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July 18, 1955


The opinion of the court was delivered by: Hoffman, District Judge.

Shedd-Bartush Foods of Illinois, Inc., brought this suit against the Commodity Credit Corporation to recover approximately $65,000, allegedly owed as the result of a contract whereby the plaintiff agreed to, and did, sell 500,000 pounds of oleomargarine to the defendant. The recovery of this amount is sought either as the unpaid balance of the purchase price, or as damages for breach of contract, or as restitution of unjust enrichment. Federal jurisdiction is based on 15 U.S.C.A. § 714b(c) which provides that the district courts of the United States shall have exclusive jurisdiction of all suits brought by or against the Commodity Credit Corporation. The United States owns all of the capital stock of the Commodity Credit Corporation.

The contract here involved consisted of an offer by the plaintiff sent to the Commodity Credit Corporation by day letter on September 25, 1946, reading as follows:

    "We Are In Position To Make Additional Half Million
  Pound Coconut Oil Margarine Late November Delivery At
  Same Price As Per Contract, Namely $16.53 CWT. FOB
  Elgin Stop Please Consider This As Firm Offer And
  Advise If Acceptable."

The Commodity Credit Corporation accepted the offer by a night letter filed September 25, 1946, reading as follows:

    "Reurtel September 25, 1946, Your Contract
  AW-F(F)-42190 Is Hereby Amended To Accept An
  Additional 500,000 Pounds Of Coconut Oil Margarine,
  November Delivery. All Other Terms And Conditions Of
  The Contract Remain Unchanged. Wire Weekly Delivery

The contract AW-f(F)-42190, mentioned in the telegram of acceptance above quoted, was effectuated by a counter offer made by telegram from the Commodity Credit Corporation to the plaintiff on September 11, 1946, and the telegraphic acceptance thereof by the plaintiff on September 13, 1946. Resolution of the conflicting claims of the parties as to the terms of this contract requires consideration of the public announcement by which the Commodity Credit Corporation solicited bids for the sale to it of oleomargarine and the ensuing correspondence between the parties.

The solicitation of bids was made by Announcement FO-22, dated August 13, 1946, which began with the following statement:

    "In order to meet definite supply needs, the U.S.
  Department of Agriculture (USDA) hereby announces
  contemplated purchases by the Commodity Credit
  Corporation (hereinafter referred to as CCC) of
  15,000,000 pounds of Oleomargarine, colored (Special)
  made from coconut oil for export. CCC will arrange to
  provide a source of supply of crude coconut oil at
  ceiling price in the event that the successful bidder
  (or bidders) are not in a position to procure crude
  coconut oil thru usual channels. * * *

"Offers must be submitted on prescribed Form FOO-22 * * *"

On August 30, 1946, the plaintiff submitted a bid on Form FOO-22 to sell to the Commodity Credit Corporation 500,000 pounds of oleomargarine to be delivered bi-weekly in October and 500,000 pounds to be delivered bi-weekly in November at 16.53 cents per pound. The bid was transmitted by a covering letter of the same date in which plaintiff explained the basis upon which it had reached the figure of 16.53 cents per pound as the bid price. The material portions of this letter read as follows:

    "With reference to the attached bid for one million
  pounds of coconut oil Margarine, F.O.-22, in offering
  this bid of $16.53 per cwt., it was necessary that we
  take into consideration a number of possibilities.
    "First, we have been advised by our oil refiners
  that they anticipate a one-half cent advance in the
  present price of coconut oil. The price in effect as
  of today is $13.89 per cwt., and if this one-half
  cent is put on, our cost will be $14.39 on the oil
  alone. At present, our main supplier, namely, Procter
  & Gamble Company, reserves the right to put this
  one-half cent escalator clause on any orders we
  place, however, we

  are of the opinion if we are advised that the oil
  takes this additional one-half cent, this will be a
  firm price, namely, $14.39.
    "Second, our supplier of shipping containers also
  advised us that they will not guarantee the present
  price on containers as they have not advanced their
  price on this type of board for a number of years and
  they feel they are entitled to an increase,
  particularly in view of their competitors having
  already taken an increase of from 10 to 15 per cent.
  If this increase goes into effect on the cases, it
  would amount to about another 7 cents per cwt. on the
  finished product.
    "Third, our Vitamin A suppliers have at present
  with-drawn from the market and will no longer supply
  an ester and alcohol type Vitamin A at today's
  prices. They will, however, make shipment of acetone
  base Vitamin A, which will cost us 35% more than the
  type we are now using.
    "Summing this up, we are bidding $16.53 per cwt. on
  a million pounds of coconut margarine for delivery in
  October and November * * *
    "If it meets with your approval, we could consider
  another one-half million for delivery later on."

The statement in the above letter that the plaintiff anticipated its cost on coconut oil would be 14.39 cents per pound is misleading. There was an excise tax on coconut oil payable by the refiner of 3 cents per pound. Since the Government waived this excise on all oil sold for use in the performance of government contracts, the cost to plaintiff would always be 3 cents less than market or ceiling prices, in this instance 11.39 cents instead of 14.39 cents. Throughout plaintiff's correspondence with the defendant and in its calculation of damages here the plaintiff uses market prices as its cost, rather than three cents less than market, which would have been the true cost to plaintiff.

Before receiving any reply to the above bid the plaintiff, under date of September 10, 1946, sent the Commodity Credit Corporation the following telegram:

    "Reference Our Recent Bid Announcement FO-22 This
  Should Read $16.53 As Firm Bid Based On Present Oil
  Market Stop Would Appreciate Advise As Promptly As
  Possible On This As Necessary We Make Arrangements
  For Tins And Cases"

The defendant replied by telegram dated September 11, 1946, reading as follows:

    "Subject Terms And Conditions FO-22 CCC Accepts
  Your Offer Dated August 30, 1946, As Amended By
  Telegram Of September 10, For 1,000,000 Pounds Of
  Coconut Oil Margarine At $0.1653 Per Pound FOB Elgin,
  Illinois. Delivery 250,000 Pounds Each Two Week
  Period Ending October 15, October 31, November 15 And
  November 30, 1946. Your Contract Number
  AW-f(F)-42190. Confirm By Wire."

The plaintiff accepted the foregoing counter-offer by telegram dated September 13, 1946, reading as follows:

    "Retel September 11th Confirm Contract AWF-F 42190
  For One Million Pounds Margarine At .1653 Per Pound
  FOB Elgin Illinois"

The foregoing counter-offer and acceptance accordingly constituted the contract to which the parties had reference when they exchanged the telegrams of September 25, 1946, above quoted, by which it was agreed that the plaintiff would sell the defendant an additional 500,000 pounds of oleomargarine at 16.53 cents per pound for late November delivery, all other terms and conditions remaining the same as in the previous contract. The defendant's telegram of September 25, 1946, had requested that plaintiff "Wire weekly delivery schedule."

The defendant not having received the requested delivery schedule sent the plaintiff a day letter on October ...

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