Reconstruction Finance Corp. v. Chromium Products Corp.

This is an appeal from a judgment of the United States District Court for the District of Montana, awarding damages for breach of a leasing agreement of mining properties by Chromium Products Corporation, hereafter called Chromium, to Metals Reserve Company, 1 a corporation created under Section 5 of the Act of June 25, 1940, 54 Stat. 573 . See 6 F.R. 2970 . By that section appellant had been authorized “(2) When requested by the Federal Loan Administrator, with the approval of the President, to create * * * corporations, with power (a) to produce, acquire, and carry strategic and critical materials as defined by the President, * * Metals Reserve Company was created for the purpose of acquiring .and carrying a reserve supply of such materials and all its stock was owned by appellant. It is not questioned that the chrome ore sought to be mined was a strategic and critical war material.

This Act of June 25, 1940, stated in its preamble that it is enacted “In order to aid the Government of the United States in its national-defense program”. At that time Germany had invaded Norway. The Netherlands (after the aerial bombardment of Rotterdam) had surrendered as had-Belgium. Italy had…

(dissenting).

The Government’s corporation has interposed a specious defense which the majority have sustained by what seems to me to be an over-simplified treatment of the problem here, which is one of interpretation of a paragraph in this lease.

I know of no reason why the lessee, creature of the Government, might not stipulate in its contract that the minimum royalties bargained for shall cease to be paid whenever the Chairman of the War Production Board makes a “requirement” that such payments stop. But such an extraordinary, one-sided, and delusive arrangement should be found only when clear language to that effect has been used.

A fair reading of paragraph 29, and all of it, — not just a detached phrase thereof,— will disclose no intent to ignore or do away with the distinctions made in Horowitz v. United States, 267 U.S. 458 , 45 S.Ct. 344 , 69 L.Ed. 736 , in Jones v. United States, 1 *668 Ct.Cl. 383 , cited in the Horowitz case with approval, and in Ottinger v. United States, 88 F.Supp, 881, 116 Ct.Cl. 282 .

None of those cases involved the construction of contract language such as that in paragraph 29. But what they all point out is that inherently, and in the nature…

202 F.2d 664 RECONSTRUCTION FINANCE CORP. v. CHROMIUM PRODUCTS CORP. No. 13185. United States Court of Appeals Ninth Circuit. Feb. 17, 1953. Rehearing Denied March 18, 1953. Wm. Amory Underhill, Asst. Atty. Gen., John F. Cotter and Edmund B. Clark, Dept. of Justice, Washington, D.C., for appellant. Fred L. Gibson, Livingston, Mont., Rockwood Brown, Horace S. Davis, William H. Bellingham and Ben N. Forbes, Billings, Mont., for appellee. Before DENMAN, Chief Judge, and HEALY and POPE, Circuit Judges. DENMAN, Chief Judge. 1 This is an appeal from a judgment of the United States District Court for the District of Montant, awarding damages for breach of a leasing agreement of mining properties by Chromium Products Corporation, hereafter called Chromium, to Metals Reserve Company, 1 a corporation created under Section 5 of the Act of June 25, 1940, 54 Stat. 573 . See 6 F.R. 2970 . By that section appellant had been authorized '(2) When requested by the Federal Loan Administrator, with the approval of the President, to create * * * corporations, with power (a) to produce, acquire, and carry strategic and critical materials as defined by the President, * * * .' Metals Reserve Company was…