Reconstruction Finance Corporation, a Corporation v. Sullivan Mining Company, a Corporation

This is an appeal from a judgment in the sum of fifty-four thousand odd dollars awarded Sullivan Mining Company for its out-of-pocket costs in stockpiling zinc concentrates for the government during and following the Second World War.

It is not disputed that Sullivan incurred costs in the amount awarded. The question is whether in the contingency which developed during the course of the relationship Sullivan became entitled to recover its costs. Resolution of the controversy turns on the interpretation to be given certain writings expressive of the understanding between the parties, plus consideration of background conditions and informal interchanges.

Sullivan owned and operated a zinc smelter near Kellogg, Idaho, in which concentrates obtained from a mine of its own as well as concentrates purchased from other mines were processed. Shortly after the entry of the United States into the war a program was officially promulgated having as its object the expansion of the output of copper, lead and zinc by domestic mine operators through the payment of premium prices therefor under a quota system. The program was placed in charge of Metals Reserve Company, a governmental corporation…

(concurring).

I concur in the foregoing opinion and should like to add some observations of my own. The language quoted from the July 12, 1944 amendment to the contract between the parties may be susceptible of two constructions. But certainly it is a permissible construction that the words “will be reimbursed for actual out-of-pocket expense incurred in connection therewith” refers to all expenses incurred in connection with the stockpiling.

This construction, which the trial court adopted, appears to me to be the more reasonable one. For obvious reasons the language should be construed most strictly against Metals Reserve which drew the instrument. It is unreasonable to suppose that Sullivan would have agreed to the stockpiling arrangement if it had not contemplated a chance to get its expenses back by processing the concentrates itself. It is difficult to understand how it would agree to a modification of the arrangement which would result in its losing all these costs. The correspondence in evidence indicates that as late as June 23, 1949, the Bureau of Federal Supply did not dispute Sullivan’s contentions as to the meaning of this language as embracing reimbursement for…

230 F.2d 247 RECONSTRUCTION FINANCE CORPORATION, a corporation, Appellant, v. SULLIVAN MINING COMPANY, a corporation, Appellee. No. 14755. United States Court of Appeals Ninth Circuit. March 5, 1956. Stimson & Donahue, L. Vincent Donahue, Spokane, Wash., Tom B. Paine, Wallace, Idaho, for appellant. Charles E. Horning, Wallace, Idaho, Robert E. Brown, Kellogg, Idaho, for appellee. Before STEPHENS, HEALY, and POPE, Circuit Judges. HEALY, Circuit Judge. 1 This is an appeal from a judgment in the sum of fifty-four thousand odd dollars awarded Sullivan Mining Company for its out-of-pocket costs in stockpiling zinc concentrates for the government during and following the Second World War. 2 It is not disputed that Sullivan incurred costs in the amount awarded. The question is whether in the contingency which developed during the course of the relationship Sullivan became entitled to recover its costs. Resolution of the controversy turns on the interpretation to be given certain writings expressive of the understanding between the parties, plus consideration of background conditions and informal interchanges. 3 Sullivan owned and operated a zinc smelter near Kellogg, Idaho, in which…