
    REMINGTON ARMS UNION METALLIC CARTRIDGE COMPANY v. THE UNITED STATES
    [No. B-102.
    Decided June 6, 1927]
    
      On the Proofs
    
    
      Contract; cost-plus; benefit of prior contract between contractor and tMrd party.- — -In a contract between tbe plaintiff and tbe Government for tbe manufacture of ball cartridges- at cost plus profit it was provided: “ Tbe contractor will, from time to time, * * *, purchase or contract for tbe purchase of all materials * * * and upon such terms as appear to tbe contractor to be reasonable,” and “ shall use every endeavor to obtain materials * * * under this contract at tbe lowest possible prices, and shall in no case pay higher prices than required by existing market conditions, nor higher prices than are or could be paid for similar materials, purchased at the same time and under like circumstances and conditions for other work in progress in the plant.” At the time the Government contract was entered into the plaintiff was receiving, for use in the manufacture of cartridges, a limited amount of sheet metal converted by another company, under an earlier contract therewith, from virgin metals furnished by the plaintiff and at lower prices than could be obtained by purchase made at the time the Government contract was entered into. Under its contract the Government for such conversion furnished its own copper, zinc, and nickel to the same company, payment to be made to the plaintiff as part of the cost of the work. Meld, that the Government, since it contracted with reference to future purchases of supplies, was not entitled to the benefit of the lower prices.
    
      The Reporters statement of the case:
    
      Mr. William Wallace, jr., for the plaintiff. Ohadboume, Etanchfield db Levy were on the brief.
    
      Mr. Dwight E. Borer, with whom was Mr. Assistant Attorney Generad Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. The plaintiff, Remington Arms Union Metallic Cartridge Company (Inc.), is and was during the different transactions hereinafter set out in these findings of fact a corporation duly incorporated and organized in the year 1916 under the laws of the State of Connecticut, having its principal place of business at No. 25 Broadway, in the city and State of New York, and its main plant at Bridgeport, Connecticut, and was a consolidation of the properties and business of the Union Metallic Cartridge Company and the Remington Arms and Ammunition Company, and is the owner of the claim which is the subject matter of this suit.
    II. On July 20, 1917, the plaintiff entered into a written cost-plus contract with the United States to manufacture 470,000,000 ball cartridges. This contract was described as No. 14065. The contract recited that a) national emergency existed, and that the President “hereby places with the Remington Arms Union Metallic Cartridge Company, as an order under the provision of section 120 of the national defense act of June 3, 1916, the requirement that it comply with the contract hereinafter set forth, to manufacture 470,000,000 ball cartridges, model of 1906, caliber .30, complete in all respects, in accordance with drawings and specifications hereto attached.” Article YII stipulated that u The contractor will make the necessary outlays in advance, and manufacture and supply in conformity with, the aforesaid drawings and specifications, including duly authorized changes therein, 470,000,000 cartridges and will supply said cartridges packed for shipment at the contractor’s works.” Article XI (d), subparagraph (3), stipulated that “The contractor will, from time to time, except as otherwise provided, purchase or contract for the purchase of all materials, tools, equipment, or other personal property of whatsoever nature required for the manufacture of said cartridges, and upon such terms as appear to the contractor to be reasonable.” Article XI (a) fixed a “ normal cost ” of $50 per 1,000 cartridges, based upon the price per pound of copper, zinc, lead, and powder, which was subject to change with the variation in prices of those elements. Paragraph (b) provided for a profit of 10 per cent on the cost of the manufacture of the cartridges. Paragraph (c) provided for a deduction of 20 per cent from plaintiff’s profits on any excess cost above the “ normal cost,” and for a bonus of 20 per cent to plaintiff for any reduction of “ normal cost ” by actual cost. Article XI (3) stipulated “A reasonable rate of interest not exceeding 6% per annum on a proper proportion of the investment in plant, facilities, inventory, and working capital, not owned or provided by the Government.” Article XII provided that “ The contractor shall use every endeavor to obtain materials, equipment, appurtenances, supplies, etc., under this contract at the lowest possible prices and shall in no case pay higher prices than required by existing market conditions, nor higher prices than are or would be paid for similar materials purchased at the same time and under like circumstances and conditions, for other work in progress in the plant.” There were five supplemental contracts executed by which the number of cartridges to be manufactured was increased to 1,365,000,000. Deliveries were to begin in October, 1917, and to be completed in January, 1919. The said Contract No. 14065 and supplements thereto are attached to plaintiff’s petition as Exhibits A1-A6, and are made part of this finding by reference thereto.
    III. The plaintiff and its predecessors for more than 100 years were engaged in the manufacture and sale of firearms, and after the invention of metallic cartridges in 1865 they were also engaged in the manufacture and sale of cartridges. The principal materials entering into the manufacture of cartridges are (a) brass and gilding metal for shells, primers, etc.; (5) cupro-nickel for bullet jackets; (e) lead for bullet cores; (d) powder and fulminate mixtures. Brass and gilding metal are manufactured from copper and zinc (spelter), and the process is called “ conversion ” and consists in melting and mixing and casting the mixture into slabs and rolling into sheets of required thickness for cartridge manufacture. Cupro-nickel is obtained from mixing nickel and copper and is converted by a similar process to that used for brass and gilding metal. . Brass mills make brass from their own metals and sell in the open market, or they render a conversion service by manufacturing brass from metals furnished by others. The use of brass and cupro-nickel in cartridge factories results in the production of a considerable amount of “ scrap metal ” which goes back to the bra,ss mill and is “ reconverted ” into brass, gilding metal, or cupro-nickel. High grades of copper, zinc, and nickel are necessary for cartridges, and to insure a proper quality manufacturers furnish their own virgin metals to the brass mills for conversion and pay the conversion service.
    IY. In 1914 and for many years prior thereto the plaintiff and its predecessor,s had a regular and well-established business. It sold from stock and also manufactured to maintain its trade. It also sold under contract. All of its business prior to 1917 was on a fixed-price basis. Cost-plus contracts prior to 1917 were unknown in the cartridge business. In 1914 plaintiff was operating a plant at Bridgeport, Connecticut, which as then built and equipped was capable of manufacturing all the cartridges it was then selling in its regular business Any considerable increase in production would have required new plants or the extension of existing factories and facilities. The plaintiff, some time afterwards, in order to take care of its greatly increased trade, including its Government contracts, made extensive increases in its facilities at the Bridgeport plant and secured two additional plants, one at Swanton, Vermont, and the other at Hoboken, New Jersey.
    
      Prior to 1914 plaintiff and it,s predecessors had never used more than 9,200,000 pounds of brass and gilding metal, nor more than 76,000 pounds of cupro-nickel in any single year. While plaintiff was not tied to any particular mill for its conversion service the American Brass Company or its predecessor had for 30 years furnished a considerable part of such service on copper, zinc, nickel, and “ scrap ” owned by plaintiff. As the cost of manufacture was largely influenced by the cost of conversion of its metals, and realizing that a continuance of the European war might affect conversion charges, the plaintiff ,so,on after August 1, 1914, took up the matter of arranging with the American Brass Company to supply its entire conversion service. On September 30, 1914, the plaintiff and the American Brass Company entered into an agreement by which for five years beginning October 1, 1914, the plaintiff agreed to take its “ entire requirements ” from the said bras(s company and the brass company agreed to reduce its charges for conversion of plaintiff’s metals into brass and gilding metal from 3 cents to 2y2 cents per pound and into cupro-nickel to 11% cents per pound, and for reconversion of plaintiff’s “ fscrap ” to 1 % cents per'pound.
    Y. The plaintiff and the American Brass Company by letters of July 26 and July 31, 1916, agreed that the contract of September 30, 1914, should be so construed as to limit for the years 1915 and 1916 the conversion service of the American Brass Company to 17,100,000 pound,s of brass and gilding metal and 900,000 pounds of cupro-nickel and that for conversion service for brass and gilding metal above 17,100,000 pounds and under 50,000,000, plaintiff should pay 3 cents per pound, and for conversion service on cupro-nickel above 900,000 pounds 14 cents per pound. That agreement was carried out during the years 1915 and 1916.
    YI. During the year 1916 the American Brass Company produced over 47,000,000 pounds of brass and gilding metal and nearly 3,000,000 pounds of cupro-nickel conversion service for plaintiff. On September 25, 1916, the brass company notified plaintiff that owing to increased labor, material, and machinery cost it would not renew the 3 cents per pound conversion charge for the year 1917, and would charge 8 cents per pound for all brass and gilding metal service during that year in excess of 17,100,000 up to 50,000,000 pounds. It was thereupon agreed between them in April, 1917, that after the 17,100,000 pounds above referred to should be used up the prices for 1917 should be fixed in accordance with prevailing conditions. This arrangement resulted in an agreement between plaintiff and the brass company fixing 6 cents per pound for all brass and gilding metal conversion during 1917 in excess of 17,100,000 pounds. Six cents per pound was the lowest market price for brass and gilding metal conversion during the years 1917 and 1918, and 14 cents per pound for cupro-nickel conversion.
    VII. The plaintiff reached its low-price limit of 17,100,000 pounds of brass and gilding metal conversion and reconversion on April 5, 1917, and its low-price limit of 900,000 pounds of cupro-nickel conversion and reconversion on May 7, 1917, after which it paid 6 cents per pound for brass and gilding metal and 14 cents per pound for cupro-nickel conversion for every excess pound taken by it in its commercial and fixed-price contract trade.
    VIII. Shortly after receiving the notice in September, 1916, from the American Brass Company concerning its contract of September 30, 1914, referred to in Finding VI, the plaintiff made a contract with the Stamford Rolling Mills for brass and gilding metal conversion service on 7,000,000 pounds not to exceed 10,000,000 pounds of plaintiff’s metal at 10 cents per pound. The plaintiff took the full 7,000,000 pounds; 4,369,161 were used in 1917 and the balance in 1918, and 10 cents a pound was paid therefor. On March 28,1918, the plaintiff procured 1,028,788 pounds of brass and gilding metal conversion for 7 cents per pound.
    IX. The plaintiff furnished all of the copper, zinc, and nickel to the brass company for conversion into brass, gilding metal, and cupro-nickel for use in its commercial business and its fixed-price cartridge contracts, several of which for large amounts were made with foreign countries before its cost-plus contract with the Government. The Government under its cost-plus contract elected to furnish its own copper, zinc, and nickel to the brass company for conversion through plaintiff. At different times during the years 1917 and 1918 the Government ran short and borrowed virgin metals from plaintiff, which were returned in kind after periods from a few days to eight months. On one occasion, when Government brass was coming into plaintiff’s plant slowly, plaintiff, with the approval of Government officers, used 1,000,000 pounds of brass which had been made by the Stamford Mills for plaintiff at a conversion charge of 10 cents per pound. Later the Government returned the same quantity of brass which had been made from its own metals by the brass mill for 6 cents per pound, and the Government refused to pay plaintiff the 4 cents a pound difference.
    X. The plaintiff in the performance of Contract No. 14065, from its date, July 20, 1917, to January 1, 1918, the end of the calendar year 1917, paid the same conversion and reconversion rates for its Government work as it paid for its commercial and fixed-price contract business, and it was reimbursed by the Government at the same rates. Due to the immense increase in the use of brass, gilding metal, and cupro-nickel by plaintiff in its regular trade, foreign fixed-price contracts and the Government cost-plus contract, at the end of the year 1917 the American Brass Company insisted that plaintiff during the year 1918 should limit its claim upon the brass company for conversion service at the contract price to its own actual requirements as contemplated by the parties on September 30, 1914, that is, not to exceed 17,100,000 pounds of brass and gilding metal, and not to exceed 900,000 pounds of cupro-nickel conversion service. The plaintiff assented to this demand.
    XI. In the performance of said Contract No. 14065 from January 1, 1918, to March 26, 1918, plaintiff charged to and was paid by defendant for 14,703,168 pounds of brass conversion at 6 cents per pound; for 109,397 pounds of anvil-brass conversion at 6y2 cents per pound; for 354,601 pounds of gilding-metal conversion at 9 cents per pound; for 867,341 pounds of cupro-nickel conversion at 14 cents per pound; for 9,321,007 pounds of brass-scrap reconversion at 2% cents per pound. The plaintiff during the same period was paying for similar conversion and reconversion service in its commercial and fixed-price contract business 214$, 30, 5%0, 11%0> and 1140, respectively. The above conversion and reconversion services were ordered at the American Brass Company’s mill with the approval of the prices charged by the proper Government officials, and the plaintiff was reimbursed for its payments after approval of its bills by the proper Government officials. The differences between the conversion and reconversion charges paid by the Government during the above period, and the same conversion and reconversion services rendered during the same period, paid for at the rates paid by plaintiff in its commercial and fixed-price contract business contracted for before it entered into its cost-plus contract with the Government, would have aggregated $646,828.59. This amount was composed of $530,-850.82 relating to brass and gilding-metal conversion, $93,210.07 relating to brass and gilding-scrap reconversion, and $22,767.70 relating to cupro-nickel conversion.
    It does not appear from the evidence whether or not any changes were made in the charges and payments for conversion and reconversion after March 26, 1918.
    XII. The differences of $646,828.59 described in Finding XI were deducted in two amounts, $400,000 on January 31, 1919, and $246,828.59 on July 16, 1919, from two amounts, $2,271,165.63 and $560,313.32, respectively, both due and payable as profits on other work under Contract No. 14065 and supplements.. There was also deducted 1% of said $646,-828.59, amounting to $6,468.28, as cash discount of bills of the American Brass Company in payment of said amounts. This was an error and was corrected in the general settlement of February 14, 1922, later described in these findings. On April 2, 1919, plaintiff submitted to the accountant in charge a request for repayment of said $400,000 and on July 30, 1919, a request for repayment of said $246,828.59, both of which were refused by the accountant in charge, the first on April 8, 1919, and the second on September 5, 1919.
    XIII. At the request of the Secretary of War the Comptroller of the Treasury rendered an opinion in which he held that the $400,000 had been properly deducted on January 31, 1919, and should not be repaid to plaintiff. 25 Comp. Dec. 941. The plaintiff afterwards requested a resubmission of the claim to the Comptroller by the Secretary, which he declined to do.
    XIY. The defendant, upon the ground that the deduction of $646,828.59 from plaintiff’s profits entitled the plaintiff to a bonus of 20 per cent of that amount under Article XI (c) of Contract No. 14065, as a saving between the estimated “ normal cost ” and the actual cost, on November 26, 1920, paid plaintiff the sum of $129,365.72. The plaintiff thereafter requested the Auditor for the War Department to settle its claim for the deduction, and on May 7, 1921, the auditor made a settlement in plaintiff’s favor in the sum of $517,462.87. This was the difference between the deduction of $646,828.59 and the bonus of $129,365.72 paid the plaintiff on November 26, 1920. In the meantime the office of the Comptroller of the Treasury was abolished, and he was succeeded in duties by the Comptroller General on July 1, 1921, 42 Stat. 23. On review of the above settlement, the Comptroller General reversed the auditor’s decision and held that the entire amount, $646,828.59, had been properly deducted, and charged the bonus of $129,365.72 against the account of the disbursing officer. On April 8, 1922, the Comptroller General denied plaintiff’s petition for a rehearing.
    XV. After the execution of the contract of July 20, 1917, known as Contract No. 14065, and during its performance, plaintiff and the United States entered into a number of other contracts for cartridges, rifles, machine guns, and other war materials and equipment, some of which were formal contracts executed in compliance with section 3744 of the Revised Statutes and some were informal contracts described as Dent Act contracts, 40 Stat. 1272. The greater part of these agreements were fixed-price contracts for the manufacture and delivery of completed articles. On February 14, 1922, claims against the Government in such of these contracts, including Contract No. 14065, as had not been completed or terminated, were included in a general settlement agreement between the plaintiff and the United States. In this settlement agreement the United States agreed to pay and the plaintiff agreed to accept $650,000 in final payment for the articles, work, services, and facilities heretofore delivered and accepted and in full and final adjustment and discharge of all claims and accounts of every nature, whether made under formal or informal contracts between the plaintiff and the United States entered into between April 5, 1917, and November 12, 1918, except unpaid claims of third persons against the contractor arising from or connected with the performance of any cost-plus contract or any lawful claim or demand by an employee or laborer employed by the contractor in the performance of eny formal or informal agreements for unclaimed wages growing out of any award by the War Labor Board. The “ Brass Conversion Claim ” growing out of the deduction of $646,828.59 then before the Comptroller for $517,462.87 (the plaintiff at that time still retained the bonus of $129,365.72), was specifically excepted from general settlement.
    It was agreed between the plaintiff and the Government that when the sum of $646,828.59 was deducted from moneys due the plaintiff by the Government the Government did not deduct the profits thereon which had been theretofore paid to plaintiff by the Government, and it was further agreed that after crediting plaintiff with $6,468.28 erroneously deducted from plaintiff as described in Finding XI the amount deducted should have been according to the contention of the Government $707,959.07 instead of $646,828.59, a difference of $61,130.48. It was further agreed that “ this settlement did not discharge or release, or in any way affect the claim of the contractor now pending before the Comptroller General, known as the ‘ Brass Conversion Claim,’ or the defenses of the United States thereto.” It was further agreed that the contractor should deposit said sum of $61,130.48, the profit paid by the United States to plaintiff as aforesaid, together with the sum of $11,461.96, the accrued interest thereon to February 14, 1922, amounting, principal and interest, to $72,592.44, in an interest-bearing escrow account. It was further agreed “ that upon final decision by the Comptroller General, or courts of competent jurisdiction of the ‘ Brass Conversion Claim,’ tbe contractor shall release to the United States such proportion of the amount then on hand in escrow as the proportion of the ‘ Brass Conversion Claim ’ disallowed bears to the entire £ Brass Conversion Claim,’ and the United States agrees to release to the contractor such proportion of the amount so then on hand in the said escrow as the proportion of the ‘ Brass Conversion Claim ’ allowed bears to the entire ‘ Brass Conversion Claim.’ ” This sum of $72,592.44 was paid by plaintiff by check dated March 8, 1922, to Captain Edwin F. Barry, Ordnance Department, disbursing officer, and was deposited by him in the Third National Bank, Springfield, Mass., on March 9, 1922, where it remains. The rate of interest paid by the bank on such deposits is not shown by the evidence. The settlement award of $650,000 was paid to plaintiff by the same disbursing officer against whose account the Comptroller General charged the bonus of $129,365.72 as an erroneous payment to plaintiff on November 26, 1920. This officer made out a voucher in which he deducted the sum of $129,365.72 from the settlement award of $650,000, leaving a balance “ for payment ” of $520,634.28. The plaintiff signed the said voucher stating in conclusion “ said payment is hereby accepted in full settlement, release, and discharge of all matters and things contained and represented, or intended so to be, in said award with reference to which said payment is made.” The plaintiff was paid the sum of $520,634.28 by check on the Treasurer of the United States, dated March 21, 1922, and signed by Captain Edwin F. Barry.
    XVI. The United States refunded to the plaintiff, with interest at the rate of six per centum per annum all of its investment in the plant, facilities, inventory and working capital not owned or provided by the Government as stipulated by Article XI, paragraph (d), subparagraph (3), including all of its investment in the sum of $646,828.59 before its deduction as described in Findings XI and XII.
    The court decided that plaintiff was entitled to recover.
   Moss, Judge,

delivered the opinion of the court:

On July 20, 1917, plaintiff, the Remington Arms Union Metallic Cartridge Company, entered into a contract with the Government by tbe terms of which it was agreed that plaintiff would manufacture for the use of the Government 470,000,000 ball cartridges in accordance with certain drawings and specifications, for which plaintiff was to be paid the actual cost of manufacture, including facilities, materials, and labor; and for its profit plaintiff was to be paid an amount equal to ten per cent on the actual cost. It was also provided by Article XI, paragraph (d), subparagraph (3), that the Government would pay “ a reasonable rate of interest not exceeding six per cent (6%) per annum on a proper proportion of the investment in plant, facilities, inventory, and working capital, not owned or provided by the Government.” Thereupon plaintiff entered upon the performance of the contract, purchasing its materials in the market and at the market price, and charging the Government the actual cost of same, together with interest at the rate of 6 per cent per annum on items of investment under the provisions of the contract just mentioned, plus ten per cent as profit, as provided in the contract, which charges were, from time to time, paid by the Government. A number of supplemental contracts were made merely providing for additional supplies of cartridges under the same terms and conditions as contained in the original contract.

In September, 1914, an agreement was entered into between plaintiff and the American Brass Company by which the brass company undertook to furnish, and the plaintiff agreed to accept, for a period of five years, plaintiff’s entire requirement of a certain metals composition necessary in the manufacture of cartridges, generally referred to as conversion supplies, at the price of two and one-half cents per pound on brass and gilding-metal conversion, and eleven and three-eighths cents per pound on what is called cupro-nickel conversion, and one and three-fourths cents per pound for scrap reconversion. Thereafter the American Brass Company furnished plaintiff its conversion supply, as will be hereinafter fully explained.

Defendant states that in September, 1918, it received certain information concerning plaintiff’s contract with the American Brass Company. In a conference thereafter, to wit, on December 18, 1918, between representatives of plaintiff and representatives of the Government, plaintiff disclosed all agreements between plaintiff and the brass company covering conversion requirement of plaintiff for the period of performance of the cartridge contract. Thereafter a full audit was made by an auditor selected by defendant, with the permission and assistance of plaintiff, which resulted in a finding by the auditor of an alleged overcharge by plaintiff on account of conversion prices amounting to $646,828.59. In January, 1919, defendant withheld the sum of $400,000 from sums otherwise due plaintiff under the contract pending the investigation just mentioned. On July 16, 1919, defendant withheld from sums otherwise due plaintiff the further sum of $246,828.59, which together with the $400,000 theretofore withheld, constituted the aggregate sum of $646,828.59 found by the auditor to be an overcharge. This action is for the recovery of the sum so withheld, $646,828.59.

The theory upon which defendant assumed the right to withhold this sum from plaintiff is based upon the contention that the Government was entitled under its contract with plaintiff to the benefit of the price for conversion supplies obtaining under the brass contract of 1914. A proper determination of this issue requires a consideration of both contracts. For many years prior to 1914 plaintiff company had been procuring most of its conversion supplies from the American Brass Company. Plaintiff, however, had never in any single year prior to 1914 required for its' use in the manufacture of cartridges more than 9,200,000 pounds of brass and gilding-metal conversion, nor more than 76,000 pounds of cupro-nickel conversion, and this was at that time approximately the capacity of plaintiff’s cartridge-making plant. Both the capacity of the plant and plaintiff’s requirement of conversion supplies were then and theretofore well known to the American Brass Company. Anticipating an increased demand for the products of its plant by reason of the European war, which began on August 1, 1914, plaintiff, exercising unusual business caution, sought by its arrangement with the brass company to protect itself in the matter of supplies necessary in the production of cartridges and against probable increase in the price of such supplies. Plaintiff’s requirement, by reason of the abnormal growth of its business, increased to such extent that the brass company objected to furnishing plaintiff’s entire requirement, claiming that the large increase was beyond its obligation under the agreement of September, 1914. An adjustment was made in July, 1915, by which it was agreed that the words “ entire requirement ” should be held to entitle plaintiff to have 17,100,000 pounds of brass and gilding-metal conversion and 900,000 pounds of cupro-nickel conversion at the low price for the years 1915 and 1916; and it was further agreed that for any excess that might be needed by plaintiff the price during each of these two years should be three cents per pound for brass and gilding-metal conversion and fourteen cents per pound for cupro-nickel conversion until the total quantities claimed should equal 50,000,000 pounds. This arrangement was observed throughout the years 1915 and 1916. The brass company, however, refused to renew the three-cent excess conversion rate for the year 1917, and the parties agreed on a six-cent price on this item. It should be mentioned that plaintiff reached the low price limit of 17,100,000 pounds for the year 1917 by April of that year, and thereafter during the year it paid the price of six cents per pound for such excess for its use in its commercial business and its fixed-price contract uses. It likewise reached its low price limit of 900,000 pounds of cupro-nickel conversion by May, 1917, and. thereafter paid during the remainder of the year fourteen cents per pound for the excess cupro-nickel conversion required and used by it in its commercial business and its fixed contract uses.

It also appears that, owing to a fear that its supply of service for its commercial uses might be imperiled, plaintiff contracted with another mill for not less than 7,000,000 nor more than 10,000,000 pounds of brass and gilding-metal conversion at ten cents per pound. Under this contract it took at that price 4,880,888 pounds in 1917, and the balance of the 7,000,000 pounds in 1918. At the time, therefore, of the execution of the contract between plaintiff and the Government, July 20, 1917, plaintiff having already exhausted its low price limit for 1917, was then paying the brass company six cents per pound for such excess as it was procuring from said company, and was also paying ten cents per pound for 4,380,888 pounds secured in 1917 under the contract just above mentioned. In 1918 plaintiff was still receiving a less quantity of the low-price material than was sufficient to meet its commercial demands.

The whole question involved here is whether or not plaintiff under its contract with the Government was under obligation to devote to the Government contract the low-price material acquired under a previous contract, while at the. same time it was required to purchase such material as was necessary for the performance of its fixed-price contracts, and for its commercial business at prices ranging from six to ten cents per pound. Without reference to the terms of the Government contract, which will presently be considered, we are of the opinion that it was under no such obligation. If all the material contracted for in 1914 had actually been on hand in plaintiff’s plant on July 20, 1917, plaintiff could not have been compelled, in the absence of an express stipulation to that effect, to furnish same at the price provided in the 1914 contract, or at less than the prevailing market price. The same principle would apply to materials delivered from time to time under such contract. The construction of the contract contended for by the Government would amount to nothing more nor less than a confiscation by the Government to the extent of the difference between the low price obtaining under the brass company contract and the price paid by plaintiff from time to time for materials used in the Government contract, which appears to have been the fair market price.

It should be observed, however, that the respective rights of the parties are fixed by the plain terms of the contract itself. It is provided that “ the contractor will, from time to time, except as otherwise provided, purchase or contract for the purchase of all materials * * * and upon such terms as appear to the contractor to be reasonable.” It is further provided that “the contractor shall use every endeavor to obtain materials * * * under this contract at the lowest possible prices, and shall in no case pay higher prices than required by existing market conditions, nor higher prices than are or would be paid for similar materials, purchased at the same time and under like circumstances and conditions for other work in progress in the plant.”

This language plainly relates to future purchases of supplies for use in the performance of the contract. It is not susceptible of any other interpretation. Any construction of these terms which would permit the Government to claim the benefit of a purchase of materials three years prior to the date of the Government contract would be a perversion of the ordinary meaning of language.

Some confusion has arisen concerning an item of $129,-365.12 which was paid to plaintiff on November 29, 1920. The Government contends that if plaintiff should be allowed a recovery of the $646,828.59, this amount paid on November 29, 1920, must be deducted. The Government paid plaintiff the $129,365.12, which is 20 per cent of the $646,828.59 withheld by the Government under Article XI (c) of the contract, which provided for a bonus of 20 per cent as a saving between the estimated “ normal cost ” and the actual cost. Plaintiff, thereafter, requested the Auditor for the War Department to settle its claim concerning the deduction by the Government of the $646,828.59, and on May 1, 1921, the auditor made a finding in plaintiff’s favor in the sum of '$511,462.81, which was the difference between the amount withheld by the Government and the bonus of $129,365.12 which had already been paid to plaintiff. On review of the ■finding of the auditor the Comptroller General reversed the decision of that official and held that the entire amount, $646,828.59, had been properly deducted and withheld from plaintiff, and charged the bonus of $129,365.12 against the account of the disbursing officer. After the execution of the -contract of July 20,1911, plaintiff and the Government made other contracts, and on February 14,1922, a settlement agreement was entered into between plaintiff and the Government. The so-called “ brass conversion claim ” then pending before the Comptroller General for $517,462.87 (plaintiff at that time still retaining the bonus of $129,865.72) was specifically excepted from the general settlement. When the settlement award, which amounted to $650,000, was paid to plaintiff, the disbursing officer against whose account the Comptroller General had charged the $129,865.72 as an erroneous payment to plaintiff, deducted said sum from the $650,000 and plaintiff was paid the balance of $520,634.28. It is perfectly clear, therefore, that the $129,365.72 was taken from plaintiff by this deduction by the disbursing officer.

It should be noticed in connection with the bonus item that plaintiff itself is in error concerning same. In its brief it is stated “ in a general settlement of all claims and contracts between Remington and the Government (save the claim here in suit), which settlement was had in February, 1922, and while Remington still held the above 20 per cent, the Government insisted that Remington should deposit in escrow (which Remington did) one-half of that 20 per cent, plus other small items, totaling about $70,000. Such deposit was to abide the event of this brass conversion controversy, and it still remains on deposit in escrow.” Plaintiff wholly misconceives the facts in regard to the escrow deposit. It is plainly set forth in the settlement contract referred to in the following language: “It is further agreed that the contractor shall deposit in an interest-bearing escrow account the sum of sixty-one thousand one hundred thirty dollars forty-eight cents ($61,130.48), being the profit paid by the United States on the principal sum of the brass conversion claim, together with the sum of eleven thousand four hundred and sixty-one dollars ninety-six cents ($11,461.96), which is agreed to be the accrued interest thereon to the date of this contract.

“ It is further agreed that upon final decision by the Comptroller General, or courts of competent jurisdiction of the ‘ brass conversion claim,’ the contractor shall release to the United States such proportion of the amount then on hand in the above escrow as the proportion of the ‘brass conversion claim ’ disallowed bears to the entire ‘ brass conversion claim,’ and the United States agrees to' release to the contractor such proportion of the amount so then on hand in the said escrow as the proportion of the ‘brass conversion claim ’ allowed bears to the entire ‘ brass conversion claim.’ ” The total sum, $72,592.44, was deposited on March 8, 1922, in an interest-bearing escrow account in the Third National Bank, Springfield, Massachusetts, where it now remains. (Finding XY.)

The petition in this case did not contain a prayer for interest. After submission and argument plaintiff presented for filing a motion for leave to amend the prayer of complaint so as to include a claim for interest. This motion is hereby granted, and the filing of an amended petition to that end and purpose is allowed. Plaintiff, however, is not entitled to interest as claimed. The service and materials furnished the Government by plaintiff were rendered and furnished under contract. The allowance of interest is therefore prohibited by section 177 of the Judicial Code, which provides that “No interest shall be allowed on any claim up to the time of the rendition of judgment thereon by the Court of Claims, unless upon a contract expressly stipulating for the payment of interest.” The only stipulation for the payment of interest under this contract is contained in Article XI, as mentioned above (Finding II), and all interest called for under that provision was charged against the Government and was paid by the Government (Finding XYI).

In the opinion of the court plaintiff is entitled to recover herein the sum of $646,828.59, and it is so adjudged.

Hat, Judge; Booth, Judge; and Campbell, Ohief Justice, concur.

Geaham, Judge, took no part in the decision of this case.  