
    DAVID A. WRIGHT v. THE UNITED STATES
    [No. A-261.
    Decided April 13, 1925]
    
      On the Proofs
    
    
      Dent Act; implied agreement; authority. — Where officers of the Ordnance Department without authority to -place orders with him or to bind the United States by contract, promise plaintiff that an order will be placed and a contract made with him by the Government to manufacture and deliver to the said Ordnance Department certain machinery, and upon the faith of such promises the plaintiff incurs great expenditures in preparation for the performance of the orders promised, he can not recover his losses occasioned thereby from the Government.
    
      Contract of sale; rescission; counterclaim. — Where plaintiff by a contract of sale with a Government salvage board purchases certain second-hand machinery, a part of which is paid for, and all of which is delivered to plaintiff, and an agent of the Government requires plaintiff to sign an agreement that the said property shall not be removed without the consent of the Government, and that the title thereto shall remain in the United States, it is a rescission of said contract of sale and the unpaid balance for said machinery can not be set up against plaintiff as a counterclaim.
    
      The Reporter’s statement of the case :
    
      Messrs. Ashby Williams and R. M. Foster for the plaintiff. Mr. George W. Burleigh was on the briefs.
    
      Messrs. Dwight E. Rarer and Percy M. Cox, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant.
    The following are the facts as found by the court:
    I. The plaintiff is, and was during the different transactions hereinafter set forth in these findings of fact, a resident of the State of Illinois, doing business in the city of Chicago as a manufacturer of machine tools and a dealer in such tools, new and second hand. The greater part of the new machine tools in which plaintiff dealt were manufactured by subcontractors and the parts assembled in his plant under his supervision by his expert mechanics.
    II. The Secretary of War, on January 81, 1918, addressed the following instructions to the Chief of Ordnance:
    “ 1. There has developed a considerable shortage in this country in the supply of machine tools of the larger sizes. It takes many months to make those tools, and the work must be planned out a long time in advance.
    “The constant demands from our allies, as well as our own, require that immediate action be taken toward providing a means for insuring deliveries for the coming year.
    “ It appears necessary that the present plants be expanded, perhaps new ones built.
    “As manufacturers can not be expected to provide for such expansion without some assurance that orders will be placed, it is necessary to ascertain the needs of those requiring these tools with a view toward actually placing orders through the machine-tool section of the War Industries Board in order that new lines of production can be provided or old lines extended.
    
      “The Secretary of War therefore directs that you cause an investigation to be made as to your probable needs for large machine tools up to January 1, 1919; further, that a list be made of actual orders you feel justified in placing for those tools for the period named. He desires that you make every. effort to anticipate your needs in order that proper provision can be made for supply and that you take all time necessary to determine properly your requirements.”
    III. There were two divisions created for the purpose of dealing with the needs and requirements of the Ordnance Department, the Production Division, and the Procurement Division.
    The duties of the Production Division involved the investigation of the facilities of the country not yet engaged in the production of ordnance, ordnance stores and supplies, and to approve plans for creation of new facilities for the production of such ordnance materials. The Production Division was specifically authorized to secure the manufacture of such ordnance materials and to pass upon their suitability where orders had already been given or contracts made by the proper officers. The Production Division was not authorized to place orders or to make contracts for the manufacture of ordnance or ordnance stores and supplies or for the creation or erection of facilities for the manufacture of such ordnance materials. Officers and employees of the Production Division had no authority at any time to assume to act as procurement or purchasing agents.
    The Production Division was abolished October 28, 1918.
    The duties of the Procurement Division were to place all orders and to negotiate and execute all contracts with private manufacturers for ordnance, ordnance stores and supplies. Such duties were definitely and exclusively assigned to the Procurement Division. The Chief of Ordnance and his assistants were limited to directing the Procurement Division, through whom it must be done, to place orders with private manufacturers for ordnance, ordnance stores and supplies.
    IY. At a convention of the National Machine Tool Association held at Atlantic City, New Jersey, on May 16, 1918, Lieutenant Colonel Tripp, head of the Production Division of the Ordnance Department, and others, addressed the association on the great need of large machine tools for that department, and he urged anyone in the convention who could be of assistance to come to Washington and do what he could to remedy the shortage. The plaintiff, who was a member of the association, was present, and, in response to Colonel Tripp’s appeal, came to Washington immediately after the close of the convention, on or about May 18, 1918, and visited the office of Colonel Tripp, where he met an officer who took him to another part of the building and introduced him to Major Charles D. Westcott, informing him'that Major Westcott was handling the entire program for machine tools, who in turn introduced him to Mr. Howard Abbott, who, Major Westcott said, wTas working with him and that together they had charge of the entire project. They had the program on a chart, a copy of which they gave plaintiff, and asked him what part of the program with the right kind of facilities he could handle. General Pershing had sent an urgent cable for lathes to reline and rebore guns in France, and in response to his request they wanted 55-inch, 88-inch, 102-inch, and 120-inch lathes. .It was finally concluded that plaintiff could best handle that part of the program relating to the production of 88-inch lathes. The plaintiff informed Major Westcott and Mr. Abbott that with his present facilities he would be unable to render them any assistance. He was then engaged in the manufacture of a large number of lathes for private parties. Pie called their attention, however, to an abandoned machinery manufacturing plant in Chicago, known as the “ old Allis-Chalmers plant,” then used for storage purposes, which was well suited for the manufacture of large lathes after proper rehabilitation, and large enough to give the required production. A number of conferences were held thereafter. The. plaintiff was urged by them to go ahead and increase his facilities, and was encouraged to believe that he would receive a contract to manufacture and deliver to the Ordnance Department sixteen 88-inch lathes, and $15,000 each was named by the plaintiff to them as a price that would pay for the machines and absorb the cost of the rehabilitation of the Allis-Chalmers plant. Major West-cott at the time was an officer in the Ordnance Department, assigned as engineer in preparation of machine-tool equipment for production and relining of field and railway artillery, and Mr. Abbott was a civilian employee of the plant section of the Production Division of the Ordnance Department, and neither of them had any authority to place an order or to negotiate a contract or agreement binding the United States.
    Y. The plaintiff after the conferences with Major West-cott and Mr. Abbott, described in Finding IY, returned to Chicago, and on May 29,1918, purchased the Allis-Chalmers plant for $125,000. In order to secure this plant plaintiff was required by the agent in charge of the sale to purchase an adjoining corner lot at $30,000, making the entire price $155,000. The plaintiff began without delay the rehabilitation of the Allis-Chalmers plant, and by about July 15, 1918, had so far rehabilitated and equipped the same as to have been able to begin the manufacture of heavy duty lathes, and the plaintiff so notified the Ordnance Department and requested an agreement to manufacture heavy duty lathes for said department. In the meantime it had been discovered by the Ordnance Department that the heavy duty lathes for which plaintiff expected to secure an order could be immediately manufactured by three other plants, and plaintiff was so informed.
    VI. After the purchase by plaintiff of the Allis-Chalmers plant, the Ordnance Department began consideration of a program for the manufacture of 194-millimeter guns, which required among other machine tools forty-three 42-inch by 40-foot lathes for boring said guns. About August 20, 1918, Mr. Howard Abbott visited plaintiff’s plant and was satisfied with the condition of the same and called his attention to the need of the Ordnance Department for 42-inch gun-boring lathes and encouraged him to believe that he might secure an order for fhe manufacture of the same. Mr. Abbott had no authority to make or negotiate an agreement for the manufacture of such lathes. Thereafter the plaintiff completed the rehabilitation of his plant, at a total- cost of $58,810.52. Mr. Abbott died April 16, 1919.
    
      VII. On August 26, 1918, the Production Division of the Ordnance Department sent the following telegram to plaintiff:
    “ Ordnance Department requires the following heavy duty engine lathes stop twenty fort3^-two inch swing by thirty-foot bod tiventy-one foot centers, two carriages stop twenty thirty-six inch or forty-two inch swing by four-foot centers, one carriage and taper attachment stop nine forty-two inch swing by thirty-foot bed twenty-one foot centers, two carriages each and taper attachment each stop five thirty-nine inch swing by twelve-foot bed, standard stop wire Captain Turner possible deliveries on such sizes as you can deliver without fail before November fifteenth nineteen eighteen stop earlier deliveries desired.”
    The above telegram was sent to all manufacturers of heavy-duty lathes, 42-inch lathes being in that class.
    On August 27, 1918, plaintiff acknowledged the receipt of this telegram, stating among other things that “We are pleased to offer you our 42-inch new model heavy-duty triple-geared Fifield engine lathe at the following specifications and prices.” Then follows a description of the lathes and a schedule of prices. ' Plaintiff then proceeds:
    “ Prices are not f. o. b. our works, Chicago, Illinois.
    “ We will deliver five of the above lathes with 14' beds by November 15th; the remainder will be delivered at the rate of two per week following.
    “We do not care to accept anything but a quantity order, namely, 20 of the 14' lathes or 29 of the 30' lathes, or all.
    “ If you should desire geared head on motor-drive lathes in place of cone type as offered above, it will delay deliveries thirty days.
    “ We would appreciate the courtesy of a reply.”
    VIII. On August 28, 1918, Mr. Howard Abbott, of the Plant Section of the Production Division, sent the following telegram to plaintiff from Washington:
    “ It is necessary that you come down here at once. Production Division, 2508 Army Ordnance.”
    In response to this telegram plaintiff came to Washington and conferred with Captain John Turner and Mr. Abbott of the Plant Section of the Production Division, Major West-cott, of the Ordnance Department, and Captain Carlton, negotiating officer of the Procurement Division of the Ordnance Department, concerning the program of the Ordnance Department relating to heavy-duty lathes. The only one of these officers authorized to enter into negotiations for a purchase order or contract with plaintiff was Captain Carlton. The letters and telegrams referred to below will best show what occurred at their conferences.
    IX. On September 3, 1918, the plaintiff wrote to Mr. Howard Abbott from Chicago as follows:
    “ Dear Sir : Supplementing our quotation of August 27th, we propose to furnish 30 42-inch lathes to take 33-foot centers with two carriages, arranged for 25-hp., A. C., motor drive and 2 2-hp., A. C., motors for quick carriage return and apron control; also 13 lathes as above with taper attachment for each carriage and equipped for 15 hp., A. C., motor instead of 25-hp., as per specifications and prices given in our quotation of August 27th.
    “We will endeavor to make delivery on the above lathes as follows :
    3 iii December, 1918.
    4 in January, 1919.
    G in February, 1919.
    8 in March, 1919.
    10 in April, 1919.
    12 in May, 1919.
    “ Trusting you will favor us with this order, we are.”
    On September 23, 1918, plaintiff telegraphed to Major Westcott:
    “ Have heard nothing regarding the forty-three-inch lathes, forty-two-inch swing; kindly wire advices our expense.”
    On September 25, 1918, plaintiff telegraphed to Captain Carlton from Chicago :
    “ Reference your letter September third informing me you were preparing requisition for approval board of review covering three sixty-inch by thirty-six foot heavy-duty triple-geared Fifield engine lathes stop we received priority certificate for these to-day stop kindly wire government order number stop when in Washington was informed requisition would be made up covering forty-three forty-two-inch by forty-foot lathes wire has this been done and shall we proceed with order for the forty-three lathes.”
    A contract with plaintiff was entered into for three 60-inch lathes and subsequently cancelled, and forms the basis of the suit of plaintiff against the United States, No. A-300 now pending in the Court of Claims (post, p. 546).
    On September 27, 1918, Major Westcott wrote to plaintiff as follows:
    “Dear Sir: Your telegram of September 23rd has been received and I have referred it to Mr. Howard Abbott, of the plant section, Production Division.
    “This 42" swing lathe project has been temporarily held up, and for that reason the Procurement Division has been unable to issue purchase orders.
    “ Mr. Abbott is just now on his way to St. Louis, and he will doubtless call on you in Chicago, confirming this statement and giving you full information.”
    On the same day, September 27, 1918, plaintiff wired Mr. Howard Abbott:
    “Kindly wire my expense what has become of order for forty-three lathes, forty-two-inch swing, which I understand was to be sent to me.”
    On the same day, September 27, 1918, the Procurement Division wired plaintiff:
    “Referring your wire September twenty-fifth War Ord one four eight five nine dash one four seven C applies to order for three sixty-inch lathes period this division has no authorization to purchase the forty-two-inch lathes mentioned therefore can not place order with you Procurement Divn two four eight five Army Ordnance.”
    X. On September 28, 1918, plaintiff wrote to Major Westcott as follows:
    “ Sir : We are more or less in a quandary in regard to the order for forty-three 42"x40' lathes which the writer was given to understand would be placed with us immediately after my return from Washington some three weeks ago. I wired Capt. Carlton in regard to this order on the 25th inst. and have his reply to the effect that his division has no authorization to purchase the 42" lathes mention: d and he therefore could not place the order with us.
    “ You will recall that both yourself and Mr. Abbott assured me while in Washington that this authorization would be made, and that I might expect to receive the order. I informed you at the time that I would proceed accordingly, and as I have received no further word from you, I trust this order has not since been diverted elsewhere, as I refused to quote on the forty-eight lathes 48" swing for the Navy Department on Sept. 24th, on account of tha forty-three lathes promised me, taking up my capacity.
    “I am enclosing herewith progress record on the three 60" x 36' lathes, priority certificate for which was received by me on Friday, tha 27th inst. and for which we expect to have all the material in our shops and well machined within the next thirty days. I should b; very glad to have you show the progress record to Mr. Abbott and Capt. Carlton, for the reason that I do not beliei^e anyone in Washington realizes the strenuous efforts we have made toward serving the Government.
    “ Wish to state also that on the 42" lathes we can show a better progress record on many of these than we shoiv on the enclosed sheet, which we believe should assist us in securing this order.
    “The writer appreciates your good offices in our behalf and is relying on you to give the matter of these 42" lathes your consideration, as I would like to be saved another trip to Washington at the present time. However, if you think it advisable I shall arrange to see you personally. Will you kindly advise me at once, obliging.”
    On the same day, September 28, 1918, plaintiff wrote to Mr. Howard Abbott:
    “Deae Sir: Will you kindly advise me what disposition has been made of the requisition for 43 42" x 40' lathes which the writer had up with yourself and Major Westcott, in Washington, some weeks ago?
    “ You will recall that I was encouraged to believe that this contract would be placed with me, and I, therefore, proceeded accordingly, on my return to Chicago, and have since refused to bid on any more lathes for Government work, and also for private industries, for the reason that these 42" lathes would take up my capacity for some time to come.
    “ I have been unable to secure any information in regard to this order, however, and I sincerely trust that same has not been diverted elsewhere.
    “ I wired you on the 27th inst. in regard to this order, but have no reply to my telegram. Will you be good enough to look into this matter, and advise me fully ? At present I prefer not to make another trip to Washington, as I am-very busy on the three 60" x 36' lathes for which I have just now received priority certificate. However, if advisable, I can arrange to go, rather than face a prospect of losing this order, as I have much of the material now on hand. Please advise.”
    On the. same day, September 28, 1918, plaintiff also wrote to Captain Carlton of the Procurement Division, the only one of the three officers written to authorized to place an order, as follows:
    “ Sie : Please accept thanks for your wire of the 27th inst. giving us war order number covering the three 60" x 36' lathes which we are making for the U. S. Government. Wish to state that while we have as yet not received formal contract covering these three lathes, we have received priority certificate and are therefore proceeding with the work accordingly. (War Order 14859-1047-C; priority certificate 111683.)
    “ It has been called to the writer’s attention th$t your letter of September 3rd, PWC No. 8335-13426, specified price includes contractor’s regular export boxing, f. o. b. cars Chicago. We wish to call your attention to the fact that our price does not include boxing; the boxing of these lathes would cost approximately $750.00 each, and we will be glad to do this work at our cost if you so' desire. Please advise in this regard.
    “We are at a loss to understand why we have not received the order for -the forty-three 42" x 40' lathes which the Production Division gave the writer to understand would be placed with us. It was my understanding that I was to proceed with this work and that the formal order for these lathes would be in my hands very shortly. We now have a great deal of the material covering these machines in stock and are in a quandary as to future proceedings. We are to-day writing to Major Westcott and Mr. Abbott requesting information from them, and we believe they will consult you in the matter. May we ask that you let us hear from you fully in this regard, as this matter is most important to us.”
    On October 2, 1918, Major Westcott wrote to plaintiff:
    “Dear Me. Weight: Your letter of September 28th, relative to the forty-three engine lathes 42" x 40' duly received.
    “ I assume that you have read my letter of September 27th relative to the same matter. I am turning your letter of the 28th inst. over to the Plant Section for the immediate attention of Mr. Abbott upon his return here, probably to-day.
    “As far as can be ascertained the procurement order for the 42" engine lathes have not been issued to you because the project for the 194-mm. guns which are to be manufactured by these lathes has itself been held up.- As soon as that gun project is approved in its final form procurement orders to you for the lathes in question will doubtless be issued. I am expediting this matter as much as possible in accordance with your request.
    “ With best wishes, I remain.”
    
      XI. About February 20, 1919, Major Westcott, who was still in the service and in uniform, came to Major Hawkins, of the Contract Section of the Procurement Division, the only contracting officer in the Ordnance Department at that time, and handed to Major Hawkins the following paper:
    “War DEPARTMENT,
    “ Office oe the Chief of Ordnance,
    “ Washington, February 19,1919.
    
    “ From: The Chief of Ordnance.
    “ To: The Secretary of War.
    “Subject: Purchase of Increased Plant Facilities in Settlement of Claim for Reimbursement by David A. Wright.
    “ 1. The accompanying ordnance report upon the claim of David A. Wright for reimbursement in the sum of $63,-810.52, with attached letter from Major Westcott, is respectfully submitted for information of the Secretary of War. Report and correspondence are self-explanatory.
    “2. In view of the premises it is recommended herewith that, in accordance with the usual procedure in such cases, the Chief of Ordnance be authorized by the Secretary of War to conclude a contract with claimant for the purchase of increased plant facilities to the value of $63,810.52, expended by the latter in preparation of his plant for the ordnance work in question.
    “3. It is requested that inasmuch as the accompanying report pertains to the files of the Ordnance Department and will be required for constant use and reference in settlement of the Wright claim, it be returned to the Chief of Ordnance.
    “ C. C. Williams,
    
      “Major General,
    “ Ohief of Ordnance, U. S. A.
    
    [1st Ind.]
    “ FEBRUARY 20, 1910.
    “ To: The Chief of Ordnance, U. S. A.
    “From: The Third Assistant Secretary of War.
    “ The foregoing recommendation for increased facilities is hereby approved.
    “ F. P. Keppel,
    “ Third Assistant Secretary of War.”
    
    The report, referred to in the above paper ivas a brief, in favor of the claim, prepared by Major Westcott. The amount, $63,810.52, consisted of the cost of the rehabilitation of the Allis-Chalmers plant, $58,810.52, with $5,000 added as the value of drawings prepared by the plaintiff of the plan of rehabilitation. Major Hawkins refused to sign a contract, because the occasion for procuring such munitions was over. Thereupon Major Westcott threatened to have him court-martialed.
    The following memorandum on the communication of General Williams to the Secretary of War was added by Major Hawkins:
    “ WaE DEPARTMENT,
    “ Oeeice oe the Chief of Ordnance,
    “ Washington, February 26,1910.
    
    “ memorandum
    “War Ord-20043-MC-6003 — David A. Wright
    “This requisition was dated February 21st and calls for $63,810.52 for ‘ increased plant facilities.’ The Wright Company never had a contract for anything, but was apparently promised a contract for some engine lathes on the reliner program by Major Charles D. Westcott, who seems to have been in the Production Division, but is now apparently acting in the dual capacity of attorney for Mr. Wright and seems to be assigned to the Executive Section, O. O.
    “The real contracts for these lathes on the reliner program (p. 13500) were placed in the proper way through Miscellaneous Section of the Procurement Division on August 18'th. The Wright matter never reached the Procurement Division at any time.
    “ Major Westcott persuaded General Williams to send the memo, to the Secretary of War, dated February 19th, in which he requested that the Chief of Ordnance be authorized by the Secretary of War to conclude a contract with claimant for the purchase of increased plant facilities to the value of $63,810.52 expended by the contractor in preparation of his plant for the Ordnance work in question. Mr. F. P. Keppel, Third Assistant Secretary of War, under date of February 20th, noted— The foregoing recommendation for the purchase of increased plant facilities is approved.’ The requisition for the contract contains the name of B. Y. Proctor as negotiator. The requisition is signed by Col. G. V. Jenks.
    “ Capt. Cooper and the writer submitted to General Peirce to-day the propriety of issuing a contract upon this requisition. General Peirce stated that there was no justification for the issuance of a contract; that all that could be done was to prepare a memorandum of the supposed agreement and file same awaiting action by Congress. If Congress passes the pending legislation the whole matter will be submitted in the regular way for settlement in the Chicago District Claims Board. Even should Congress pass the legislation, the contract will not be prepared, but the file will serve as an aid in the settlement of any claim Mr. Wright may have.
    “R. H. Hawkins,
    
      “Major, Ord. Dept., U. S. A.”
    On March 14, 1919, the following communication was addressed by Major Hawkins to the Chicago District Claims Board:
    “ From: Contract Section, Administration Division, O. O. “To: Chicago District Claims Board, Chicago, Ill. Attention Major F. R. Schanck.
    “Subject: Claim of David A. Wright-War-Ord-20043-MC-6003.
    “ 1. Forwarded herewith please find copy of a requisition for contract dated February 21, 1919, upon which this section has declined to issue a contract.
    “2. If the contractor is entitled to anything at all it would be under the provisions of the act of March 2, 1919, Supply Circular No. 17, and Claims Board Circular No. 56.
    “3. With the copy of the requisition there is a copy of memorandum from the Chief of Ordnance to the Secretary of War (O. O. 167/10321), dated February 20, 1919, with first indorsement by Mr. Keppel, Third Assistant Secretary of War, dated February 20; also a memorandum signed by the writer under date of February 26; also memorandum addressed by Major Charles D. Westcott to the writer under date of February 27 (O. O. 167/10492); also a ‘marked report on the claim of David A. Wright tor expenditures at request of the Ordnance Department in preparation of his Chicago plant for the manufacture of 43 engine lathes by Charles D. Westcott, LL. M., D. C. L. (major, Ordnance Dept., U. S. A.).’
    “ 4. Unfortunately Major Westcott has stated in the office of the writer upon numerous occasions that Mr. Wright was his client.
    “ 5. In the summer of 1918 numerous manufacturers were asked to undertake the manufacture of heavy lathes, which were intended to be used on the so-called reliner program. Contracts were placed with a number of contractors, moneys allotted upon the respective contracts, war-order numbers assigned, procurement orders issued, and later formal contracts executed. One of the illustrative contracts in this group is that issued to the Amalgamated Machinery Corporation, P13500-1235M, with which you are doubtless familiar: No proper papers were issued to show any contract with David A. Wright.
    “ 6. Who undertook the so-called negotiations with Mr. Wright does not appear any place. The proper negotiator on the contracts included in the reliner program was Capt. H. C. Carlton, now transferred to the District Claims Board, New York City. The indications point strongly -to attempted negotiations by Major Westcott, who is in the unfortunate position above refererd to. Major Westcott at that time was doing ‘time studies on machine tools.’
    “ 7. The writer understands that Major Westcott had no ¡lower to negotiate contracts of any character whatsoever. ,
    “ 8. It is understood that no lathes have been completed or delivered.
    “ 9. It is suggested that the whole matter receive careful attention in your office. You have the entire file appearing in this office.
    “ By order of the Chief of the Administration Division.”
    Major Hawkins was the contracting officer and as such was charged with the duty of looking into such claims and coming to any conclusion justified by the evidence. He had ample authority to write the above letter to the Chicago District Claims Board. Major Westcott had-no authority to investigate plaintiff’s claim or to advise the Chief of Ordnance to recommend the claim to the Secretary of War. General Williams admits Major Hawkins had authority to criticise him for following the advice of Major Westcott. After Major Westcott left the active service it was reported to the Chief of Ordnance by the personnel officer that he should not be commissioned in the Ordnance Reserve Corps.
    XII. The duties of the employees of the Production Division were to locate and investigate the sources of supply of ordnance munition and to encourage the increase of facilities for their production. They had no authority to place orders, make contracts, or enter into negotiations of any kind with manufacturers that would bind the Government. These employees well knew the limitations placed upon their activities. The employees of the Plant Section of the Production Division frequently went beyond the limits of their authority and attempted to place orders with manufacturers against the strong protests of the negotiator of the Procurement Division, who had considerable difficulty in straightening out some of the negotiations that were surreptitiously carried on by such employees.
    XIII. The defendant on July 3, 1922, filed a counterclaim for a balance alleged to be due by plaintiff to the United States on the purchase of certain machinery from the Chicago and St. Louis Ordnance Salvage Boards, and after-wards, on February 19, 1924, filed an amended counterclaim. The material facts out of which this counterclaim arose are set out below.
    On April 1, 7, and 23, 1920, plaintiff agreed to purchase from the Chicago United States Ordnance Salvage Board certain secondhand machine tools, principally lathes, of different makes, and made certain payments thereon, the plaintiff expecting to overhaul and dispose of the same in a short time. Some of it had been sold under contract. On March 25, 1920, April 13, 1920, and May 29, 1920, plaintiff agreed to purchase from the St. Louis United States Ordnance Salvage Board certain other second-hand machine tools and also made partial payments thereon. These machine tools bargained for as aforesaid were not delivered to or received by plaintiff at his warehouse in Chicago until the later part of August, 1920, and the first part of September, 1920, although the plaintiff had repeatedly requested delivery and sent more than once at his own expense his own trucks to get the same. The amount of the purchase price unpaid for said machine tools was $25,337.40. These machine tools, instead of being delivered within a reasonable time, were rushed into plaintiff’s yards against his protest faster than he could pay for or dispose of. On September 2 and 11, 1920, the machinery bargained for from the Chicago Salvage Board was stored in his warehouses. That bargained for from St. Louis was on about 40 freight cars that stood in his yards. The salvage officials, being fearful of plaintiff being thrown into bankruptcy, required him to sign two papers, one dated September 2, 1920, by which plaintiff consented to hold the property agreed to be purchased from the Chicago Salvage Board, amounting to $16,709.82, as custodian for the Government, on the following terms:
    . “ It is hereby understood and agreed that the title of none of the property above listed has passed from the United States and vested in David A. Wright, but that the ownership of said property still remains in the United States, and that the same is held by David A. Wright as custodian only, same to be held by him until further instructions from duly accredited representative of the ordnance salvage board, Chicago district, without cost to the Government for storage, handling, or any other charge; that the Government’s duly accredited representative shall have the right to sell or dispose of any or all of the above-listed property on such terms and conditions as the Government or its duly accredited representatives shall see fit, and that the Government or its duly accredited representatives shall have access at any and all times to the premises of the said David A. Wright for the purpose of loading and removing said property from the premises of said David A. Wright.
    “It is hereby further understood and agreed that said David A. Wright shall have the right to purchase for cash, as heretofore agreed, any and all of the above items within the period of thirty days from the date hereof, but nothing-in this agreement shall be construed as giving said David A. Wright a prior claim or right to the purchase of above-listed machinery, and that the Government or its duly accredited representatives shall have the first right to sell and dispose of said property.
    “ It is further understood and agreed that the said David A. Wright shall not remove any of said above-mentioned property from his premises or sell or dispose of or hypo-thecate or procure -loan upon said property without the consent in writing of the said party of the second part to this agreement.”
    By the second paper signed September 11, 1920, the plaintiff consented to hold the property agreed to be purchased from the St. Louis Salvage Board, amounting to $14,746.10, as custodian for the Government, and to pay freight charges, demurrage, etc., and unload without cost to the Government, otherwise the conditions were the same as in the paper signed September 2, 1920. The total value of the machine tools held by plaintiff under the two agreements was $31,455.92, on which there remained an unpaid balance of $25,337.40. The lot from St. Louis was after-wards unloaded and stored in plaintiff’s warehouses, where it still remains, the freight and other expenses having been paid by plaintiff. The two papers described above were executed by the plaintiff only, and the officer who requested their execution had authority to do so.
    XIV. On May 19, 1920, the plaintiff entered into a contract with Col. It. H. Hawkins, contracting officer of the Ordnance Department, for the purchase of secondhand machine tools. The only lot agreed to be purchased under this contract was that from the St. Louis salvage board .on May 29, 1920, on which there was a balance due of $3,108; all the other lots were bargained for before the contract was made.
    The contract of May 29, 1920, is attached to these findings as Appendix A, and is made part of this finding by reference thereto.
    XV. The plaintiff paid freight charges upon the machinery delivered to his plant from Chicago $152.91, and freight and demurrage charges upon said property delivered from St. Louis amounting to $2,685.07. The reasonable costs and charges incurred and expended by the plaintiff in unloading the said property was $7.50 per net ton, upon the Chicago property $2,522.20, and upon the St. Louis property $2,563.33. The plaintiff has cared for and slushed the said machinery twice per year since October 1, 1920, and the reasonable value of this service has been $5 per machine upon the 115 machines per year. Plaintiff has also at his own expense stored the said machinery at his plant at Chicago since October 1,1920, and such machinery has occupied 5,445.72 square feet of space. The reasonable and usual value of such storage space was 7% cents per square foot per month or $408.51 per month.
    XVI. Plaintiff, upon the armistice and suspension of all war work, submitted a claim to the War Department for damages for the cancellation of the alleged agreement for forty-three 42-inch lathes, under the Dent Act, asserting $63,180.52 for rehabilitation cost and $34,424.47 for materials purchased. The claim was rejected by the Board of Contract Adjustment upon the ground that there was no agreement within the meaning of the Dent Act, and the decision of the board was affirmed by the Secretary of War. Decisions of Board of Contract Adjustment, vol. I, p. 850; also id., vol. 8, p. 232.
    APPENDIX A
    Whereas certain machine tools have been procured and acquired by the Ordnance Department, United States Army, since April 6, 1917; and
    Whereas some of these machine tools have parts missing or broken, some have special features, and others are single-purpose machines; and
    Whereas the contractor has facilities for repairing, modifying, and rebuilding such tools; and
    Whereas the United States deems it expedient to dispose of same to the best advantage;
    Now, therefore, in consideration of the mutual covenants herein contained, it is agreed as follows:
    Aeticle I. Material to be sold. — The United States agrees to sell and the contractor agrees to purchase and pay for, under the terms and conditions herein set forth, such machine tools under the control of the salvage board of the Ordnance Department as may be selected by the contractor from time to time within a period of one year from the date of the execution of this contract, and which, in the sole discretion of the contracting officer or his authorized representative, may be available for sale at the time of such selection and may be sold hereunder advantageously to the United States, of the following character and classes :
    
      (a) Machine tools having parts missing or broken.
    
      (b) Machine tools having special features or special attachments.
    
      (c) Single purpose machine tools.
    Art. II. Conditions. — The contractor agrees to accept the machine tools purchased under this contract in the condition in which they and each of them may be at the time of their selection by the contractor, without warranty or representation by the United States as to their quality, condition, or fitness.
    Art. III. Contract price. — The Chief of Ordnance or his representative, with the approval of the Director of Sales of the War Department, shall establish prices upon the surplus machine tools of the United States of the classes being sold hereunder and may change the prices so established from time to time. The contractor agrees to pay for each machine tool purchased by him under this contract the price established as above provided and in effect at the time of the selection of such machine tools.
    Aet. IY. Payment. — The contractor, at the time of the selection of a machine tool or machine tools, shall pay to the United States ten per cent (10%) of the purchase price of such tool or tools, and within thirty (30) days thereafter shall pay an additional ten per cent (10%) of such purchase price,_ and within ninety (90) days from the date of such selection shall pay the entire balance of the purchase price of such tool or tools.
    The United States shall be under no obligation to sell any machine tool or tools to the contractor under the provisions of this contract or to refrain from disposing of same in any manner it may see fit until such machine tool or tools shall have been selected by the contractor and approved for sale hereunder by the contracting officer or his authorized representative and the initial payment of ten per cent (10%) of the purchase price therefor has been paid by the contractor.
    Aet. Y. Delivery. — The contractor shali, within ninety (90) days after the selection of any machine tool or tools, furnish the contracting officer, or his duly authorized representative, shipping instructions for such machine tool or tools. The United States will deliver the machine tools purchased by the contractor, properly crated, f. o. b. cars at points where same may be stored.
    Where machine tools select'd by the contractor are in storage which must be abandoned by the United States prior to the expiration of ninety (90) days from the date of the selection of such machine tools by the contractor, full payment of the purchase price of such machine tools shall be made by the contractor and shipping orders therefor furnished by the contractor not less than ten (10) days prior to the date upon which the Government must abandon such storage. Notice of the necessity of the abandonment of such storage by the Government shall be given the contractor by the' contracting officer or his representative not less than thirty (30) days prior to the date of such abandonment.
    Provided, however, that if the United States is unable to make shipment of such machine tool or tools prior to the date of such abandonment, the contracting officer may permit the contractor to make the final payment upon such machine tool or tools at a later date, but not to exceed ninety (90) days from the date of the selection of such machine tool or tools, and prior to their delivery to the contractor.
    The United States will not deliver to the contractor any machine tool purchased hereunder until the contractor shall have paid the full purchase price of said machine tool to the United States.
    
      Upon delivery of said machine tools as herein provided title thereto shall pass to the contractor, and all responsibility of the United States with respect thereto shall thereupon cease.
    It is expressly agreed that the contractor shall pay all freight or express charges.
    In the event of the failure of the contractor to furnish shipping instructions within the time spreified herein for any machine tool purchased hereunder and fully paid for by the contractor, such machine tool shall be held by the United States, at the contractor’s risk; or the United States, should it so elect, may place same in storage, other than that of the Government, at the contractor’s expense.
    ART. VI. Nonpayment by contractor. — It is further agreed that should the contractor default in making any payment due upon any machine tool purchased hereunder, the United Stafc s shall be entitled to retain fifty per cent (50%) of any and all prior payments made by the contractor upon the purchase price of such machine tool, as liquidated damages for such breach of the contract, and the contractor shall have no further right or claim to said machine tool.' The remaining fifty per cent (50%) of any and all prior payments upon such machine tool shall be returned to the contractor by the United States.
    Art. VII. Termination of contract. — Should the contractor, at any time, make default in the performance of this contract, the United States may, at its option, cancel this agreement without prejudice to any other rights or remedies which it may have.
    Art. VIII. Settlement of disputes. — Any doubt or dispute which may arise as to the meaning of-anything contained in this agreement, or as to its performance or nonperformance, shall be referred to the Chief of Ordnance for determination. If, however, the contractor, shall feel aggrieved at any decision of the Chief of Ordnance upon such reference he shall have the right to submit the same to the Secretary of War, whose decision shall be final and binding upon both parties hereto.
    Art. IX. Not transferable. — Neither this contract nor any interest herein shall be transferred by the contractor to any other party, except to the extent permitted by section 3477, Revised Statutes of the United States.
    Art. X. Officials not to benefit. — No Member of or Delegate to Congress, or Resident Commissioner, is or shall be permitted to any share or part of this contract or to any benefit which may arise herefrom, but this article shall' not apply to the contract so far as it may be within the operation or exceptions of section 116 of the act of Congress approved March 4, 1909 (35 Stat. 1109).
    Aet XI. Approval. — It is hereby agreed that this contract shall not be valid or binding on either of the parties hereto unless and until the Director of Sales of the War Department shall have indorsed his approval hereon.
    ART. XII. Definitions. — Whenever in this contract the words “ hereinafter enumerated ” are used they shall mean—
    Contractor: The party of the second part, his legal representatives, successors, and assigns.
    Contracting officer: The officer in whose name this contract is executed, his successor or successors, his or their duly authorized agent or agents, or anyone from time to time designated by the Chief of Ordnance to act as contracting officer.
    Aet. XIII. Notice. — Any notice to the contract shall be deemed to have been sufficiently given under this contract when mailed in a sealed, post-paid wrapper addressed to him at 568 West Washington Street, Chicago, Illinois, and any notice to the United States shall be deemed to have been sufficiently given when mailed in a sealed, postpaid wrapper addressed to the Chief of Ordnance, United States Army, Washington, D. C.
    In witness whereof the parties hereto have caused this contract to be duly executed, in quadruplicate, by their re-‘ spective officers thereunto duly authorized, the day and year first above written.
    UNITED States oe America,
    By B,. H. Hawkins, (Sgd.),
    
      Lt. Gol., Ord. Dept., ü. S. A.,
    
    
      ■Contracting Officer.
    
    D. A. Weight, (Sgd.),
    
      Chicago, Contractor.
    
    Witnesses:
    Genevieve Strobed,
    H. L. Dewsberrv. (Sgd.)
    Approved June 5, 1920.
    E. D. Moese, (Sgd.),
    
      Director of Sales.
    
    This is to certify that the within is a true and complete copy of a contract executed by the parties hereto and now on file in this office, Washington, D. C.
    Jno. G. Booton,
    
      Major, Ord. Dept., U. S. A.
    
    The court decided that neither plaintiff nor defendant was entitled to recover.
   Booth, Judge,

delivered the opinion of the court:

This is a Dent Act ease. The plaintiff predicates his right of recovery upon an informal contract. The plaintiff was engaged in the manufacture of machine tools. His plant was located in the city of Chicago and was prior to the time of the transaction here involved sufficient in size to care for his enterprise, but wholly insufficient to carry on the contract work which the Government desired. What he now claims, and the damages he insists he is entitled to recover, arose in the following manner: On May 16, 1918, a general convention of the National Machine Tool Association was held at Atlantic City, N. J. The plaintiff, as a member of the association, attended this convention. Lieutenant Colonel Tripp, representing the Bureau of Ordnance, in an address to the convention, appealed to the members of the association to cooperate with and come to the assistance of the Government in the matter of machine tools. The situation was depicted by the officer as extremely critical and the necessity acute and vital. The plaintiff came to Washington from the convention and immediately got in touch with the Bureau of Ordnance. Maj.’ Charles D. Westcott, to whom he was introduced, was singled out for him as the officer in charge of the machine tools program. Major Westcott turned him over to Mr. Howard Abbott, said to have been associated with the major in the matter, and thereafter most of plaintiff’s dealings were with Mr. Abbott. Major Westcott and Mr. Abbott disclosed to the plaintiff the urgent needs of the department, going into detail, and sought from the plaintiff information of his present ability to contract for some portion of the contemplated machinery. It was finally agreed between them that the plaintiff’s knowledge of lathes and their manufacture best fitted him for an undertaking to manufacture the same. The plaintiff, however, assured the officers that his present plant facilities were decidedly inadequate to in anywise take on and complete the manufacture of the lathes decided upon, and that his only hope of being of any real' assistance was to secure additional plant facilities. He informed the officers that there was a vacant building, formerly used as a manufacturing plant by the Allis-Chakners Company, which lie might secure, rehabilitate, and thus procure the needed facilities for manufacturing a substantial number of lathes. This situation appealed strongly to the officials, and they promptly urged the plaintiff to carry it forward, promising him at the time that if he did so he should have contracts, the consideration for which would be fixed at a price sufficient to absorb the cost of the rehabilitation of the acquired plant, discussing at the time the supplying of forty-three 42-inch lathes, and assuring him a contract for the same, a contract which would have practically absorbed the cost of rehabilitation, as a matter of fact going into detail respecting this contract and formulating the plans and specifications therefor, which the plaintiff thereafter prepared and submitted. Following a number of conferences concerning the matter, the plaintiff returned to Chicago, and on May 29, 1918, purchased the Allis-Chalmers plant, paying therefor $155,000, and with exceeding diligence and promptness rehabilitated the same at a cost of $58,810.52. On July 15, 1918, within two months after his visit to Washington, the plaintiff notified the department that he was equipped and ready to take over the contracts mentioned to him in his first conferences. In August, 1918, Mr. Abbott personally inspected the new plant and gave it his approval. The Ordnance Bureau gave the plaintiff one contract, and one only, for the manufacture of three 60-inch Fifield lathes at $20,000 each, and, despite their repeated promises and assurances to the contrary, the plaintiff received no other orders or contracts for work. The armistice precluded the contemplated activities of the department and the plaintiff’s single contract wras cancelled long before the time for completion. This suit is for the recovery of the amount expended in rehabilitating the old Allis-Chalmers plant, $58,810.52; $17,671.56 overhead expenses incurred in the rehabilitation of said plant; $5,000 for engineering services in preparation of the plans and specifications ^or the contract alleged to have been made for the manufacture of forty-three 42-inch lathes, and $10,977.38 for the materials purchased to perform the same, totaling a claim for $92,459.46.

The kaleidoscopic changes and reorganization of the Ordnance Bureau going on at the time plaintiff conducted his transaction precludes a recovery in this case. There can be no doubt but what the plaintiff was positively assured the contract for which he contends; nor that he made the purchase of the new plant on the faith of such assurance. As a matter of fact, he refrained from taking on other and profitable work for the Navy Department because of this fact. The record discloses that just prior to plaintiff’s dealings with the department, the Chief of Ordnance operated the department upon a plan known as the commodity organization, i. e., bureaus were established for the procurement of the necessary ordnance supplies, and each bureau was empowered with plenary authority to contract for and purchase the particular commodity within its jurisdiction. A change in the office of the Chief of Ordnance brought about a complete reversal of the organization, and instead of the commodity plan, a new and novel organization predicated upon an organization known as functional divisions was adopted, bo far as this case is concerned, we need only mention that in pursuance of this organization a procurement and production division was established. In the production division a plant section ivas set up, and this section was charged with surveying the general conditions as to plant facilities throughout the country and encouraging the devotion of such facilities to war production, as well as soliciting enlargement of the same to meet the needs of the department. The officials with whom the plaintiff dealt, with the exception of Major Westcott, whose status seems never to have been exactly fixed, were officials of the plant section of the production division, and beyond doubt, under this organization, such officials were without authority to contract for or purchase ordnance supplies. This particular function was reposed in the contract section of the procurement division. The plaintiff, it is true, was never advised by anyone of this fact, and in this connection it is proper here to observe that within a very short time after his transaction with the department the functional organization was abandoned and the former commodity plan readopted.

In the case of Rock Island R. R. Co. v. United States, 254 U. S. 141, 143, the Supreme Court used this language: “Men must turn square corners when they deal with the Government. If it attaches purely formal conditions to its consent to be sued, those conditions must be complied with.” The Dent Act, 40 Stat. 1212, extending a forum and relief to contractors who, during the war, entered into so-called informal agreements, i. e., contracts not in writing, as required by section 3144, Revised Statutes, has not been construed to include an agreement, no matter how positive, if the officer making the same was without authority to act. We would have no jurisdiction to adjudicate if the facts and circumstance of the case disclose a situation from which a contract may not be implied, even though the authority to contract existed.

This case falls squarely within the decision of the Supreme Court in Baltimore & Ohio R. R. v. United States, 261 U. S. 592, and the plaintiff may not recover. There was, so far as the decided cases indicate, no relaxation of the statutory requirement as to written agreements under sec. 3744, Rev. Stats., relating to contracts with the War Department because of the war. Erie Coal & Coke Corp. v. United States, 266 U. S. 518. The Dent Act afforded a remedy where the contract, did not meet the statute, but it did not by its terms dispense with the necessityof a contract. However misleading, and notwithstanding the confidence with which assurances were given and accepted, it is manifest that the same, including negotiations, afford no substantial grounds for inferring a meeting of the minds and implying contractual obligations. The findings clearly disclose that a contract between the parties herein was dependent upon the carrying forward of a contemplated plan which involved the procurement of the lathes. The whole transaction was contingent; it had not been definitely decided upon, and despite the lack of authority to contract, we would be unable to render judgment upon the record, if authority obtained.

The defendant contends for a judgment of $26,647.85, with interest, against the plaintiff on a counterclaim duly plead. The facts in the record upon this issue disclose an amazing situation, decidedly anomalous, and obviously without merit. After the close of the war the Bureau of Ordnance sought to dispose of vast quantities of surplus material, a considerable portion of the same being lathes, machinery of a character the plaintiff dealt in. On April 1, 7, and 23, 1920, the plaintiff purchased from the Chicago Salvage Ordnance Board certain second-hand lathes, at the time making the advance payments required. This machinery the plaintiff contemplated overhauling and disposing of in a short time. Indeed, some of it had been sold by contract. Despite the persistent, repeated, and expensive efforts of the plaintiff to procure delivery of his purchase (he even going to the expense of sending his own trucks for the machinery), he could not obtain the same. The Chicago Ordnance Salvage Board was in a state of almost inextricable confusion. It was functioning abnormally, so much so, as will appear hereafter, that it required the heroic efforts of the officials at Washington to bring order out of chaos. In any event, the officials in charge ignored the plaintiff’s repeated requests for the delivery of the machinery involved, and finally, after the plaintiff had practically abandoned all efforts to procure the latter, and his customers had been lost, the officials of the Salvage Board in Chicago delivered at one time the whole purchase the latter part of August and the first of September. There was no market for the sale of the same, and the demand for the payment of this and the St. Louis lot was too great for the plaintiff’s financial resources; he could not meet it. Again, on March 25, April 13, and May 29, 1920, the plaintiff agreed to purchase from the St. Louis Ordnance Salvage Board certain machinery upon which he at the time made the requisite advance payments. A portion of this purchase ivas covered by a written contract between the plaintiff and Col. Hawkins, contracting officer of the Ordnance Bureau. This entire St. Louis purchase was finally rushed to the plaintiff’s plant about the same time as the Chicago purchase, in forty separate freight cars, over the protest of the plaintiff, and remained aboard the cars for some days, the plaintiff declining to accept it, and fully acknowledging his financial inability to pay for it, if he did, until finally the official of the United States designated for the purpose exacted from the plaintiff the signed agreement set out in Finding XIII. Manifestly, no such wholesale delivery of the articles purchased was ever within the contemplation of the parties to the contract of sale. This is clearly expressed in the terms of the only written contract in existence. The case would fall within the decision of the Supreme Court in Erie Coal & Coke Corp. v. United States, supra, unless delivery might alter the situation. Without acceptance, delivery alone is seemingly insufficient. Aside from this, however, as between the parties, the agreement exacted from the plaintiff by the special officer dispatched under orders from the Washington bureau to proceed to Chicago and take charge of the Chicago Salvage Board, collect outstanding indebtedness, and clean up the prevailing .confusion is an express cancellation and rescission of the contract of sale and vested title to the articles sold in the defendant. It was so intended by the parties and was and is treated as such. It was executed at a time when the purchase price was unpaid and had been demanded, and the express purpose of its execution was to save the Government harmless from the impending and contemplated bankruptcy of the plaintiff. We see no objection to the agreement as between the parties to the contract of sale. It is quite elementary that the failure of the buyer to pay at the time agreed upon, and the seller notifies him that payment is due, and the buyer thereafter refuses to pay, that the contract of sale may be rescinded by the seller and the property resold.

It is certainly far from the manifestation of an acute appreciation cef justice to- predicate a claim for a most substantial amount upon the repudiation of an express agreement exacted by the Government from one of its citizens whose patriotic exertions to assist in time of war results so unfortunately. Courts never fail to hold the contractor to the terms of his agreement in his relationship to the Government, and no authority has been cited authorizing a different rule respecting express covenants of the United States. The property involved is the property of the United States and not the plaintiff’s.

The counterclaim of defendant will be dismissed. The plaintiff’s petition will also be dismissed. It is so ordered.

Geaham, Judge; Hat, Judge; DowNey, Judge; and Campbell, Ohief Justice, concur.  