
    A. C. LAWRENCE LEATHER CO. v. THE UNITED STATES
    [No. D-4.
    Decided December 7, 1925]
    
      On the Proofs
    
    
      Bent Act; subcontractors. — Where at the suggestion of one who assumed to represent the United States the plaintiff engaged in the manufacture of special leather for sale by it to manu-
    
      Reporter’s Statement of the Case facturéis of Army shoes, and immediately after the armistice received a telegram signed “ Wood Leather Byron ” requesting it to convert its surplhs Army leather into leather for civilian needs as the Government requirements had ceased, the facts show no contract under the Dent Act under which there can be recovery from the United States of the expense of such conversion.
    
      The Reporter's statement of the case:
    
      Mr. Jennings C. Wise for the plaintiff. Mr. W. Parker Jones was on the briefs.
    
      Mr. Dan M. Jackson, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant. Mr. Dwight E. Rorer was on the brief.
    The court made special findings of fact, as follows:
    I. The claimant, the A. C. Lawrence Leather Company, is a corporation organized and existing under the laws of the State of Maine, with its principal office and place of business in the city of Boston, Mass., and in the year 1918 was engaged in the tanning of light hides into upper leather, mostly of light nature and principally patent leather.
    II. In the spring of 1918 the War Department specified for the use of the manufacturers of Army shoes a special leather which was not then a commercial product.
    III. After having been invited to attend a conference at Washington between leather manufacturers and representatives of the Government for the purpose of discussing the manufacture of leather for Government needs, which conference it did not attend, claimant received the following letter:
    WAR DEPARTMENT,
    Oeeice oe the
    Quartermaster General oe the Armt,
    
      Washington, March 5, 1918. To A. C. Lawrence Leather Company,
    
      Boston, Mass.:
    
    We regret exceedingly your inability to have been present at the meeting held at this office this morning to discuss the new specifications for models A and B trench and marching shoe.
    
      We are sending yon the specifications which will give you an outline of what is wanted in these two models. It is very difficult to describe in a letter just what the Government wants in this new shoe; and we suggest that if you want to participate in the making of this leather, you come-to Washington for a conference, so we can outline to you the necessities of the Government in this matter. We feel very strongly that the cooperation of the entire tanning industry on this project is necessary. The qualifications of this leather are different from what has been made in this country in recent years, and to describe it except by personal interview is very difficult.
    The method of procedure in making up leather of this kind roughly is as follows: You follow the specifications, which is to be delivered in bends of specific trim, and submit it to this committee for examination and approval. As soon as satisfactory samples have been made and approved of they will be held at this office for future reference, and shoe manufacturers making these new models of trench shoes will be advised that leather made by you is satisfactory.
    We realize that this is a rather new way of proceeding, but we feel that the demand made by General Pershing for this shoe is so urgent that the authorities at Washington absolutely consider it of utmost importance that he receive exactly what he asks for. Won’t you cooperate with us in this matter and give us a chance to explain to you what is needed ?
    By direction of the Acting Quartermaster General.
    Hide AND Leather CoNtrol Board,
    (Signed) By Fred A. Vogel.
    IV. There were conferences, personally and by letter, in the spring of 1918 between the then assistant manager of the claimant company on the one hand and Fred A. Vogel on the other, the latter assuming to represent the United States, as a result of which the claimant entered upon the manufacture of the special leather which had been specified by the Government for use in the manufacture of Army shoes.
    Vogel urged the claimant to devote its entire facilities to the manufacture of the leathers needed in equipping the Army, some classes of which are not here in question, and as to the special leather to be made into Army shoes he represented to and promised the claimant that a market would be found for all such leather which it would make. Large contracts for Army shoes were being let by the Government to shoe manufacturers for shoes to be made of this special leather and it was the adopted plan, of which claimant was informed, to furnish it a list of factories to which these contracts were let and also to inform the shoe factories that leather meeting the required specifications could be procured of claimant. Vogel assured claimant that an outlet for its entire production would thus be furnished it but he did not promise claimant that the United States would take or pay for any leather which might not be pur- , chased by the shoe manufacturers.
    Whether or not Vogel had authority to obligate the United States to any extent, or to what extent, does not appear from the record.
    V. The claimant manufactured large quantities of this special shoe leather which, pursuant to the plan above outlined, was sold to contractors for the manufacture of Army shoes. Upon receipt of a telegram dated November 16,1918, and signed “Wood Leather Byron” it ceased the further manufacture thereof. Said telegram was as follows:
    A. C. LawreNce Leather Co.,
    
      Leather Contractors, Boston, Mass.:
    
    The Government requirements for leather equipment have practically ceased and you are advised that the prospects of using equipment and harness leather for further Government contracts is exceedingly remote. It is requested that you take such steps as may be possible to convert leather which you have coming through on your contracts into leather suitable for other purposes and manufacture for Army purposes just as little as you possibly can. It is, of course, understood that tanneries will run and that this conversion to civilian needs will not to any extent disturb the conditions of labor.
    Wood Leather ByroN.
    In addition to this special shoe leather claimant had also manufactured for Government use leather for jerkins and for helmet linings, but at the time of the receipt of this telegram it was manufacturing only shoe leather and it construed said telegram as applying thereto.
    VI. Claimant had a considerable quantity of this leather on hand when it thus ceased further manufacture. At a conference held in Washington for consideration of the situation it was determined that leather on hand should properly be considered under two heads, viz, commitment leather, to include all leather under contract to shoe manufacturers; and surplus leather, including all not so under contract. As to the commitment leather there was an adjustment with the shoe contractors, but as to the surplus leather there was no recognition of responsibility on the part of the Government and no adjustment.
    VII. The surplus of this special shoe leather which the claimant had on hand, amounting to 296,095 feet, was not a commercial product and for the purpose of making it salable on the market the claimant converted it into a commercial product at an expense to it of 4 cents per foot, an aggregate expense to it of $11,848.80.
    VIII. Claimant filed a claim under the Dent Act for $58,320.03, which was considerably reduced during the hearing before the board of contract adjustment, but was disallowed and the disallowance was thereafter affirmed by the Secretary of War.
    The court decided that plaintiff was not entitled to recover.
   Downey, Judge,

delivered the opinion of the court:

The claimant, being a tanner, engaged in the production of leather needed by the United States during the war and particularly as involved here, in the production of a special upper leather which shoe manufacturers under contract with the Government were being required to use in the manufacture of Army shoes. It was not a commercial product.

Conferences, correspondence, etc., which resulted in the claimant taking on this particular line of manufacture were with one Fred A. Vogel. Signatures to letters indicate that he was probably the chief of the upper leather section of the hide and leather control branch of the Quartermaster General’s office, but the record furnishes no proof as to his authority to obligate the United States, if any he had.

The plan was to induce tanners to manufacture leather of the particular kind required by the Government but not, as to this particular leather, to manufacture it directly for the Government. It was to be manufactured after adopted specifications for use in Army shoes for which the Government was then letting large contracts to shoe manufacturers. The claimant, with others, was informed of the letting of these contracts and it was no doubt represented and expected that an outlet would be furnished for all of this special leather which it was to manufacture through the medium of orders placed by the contractors for the manufacture of Army shoes. In furtherance of this plan the claimant was furnished with the names of concerns which had contracted to manufacture Army shoes and the shoe manufacturers were informed that the claimant could furnish the requisite leather. The plan worked with entire satisfaction for a time, the claimant produced considerable quantities of this special leather which it sold to the shoe manufacturers and there would apparently have been no occasion for a controversy but for the fact that rather unexpectedly the demand for this special leather ceased when the claimant yet had a considerable quantity of it on hand. Of that on hand some was under commitment to shoe manufacturers and as to that there was an adjustment, just how is not material, but as to the remainder the Government declined to assume any liability. In that connection it is to be said that the record, eliminating any question of authority, shows no agreement on the part of the Government to take or to pay for this surplus.

In view of the position taken by the claimant it might well be said that there is no occasion to discuss the question as to whether there was or was not an agreement on the part of the Government to take or pay for this surplus leather, since the claimant does not rely upon a breach of any such contract, and sue for resultant damages, but seeks solely to recover an expense which it incurred in converting this special leather into a commercial product so that it might be salable on the market. However, the suggestion is made as to the original situation because of the fact that if the United States had, by competent authority, contracted to take or pay for any surplus leather, it might furnish the consideration for an agreement to reimburse the claimant the expense of conversion as a proper procedure in the minimizing of damages. But the conclusion being forced that there was no obligation on the part of the Government to take or pay for this' surplus, the claimant’s rights must be considered solely upon the basis of the transaction in conversion.

So far as the facts are concerned there is apparently no room for doubt that the claimant, having on hand this surplus of special leather which was not a commercial product, incurred the expense stated in converting it into a commercial product so that it might be disposed of on the market. The basis of asserted liability is apparently the telegram set out in Finding V.

The claimant’s contention is that it believed that the United States was obligated to pay for the surplus leather which it had on hand and that the request contained in said telegram that it should convert it into a commercial product in order that it might be disposed of on the market and thus relieve the United States of its obligation to pay for this leather carried an implied contract upon the part of the United States within the purview of the Dent Act to pay the expense of such conversion.

There is nothing in the record to show that this telegram if otherwise susceptible of the construction put upon it emanated from a contracting authority. It was signed “Wood Leather Byron” and it may be surmised that this signature incorporated the name of the Quartermaster General, an abbreviated designation of a possible leather section in the Quartermaster General’s office and the name of an official at the head of that leather section, but as to this there is absolutely no proof and we may not substitute a surmise therefor.

But aside from the question of authority there is apparent room for the suggestion that this telegram had no application to the situation so far as claimant’s surplus leather was concerned, since it does not fit that situation. It may readily be conceived that at this time when contracts were being canceled by reason of the armistice that telegrams were being sent out to tanners who had contracts with the United States for various kinds of leathers, and that in sending them, out there was no attempt to fit the telegram to the particular case and that in this instance the claimant received a telegram which in its terms might well have been applicable to other tanners but which was not in fact applicable to it. It advised the claimant that the prospect of using “equipment and harness leather ” for further Government contracts was remote. The claimant was not then engaged in manufacturing equipment or harness leather. It requested that its recipient might take such steps as might be possible to convert leather which it had coming through on its contracts into leather suitable for other purposes, whereas it is determined, and in fact conceded, that the claimant had no “ contract ” to manufacture this special shoe leather for the Government.

It is to be said for the claimant that it no doubt in good faith interpreted this telegram as authority to convert its surplus special shoe leather into a commercial product, and that it incurred the expense it did in so converting this leather in the belief that it was authorized by competent authority so to do and that it would be compensated therefor. But if it had no proper basis for such a conclusion upon its part and there was in fact the incurring of no Adalid obligation upon the part of the Government to reimburse it for its expense incurred it must still be said that its good faith in the matter can furnish no basis for a judgment at our hands. Considering the claim as predicated upon a contract within the purview of the Dent Act to reimburse the claimant for its expense incurred in this behalf it must be concluded that the facts give rise to no such contract, and that if not deficient in that respect it must necessarily result that it was a contract wholly without consideration, due to the conclusion that there was no valid obligation on the part of the United States with reference to this surplus leather. It is but one of those cases of not infrequent occurrence where a loss results without a legal remedy.

Graham, Judge; Hay, Judge; Booth, Judge; and Campbell, Chief Justice, concur.  