92 Opinion of the Court ing 42). The contracting officer adopted the one which yielded the lowest amount and sent plaintiff a voucher in the sum of $3,106.82 to cover the first and final payment to plaintiff. On July 24, 1940, plaintiff refused to accept the voucher, and after several conferences finally presented a claim on June 10, 1942, to the contracting officer in the amount of $278,520.41. With this claim, plaintiff made the contentions upon which this action is based and asserted that since defendant had breached the contract, plaintiff was entitled to the costs incurred in performance of the contract. This letter was treated as an appeal from the contracting officer's ruling and on December 9, 1942, he made findings of fact and furnished plaintiff with a copy thereof. The findings are set out in our finding 44. After a conference with the representative of the Chief of Engineers, plaintiff in a letter of March 9, 1943, to the Chief of Engineers reiterated the contentions made in its letter of June 10, 1942. In addition, plaintiff, for the last time, attempted to excuse its lack of performance on the basis of a comparison between the percentage of rock which, it argued, would have been placed in the levee from plaintiff's proposed borrow pit and the percentage of rock that was deposited in the experimental levee by the Government dredge Welatka. With respect to this argument and the other contentions made by plaintiff to the effect that the operations of the Welatka supplied a pattern or standard for performance of the contract, we are of the opinion that the data contained in the specifications regarding the experimental dredging by the Welatka were for informative purposes only and did not constitute representations, either that a performance similar to that of the Welatka would be accepted as compliance with the contract, or that plaintiff would encounter the same conditions as were found in the experimental levee construction. As a matter of fact, plaintiff concluded before its bid was submitted that the contract work would be more difficult, that it would be required to drill and blast through from two to four hard rock ledges, and that the rock in the contract area was much harder than that found during the operations of the Welatka. On March 16, 1943, the Chief of Engineers rendered his Opinion of the Court 115 C. Cls. decision and affirmed that of the contracting officer in all respects except that plaintiff was allowed $42,172.36 instead of the $3,106.82, which the contracting officer found to be due (see finding 46). The plaintiff informed the Chief of Engineers on April 13, 1943, that the decision was unsatisfactory and requested a reconsideration. This request was granted and on May 11, 1943, plaintiff was advised that no change in the decision would be made. On July 28, 1943, a voucher in the amount of $42,172.36 was mailed to plaintiff which it accepted under protest. Since there is no dispute as to the actual yardage of materials dredged by plaintiff (finding 48), and since we have concluded that there was no breach of contract, plaintiff is not entitled to recover in this action unless its final contention prevails. Plaintiff says the following provisions of paragraph 1-08 of the specifications constitute a penalty which should not be enforced: If the quantity of material excavated by the dredge (as determined by borrow pit measurement) exceeds the guaranteed output for the period (as computed above), the excess yardage will be paid for at 100 percent of the unit price (obtained by dividing the hourly rental rate by the guaranteed hourly output) and added to the sum earned by the lessor at the rental rate for the period. If the quantity of material excavated is less than the guaranteed output for the period (as computed above) the deficiency yardage, multiplied by 125 percent of the unit price (obtained by dividing hourly rental rate by guaranteed hourly output) will be deducted from the sum earned by the contractor at the rental rate for the period. By these terms, plaintiff was to be paid a rental rate of $135 per hour for a guaranteed hourly output of 500 cubic yards, or 27 cents a yard. If, for example, it produced 600 cubic yards it was to be paid 500 x $0.27 plus 100 x 100% of $0.27. If, on the other hand, it produced only 400 cubic yards, it was to be paid 400 x $0.27 minus 100 x 125% of $0.27. As we have previously pointed out, both the contracting officer and the Chief of Engineers stated that the contract 92 Opinion of the Court was in fact one for a unit price of 27 cents per cubic yard with a penalty attached for failure to meet the contract requirements and plaintiff understood that the contract called for a penalty in the event of its failure to dredge the guaranteed amount of material. Whether we say the contract called for a "penalty" or "liquidated damages" must be determined by an examination of the language used in the light of the subject matter of the contract and the intention of the parties. Here the Government wanted a levee of fairly hard materials erected before the coming of the next hurricane season. Both plaintiff and defendant knew that a levee built of softer materials contained weak spots which would not withstand a hurricane. Both parties knew and the court will take judicial notice of the fact, that the hurricane season on the east coast of Florida comes in the months of August and September each year. Thus there was a deadline for the completion of the contract which was recognized and fixed in the terms of the contract itself by the dates for starting and completing the work to be done. Defendant desired that the work be done well, in accordance with the specifications and within the time specified, but it provided an incentive for earlier completion of the contract by offering the contractor a "bonus" for excavating materials for the levee at a greater rate than the minimum output required by the contract. Plaintiff thought it could profit by such a proposition for it freely entered into the contract, realizing at the same time that if required production was not maintained it would be "docked" or "fined" for any deficiency. The language used plainly expressed such an agreement and we cannot say that the parties intended anything else. Sun Printing and Publishing Association v. Moore, 183 U. S. 642, 661. * "When that intention is clearly ascertainable from the writing, effect will be given to the provision as freely as to any other * There is no sound reason why persons competent and free to contract may not agree upon this subject as fully as upon any other, or why their agreement, 878641-50- -13 J 115 C. Cls. Syllabus when fairly and understandingly entered into should not be enforced." Wise v. United States, 249 U. S. 361, 365. The provisions of paragraph 1-08 are clearly drawn and the intention of both parties is readily ascertainable. Plaintiff had engaged in other contracts with the Government of an almost identical nature, was generally familiar with contracts involving this sort of work, and clearly understood the effect of these provisions in the contract. Therefore, we cannot say that plaintiff was not competent to execute this contract nor can we say that it did not freely enter into it. Under these circumstances, we conclude that these provisions are valid and enforceable. Since the Chief of Engineers based his final calculations upon them in determining the final amount due plaintiff, plaintiff is entitled to no further recovery. The petition therefore will be dismissed. It is so ordered. Madden, Judge; Whitaker, Judge; Littleton, Judge; and Jones, Chief Judge, concur. THE SINGER MANUFACTURING COMPANY v. THE UNITED STATES [No. 45537] SINGER SEWING MACHINE COMPANY v [No. 45538] THE SINGER MANUFACTURING COMPANY, SINGER SEWING MACHINE COMPANY, DIEHL MANUFACTURING COMPANY, BOURNE & COMPANY, LTD., INTERNATIONAL SECURITIES COMPANY, INTERNATIONAL FIDELITY INSURANCE COMPANY, AND TRUMANN LIGHT & POWER CO. v. THE UNITED STATES [No. 45539] 162 Syllabus THE SINGER MANUFACTURING COMPANY, SINGER SEWING MACHINE COMPANY, DIEHL MANUFACTURING COMPANY, BOURNE & COMPANY, LTD., POINSETT LUMBER & MANUFACTURING COMPANY, INTERNATIONAL SECURITIES COMPANY, INTERNATIONAL FIDELITY INSURANCE COMPANY, AND TRUMANN LIGHT & POWER COMPANY v. THE UNITED STATES [No. 45790] THE SINGER MANUFACTURING COMPANY, SINGER SEWING MACHINE COMPANY, DIEHL MANUFACTURING COMPANY, BOURNE & COMPANY, LTD., POINSETT LUMBER & MANUFACTURING COMPANY, INTERNATIONAL FIDELITY INSURANCE COMPANY, AND TRUMANN LIGHT & POWER COMPANY v. THE UNITED STATES [No. 45791] THE SINGER MANUFACTURING COMPANY, SINGER SEWING MACHINE COMPANY, DIEHL MANUFACTURING COMPANY, POINSETT LUMBER & MANUFACTURING COMPANY, AND TRUMANN LIGHT & POWER COMPANY v. THE UNITED STATES [Nos. 45792, 45793, 45794 and 45795] [Decided January 3, 1950] On the Proofs Income tax; consolidated returns; loss sustained upon liquidation of subsidiary; operating losses previously deducted.-Where the parent corporation had no taxable income for the years 19181920 by reason of the application of the rule limiting the privilege of carrying losses backward and forward to the particular |