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Aleutco Corp. v. United States

decided.: May 8, 1957.


Author: Kalodner

Before GOODRICH, KALODNER and HASTIE, Circuit Judges.

KALODNER, Circuit Judge.

In an action against the United States under the Federal Tort Claims Act,*fn1 in the District of Delaware, Aleutco Corporation ("Aleutco") sought damages for conversion of certain war surplus property which it had purchased from the Government. Judgment of $68,127.50 was awarded to it and this appeal followed, presenting these contentions by the United States:

(1) Aleutco's claim is founded on contract since it had its inception in a contract of purchase for the war surplus property and such a claim is not actionable under the Federal Tort Claims Act because the latter relates exclusively to tort claims;

(2) The amount involved exceeds $10,000 and accordingly the Court of Claims, under the terms of the Tucker Act, has exclusive jurisdiction;*fn2

(3) Assuming jurisdiction under the Federal Torts Claims Act its two-year limitation period barred Aleutco's action;

(4) There was no conversion because the property had reverted to the United States under the terms of the contract;

(5) The damages awarded rested on inadequate testimony and were excessive.

The facts as found by the District Court,*fn3 and disclosed by the record, may be summarized as follows:

In May, 1948, Aleutco purchased from the War Assets Administration, for $868,000, miscellaneous surplus war property located in the Aleutian Islands, Alaska, in the custody of the Navy. The contract of sale required removal of the property by November 30, 1948, and gave the Government the right, upon fifteen days written notice, to treat the property as abandoned if not removed by that time.*fn4 The November 30, 1948 removal date was later extended by mutual agreement to October 30, 1949.

The surplus property purchased by Aleutco consisted of approximately twenty boatloads of miscellaneous equipment and materiel. Eighteen boatloads were removed by Aleutco in the summer of 1948. Two additional boatloads of goods remained at Dutch Harbor in the Aleutians, one of which was removed by Aleutco in the summer of 1949.

On August 2, 1949, the General Services Administration, successor to the War Assets Administration, wrote to Aleutco acknowledging its payment of the balance of the $868,000 purchase price due under the contract and releasing it from the provisions of the credit and warehouse agreements between it and the Government.

On March 14, 1951 Aleutco (through its counsel) wrote to the Navy requesting permission to send a vessel to Dutch Harbor for the purpose of removing the balance of the property purchased under its contract. The permission sought was granted by the Navy on March 22, 1951. Pursuant thereto, Scott C. Kellogg and Bill Green, two Aleutco officials went to Kodiak in the Aleutians to arrange for the shipment. They there conferred with Coy E. Stockard, a civilian employee of the Navy, whose duties "embodied administration of disposal of surplus property". Stockard refused permission to the Aleutco representatives to remove any property from Dutch Harbor because "he did not know of any property that belonged to the Aleutco Corporation"; because they had not produced "evidence of ownership of this property"; and "that after a period of 21 months with the material and equipment left there without some arrangement for custody that I would consider the property had been abandoned."

The matter was then referred to the Navy Department in Washington for determination as to the ownership of the disputed property. Shortly thereafter, May 9, 1951, Aleutco's counsel wrote to the General Services Administration, Washington, stating that the War Assets Administration had earlier advised Aleutco that "there was no urgency for the removal of the property so long as it was kept out of any areas needed by either the Army or the Navy" and that "Specific written permission was granted by the Commander of the Naval operating base at Adak, Alaska, for an indefinite extension of time for removal of the surplus materials remaining at Dutch Harbor." On June 15, 1951, the General Services Administration wrote to Aleutco's counsel stating that the Navy Department "has been advised that it is the position of this Administration that ownership of the property covered by the sale and actually delivered in accordance with the terms thereof passed to the Aleutco Corporation as of the date of execution of the sales agreement * * * and that any arrangement which may have been made between the Aleutco Corporation and the Navy Department under which the property here involved was allowed to remain on the Aleutian Islands is a matter entirely between the Navy Department and the Aleutco Corporation, whose respective rights concerning ownership of the property would be for determination under applicable law and not for determination under the terms of the contract covering the purchase of the property by Aleutco Corporation from the United States."

On September 7, 1951, following correspondence and conferences between Aleutco and representatives of Rear Admiral Sprague, Commander, Alaskan Sea Frontier, the latter wrote Aleutco, stating in part:

"* * * The District Public Works Officer of this Command has reviewed all available information in an attempt to determine if any Corporation owned ...

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