United States v. Dwyer Lumber & Plywood Co., an Oregon Corporation

This case involves construction of a contract for sale of standing timber by the United States. The District Court for the District of Oregon ruled that the contract was ambiguous and construed it against the United States. Assigning that ruling as error, the United States has appealed.

In sales of standing timber it is the practice of the United States to impose upon the purchasers the responsibility for constructing all necessary logging roads but to permit them to deduct from their payments for the timber, as an offset, the cost of such construction as estimated by the Government at the time of sale. Contracts are let on the basis of bids made at public auction. Bids are made after the bidder has been furnished with a prospectus of the timber offering and a copy of the form of contract to which the bids will be directed. The contract specifies the amount of road construction cost which is allowable as an offset and the rate at which it may be amortized during the course of the contract. Bids are made on what the contract calls the “tentative rate,” which is the sale price per thousand board feet less the specified amortization rate. The effect of this arrangement is that when…