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KIPE OFFSET PROCESS CO. v. UNITED STATES

June 30, 1954

KIPE OFFSET PROCESS CO., Inc.
v.
UNITED STATES



The opinion of the court was delivered by: KAUFMAN

This is an action against the United States to recover the sum of $ 3,087.99 for alleged breach of contract. Plaintiff is a corporation engaged in the business of printing and lithographing. For some years it has prepared and printed damage control diagrams for United States Navy ships. *fn1" These diagrams are usually printed in color but may be printed in black and white tones.

On June 30, 1948 the defendant, pursuant to a contract existing between the parties, submitted a written order (Job Order No. 8) to plaintiff, calling for the production by plaintiff of 50 damage control diagrams in color for naval vessel CV 36. The order contained the notation:

'This job must be delivered by 23 July. If unable to deliver the Bureau should be notified immediately.'

 Plaintiff began preparing the diagrams but was unable to complete them in time. On August 11, 1948, defendant, after a conversation with plaintiff, issued a written 'supplement' (Supplement No. 1 to Job Order No. 8). This supplement called for the production of black and white diagrams, which could be completed more quickly than color diagrams.

 In accordance with the August 11 order, plaintiff completed and submitted the black and white diagrams to the Navy. Plaintiff ceased working on the color diagrams but suddenly resumed working on these diagrams in March 1949. Almost a year after the original order, to wit: in June 1949, plaintiff submitted the color diagrams and requested payment.

 Defendant rejected the color diagrams on the ground that Job Order No. 8 had been modified by Supplement No. 1 so as to call for black and white rather than color diagrams. Defendant paid only that part of plaintiff's bill which would have been proper for black and white diagrams.

 The single issue, apart from the question of damages, is whether Supplement No. 1 should be construed as an order for black and white diagrams in lieu of color diagrams or whether it should be construed as an order for black and white diagrams in addition to color diagrams.

 Neither Job Order No. 8, nor Supplement No. 1, standing alone, is conclusive in a determination of the problem. Both are government order forms with only essential notations filled in. Even when considered with the basic contract pursuant to which the Order and Supplement were issued, ambiguity exists. Oral testimony to interpret and clarify the written documents was therefore received. Rotberg v. Dodwell & Co., 2 Cir., 1945, 152 F.2d 100, 101.

 The trial testimony made clear that an honest misunderstanding did exist. But misunderstanding does not absolve either party from the legal obligation created by the written instruments. While the intent of the parties is often an aid in interpretation,

 
'contracts depend upon the meaning which the law imputes to the utterances, not upon what the parties actually intended * * *. The standard is what a normally constituted person would have understood them to mean, when used in their actual setting.' New York Trust Co. v. Island Oil & Transport Corporation, 2 Cir., 1929, 34 F.2d 655, 656.

 See also 3 Williston on Contracts, Section 613 at pages 1763-1764. Considered in their 'actual setting', that is, together with all the circumstances surrounding the issuance of the basic contract, Job Order No. 8, and Supplement No. 1, I am convinced that a normal person would have read Supplement No. 1 as calling for black and white diagrams in lieu of and not in addition to, the color diagrams originally ordered.

 Job Order No. 8, as previously stated, included the notation:

 
'This job must be delivered by 23 July. If unable to deliver, the Bureau should be notified immediately.'

 Upon receipt of notification by the plaintiff that it was unable to produce the diagrams within the allotted time, defendant issued ...


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