Findings of Fact

128 C. Cls.

and data in his possession in connection with his duties. He returned to Fort Benjamin Harrison at the expiration of his 15-day leave.

7. Plaintiff was placed on military furlough status on the rolls of the Bureau of Internal Revenue on August 1, 1942, and continued in such status through September 30, 1947.

8. On June 3, 1942, plaintiff had creditable civilian Federal service for the purpose of computing his period of service under sections 5 and 6 of the Civil Service Retirement Act of May 29, 1930 (46 Stat. 468), as amended, of 4 years 11 months and 9 days. If, in addition to this acknowledged creditable civilian Federal service, plaintiff had also been credited with the 57 days from June 3, 1942 to July 30, 1942, he would then have had the necessary period of five years to qualify under the act.

9. Plaintiff served as an enlisted man in the Army of the United States from June 3, 1942 until January 19, 1943, on which date he was discharged. On January 20, 1943, he was appointed a 2d Lieutenant in the Army of the United States and was called to active duty on that same day.

10. Plaintiff served on active duty as a commissioned officer in the Army of the United States from January 20, 1943 until November 1, 1947, on which date he was retired from active duty by reason of physical disability.

11. Since November 1, 1947, plaintiff has received retirement pay under section 5 of the Act of April 3, 1939, 10 U. S. C. 456, on account of permanent disability incurred in line of duty. Effective January 1, 1951, plaintiff commenced to receive part of such compensation as disability compensation paid by the Veterans Administration pursuant to Public Law 314, 78th Congress, 2d session.

12. On September 2, 1947, plaintiff submitted an application to the United States Civil Service Commission for disability retirement under the terms of section 6 of the Civil Service Retirement Act. Plaintiff's application for annuity on account of disability under the Civil Service Retirement Act was medically approved by the Commission's Medical Division on September 22, 1947.

13. By letter dated November 5, 1947, Warren B. Irons, Chief, Retirement Division, United States Civil Service Commission, advised plaintiff as follows:


Findings of Fact

Reference is made to your application for annuity under section 6 of the Act of May 29, 1930, as amended, on account of total disability for useful and efficient service.

The Act of January 24, 1942, amending the Civil Service Retirement Act of May 29, 1930, liberalizes the retirement law by vesting title to annuity in an officer or employee who is departed after having rendered a minimum of five years of service.

From the certified record of the Treasury Department, it is shown that you received an appointment in the Post Office Department, Chicago, Illinois, on January 18, 1937, and resigned on February 9, 1937. On July 16, 1937, you were appointed in the Treasury Department, Internal Revenue, Baltimore, Maryland; and on September 27, 1937, you were transferred to Chicago, Illinois, where you were separated September 30, 1937. [sic]

From an official report from the Adjutant General's Office, War Department, it is shown you enlisted January 3, 1942, [sic] and were relieved from active duty on November 1, 1947, on account of physical disability.

However, your civil service can only be counted up to June 2, 1942, inclusive, with a total service of four years eleven months and nine days of creditable civil service.

Inasmuch as you have not rendered the required five years of service, the Commission finds it necessary to reject your claim for disability.

It is regretted that more favorable action cannot be taken on your claim.

14. Plaintiff appealed the disallowance of his claim to the Civil Service Board of Appeals and Review and to the Civil Service Commission, both of which approved the decision denying the plaintiff's claim.


Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law the plaintiff is entitled to recover.

The entry of judgment is suspended pending the incoming of a stipulation from the parties showing the amount due in accordance with this opinion, or, in the absence thereof, until the incoming of a report from a commissioner showing the amount due.



128 C. Cls.


[No. 49474. Decided April 6, 1954]
On the Proofs

Suit under War Contract Hardship Claims Act or Lucas Act; evidence precludes recovery.-Where plaintiff's claim for extralegal relief for losses incurred under a war contract is presented under the provisions of the War Contract Hardship Claims Act (Lucas Act), 60 Stat. 902, as amended; and where it is shown by the evidence that the losses incurred by the plaintiff were not incurred without fault or negligence on the part of plaintiff in the performance of the contract, as required by the Act; it is held that the plaintiff is not entitled to recover. United States 74 (17)

Same; plaintiff unable to produce satisfactorily.—Plaintiff was a subcontractor with another contractor which in 1943 entered into a contract with the War Department to supply high explosive shells for the war effort. Plaintiff was encouraged by the War Department and by the prime contractor to participate in the war effort and was given assistance, technical and financial, by the prime contractor, from time to time, but was unable to produce satisfactorily and on time, in accordance with its subcontract.

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Same; causes of plaintiff's inability to produce.-On all the evidence, and the report of a commissioner of the court, it is found that plaintiff's failure to produce, in accordance with the provisions of the subcontract, was due to inadequate technical management, improper plant facilities and equipment, financial instability, interference by unskilled managers with technical plant operations, and failure to adhere to proper forging methods.

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Same; recovery precluded under Lucas Act.—It is held that plaintiff's losses were not incurred without fault or negligence on its part and hence plaintiff precluded from recovery under the Lucas Act.

United States 74 (17)

Mr. Raymond C. Cushwa for the plaintiff. Mr. George D. Webster and Messrs. Davies, Richberg, Tydings, Beebe & Landa were on the briefs.

Mr. Carl Eardley, with whom was Mr. Assistant Attorney General Warren E. Burger, for the defendant. Mr. Donald D. Webster was on the brief.


Opinion of the Court

JONES, Chief Judge, delivered the opinion of the court: The plaintiff sues for $111,052.56, which allegedly represents losses incurred in the performance of a subcontract under a prime contract with the government for the production of 60 mm. shells. The suit is based on the Lucas Act, 60 Stat. 902, 41 U. S. C. 106 note, as amended, 62 Stat. 992. The plaintiff is referred to hereinafter as Plasco, the name by which it was known during the contract period involved.

The issue presented by this case is whether the provision of the Lucas Act restricting recoverable losses to those "incurred *** without fault or negligence on [the part of a plaintiff] in the performance of such contracts or subcontracts [with the government]," precludes recovery by this plaintiff. For reasons set out in detail in our findings and summarized below, we hold that plaintiff is so precluded.

Plasco Company was originally a partnership which was formed in 1942 by Carl Hofmeier, Henry Maykemper and N. Halperin. This partnership was engaged in experimenting with methods of forgings which were new in the United States. In August 1943, Henry M. Blume, a lawyer engaged in the promotion of business enterprises, and Stanley Evans purchased Halperin's interest in the partnership. On August 25, 1943, Mr. Blume went to Washington, D. C., and conferred with officers of the Ordnance Division of the Army regarding the use of forgings in the production of 60 mm. shells. He was encouraged by his reception and the possibilities of participating in the preparedness program. The following month the partners formed the corporation known as Plasco Steel Works, Inc., with common stock divided among the partners. Mr. Blume was made president of Plasco.

Upon being informed by Mr. Blume that Plasco was able to engage in the production of shell forgings, Ordnance authorities investigated Plasco's facilities and reported on November 9, 1943, that while Plasco had produced a satisfactory forging, it would need financing, equipment and a new plant before it could engage in intensive production. In November and December 1943, the Goslin-Birmingham Manufacturing Company of Birmingham, Alabama (hereinafter Goslin-Birmingham), entered into a contract with the

Opinion of the Court

128 C. Cls.

War Department to supply 1,100,000 shells, high explosive, 60 mm. The contract delivery schedule required 10,000 shells in February 1944; 60,000 in March 1944; 145,000 in April 1944 and each month thereafter through September 1944; 160,000 in October 1944, completing deliveries by the end of that month. After ascertaining that no known supplier of 60 mm. rough forgings could furnish any for this contract, Goslin-Birmingham learned from Ordnance that Plasco had indicated its capability for producing them. Goslin-Birmingham contacted Plasco and was informed that the latter was engaged in constructing dies for sample 60 mm. shells and that upon securing satisfactory samples, Plasco would notify Goslin-Birmingham. On December 30, 1943, Plasco wrote that with present equipment it could make 50,000 rough forgings per month. If it decided upon expansion of facilities, Plasco expected to produce 100,000 to 150,000 per month without heat treating or sand blasting. Two sample 60 mm. forgings were sent to Goslin-Birmingham. It was the latter's understanding that these samples were made by the method which would ultimately produce volume forgings. Actually, the samples were hand produced.

Following various negotiations Goslin-Birmingham, on January 15, 1944, formally agreed to purchase from Plasco 1,100,000 rough forgings in accordance with Army specifications, at a price of 35 cents per forging, with monthly shipments to be equally distributed between January and October 1944. Goslin-Birmingham supplied Plasco with 816 tons of steel for the forgings.

When Plasco entered into this agreement its equipment consisted of two presses in rather poor shape and a round table. Three presses, three furnaces, and an air compressor were added later. Plasco initially proposed to make the forgings by mounting six dies on the table under a press after initial heating. However, after trial it was found that this method was wholly inadequate and the idea was abandoned. The forgings actually shipped by Plasco were forged by using two dies under a press, then cooled, cut and reheated to complete the processing.

From the outset Plasco experienced difficulty in producing acceptable forgings. The forgings failed to conform to

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