Birkelund v. United States in a Fiduciary Capacity

LittletoN, Judge, delivered the opinion of the court: This case comes before the court pursuant to the provisions of the following special jurisdictional act of January 3,1951, (64 Stat., Part 2, p. A273) : Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, notwithstanding the provisions of section 2103 of the Revised Statutes (U. S. C., title 25, sec. 81) and notwithstanding any statute of limitations or lapse of time or any limitation upon the jurisdiction of the Court of Claims with respect to claims upon any contract implied in law, jurisdiction is hereby conferred upon such court to hear, determine, and render judgment upon the claim of the Algoma Lumber Company (including the claim of George R. Birkelund and Charles E. Siddall, of Chicago, Illinois, and Kenyon T. Fay, of Los Angeles, Califorma, trustees of the Algoma Lumber Liquidation Trust, successors by transfer, conveyance, and assignment thereof) either against the United States in a fiduciary capacity for the Klamath and Modoc Tribes and Yahooskin Band of Snake Indians or against said Klam-ath and Modoc Tribes and Yahooskin Band of Snake Indians in connection with the contract construed by such court in its decision dated January 12,1938, in the case of Algoma Lumber Company, a corporation, against the United States (86 C. Cls. 226). Seo. 2. The amount of any judgment awarded bv the Court of Claims upon such claim shall not exceed the amount of the judgment heretofore awarded by such court in the case of Algoma Lumber Company, a corporation, against the United States (86 C. Cls. 226, 271). Seo. 3. Suit upon such claim may be instituted by or on behalf of the Algoma Lumber Company or by the said trustees as successors in interest thereto at any time within 1 year after the date of enactment of this Act. Proceedings for the determination of such claim and review thereof shall be had as in the case of claims over which such court has jurisdiction under section 1491 of title 28 of the United States Code, and the Klamath and Modoc Tribes and Yahooskin Band of Snake Indians shall be entitled to be represented in such proceedings, if they so desire, by legal counsel employed in conformity with the provisions or section 2103 of the Revised Statutes (25 U. S. C. 81). In the trial of any such suit the — 506 — Court of Claims shall have jurisdiction to hear and determine any defenses available under the rules of law and equity applicable to contracts made by the United States, defenses of waiver or estoppel based on the course of dealing between the parties, and defenses based on mistake of law or fact, including any failure to collect sums payable under the contract involved in such suit by reason of mistake of law or fact, and shall determine the liability, if any, of the parties defendant as the facts and law require. Parol evidence shall be admissible for the purposes of proving or disproving such defenses notwithstanding any limitation upon the admissibility of parol evidence in suits involving contracts in writing. Any setoff, counterclaim, claim for damages, or other demand set up on the part of any defendant shall be heard and determined by the court in accordance with the provisions of section 2508 of title 28 of the United States Code. Sec. 4. Any part of any judgment rendered hereunder which represents sums actually deposited to the credit of said Klamath and Modoc Tribes and Yahooskin Band of Snake Indians for timber cut from tribal lands shall be paid by the Secretary of the Treasury, upon appropriation by the Congress, from any funds in the Treasury of the United States to the credit of said tribe. Any other part of any judgment rendered shall be payable in the same manner as in the case of claims over which the Court of Claims has jurisdiction under section 1491 of title 28 of the United States Code. Plaintiffs are suing to recover the sum of $25,094.56, alleged to have been illegally collected by the defendant as a part of the contract price for certain timber sold by the defendant to the Algoma Lumber Company. In a previous suit brought in the Court of Claims, the court, on January 12, 1988, rendered judgment in favor of plaintiff’s predecessor in the amount of $25,094.56, Algoma Lumber Co. v. United States, 86 C. Cls. 226. The judgment was reversed by the Supreme Court, United States v. Algoma Lumber Co., 305 U. S. 415, on the ground that Algoma’s contract was not one with the United States but was with the Indians and that accordingly the Government was not liable for any breach thereof. Under the terms of the special jurisdictional act, quoted above, this court is now given jurisdiction to consider the claims under all the terms of the contract — 507 — and to render judgment on such claims either against the United States in a fiduciary capacity for the Indian tribes, or against the tribes themselves. There is no dispute concerning the facts in this case which the parties have stipulated and agreed shall be all the facts contained in the report of Court of Claims Commissioner I. M. Foster, filed April 24, 1937, including also any additional facts alleged in the petition and admitted in defendant’s answer. Insofar as material to a decision of the issues in this case, the facts are as follows: On September 17, 1917, pursuant to the Act of June 25, 1910 (36 Stat. 855), the Assistant Secretary of the Interior approved a contract entered into on July 28, 1917, by the Algoma. Lumber Company and the superintendent of the Klamath Indian School, for and on behalf of the Klamath Indians, under which Algoma agreed to cut and remove certain timber from a specified area of the Klamath Reservation prior to April 1,1932, and to pay for such timber its value as specified in the contract. The contract was for a 15-year period and was divided into five 3-year periods ending on March 31 in 1920, 1923, 1926, 1929 and 1932. Just prior to the commencement of any 3-year period the contract gave the Commissioner of Indian Affairs the right to compare the cost of lumbering operations and manufacture with the prevailing market prices for lumber products in the area during the three years preceding January 1 of the year in which the new prices were to be fixed by the Commissioner for the purpose of determining whether or not the stumpage price paid by the purchaser should be adjusted. The determination of such new stumpage rates for the next 3-year contract period was left to the decision of the Commissioner, with the right in the purchaser to a hearing. The only limitation placed by the contract on the power of the Commissioner to advance stumpage rates was the following contract provision: * * * It is agreed further that the advance in stump-age rates as determined at the close of each specified period shall not exceed fifty fer cent of the increase in the average mill mm wholesale net value of lumber at — 508 — mills in Southern Oregon and Northern California during the three years preceding January 1 of the year in which the new prices are fixed. [Italics supplied.] The Algoma contract did not provide, as did the Forest Lumber Company contract (Forest Lumber Company v. United States, this day decided ante, p. 489), that during any 3-year period the Commissioner might reduce stumpage rates previously fixed for such 3-year period. The parties to the contract agreed that the average mill run wholesale price of lumber at the beginning of the first 3-year period of the contract was $15.75 for yellow pine, and $13.50 for white fir. At the beginning of the second 3-year period of the contract, the average wholesale price of pine lumber for the three years just past was approximately $22.64. In view of the increase in that average wholesale price of lumber over the $15.75 stipulated average price for that period, the Commissioner of Indian Affairs notified Algoma that he was going to advance stumpage rates under the contract by 67 cents, effective April 1,1920, the beginning of the second 3-year period. Although, under the strict terms of the contract, such an advance in stumpage rates, once imposed, would continue in effect for the entire 3-year period ending March 31,1923, the Commissioner advised Algoma that if an investigation at the close of the year 1920 convinced him that the stumpage price advance was too high, a reduction might be made for the years 1921 and 1922. Algoma replied that it accepted the proposed advance in stumpage price, and stated that it was grateful to the Commissioner for his promise to reconsider such advance in the succeeding two years with a view to a possible reduction. No reduction in stumpage rates during the second 3-year period was made by the Commissioner. Although the average wholesale price of lumber fluctuated sharply each year in that period, such prices remained higher than in any of the three preceding years. (Finding 5.) At the beginning of the third 3-year period (April 1,1923) of the contract, the average wholesale value of lumber for the three years just past (1920, 1921 and 1922) was approximately $34.22, representing a substatial increase over the average wholesale price of lumber (actual, not stipulated) — 509 — for the first three years (1917, 1918 and 1919) of the contract. Accordingly, the Commissioner notified Algoma that effective April 1,1923, the stumpage price for the next three years wonld be advanced 66 cents per thousand feet. Algoma accepted such advance in stumpage rates, but asked the Commissioner to review the situation the following year, as he had promised he would do in the previous period, to see whether or not a reduction in stumpage rates might be justified. The Commissioner assured Algoma that he would do this. During the course of this 3-year period no reduction in stumpage rates was made by the Commissioner, although, as the Commissioner knew, the wholesale lumber prices declined steadily during that period. At the beginning of the fourth 3-year period of the contract (April 1,1926), the average wholesale value of pine lumber for the three years just past (1923, 1924 and 1925) was $28.69, representing a substantial drop in the average wholesale price of lumber below the $34.22 average price for the 3-year period 1920, 1921 and 1922, and the Commissioner of Indian Affairs notified Algoma that there would be no advance in stumpage prices under its contract on April 1,1926. Nothing was said by either party about reviewing the market situation the following year for the purpose of advancing or reducing stumpage rates during the 1926-1929 contract period. In February 1927, the Commissioner notified Algoma that he was not going to advance stumpage rates under the contract on April 1,1927. Algoma replied that it was at a loss to understand the Commissioner’s communication inasmuch as the prior determination of the Commissioner in 1926 not to advance stumpage rates had the effect, under the contract, of definitely fixing the stumpage rates for the 3-year period 1926, 1927 and 1928. In his reply the Commissioner stated that in past years on the stumpage adjustment date provided for in the contract, Algoma had “consented” to leave to the Commissioner the question of possible reductions in stump-age rates during the current 3-year period. Algoma replied that on the occasion of the determination of the Commissioner not to advance stumpage rates as of April 1,1926, the Commissioner had made no such reservation to review the — 510 — situation, at yearly intervals for the purpose of changing stumpage rates in or during the coming 3-year period. Al-goma also pointed out that the contract provided for the fixing of stumpage rates but once every three years and that once fixed, the rate was to continue for three years with no power in the Commissioner to make any change. In the ensuing correspondence between Algoma and the Commissioner, the Commissioner took the position that the correspondence between the parties concerning the first two stump-age price advances had resulted in a modification of the contract which gave the Commissioner the right to adjust stumpage rates up or down every year if, in his opinion, the circumstances justified such action. In our opinion this was in error, especially insofar as any increase in rates was concerned. Early in 1928, the Commissioner notified Algoma that stumpage prices under its contract would be advanced 40 cents on April 1,1928, to remain in effect one year. The year in question was the third and last year of that particular 3-year contract period and plaintiff properly protested that under the terms of the contract such an increase was not permissible during the 3-year period, and that cash advances or deposits which had been made by Algoma under the contract were not to be and could not be properly applied at a rate greater than the stumpage rate without such advance of 40 cents. The wholesale price of lumber for the year 1927 just past was $24.73, representing a drop from the wholesale price of lumber for 1926, which had been $26.36. Wholesale lumber prices for the three years ending January 1, 1929, averaged approximately $25.28 and were lower than the wholesale lumber prices for the preceding three years, 1923-1925, which had been $28.45. Under the terms of the contract no advance in stumpage rates would have been permissible for the three years commencing April 1, 1929. However, just prior to that date, the Commissioner notified Algoma that a 40-cent increase imposed the previous year (1928) would continue in effect for another year (1929). Algoma duly and properly protested, as it had in 1928. Early in 1930, the Commissioner notified Algoma that the 40-cent advance in stumpage rates would be in effect for an — 511 — additional year and again Algoma protested the action taken. In the court’s decision, when this case was previously here in 1938, awarding Algoma a judgment representing the amount by which Algoma’s stumpage rates had been improperly and illegally advanced in 1928, 1929 and 1930, the court merely stated that the facts and legal issues in the case were in all essential respects similar to those in Forest Lumber Company v. United States, 86 C. Cls. 188, decided the same day, and that accordingly the court’s decision in the Forest case controlled the decision in the Algoma case. The primary basis for recovery assigned by the court in the Forest case was that the stumpage advances made by the Commissioner, and complained of by the Forest Lumber Company, had been made in violation of the 50-percent limitation provision contained in the Forest contract. Defendant now requests the court to reconsider its decision in the Algoma case because it now says that the contract provisions in the Algoma contract were different from those in the Forest contract, and that the facts and circumstances surrounding the stumpage rate advances made by the Commissioner and complained of in the Algoma case raise issues of law different from those raised in the Forest case. The main difference in the two lumber contracts was that in the Forest contract the Commissioner of Indian Affairs had the express power and authority to reduce a stumpage rate previously set at the beginning of any 3-year period so long as the resulting rate was not less than the rate for the first 3-year period. In the Algoma contract, the Commissioner had no such express right. In all other material respects the contracts in the two cases were identical: stumpage rates were fixed by contract for the first three years and were subject to adjustment by the Commissioner according to a method prescribed in the contract at the beginning of each succeeding 3-year period; any advance in stumpage rates might not exceed 50 percent of the increase in wholesale lumber prices for the three years just prior to the adjustment date over the earlier three years, and stumpage rates fixed at the beginning of a 3-year period were to prevail for the entire 3-year period except, in the Forest contract, the Commis — 512 — sioner might by express provision make an interim reduction in such. rate. In the Forest case the court found and decided that because there had been an actual decrease in wholesale lumber prices in the three years just prior to the imposition of a stumpage rate advance imposed by the Commissioner, the rate advance imposed was in violation of the contract. In the instant case, the stumpage increases imposed on Algoma in the 1926-1928 period, and in the 1929-1981 period, were likewise imposed in the face of the fact that wholesale lumber prices had been dropping just prior to each 3-year period in question. Accordingly, the court was correct in holding that its ruling in the Forest case was applicable to the issues in the Algoma case, unless, as now contended by defendant, plaintiff in Al-goma is in some way estopped to make the claim it has made or has waived its right to recover back the sum of money which was exacted from it. Defendant urges that under the facts and circumstances of this case, plaintiffs are estopped to complain that the Commissioner of Indian Affairs did not comply with the terms of the contract when he ordered an increase of 40 cents in the stumpage price on April 1, 1928, which remained in effect through March 31,1931. The defendant takes the untenable position that on the facts during the two price adjustment periods from 1920 to 1926, Algoma induced the Commissioner to depart from the contract terms requiring stumpage price adjustments to be made, if at all, at the beginning of a 3-year period specified in the contract to remain in effect unchanged during that period, and to be based on any increase in the average wholesale value of lumber during the previous 3-year period; that, instead, the defendant says, we think erroneously, that the parties by their conduct agreed that stumpage rates should be determined by the Commissioner every year on the basis of the then current market conditions, and that the 40-cent stumpage rate advances made in 1928,1929 and 1930 were made by the Commissioner relying on that understanding. Defendant relies on cases involving the doctrine of equitable estoppel, particularly the case of Hubshman v. Louis Keer Shoe Co., 129 F. 2d 137, in which the court held: — 513 — * * * It is well established that one cannot by a long course of conduct lead another to believe that he will not insist upon the strict performance of a dnty imposed by law or contract, and then without notice insist upon strict performance. * * * [Italics supplied.] As pointed out by defendant, the doctrine of equitable es-toppel is designed to prevent results contrary to good conscience and fair dealing, and to insure that the person who has been the cause or occasion of a condition by which a loss has been caused would be the one to bear such loss. The party relying on an estoppel has the burden of proving its component elements and his opponent is not required to show the absence of any of them. Ross v. Commissioner, 169 F. 2d 483. The substance of equitable estoppel is the reasonable reliance by the party claiming it upon some representation or course of conduct of the other party which will injure the relying party if the other party is permitted to assert the existence of a state of facts at variance with his prior representations. A party may not base a claim of estoppel in Ms favor upon his own dereliction of duty or on acts or omissions induced by him by his own conduct or representations. Sedlak v. Duda, 144 Neb. 567, 13 N. W. 2d 892. Defendant argues that Algoma induced the Commissioner of Indian Affairs to depart from the written contract provisions and requirements for stumpage rate adjustment during the period 1920-1926; that in reliance upon the actions and representations of Algoma, the Commissioner believed that Algoma had agreed to yearly reconsideration of stumpage prices on the basis of current market conditions, and that the three 40-cent increases in stumpage price imposed from April 1, 1928, through March 31,1931, were made in accordance with the manner in which Algoma had induced defendant to interpret the contract. The provisions of the contract were clear and unambiguous and the defendant clearly knew what those provisions were. The first suggestion that the contract terms relative to stumpage price adjustments be departed from came from the defendant itself and not from Algoma when, in 1920, the Commissioner of Indian Affairs advised Algoma that he would reconsider in the following year the 67-cent advance in stumpage rate to be imposed for the next 3-year period, — 514 — with a view to a possible reduction in such advance if market conditions should warrant. Although Algoma agreed to such a reconsideration, no actual change in the stumpage rate was in fact made by the Commissioner during that 3-year contract period. It is true that on the occasion of the next stumpage rate adjustment date, Algoma was the one to suggest that the rate advance imposed by the Commissioner for the next three years should be reviewed each year with a view to a possible reduction, and the Commissioner consented to do so. But again, no reduction or change in the rate advance was made by the Commissioner during the ensuing 3-year period. It is also significant that both advances in stumpage rates made by the Commissioner appear to have been based on an increase in the average wholesale price of lumber in the three years just preceding the stumpage adjustment date as called for by the contract. On the occasion of the next stumpage price adjustment date on April 1, 1926, the Commissioner notified Algoma, as he had the right to do, that no advance in stumpage rates would be imposed, and on that occasion the Commissioner made no reservation, one way or the other, of the right to review the matter during the next 3-year period. No request for such a review was made by Algoma. Under the terms of the contract, market conditions in the lumber industry were such that no advance in stumpage rates should have been imposed because the wholesale price of lumber had declined. When, in the second year of that 3-year period (1927), the Commissioner notified Algoma that he was not going to impose an advance in stumpage rates for the year 1927, Algoma notified the Commissioner in effect that it would expect the contract terms regarding stumpage rate adjustments to be complied with and that the contract did not permit a change in rates during a 3-year period, but only at the beginning thereof. Algoma also pointed out that the wholesale lumber prices did not justify any advance in stumpage rates for the period in question, and the facts of record, discussed earlier herein, support that position. When the Commissioner of Indian Affairs imposed the 40-cent advance in stumpage rates on April 1, 1928, which date — 515 — was tbe beginning of the last year of that particular 3-year period, the Commissioner was on notice that Algoma was insisting upon strict compliance with the stumpage rate adjustment provisions of the contract and thus it cannot be said that the Commissioner made the interim advance in rates relying on representations by Algoma that it would accept such an advance made contrary to the terms of the contract both as to time and without any basis because of an actual decrease in wholesale lumber prices. Up to that time there had been no actual departure from the contract terms concerning stumpage rate adjustments. Between 1920 and 1926, there had merely been correspondence discussing the possibility of such a departure. Any understanding that there might be a departure from the contract terms was completely dissipated by the correspondence in 1927 and 1928. The first actual departure from the clear terms of the contract by the Commissioner in 1928, was not made with any reasonable reliance that Algoma would accept such an interpretation of the contract. Obviously the fact that Algoma had at an earlier date consented to permit the Commissioner to review a stumpage advance Avhich he made in 1920, and again in 1923, with a view to a possible future reduction thereof, did not justify the Commissioner or mislead him into supposing that Algoma would agree in 1928 to an interim advance in stumpage rates in 1928,1929 and 1930 not justified by market conditions and following several notices on the part of Algoma that it expected strict compliance with the contract terms concerning stumpage price adjustments. Under the above circumstances, we are of the opinion that the defendant has clearly failed to establish those elements of estoppel which would make it inequitable to require the defendant to respond in damages to plaintiffs’ otherwise valid claim under the contract. The 40-cent increase in stumpage rates imposed by the Commissioner in 1928 and remaining in effect until March 31, 1931, was in violation of the express terms of the contract, as pointed out above, and such increase was not made in any reasonable reliance on any representations or course of conduct by Algoma that the Commissioner’s interpretation of the contract was agreed to by Algoma. As to defendant’s argument that plaintiffs are not entitled — 516 — to recover the amount of the alleged overpayments resulting from the stumpage price increases in 1928, 1929 and 1930, because such payments were made by Algoma voluntarily and not under duress, what we have said in the Forest Lumber Company case, this day decided, on this same argument, applies equally in the instant case. Because Algoma had made a deposit or had paid in advance for all stumpage to be cut under the contract, the most it could do when the improper advance in stumpage rates was imposed, was to protest and notify defendant not to charge its account with the amount of such increase. There was no voluntary payment. The jurisdictional act provides for the payment of any judgment made by the court as follows: Seo. 4. Any part of any judgment rendered hereunder which represents sums actually deposited to the credit of said Klamath and Modoc Tribes and Yahooskin Band of Snake Indians for timber cut from tribal lands shall be paid by the Secretary of the Treasury, upon appropriation by the Congress, from any funds in the Treas-uary of the United States to the credit of said tribe. Any other part of any judgment rendered shall be payable in the same maimer as in the case of claims over which the Court of Claims has jurisdiction under section 1491 of title 28 of the United States Code. Plaintiff is entitled to recover the amount of $25,094.56 and judgment is rendered therefor. In view of the above-quoted provision of the special jurisdictional act, payment of that part of the judgment which shall be paid in the same manner as in the case of claims over which this court has general jurisdiction under section 1491 of title 28 of the United States Code (i. e. by Congressional appropriation), will be suspended pending the making of a stipulation by the parties or a determination by the proper Government officials of the amount so to be paid, in accordance with Eule 38 (c). It is so ordered. LakamoRe, Judge; MaddeN, Judge; and JONES, Chief Judge, concur. Whitaker, Judge, took no part in the consideration or decision of this case. — 517 — FINDINGS OF FACT By agreement of counsel at the pretrial proceedings before Commissioner William E. Day, on September 27 and 28, 1954, the parties agreed to enter into a stipulation covering all the facts in the instant case. The parties further agreed that the facts agreed upon were all of those contained in the report of Court of Claims Commissioner I. M. Foster, dated April 24, 1937, covering the subject matter of the case, and that the facts to be stipulated should also include additional facts, if any, which were alleged in the petition and admitted in defendant’s answer. The above-mentioned report of Commissioner Foster was adopted in all material respects by the court as its special findings of fact in its decision on January 12, 1938, in Algoma Lumber Company v. United States, 86 C. Cls. 226. Accordingly, the special findings of fact of the court in the Algoma Lumber Company case, supra, are incorporated herein by reference, with the following additional findings based on the above-mentioned stipulation of the parties in the instant case: 1. The Algoma Lumber Company was, at the times hereinafter referred to, a corporation duly organized and existing under the laws of the State of California with its principal office and place of business in Los Angeles; the plaintiffs are trustees of the Algoma Lumber Liquidation Trust, successors in interest of the said Algoma Lumber Company, and were duly appointed as trustees of the said Algoma Lumber Liquidation Trust by an instrument in writing, dated August 22,1946, and duly executed by the said Algoma Lumber Company and the plaintiffs Birkelund, Siddall and Fay.1 2. A copy of the contract is of record as defendant’s Exhibit D, pp. 2-10, and is by reference made a part hereof.2 3. A copy of said bond is in evidence as defendant’s Exhibit D, pp. 13-16, and is by reference made a part hereof.3 — 518 — 4. The regulations, approved June 29, 1911, as amended March 17,1917, are in evidence as defendant’s Exhibits A and B and, by reference, are made a part hereof.4 5. The following material appeared at the end of finding 19 of the court’s special findings of fact; it was not a part of finding 19 by Commissioner Foster, and is not included in the printed stipulation. Inasmuch as the parties have agreed that the stipulated facts should include any additional facts alleged in the petition and admitted in the defendant’s answer, this finding of fact appears to be stipulated by the parties as a fact in the instant case: The statistical studies and reports made by the valuation engineer show that during the contract period the average mill run net wholesale value of pine lumber within the Klam-ath District fluctuated as follows: Year Average mill run net wholesale value of pine lumber per M. 1917_$17. 49 1918_ 22.96 1919_ 27.46 1920_ 42.44 1921_ 28. 50 1922_ 81. 71 1923_w_ 30. 37 1924_J_i— 27.51 1925_27. 48 1926_’ 26.36 1927_ 24.73 1928_ 24.75 1929_ 25.50 Production costs for said years within the same area as shown by said statistical studies and reports were as follows: Year Production cost per M. 1917_$15.33 1918_ 21.52 1919_ 25.43 1920_ 30.70 1921_ 27.79 1922_ 27. 59 1923_ 28. 01 — 519 — 1924_ 25. 59 1925_ 24.62 1926_ 24.37 1927_J_ 24.45 1928_ 23.38 1929_ 25.07 6. The abnormal conditions engendered by the World War, and the unprecedently high levels attained by the sales prices of lumber within this competitive area in 1920, and for several years thereafter, together with the rapid rise of stump-age values during the period between 1917 and 1929, as reflected by competitive bids for stumpage within the Klamath Region, imposed upon the Secretary of the Interior a difficult task in determining what share of the profits derived from the sale of the timber should be allocated, under the terms of the contract, between purchaser on the one hand and the Klamath Indians on the other. These unprecedented and abnormal conditions made it necessary for the Commissioner, in the exercise of his discretion, not to follow the strict provisions of the contract, but to make only such price readjustments, based upon an equitable interpretation of the contract as, in his judgment, he thought would enable the purchaser, on the one hand, to earn a reasonable profit from its operations and on the other hand, to safeguard the interests of the Klamath Indians in the sale of property, of which they were the beneficial owners.6 7. The officials of the Government who drafted the contract and who participated in its administration throughout the period of its performance interpreted this provision of the contract to mean that the Klamath Indians should share in one-half of such increased profits. The plaintiff also attached that meaning to the contract. It was understood by the parties to the contract that the remaining one-half of the profits would absorb any increase in the cost of production under the contract.7 — 520 — CONCLUSION OF LAW Upon the foregoing findings of fact, including the special findings of fact of the Court of Claims in Algoma Lumber Company v. United States, 86 C. Cls. 226, which are incorporated herein and by reference made a part hereof, and which are made a part of the judgment herein, the court concludes as a matter of law that plaintiffs are entitled to recover, and it is therefore adjudged and ordered that they recover twenty-five thousand ninety-four dollars and fifty-six cents ($25,094.56). Footnotes [1] This finding, as stipulated by tbe parties, differs from finding 1 by Commissioner Foster and also from the court’s finding 1 of its special findings of fact, and identifies the present plaintiffs as successors in interest to the plaintiff in the former case. [2] This paragraph was added by stipulation of the parties. [3] This paragraph was the final paragraph of finding 6 by Commissioner Eoster and was omitted by the court in finding 6 of its special findings of fact. [4] This was the last sentence of finding 7 by Commissioner Foster and was omitted by the court in finding 7 of its special findings of fact. [6] This material which appeared at the beginning of finding 20 by Commissioner Foster was omitted by the court from finding 20 of its special findings of fact. [7] This paragraph of finding 20 by Commissioner Foster was omitted by the court from finding 20 of its special findings of fact.