
    R. J. REYNOLDS TOBACCO COMPANY v. THE UNITED STATES
    [No. B-282.
    Decided February 9, 1925]
    
      On the Proofs
    
    
      Contract; delivery; nonacceptance of price. — Where the Government placed an order with plaintiff to furnish and deliver certain articles of manufacture and accepted them without agreement as to price, and plaintiff did not accept the price afterwards fixed by the Government nor the amount based thereon tendered in settlement, plaintiff became entitled to the fair market value of the goods delivered in conformity with the order.
    
      The Reporter's statement of the case:
    
      Mr. E. E. Shelton for the plaintiff. Mr. S. Olay Williams was on the brief.
    
      Mr. Dwight E. Rorer, with whom was Mr. Assistant Attorney General Robert E. Lovett, for the defendant.
    The following are the facts as found by the court:
    I. The plaintiff, R. J. Reynolds Tobacco Company, is a corporation organized under the laws of the State of New Jersey, and has an office in Winston-Salem, North Carolina.
    
      II. Plaintiff is now, and was at the time of the transactions herein mentioned, engaged in the business of manufacturing and selling tobacco and tobacco products, including cigarettes, smoking and chewing tobacco of various kinds, manufactured and sold under various brands.
    III. Under date of August 26, 1918, the Bureau of Supplies and Accounts of the Navy Department by the Paymaster General of the Navy placed an order with the plaintiff, under the conditions stated therein, to furnish and deliver 150,000 tins Prince Albert brand smoking tobacco and 400,000 packages Camel brand cigarettes. This order was known as Navy Order N-4130 and a copy of it is attached to plaintiff’s petition as Exhibit A and is made a part of these findings by reference.
    On the 2d day of September, 1918, the plaintiff returned unexecuted said Navy Order N-4130. A copy of their letter to the Navy Department is made Exhibit G to the petition and is made a part hereof by reference.
    IV. On or about the 7th day of September, 1918, the Paymaster General of the Navy transmitted a letter to the plaintiff referring to Navy- Order N-4130 whereby a modification was made of said Navy order. A copy of this letter, marked “ Exhibit B,” is attached to the petition and is made a part hereof by reference. Said Navy order was further modified by a communication from the Paymaster General of the Navy to plaintiff dated September 9, 1918, a copy of which, marked “Exhibit C,” is attached to the petition and made a part hereof by reference. A further modification of said Navy order was made in a communication dated November 21, 1918, from the Paymaster General of the Navy to plaintiff, a copy of which marked “ Exhibit D,” is attached to the petition and is made a part hereof by reference.
    . On February 20, 1919, plaintiff was notified that no further orders would be placed by the Navy under said Navy order. A copy of this communication marked “Exhibit E,” is attached to the petition and made a part hereof by reference.
    V. On or about the 19th day of September, 1918, a communication was transmitted to the plaintiff from the Bureau of Supplies and Accounts, a copy of which marked “ Exhibit I ” is attached to the petition and is made a part hereof by reference. This communication calls attention to the fact that Navy Order N-4130 had not been signed and returned and that payments could not be made until the order had been properly signed. On October 2, 1918, the plaintiff addressed a communication to the Paymaster General relative to said order N-4130, bearing date of August 26, and to the communication of September 19. A copy of this letter being marked “ Exhibit K ” is attached to the petition and is made a part hereof by reference. This letter stated that the order had been returned by the plaintiff to the bureau un-executed on September 2, and the reasons therefor had been stated in the letter of that date. It was stated that the order had been promptly filled and the goods billed at the price in effect, and further stated that inasmuch as the price named by the department would not prejudice any future price later decided upon as proper said Order N-4130 as modified by the letters of September 7, 9, and 26 had been or would be complied with.
    YI. The plaintiff shipped tobacco and cigarettes under said order N-4130 and the modifications thereof to the Navy and to the Marine Corps, the amount of the shipments being 1,413,784 tax-paid packages of cigarettes, 325,500 packages of cigarettes in bond, 710,208 tax-paid packages of Prince Albert smoking tobacco, and 145,152 pounds smoking tobacco in bond to the Navy, and 647,500 tax-paid packages of cigarettes and 87,500 packages of cigarettes in bond to the Marine Corps. These shipments were invoiced at $326,677.97. From time to time the plaintiff was paid on account of the cigarettes and smoking tobacco shipped as stated in the aggregate-sum of $285,070.68.
    On or about December 4, 1920, the Paymaster General of the Navy notified the plaintiff that the price of the cigarettes and tobacco furnished as stated had been determined based upon the Federal Trade Commission’s report, and thus showed a balance due the plaintiff of $12,595.08, which would be paid upon the signing and return of the original letter, and added that if the final prices were not satisfactory plaintiff should make claim in the manner prescribed by law as quoted in the original Navy order. The prices fixed were not accepted by the plaintiff nor was the amount offered accepted. The original letter was not signed and the proffered settlement was declined. The prices at which plaintiff invoiced the cigarettes and tobaccos were reasonable and were not in excess of the fair market value of the same at the time of their delivery. The reasonable and fair market value of the cigarettes and smoking tobacco delivered by plaintiff to the Navy and to the Marine Corps under said Navy Order N-4130 was $326,677.97. The plaintiff has been paid, as above stated, $285,070.68, leaving a balance due the plaintiff of $41,607.29.
    The court decided that plaintiff was entitled to recover.
   MEMORANDUM BT THE COURT

The orders placed by the Government and accepted, as stated in the findings, constituted a contract between the plaintiff and the United States under which the plaintiff became entitled to the reasonable and fair value of the goods delivered in conformity with the order. See Federal Sugar Refining Co. case, ante, p. 184, and Consolidation Coal Co. case, post, p. 608.  