he wanted clearance from the Military Attache’s staff before he sold it as he did not want to be held responsible if the radar fell into the hands of the Communists. However, at the time of this representation, Mr. Childers’ negotiations with the Chinese Nationalist Air Forces for the sale had been broken off because the Chinese were not interested in purchasing the radar, under the terms asked by Childers.

19. The Military Attache notified the United States military authorities of Mr. Childers’ representations and, on May 5,1947 the Commanding General of the Far East Air Force, Lt. Gen. Whitehead, flew from Tokyo to Manila on orders from the War Department to determine what radar was in the depot. The next day he and a Major Talley, an Air Force radar expert, flew to the depot where they inspected the radar in the corporation’s possession and returned to Manila that afternoon.

20. On May 9,1947, a conference was held with Mr. Eric T. Bradley, the Foreign Liquidation Commission officer who had originally handled the sale of the surplus property, Mr. Ranslow, Colonel Hawkins, the officer in charge of the 4th Air Depot, and Major Talley to discuss the extent to which the radar was of interest to the United States Government because of its military use or security classification.

Mr. Ranslow was asked to allow agents of the defendant to enter the depot to demilitarize those items which had no commercial value, i. e., items completely military in nature with no civilian use, but he refused to allow this for the stated reason that he had to confer first with Mr. Childers, who was then in Shanghai.

Mr. Banslow agreed to the request that Major Talley be allowed to return to the depot to assist in the completion of the inventory which was then being prepared by a Mr. Mobberly, who had been hired by the corporation for that purpose.

21. Several days later, Major Talley returned to the depot to .assist in the preparation of the inventory which, upon his arrival, he found was nearly complete. Major Talley remained at the depot several days examining the radar and discussing its condition with Mr. Mobberly.

22. On May 22, 1947, a conference was held by Messrs. Bradley, Childers, Banslow, Colonel Hawkins and Major Talley to discuss settlement of the question of the disposition of the radar. Defendant offered to exchange commercial type communications items, on a tonnage basis, for the noncommercial military type, classified radar at the depot, but this was refused. Col. Hawkins refused Mr. Childers’ counter-offer to exchange the radar, based on bulk declaration value, for any items, such as machine and hand tools, except electronic equipment, which Mr. Childers would be allowed to select from another Air Force Depot.

Mr. Childers refused to allow the removal of the key components from the radar sets which would have effectuated the removal of the security classification, until arrangements for reimbursement had been made. The conference terminated without any settlement.

23. On June 2, 1947, General Hopkins arrived in Manila from Tokyo and advised Mr. Banslow that he had been authorized to tell the corporation that it could dispose of the radar in any way it saw fit.

24. On July 24,1947, Brigadier General Acheson, the Commanding General, 4th Air Depot, left word at Mr. Banslow’s office that defendant desired to repossess the radar, by negotiation, if possible, or by securing the aid of the Philippine Eepublic in seizing the radar if such should become necessary. The reference to requesting the aid of the Philippine Bepublic, in the event that the negotiations failed, was necessary because the Philippine Government owned the land at the depot and the United States Army officers could not recover the radar directly as they could not exercise any authority outside of their own bases in the Eepublic of the Philippines.

25. On July 25,1947, Mr. Eanslow wrote a letter to General Acheson wherein he indicated, after stating that the corporation, a Philippine corporation, had purchased the property, which was then in the corporation’s possession and control, and that the United States War Department representatives had no right to enter the premises and take away the radar, that the corporation would enter into negotiations for resale of the radar at a fair and reasonable price..

It was made clear that the corporation would resist any attempt on the part of the War Department to seize the equipment.

On the same date, Mr. Eanslow wrote a letter to the President of the Philippines advising him that General Acheson had stated that the radar would be seized forcibly unless turned over to defendant without delay. Mr.' Eanslow requested that an opportunity be given the officers of the corporation to present its side of the case before the Philippine Government gave permission for the seizure if the United States War Department requested authority from the Philippine Government to seize the property.

26. General Acheson advised Mr. Eanslow by letter dated July 28, 1947, as follows:

* * * it is not the desire of the War Department to purchase the aforementioned property. But inasmuch as said property was sold to the Philippine Eepublic inadvertently, the United States Government .is only interested in reclaiming same. This procedure is normal for the reclamation of combat material and is usually concurred in by the Philippine Eepublic inasmuch as such material affects the national defense of the Philippines.
The position of the Leyte Supply Corporation in the Philippines is fully understood as is the position of the United States Government, and you may rest assured that the United States Government will not resort to any of the highhanded methods to which you refer but will, as I previously informed you, solicit the aid of the Philippine Eepublic in seizing said property if it becomes necessary.
It is hoped that the property can be reclaimed by negotiation rather than by process of law.

27. Mr. Kanslow’s letter of July 25,1947, to the President of the Philippines came to the attention of Mr. Emilio Abello, Chief of the Executive Office of the President, who requested from Major Glazer, the American Liaison Officer between his office and the American Armed Forces, verification of Mr. Kanslow’s statements.

Mr. Abello was then advised that while the defendant at no time intimated that it would resort to high-handed methods in reclaiming the radar, the defendant was deeply concerned over the possible exportation of the classified radar.

28. On July 30, 1947, Mr. Abello wrote the corporation that he had inquired concerning the defendant’s purported high-handed methods and had found them to be without basis. The letter continued in part:

* * * I wish to inform you, however, that in view of the nature of the equipment which the United States Army desires to retrieve from the properties object of the bulk sales made to you, the Philippine Government would request that you immediately initiate negotiations for the purpose of determining the price for which the same could be acquired from you by the Philippine Government; * * *
In the meanwhile, and in order to avoid any shipment of the .aforesaid materials through an oversight, I have issued instructions to the Philippine Sugar Administrator not to grant export license for any of the supplies and equipment sold you under said bulk sales until after the aforesaid materials have been delivered by you to us.

On the same date, Mr. Abello, acting at the request of American officials, as an official of the Philippine Government issued an order to the Philippine Sugar Administrator, who had charge of issuing export licenses as follows:

While negotiations are pending for the acquisition by the Government of certain critical materials included in the bulk sales to the Leyte Supply Corporation, it is directed that no export license of any kind should be issued to said corporation or to a successor thereto or to any vendee of said corporation until further orders from this office.

29. By letter dated July 31, 1947, Mr. Kanslow advised Mr. Abello, in part, as follows:

* * * We shall indeed be very happy to negotiate with the Philippine Government foe its acquisition from us of some of the properties which we purchased from the FLC in October 1946. For that purpose, we are now preparing a complete and detailed list of the equipment which the U. S. Army has indicated to us constitutes the properties which they wish to obtain through your Office. * * *

30. By letter dated August 4, 1947, Mr. Ranalow advised Mr. Abello, in part, as follows:

* * * we shall be glad to turn over either to the Philippine Government or to the U. S. Army, for whom you apparently are acting, the equipment described in the list attached hereto for the sum of $100,000. In this connection, we should like to make it clear that this list includes all the parts necessary to operate the equipment in question. * * *

The Philippine Government did not act upon Mr. Ranslow’s offer to sell the equipment for $100,000 because, in Mr. Abel-lo’s opinion, the price was much too high.

31. On August 6, 1947, General Acheson advised the corporation as follows:

1. This is to inform you that you have in the Leyte Supply Depot certain classified radar materials (list of which is attached as inclosure) that through error were turned over to the Philippine Surplus Property Commission by the Manila Foreign Liquidation Commission. In view of the critical nature of these materials, it is the desire of the War Department to effect reclamation since they affect the national defense of the United States and of the Philippine Republic.
2. It is my understanding that in cases of this nature the Philippine Surplus Property Commission will reimburse you for the items that are reclaimed on a basis of so many dollars, or cents, per pound based on the price that you paid for this property and the Philippine Republic will be credited by the Foreign Liquidation Commission on a similar basis.
3. Information is desired as to when representatives of the War Department may proceed to Tacloban in order to reclaim said materials.

On the same date the Corporation advised General Acheson, in part as follows:

* * * We shall be very glad to sell the radar materials included in this equipment to the U. S. Army but we are unwilling to turn them over to you under the terms mentioned in your letter. * * *

32. On August 19, 1947, Mr. Nathaniel P. Davis, Chargé d’ Affaires ad Interim, American Embassy, Manila, addressed a diplomatic note to the Secretary of Foreign Affairs for the Philippine Republic, in which he stated in part:

* * * • There have been several conferences regarding this matter between officers of the United States Army and the Office of the President of the Philippines which has taken emergency action to prevent the disposal of the property in question outside the Philippines until the question of its return to the United States Government has been settled. The Embassy understands that in previous cases of this nature, the Philippine Surplus Property Commission has repurchased the property and received credit on the books of the Foreign Liquidation Commission. In view of the fact that it has been represented to this Embassy that it would adversely affect the national defense and safety of both the Republic of the Philippines and of the United States should the equipment described in the attached list or any other items so classified fall into the hands of any third party, the Embassy respectfully requests that the competent authorities of the Philippines render all possible assistance to facilitate the return thereof to the custody of the United States military authorities.

33. By letter dated August 21, 1947, Mr. Ranslow requested Mr. Abello to amend his order of July 30 to the Philippine Sugar Administrator to the extent of permitting the corporation “to export such equipment as do not form part of the radar properties which the U. S. Army desires to acquire.”

34. On August 28, 1947, Messrs. Ranslow and Childers, accompanied by their attorney, conferred with Mr. Davis concerning the embargo.

Mr. Davis requested written assurances that the corporation would segregate the radar in dispute and would guarantee not to dispose of it, inside or outside of the Philippines, until the dispute was settled. Mr. Davis advised that, upon receipt of such written assurances to him and to the President, he would inform the Executive Office (Mr. Abello) that the Embassy had no ground for opposing export licenses to the corporation covering other merchandise.

On August 29, 1947, Messrs. Banslow and Childers submitted a memorandum to Mr. Davis which did not contain the assurances requested by Mr. Davis, and he advised them that since the assurances he had requested had not been furnished, he would not communicate further with the Philippine Government concerning the matter.

On August 30,1947, Mr. Childers furnished Mr. Davis the requested assurances.

35. On August 30, 1947, Mr. Abello, Mr. Davis, and General Eubank were present at a luncheon at the Presidential Palace along with many other guests at which time these three, incidentally, discussed the radar matter. It was agreed (1) to have the radar properties in which the United States Army was interested segregated from the general bulk of the property at the depot, and (2) to appoint an officer or enlisted man of the United States Army who would act as an agent of the Philippine Government to supervise the segregation and security of the radar.

36. By letter dated September 2, 1947, Mr. Davis transmitted Mr. Childers’ letter of assurance to Mr. Abello and advised him that since he had been informed that similar assurances had been given to the President of the Philippines, that the Embassy had no reason to object to the issuance of export licenses to the corporation for material other than the radar, but that the letter was not intended in any way as intervention by the Embassy in the administration of export permits which was within the jurisdiction of the Philippine Government.

37. On September 3, 1947, Mr. Abello advised the Philippine Sugar Administrator that his order of July 30, 1947, ordering that no export licenses should be issued to the Corporation was lifted, effective immediately, “as the reason for issuing the same no longer exists,” and the Administrator was authorized to process pending applications for export-licenses from the corporation or its vendees.

38. By orders dated October 10, 1947, Captain Harold Boyce was ordered to proceed to the depot on or about October 13,1947. He went, taking with him a team of American enlisted men, consisting of one sergeant and three privates who segregated the radar and piled it into one place. The items were shipped out in two shipments; one on November 25, 1947, consisting of 46 boxes, and one on December 10, 1947, consisting of 266 boxes, the gross weight being 73,655 pounds.

39. On November 11,1947, Captain Boyce and Mr. Child-ers executed the following agreement, in pertinent part, as follows:

An agreement at the request of Leyte Supply Corporation was made, and is hereby confirmed between Leyte Supply Corporation represented by Mr. Vernon E. Childers, and the Thirteenth Air Force represented by Brigadier General K. C. Oliver, that the classified material now at Leyte and segregated from the bulk of the material owned by the Leyte Supply Corporation at said location would be returned to the United States Government as is and on the ground and that a full receipt would be given to the Leyte Supply Corporation by the United States Government at the time of this transaction.
The Thirteenth Air Force hereby designates Capt. H. L. Koyse (sic), as the representative of the Thirteenth Air Force on behalf of the United States Government in the consummation of this transaction. The Leyte Supply Corporation designates Mr. E. B. Turney to act as their representative in this transaction.
Every effort will be made to consummate this transaction without delay and prior to the turnover of the buildings at this location by the Leyte Supply Corporation to Powellsons.
The Leyte Supply Corporation herewith advises the Thirteenth Air Force that it is the intention of the Leyte Supply Corporation to file claim against the United States Government for losses it considers having been incurred because of delay involved and the loss of monetary value of the property by said corporation because of not having known of the classified restrictions at the time of their purchase of this property.
The classified material referred to herein is that which has been segregated with the consent of the Leyte Supply Corporation and has been secured from the removal from its present location pending a firm determination on the part of the Leyte Supply Corporation as to its final disposition. Execution of this agreement evidences the decision of the Leyte Supply Corporation and its agreement as to the disposition of this property.
At the insistence of the Philippine Government and by advice of the United States Government, the Leyte Supply Corporation agreed to segregate and not remove said property in order to guarantee its security.

40. The radar equipment in question was recovered after its existence became known. Neither the Vendor’s Shipping Document dated October 5, 1946, nor any other document listing the material being declared surplus and sold, reveals any radar equipment or indicates its presence.

Had it been known by the declaring agent that radar equipment was on the base, it would not have been included in the surplus declaration and would not have been included in the sale. Its presence on the base was not known by Childers and Eanslow at the time of their bid.

41. Hadar, a coined word, is used to describe a combination of transmitting and receiving radio sets, and a screen, similar to a television screen by means of which the direction and range of distant objects are ascertained. (See Remco Electronic, Inc., et al. v. United States, 117 Ct. Cls. p. 653.) Many of the parts of the radio sets are interchangeable with other radio sets both commercial and military.

The radio type components of the radar which were recovered from the depot had been exposed to prolonged moisture and adverse tropical humidity conditions which resulted in some of the components being damaged to the extent that they had no serviceable value.

42. In September 1947, the Khoongs from China made an offer by cable to purchase for eighty thousand dollars ($80,-000) the sixty (60) percent interest of Childers, Eanslow, Lee and Chang. The offer read in part:

* * * THIS OFFER INCLUDES EVERYTHING IN BASE MANILA AND CEBH. * * *

Childers replied by telegram dated October 4,1947, “Accept offer if cash paid New York immediately. * * On October 23, 1947, this agreement was reduced to a formal contract between Leyte Supply Corporation, as Sellers, and Powell Khoong as Buyer, conveying “the entire property belonging to the sellers,” the material portions of which read as follows:

(1) The “Sellers” agree to sell and the “Buyer” agrees to buy the entire property belonging to the sellers located in Tocaloban (sic), Cebu and Manila in the Republic of the Philippines, for a total price of IT. S. Dollars Eighty Thousand only (US$80,000. — ).
‡ $ $ $ $
(3) The birder shall assume full responsibility for the following liabilities beginning from October 21, 1947, provided, however, that the total amount shall not exceed US$4,000.— per month:
(a) Salaries and wages of all personnel employed by your Corporation at Tocaloban (sic), Manila and Cebu.
(b) Rent on land, bodega, office space in Tocaloban (sic), Cebu and Manila.
¡}i i{i * # *
(5) If the sellers, for any reason whatsoever, cannot transfer the property under sale to the buyer by this agreement, the sellers hereby irrevocably agree to pay to the buyer US$20,000. — as penalty.

43. On October 25, 1947, a supplementary agreement was entered into between Paul B. Ranslow for the Sellers and Powell Khoong for the Buyer, which also referred to the conveyance of “the entire property belonging to the sellers,” the material parts of which are as follows:

Supplement to an agreement entered between The Leyte Supply Corp. Manila, Philippines (The Sellers) represented by Paul B. Ranslow and Powell Khoong of Shanghai (The Buyer) on the 23rd. of October 1947 the parties to the said agreement have hereby further agreed to the following amendments:
(I) Whereas the “Buyer” is the original partner and rightful owner of 40% shares of the entire properties of the said Leyte Supply Corp. and during the time of purchasing the entire property of the said Corp. the Buyer is still holding the ownership of the said 40% shares. Therefore in Article I of the said agreement shall be meant the Sellers agree to sell and the Buyer agrees to buy the entire property belonging to the Sellers and the Buyer located in Tacaloban (sic), Cebu and Manila and for a total price of U. S. Dollars Eighty thousand shall be meant for the total price of the 60% shares of the properties of the said Corp.
(II) Whereas the Buyer, in making the said deal of purchase, is with a view to helping the sellers to dispose of the entire property of the Corp. after their previous failures in order to release their obligations of maintenance, etc., and whereas the Buyer has helped the Sellers in creating the Corp. by first investing his shares and assisted the sellers in China for the disposal of Corporation’s property during its operation. Therefore, it is hereby agreed that in Art. II of the said agreement the manner of payment of the above-mentioned price of US$80,000.00 is altered and extended to the time limit of on or before October 31, 1947 instead of clauses (a) and (b) of the said agreement.
This supplementary agreement shall be attached to the said agreement of Oct. 2nd, 1947.
* # * * *

44. On October 4, 1947, when Childers accepted by cable the offer of interveners to purchase the assets, and on October 23,1947, and October 25,1947, all of the radar equipment was still at the Tacloban base and no decision had been reached by the Army as to which of the equipment would be removed or demilitarized.

45. On October 30, 1947, after the execution of the contracts of sale described in Findings Nos. 42 and 43, a special meeting of stockholders of the Leyte Supply Corporation was held in Manila, at which the Khoongs were not present and Ranslow voted their stock by proxies. It was decided to liquidate the Corporation. The minutes of this meeting recite that the company had been able to dispose of the supplies and equipment acquired by it and no mention was made of any exception as to the radar or of any claim against the United States for the taking thereof.

46. The stockholders at the meeting of October 30, 1947, adopted a resolution amending the corporate charter so that it would expire on December 7,1947, and designating Edward B. Turney as liquidating trustee. In the enumerating of the liquidating trustee’s powers, there was a specific authorization as follows: but there was no authorization to prosecute any suit, action or other proceeding in the United States Court of Claims or other Court or tribunal of the United States.

To prosecute and defend any and all suits, actions, and other proceedings in the Courts, tribunals, departments and offices of the Government of the Republic of the Philippines and to compromise, settle and adjust the same and the subject-matter thereof;

47. Eanslow and Childers, or one of them, advised the Khoongs of the interest of the United States in seizing part of the radar, and of the embargo against exports imposed by the Philippine Government on July 30, 1947, and of the placing of guards at the base on September 4,1947, after the embargo was lifted, and of the agreement of August 30,1947, not to remove or dispose of the radar.

48. On November 13,1947, a further contract was entered into between the Corporation and Khoong reciting as consideration for the sale the sum of One Peso, the material portions of which read:

Whereas, in October, 1946 the leyte corporation acquired certain quantities of surplus properties located at the Leyt¿ Air Depot, the greater part of which properties the leyte corporation has since been selling and disposing of to third parties;
. Whereas, what now remains of said properties is of little value to the leyte corporation and it is no longer profitable for the company to continue holding those properties in view of the overhead expenses which it would have to maintain;
Whereas, the leyte corporation having already sold the greater part of these surplus properties desires to dispose of all of the remaining equipment in favor of the khoongs * * *
*****
I.
The leyte corporation acknowledges to have received from the khoongs the sum of One (P1.00) Peso.
II.
The leyte corporation sells, transfers, assigns and conveys to the khoongs all the properties belonging to the leyte Corporation located in the following places: $ $ * $ $
(c) Leyte Supply Corporation warehouses in Taclo-ban, Leyte.
III.
The khoongs hereby assume the responsibility and expense of removing or otherwise disposing of the properties mentioned in the next preceding paragraph. The khoongs further undertake to pay the storage charges that may be due the owners of the warehouses and lands on which these properties are at the present time located, * * *.
IV.
The khoongs agree to engage all the Filipino employees and laborers of the leyte corporation who are, at the present time, caring and guarding the properties herein sold * * *.

The contract of November 13,1947 was executed for the purposes of aiding the corporation and Ranslow and Childers in connection with taxation of the corporation and Ranslow and Childers. It was not intended as a bona fide contract in any way changing the agreements of October 23 and 25.

. 49. By the contracts of October 23 and 25 it was not intended that so much of the radar equipment as would ultimately be taken by the United States would be transferred to the Khoongs.

Shortly after execution of these agreements, Ranslow and Childers left the Philippine Islands and returned to the United States.

50. At or about the time the guards were placed at the air base, the officers of the defendant segregated about. 900 boxes as containing items, disposition of which the War Department thought might be advisable to restrict.

However, only 312 boxes of items were removed by the War Department on November 25 and December 10, 1947.

51. After the properties were transferred to the Khoongs, they effected disposition of the remaining properties.

Jn connection with the disposition of the properties, it was necessary for the Khoongs to obtain a license from the Philippine Government. While making application for license, to show title to the properties, the Khoongs exhibited to Philippine officials the contract of November 13,1947. The license was not granted to the Khoongs, as the proper licensing agency declined to accept as evidence of the title the contract of November 13. However, Mr; Turney, as liquidator'of the Leyte Supply Corporation applied for a license which was granted either in the name of the Leyte Supply Corporation or Mr. Turney. Operations were continued on this basis until about June 1948 when the difficulties of such operation were such that the Khoongs on June 7,1948 entered into another contract with Turney as Liquidating Trustee of the Leyte Supply Corporation for the sale of the entire properties for the sum of 160,000 pesos or $80,000. Following this contract, Khoongs obtained a license to operate and later the remaining properties were transferred to China.

The contract of June 7,1948, lists the property transferred as all the remaining aircraft, spare parts and accessories, communications and signal equipment, radio spare parts, radio testing and aircraft testing equipment with an approximate total tonnage of 5700 measured tons at present located in the following places:

a. That portion of the San Agustín Church now being used as a bodega;
b. Leyte Supply Corporation warehouses in Cebu City; and
c. Leyte Supply Corporation warehouses in Tacloban, Leyte.

52. The fair and reasonable value of the property recovered by the United States Army authorities from the Leyte Base as having been inadvertently declared surplus and included in sale of surplus on September 5, 1946, at the time and place of its recovery was $75,000.

CONCLUSION OF LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law the plaintiff is entitled to recover, and it is therefore adjudged and ordered that he recover of and from the United States seventy-five thousand dollars ($75,000); together with interest thereon at the rate of 4 percent per annum from October 13, 1947, to date of payment, not as interest but as a part of just compensation.

And it is further adjudged and ordered that the petition of the intervenors is dismissed.  