Reporter's Statement of the Case case the shipbuilder did not proceed with reasonable dispatch in the building of the vessels the purchaser might enter into the yard of the shipbuilder, employ any number of workmen, and use and employ the necessary machinery, engines, and tools of the shipbuilder, purchase materials, proceed with the finishing of the vessels, pay the wages of the workmen, and pay for such materials out of the balance remaining unpaid of the purchase price, and in case the same was insufficient for the purpose, the shipbuilder would pay and make good the deficiency. The contracts further provided that the shipbuilder should place in escrow in a designated bank or trust company the first payment thereunder, namely, $164,250, under each of said contracts, amounting to $328,500, being 15 per cent of the purchase price, to be held by the bank or trust company as security to the purchaser for the faithful performance of the contracts by the shipbuilder, and that the shipbuilder could at any time substitute for those deposits bonds of a surety company in favor of the purchaser for like amounts, conditioned upon the faithful performance of the contracts by the shipbuilder, whereupon the said escrow money should be paid to the shipbuilder. After the execution of these contracts the Standard Shipbuilding Corporation prepared for the construction of said vessels, designated as hulls Nos. 10 and 11. The said contracts were identical except the vessels therein were respectively designated as hulls Nos. 10 and 11, and hull No. 10 was to be completed on March 31, 1918, and hull No. 11, April 30, 1918. A copy of one of the contracts is attached to plaintiff's petition as Exhibit A and is made a part of this finding by reference. V. Prior to July 25, 1917, there had been paid by de Luca, plaintiff's assignor, to the Standard Shipbuilding Corporation, as provided in said contracts of April 23, 1917, on account of the construction of the said vessels the first three installments amounting to the sum of $635,100. Prior to August 3, 1917, the Standard Shipbuilding Corporation deposited in escrow with the Guaranty Trust Co. of New York, for the faithful performance of the work as required by the terms of the contract the sum of $328,500. Thereupon the said Guaranty Trust Co. procured from the Globe Indemnity Co. a hond dated July 23, 1917, in favor Reporter's Statement of the Case of the purchaser for the sum of $328,500, conditioned upon the construction and delivery of the said vessels by the shipbuilder in accordance with the terms of the contract. Thereafter because of said bond, the purchaser released the said deposits and the Guaranty Trust Co. paid the same to the Standard Shipbuilding Corporation. VI. On July 25, 1917, the two contracts described in Finding IV were assigned by the said Carlo de Luca to the plaintiff by an instrument in writing, a copy of which is attached to plaintiff's petition as Exhibit B and is made part of this finding by reference. In accordance with the terms of this instrument, the plaintiff paid to the said Carlo de Luca for the assignment of said contracts the sum of $1,000,000, and in addition thereto the sum of $491,731 in fees, commissions, taxes, and other charges growing out of the purchase of said contracts. The plaintiff also reimbursed the assignor the sum of $635,100 theretofore paid by him to the shipbuilder, and itself paid to the shipbuilder on July 31, 1917, the fourth installment of $153,300 on the two vessels, a total of $788,400 paid by plaintiff and its assignor to the shipbuilder. There still remained on August 3, 1917, to be paid eight installments aggregating $1,401,600. VII. On July 11, 1917, the President, by virtue of the authority vested in him by act of Congress of June 15, 1917, by an Executive order delegated the powers conferred upon him by the said act to the United States Shipping Board Emergency Fleet Corporation. Under authority so conferred upon it, while the work provided to be done under the said contracts of April 23, 1917, between de Luca and the Standard Shipbuilding Corporation was in progress, the Emergency Fleet Corporation on August 3, 1917, sent the Standard Shipbuilding Corporation the following telegram and the following letter which were duly received: STANDARD SHIPBUILDING CORPORATION, Shooter's Island, N. Y.: By virtue of an act approved June 15, 1917, and authority delegated to the Emergency Fleet Corporation by Executive order of July 11, 1917, all power-driven cargo-carrying and passenger vessels above twenty-five hundred tons deadweight capacity under construction in your yards, and ma Reporter's Statement of the Case terials, machinery, equipment, and outfit thereto pertaining are hereby requisitioned by the United States and will be completed with all practicable dispatch. Letter follows. W. L. CAPPS, General Manager. [Letter] UNITED STATES SHIPPING BOARD STANDARD SHIPBUILDING CORPORATION, Washington. Shooter's Island, N. Y.: By virtue of an act of Congress approved June 15, 1917, entitled "Act making appropriations for the Military and Naval Establishments on account of war expenses for the fiscal year ending June thirtieth, nineteen hundred and seventeen, and for other purposes," and by authority delegated to the United States Shipping Board Emergency Fleet Corporation under Executive order of the President, dated July 11, 1917, all power-driven, cargo-carrying, and passenger ships, above 2,500 tons d.-w. capacity, under construction in your yard and certain materials, machinery, equipment, and outfit necessary for their completion are hereby requisitioned by the United States. On behalf of the United States, by virtue of said act and said order, you are hereby required to complete the construction of said requisitioned ships under construction and will prosecute such work with all practicable dispatch. The compensation to be paid will be determined hereafter and will include ships, material, and contracts requisitioned. You will furnish immediately general plans and detail specifications of the ships requisitioned, and copies of contracts and all supplemental agreements in relation thereto and full particulars as to owners, date of completion, payments made to date, amounts still due, and any other information necessary to a fair and just determination of the obligations of the Emergency Fleet Corporation in taking over these ships and contracts. You will report immediately whether any additional contracts are under consideration and their character and extent and will not enter into any additional contracts or commitments with respect to merchant tonnage without express authority from this corporation. (Signed) W. L. CAPPS, General Manager, United States Shipping Board, Emergency Fleet Corporation. WASHINGTON, D. C., August 3, 1917. Reporter's Statement of the Case Among the vessels described above were included hulls Nos. 10 and 11 which the Standard Shipbuilding Corporation was building under these contracts. VIII. On August 13, 1917, Eads Johnson, the district officer of the United States Shipping Board Emergency Fleet Corporation at New York, sent Admiral W. L. Capps, the general manager, the United States Shipping Board Emergency Fleet Corporation; Washington, the following letter: EADS JOHNSON, UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION, 2nd District, 115 Broadway, New York City, ADMIRAL W. L. CAPPS, August 13, 1917. General Manager Emergency Fleet Corporation, STANDARD SHIPBUILDING CORPORATION. DEAR SIR: Herewith copies of contracts, plans, and specifications for thirteen (13) 7,300-ton dead-weight capacity steel cargo vessels, their standard design, each contract covering one vessel only. Their letter dated August 8th, marked “A," attached, states that these are true and correct copies. There was found, however, in the case of Nos. 6 and 7, some discrepancies, but their letter of August 10th, marked "B," two sheets, clears up the difference between the original and copies. 2. Copies of contracts 6 and 7, and letter furnished me by the Russian Volunteer Fleet, are also enclosed, wherein there is some difference between these and the copies furnished. These are marked "C," "C-1," "C-2," and "C-3." 3. Report of contracts on hand, so far as the financial status is concerned, is enclosed, marked "D." 4. Supplementing the information which they have furnished, I have made a personal inspection, and find contracts in the following conditions: Hull No. 1: Has been launched. Schedule trial trip Sept. 1st to 15th. Present stage of completion hull steelwork, 90%. Carpenter work, 75%. Joiner work, 15%. Main engines in ship, 95% completed. Main boilers in ship, 90% complete. Reporter's Statement of the Case Piping, 30% complete. Being held up on account of valves and fittings not delivered. NOTE. I think the trial date will have to be extended from 3 to 6 weeks beyond dates they give, from present stage of the work. Hull No. 2: Still on stocks. Launching date given, September 10th. Hull now 85% completed. NOTE. Will require continuous work to meet launching date. Would name at least two weeks additional time necessary. Main engines are very nearly completed and could be made ready to install in ship in ten (10) days' time. Boilers, 43% completed. Hull No. 3: Hull about 55% completed. Engines, 75%, completed, in shop. Boiler, 15%, completed. Hull No. 4: Keel and keelson laid and 75% of bottom shell in place. No frames up. Engines, 65% completed, in shop, awaiting forgings for connecting rods. Boilers, all material at plant, not worked. Hull No. 5: 90% of keel laid. 40% bottom shell plates in place. Start made on engine bedplate. Boiler, all material at plant, not worked. Hull No. 6: Nothing done. Material in vard. Practically all material, including auxiliaries, with the exception of mast and spars, has been delivered for all six (6) vessels. Report of material attached (marked "F"). They have also received contract for two mine sweepers for the United States Navy, and the keel blocks are now ready for keels. In accordance with instructions received from Mr. Fuller on Saturday, I sent my district auditor, with accountant, to the plant, and the result of his findings is on attached sheet (marked "E"). 109770-28-C C-VOL. 64 |