B-141780, FEB. 1, 1961

B-141780, FEB. 1, 1961

TO WETSEL-OVIATT LUMBER COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 30, 1959, WITH ENCLOSURES, AND SUBSEQUENT CORRESPONDENCE, REQUESTING RECONSIDERATION OF OFFICE SETTLEMENT DATED MARCH 19, 1959, WHICH DISALLOWED YOUR CLAIM FOR $20,299.24--- NOW $39,650.76--- REPRESENTING EXCESS COSTS ALLEGED TO HAVE BEEN INCURRED UNDER TIMBER SALES CONTRACT NO. 12-11-005-17307 WITH THE FOREST SERVICE, DEPARTMENT OF AGRICULTURE.

THE CONTRACT DATED SEPTEMBER 21, 1955, PROVIDED FOR THE SALE OF AN ESTIMATED 12,800 THOUSAND BOARD FEET, MORE OR LESS, OF LIVE AND RECENTLY KILLED (SOUND SAPWOOD) TIMBER LOCATED IN AN AREA OF ABOUT 800 ACRES IN THE DUFRENE UNIT OF THE AMADOR WORKING CIRCLE, ELDORADO NATIONAL FOREST, CALIFORNIA. THE RATES OF PAYMENT PER THOUSAND FEET BOARD MEASURE (M B.M.) FOR LIVE AND RECENTLY-KILLED TIMBER SCALED OR FELLED WERE SET OUT IN THE CONTRACT AS FOLLOWS:

TABLE

(PER M B. M.)

PONDEROSO PINE $29.65

SUGAR PINE 35.55

WHITE AND RED FUR 15.00

INCENSE CEDAR 15.00 THE CONTRACT RATES FOR OLDER DEAD (UNSOUND SAPWOOD) TIMBER WERE:

(PER M B. M.)

PONDEROSO PINE $14.85

SUGAR PINE 17.80

WHITE AND RED AIR 1.00

INCENSE CEDAR 1.00

SECTION 4 OF THE CONTRACT PROVIDED THAT: "LIVE TIMBER SHALL BE MARKED OR DESIGNATED FOR CUTTING AS FOLLOWS: ALL TREES WHICH, IN THE JUDGMENT OF THE FOREST OFFICER, ARE POOR RISKS SHALL BE MARKED OR DESIGNATED FOR CUTTING.' AND SECTION 11 PROVIDED:

"THE PURCHASER SHALL CUT ALL AND ONLY MARKED OR DESIGNATED LIVE TREES AND SHALL REMOVE ALL MERCHANTABLE MATERIAL FROM THE SALE AREA. NO TIMBER SHALL BE CUT UNTIL PAID FOR, NOR REMOVED FROM THE PLACE OR PLACES AGREED UPON FOR SCALING UNTIL SCALED, MEASURED OR COUNTED BY A FOREST ICER.'

AS PART OF THE CONTRACT CONSIDERATION, YOU WERE OBLIGED TO PERFORM FIXED DEVELOPMENT AREA WORK CONSISTING OF ROAD CONSTRUCTION, CULVERTS, SKID TRAILS, EROSION CONTROL, ETC.YOU APPARENTLY ESTIMATED THESE FIXED COSTS OF $3.38 PER THOUSAND BOARD FEET BASED UPON THE APPRAISED TIMBER VOLUME OF 12,800 THOUSAND BOARD FEET. AT THE COMPLETION OF CUTTING, YOU REMOVED AND PAID $146,316.32 FOR 6,493,670 BOARD FEET OF TIMBER CUT UNDER THE CONTRACT, OR ABOUT 49 PERCENT LESS THAN THE CONTRACT ESTIMATED VOLUME. VIEW THEREOF, YOU CONTEND THAT YOUR ACTUAL FIXED AREA DEVELOPMENT COSTS WERE INCREASED FROM $3.38 PER THOUSAND BOARD FEET TO $6.66 PER THOUSAND BOARD FEET, RESULTING IN EXCESS DEVELOPMENT FIXED AREA COSTS OF $3.28 PER THOUSAND BOARD FEET BECAUSE OF THE DECREASE IN ANTICIPATED VOLUME.

WE UNDERSTAND THAT ABOUT 87 ACRES OF THE CONTRACT AREA WERE MARKED UNDER THE MARKING RULES AT THE TIME THE SALE WAS ADVERTISED AND THAT IT WAS CUSTOMARY FOR BIDDERS TO INSPECT THE SALE AREA TO DETERMINE FOR THEMSELVES WHETHER THE ESTIMATED VOLUME WAS REALISTIC. THE FOREST SERVICE ADVISED US IN THAT REGARD THAT:

"/1) THE FOREST SERVICE MARKED ALL TREES THAT SHOULD HAVE BEEN MARKED FOR CUTTING UNDER THE TERMS OF THE CONTRACT. THE FOLLOWING IS QUOTED FROM A MEMORANDUM FROM TIMBER MANAGEMENT, R5, TO THE REGIONAL FISCAL AGENT DATED OCTOBER 28, 1958:

" "THE SALE PROCEEDED WITH THE MARKING CONTINUING IN ACCORDANCE WITH THE MARKING CLAUSE OF THE CONTRACT AND AT THE COMPLETION OF CUTTING THE PURCHASER HAD REMOVED 6,493 M FEET. PURCHASER CUT AND REMOVED MARKED TIMBER TO THE SATISFACTION OF THE FOREST SERVICE. TIMBER SALE INSPECTIONS AND CUT AND LEAVE CHECKS MADE DURING THE LIFE OF THE SALE REVEALED THAT MARKING WAS DONE ON A POOR RISK BASIS AND IN ACCORDANCE WITH THE CONTRACT REQUIREMENTS.'

"/2) THE EXTENT OF WETSEL OVIATT'S INSPECTION OF THE SALE IS DESCRIBED AS FOLLOWS IN A. R. SCHMIDT'S (TIMBER MANAGEMENT OFFICER), REPORT TO THE FOREST SUPERVISOR DATED NOV. 1, 1957:

" "DURING THE ADVERTISING PERIOD NO ADDITIONAL WRITTEN MATERIAL OTHER THAN THE PROSPECTUS AND COPY OF THE ADVERTISEMENT WERE REQUESTED BY PROSPECTIVE BIDDERS. VERBAL STATEMENTS WERE MADE BY T.M.A. EUGENE T. ARES TO BIDDERS ON THE MARKING, ROAD LOCATIONS AND SLASH DISPOSAL BUT EXACT NATURE CANNOT NOW BE DETERMINED. ARES STATED THAT MEMBERS OF THE WETSEL OVIATT LUMBER COMPANY TOOK A QUICK LOOK AT THE SAMPLE MARK AND PROPOSED ROADS PRIOR TO THE TIME OF BIDDING. MR. WETSEL HAS STATED RECENTLY TO US THAT THEY RELIED ON OUR ESTIMATED VOLUMES AS BEING REASONABLY ACCURATE AND DID NOT CRUISE THE AREA FOR PURPOSES OF BIDDING.'"

THIS IS CONTRARY TO YOUR STATEMENT THAT YOU HAD INSPECTED THE SALES AREA PRIOR TO THE CONTRACT DATE AND THAT YOU HAD ASCERTAINED THAT THE GOVERNMENT COULD HAVE MARKED THE VOLUME OF 12,800 THOUSAND BOARD FEET. THUS, THERE IS CREATED A DISPUTED QUESTION OF FACT AS TO WHICH WE ARE REQUIRED, UNDER THE ESTABLISHED RULE OF THIS OFFICE (37 COMP. GEN. 568), TO ACCEPT THE ADMINISTRATIVE VERSION IN THE ABSENCE OF EVIDENCE SUFFICIENTLY CONVINCING TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF. WE DO NOT FEEL THAT SUCH EVIDENCE HAS BEEN PRESENTED HERE.

IT IS YOUR CONTENTION THAT THE RULES LAID DOWN IN BRAWLEY V. UNITED STATES, 96 U.S. 168, 174, ARE APPLICABLE TO YOUR CLAIM AND SUPPORT ITS ALLOWANCE AS A MATTER OF LAW. THAT CASE HELD, QUOTING TO SYLLABUS (24 L. ED. 622):

"WHERE THE CONTRACT IS NOT FOR THE DELIVERY OF ANY PARTICULAR LOT OR QUANTITY, BUT TO DELIVER AT A GOVERNMENT POST 880 CORDS OF WOOD, MORE OR LESS, AS SHALL BE DETERMINED TO BE NECESSARY, BY THE POST COMMANDER, FOR THE REGULAR SUPPLY, THE QUANTITY DESIGNATED IS TO BE REGARDED MERELY AS AN ESTIMATE OF WHAT SHALL BE NECESSARY TO BE DETERMINED BY THE POST COMMANDER.'

FOR THE PURPOSE OF CONVENIENCE, THE RULES OF LAW ESTABLISHED BY THE BRAWLEY CASE ARE QUOTED BELOW.

"WHERE A CONTRACT IS MADE TO SELL OR FURNISH CERTAIN GOODS IDENTIFIED BY REFERENCE TO INDEPENDENT CIRCUMSTANCES, SUCH AS AN ENTIRE LOT DEPOSITED IN A CERTAIN WAREHOUSE, OR ALL THAT MAY BE MANUFACTURED BY THE VENDOR IN A CERTAIN ESTABLISHMENT, OR THAT MAY BE SHIPPED BY HIS AGENT OR CORRESPONDENT IN CERTAIN VESSELS, AND THE QUANTITY AS NAMED WITH THE QUALIFICATION OF "ABOUT," OR ,MORE OR LESS," OR WORDS OF LIKE IMPORT, THE CONTRACT APPLIES TO THE SPECIFIC LOT; AND THE NAMING OF THE QUANTITY IS NOT REGARDED AS IN THE NATURE OF A WARRANTY, BUT ONLY AS AN ESTIMATE OF THE PROBABLE AMOUNT, IN REFERENCE TO WHICH GOOD FAITH IS ALL THAT IS REQUIRED OF THE PARTY MAKING IT. * * * (RULE I)

"BUT WHEN NO SUCH INDEPENDENT CIRCUMSTANCES ARE REFERRED TO AND THE ENGAGEMENT IS TO FURNISH GOODS OF A CERTAIN QUALITY OR CHARACTER TO A CERTAIN AMOUNT, THE QUANTITY SPECIFIED IS MATERIAL, AND GOVERNS THE CONTRACT. THE ADDITION OF THE QUALIFYING WORDS,"ABOUT," "MORE OR LESS," AND THE LIKE, IN SUCH CASES, IS ONLY FOR THE PURPOSE OF PROVIDING AGAINST ACCIDENTAL VARIATIONS ARISING FROM SLIGHT AND UNIMPORTANT EXCESSES OR DEFICIENCIES IN NUMBER, MEASURE OR WEIGHT. (RULE II)

"IF, HOWEVER, THE QUALIFYING WORDS ARE SUPPLEMENTED BY OTHER STIPULATIONS OR CONDITIONS WHICH GIVE THEM A BROADER SCOPE OR MORE EXTENSIVE SIGNIFICANCY, THEN THE CONTRACT IS TO BE GOVERNED BY SUCH ADDED STIPULATIONS OR CONDITIONS. AS, IF IT BE AGREED TO FURNISH SO MANY BUSHELS OF WHEAT, MORE OR LESS, ACCORDING TO WHAT THE PARTY RECEIVING IT SHALL REQUIRE FOR THE USE OF HIS MILL, THEN THE CONTRACT IS NOT GOVERNED BY THE QUANTITY NAMED, NOR BY THAT QUANTITY WITH SLIGHT AND UNIMPORTANT VARIATIONS, BUT BY WHAT THE RECEIVING PARTY SHALL REQUIRE FOR THE USE OF HIS MILL; AND THE VARIATION FROM THE QUANTITY NAMED WILL DEPEND UPON HIS DISCRETION AND REQUIREMENTS, SO LONG AS HE ACTS IN GOOD FAITH. * * *" (RULE III)

IT IS POINTED OUT IN YOUR BEHALF THAT THE FIRST RULE LAID DOWN BY THE BRAWLEY CASE WAS BOTTOMED ON THE FACT THAT THE PARTIES WERE DEALING WITH A "SPECIFIC LOT" IDENTIFIABLE BY REFERENCE TO INDEPENDENT CIRCUMSTANCES DESCRIBING THE LOT. ON THAT BASIS, IT IS ARGUED THAT SUCH RULE IS NOT APPLICABLE HERE, BUT RATHER, THERE IS FOR APPLICATION RULE II SINCE THE INSTANT CONTRACT IS NOT FOR THE SALE OF A LOT IDENTIFIABLE BY REFERENCE TO INDEPENDENT CIRCUMSTANCES, CITING IN SUPPORT THEREOF, PINE RIVER LOGGING COMPANY V. UNITED STATES, 186 U.S. 279; UNITED STATES V. REPUBLIC BAG AND PAPER COMPANY 250 F. 79; 15 COMP. DEC. 130 15 COMP. GEN. 386.

WE DO NOT AGREE THAT THE NAMING OF THE QUANTITY OF THE TIMBER TO BE CUT UNDER THIS CONTRACT WAS IN THE NATURE OF A WARRANTY OR AS PERMITTING ONLY SLIGHT AND UNIMPORTANT VARIANCES IN QUANTITY. THE "OBVIOUSLY DOMINANT MEASURE" (SMOOT V. UNITED STATES, 237 U.S. 38, 42) OF THE QUANTITY OF TIMBER TO BE CUT WAS THE AMOUNT OF TIMBER MARKED BY THE FOREST OFFICER IN HIS DISCRETION. AS IN THE BRAWLEY CASE, THE QUANTITY NAMED, AS HERE, DEPENDED UPON THE DISCRETION OF THE GOVERNMENT OFFICER IDENTIFIED IN SECTION 4 OF THE CONTRACT TO MARK THE TIMBER TO BE FELLED. SEE LOBENSTEIN V. UNITED STATES, 91 U.S. 324; NITKE V. WARREN LEATHER GOODS COMPANY, 263 F. 888; HOLLAND V. ROCK, 259 P. 415; HACKETT V. STATE, 37 P. 156; MIZEL V. BROWN, 231 P. 661; PAXTON LUMBER COMPANY V. PANTHER COAL COMPANY, 98 S.E. 563; 19 COMP. GEN. 599; 37 ID. 400; AND THE ANNOTATIONS AT 58 A.L.R.2D 392 -394. THE CASES CITED IN SUPPORT OF THE PROPOSITION THAT RULE II OF THE BRAWLEY CASE APPLIES CLEARLY ARE NOT APPLICABLE HERE SINCE THOSE CASES INVOLVED ESTIMATED QUANTITIES WHERE THE ONLY DOMINANT MEASURE OF AMOUNTS WAS THE ESTIMATE ITSELF. SUCH IS NOT THE CASE HERE WHERE THE QUANTITY WAS TO BE MEASURED UNDER THE CONTRACT BY THE TREES MARKED IN THE DISCRETION OF THE FOREST OFFICER. SEE 37 COMP. GEN. 688. WE FIND NOTHING IN THE RECORD IN THIS CASE WHICH WOULD EVEN INDICATE THAT THE ESTIMATE WAS ARRIVED AT OTHER THAN IN GOOD FAITH.

NEITHER DO WE BELIEVE THAT THE SUBSTANTIAL DEFICIENCY IN THE QUANTITY ACTUALLY CUT AFFORDS ANY LEGAL BASIS FOR ALLOWANCE OF THE CLAIM. SINCE WE HOLD THAT THE GOVERNMENT DELIVERED ALL OF THE TIMBER REQUIRED OF IT UNDER THE CONTRACT, IT MAY NOT BE HELD LIABLE IN DAMAGES BECAUSE OF FAILURE TO DELIVER THE FULL 12,800 THOUSAND BOARD FEET. SEE MIZEL V. BROWN, SUPRA, AT PAGE 663, AND THE CASES THERE CITED; S. O. STRAY AND COMPANY, INC., V. TROTTIER, IDE AND COMPANY, 280 F. 249.

WE RECOGNIZE THE CONTRARY HOLDING IN CREIGHTON V. COMSTOCK, 27 OHIO ST. 548, BUT IN VIEW OF THE WEIGHT OF AUTHORITY CITED ABOVE, WE DO NOT CONSIDER SUCH DECISION AS DISPOSITIVE OF THE MATTER. WHILE THERE ARE SOME INDICATIONS IN THE ADMINISTRATIVE FILE STRONGLY BEARING ON THE EQUITIES OF YOUR CLAIM, WE HAVE NO ALTERNATIVE BUT TO HOLD THAT NO LEGAL BASIS EXISTS UNDER THE CONTRACT TO ALLOW YOU ANY EXCESS COSTS WHICH MAY HAVE ARISEN BECAUSE OF THE FAILURE OF THE ESTIMATE TO APPROXIMATE THE AMOUNT OF TIMBER ACTUALLY CUT.