L. Vogelstein & Co. v. United States
Headline: Upheld that government-paid market price (23% cents per pound) fully compensated a metals dealer for wartime copper, blocking extra recovery even though the dealer’s purchase costs were higher.
Holding: The Court held that payment of the prevailing market price (23% cents per pound) to a metals dealer for copper furnished to the United States fully satisfied compensation, so no additional recovery was allowed.
- Prevents sellers from recovering costs above government-paid market price.
- Treats government purchases at prevailing market price as final compensation.
- Limits claims based on higher long-term contract costs.
Summary
Background
Between September 28, 1917, and February 1, 1918, the United States obtained 12,542,857 pounds of copper from a metals dealer and paid 23% cents per pound. The dealer sued seeking an additional $424,196.54, saying its necessary cost was 26.881977 cents per pound and that the copper had been taken under mandatory government orders. The Court of Claims found the prevailing market price during the period was 23% cents per pound and dismissed the dealer’s claim.
Reasoning
The central question was whether the government’s payment of the prevailing market price measured the dealer’s compensation, even if the dealer had paid more under earlier long-term purchase contracts. The Supreme Court agreed with the Court of Claims. It said the market price at the time the copper was obtained was the appropriate measure of value. Higher costs that the dealer had incurred under long-term contracts did not prove the copper’s market value when the government took it. The Court therefore denied the request for extra payment and refused to send the case back for more fact-finding.
Real world impact
The ruling means that sellers who supply commodities to the government at an established prevailing price cannot later claim extra money simply because their earlier purchase costs were higher. It confirms that a uniform market price fixed and relied on during wartime procurement can be treated as the owners’ compensation. The decision affirms the payment made and ends the dealer’s claim for additional damages.
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