Case ID: us-ct-cl_59/html/0611-01.html
Source: Caselaw Access Project
Author: {"author": "Campbell, Olvief Justice>,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

C. R. WILSON BODY COMPANY v. THE UNITED STATES
    (No. A-79.
    Decided April 28, 1924]
    
      On the Proofs
    
    
      Contract; termination; settlement contract; release. — Where plain-. tiff’s contract has been terminated and a settlement contract entered into by it with the Government and after payment in full nuclei' file terms of said settlement contract, plaintiff signs a release to “ remise, release and forever discharge tlie Government of and from all manner of debts, dues, sums of money, accounts, claims, and demands due, in law or in equity, under or by reason of, or arising out of, said original contract,” plaintiff can not thereafter recover on any unsettled claim growing out of said original contract.
    
      The Reporter's statement of the case:
    
      Mr. George R. Shields for tlie plaintiff. Goodenough, Voorhies, Long c& Ryan, and Mr. Irvin T^ong were on tlie briefs.
    
      Mr. Percy M. Oox, with whom was Mr. Assistant Attorney General Robert II. Lovett, for the defendant.
    . The following are the facts of the case as found by the court:
    ' I. The plaintiff, C. It. Wilson Body Company, is a manufacturing corporation organized under the laws of the State of Delaware, having plants at Detroit and Bay City, Michigan.
    II. Tlie plaintiff entered into a contract with the United States, dated March 15, 1918, known as contract No. 2793, whereby it agreed to make nine sets of spare parts for De Haviland-4 airplanes, in accordance with drawings and specifications attached to the contract, or to be later furnished by the Government. The price to be paid plaintiff was to be the actual cost of production as defined in Article Y of the contract and as determined under other provisions of the contract, and the contractor was also to receive a percentage on the estimated cost. A copy of the contract is attached as Exhibit A to the petition herein and is made a part of this finding by reference.
    III. In order to provide necessary materials for the contemplated work, the plaintiff at divers times during the contract period ordered materials from other dealers among them the Globe Machine & Stamping Company, Cleveland, Ohio, hereafter for brevity called Globe Company, On March 21, 1918, plaintiff sent three purchase orders, numbered respectively 98, 107, and 261, to Globe Company for wiring plates, compliance with which orders involved certain labor and material. These orders did not purport to state the prices, and they were transmitted to Globe Company prior to the arrival at plaintiff’s plant of a plant approval officer, appointed by the War Department, whose duty it was to approve all purchases of materials and supplies for said work. The plaintiff did not know that an approval officer was to be sent to its plant for nearly 30 days after it had begun to buy supplies needful under its contract. Second Lieutenant Robert C. Campbell was appointed approval officer at plaintiff’s plant located at Bay City, Michigan. He worked under the Finance Division, Approval Section, Aircraft Production, War Department, and took up his duties at plaintiff’s plant in the early spring of 1918. The said three purchase orders Nos. 98, 107, and 261 were subsequently, on June 25, 1918, stamped disapproved by said approval officer on account of the price, which meant simply that the prices had not then been stated. The wiring plates called for by these purchase orders were received at plaintiff’s plant in •August or September, 1918, and were duly checked by the Government’s agent into the plant.
    IV. It Avas not until some time after the receipt of the goods that plaintiff received invoices from Globe Company covering the shipments. When the invoices came in exception was taken to the prices by both the plaintiff and the Government approval officer and they were returned to the Globe Company. In December, 1918, invoices of the said material were rendered by the Globe Company to the plaintiff which included the charges for labor oand percentages and amounted to $4,393.97. The approval officer refused to approve the invoices or the prices stated therein.
    V. On or about November 28, 1918, the Government abrogated or suspended said contract with the plaintiff, to take effect 30 days from that time, and plaintiff was furnished with forms to send to its vendors or subcontractors, which were to be made out and returned to plaintiff for approval of the approval section before they were ordered paid by the Government auditor. Notice to this effect was sent by plaintiff to the Globe Company, who had other orders from plaintiff than the three purchase orders above mentioned, which had been invoiced as already stated. The Globe Company objected to making out its claim upon the form submitted because of its claim as to the terms upon which it had taken plaintiff’s orders.
    YI. On or about Janu'ary 14, 1919, the plaintiff wrote the Globe Company relative to the invoices the latter had submitted in December, 1918 (Finding IV), for materials and work under purchase orders 98, 107 and 261, and after stating that plaintiff was positive 'an error had been made by said vendor in figuring the cost of said parts notified Globe Company that the approval section would not pass said invoices at the prices stated in them, and requested that company to h'ave its cost records gone into on said parts and see if some adjustment could not be made to the end that an immediate approval by the approval section could be had of such adjustment. The letter suggested that because the orders were of such long standing labor may have been charged into them which was properly applicable to some other order. On February 6, 1919, the Globe Company wrote plaintiff to the effect that it had had its production department go into the matter thoroughly and that it 'attached a report which it believed would explain the situation fully. It stated that it would be glad to supply any further information desired and asked to be advised if the approv'al section would pass the invoices on the basis of said report. It further stated that its cost records were open to audit by the approval section. On February 10, 1919, plaintiff acknowledged receipt of the letter of February 6 'and report, and by telegram to Globe Company notified it that a representative of the Bureau of Aircraft Production, Detroit district, would be at that company’s plant the next day to look into high cost in said invoices.
    On February 22 Globe Company telegraphed and also wrote plaintiff that “ No representative of district office has called regarding disputed invoices.” On February 24 plaintiff replied that it had’taken the matter up with the approval officer and w'as anxious to get it closed.
    On March 3 plaintiff against asked if Government representative had “ called to straighten out claim,” to which, on same day, Globe Company telegraphed plaintiff that “ no Government representative has called as yet regarding claims.” It was not until March 19 that Globe Company could inform plaintiff, as it did not that day, that the Bureau of Aircraft Production was then investigating claim.
    VII. On March 26, 1919, plaintiff 'again wrote the Globe Company that it had heard nothing from the latter “ regarding Government investigation of your invoices and we would like this information at the earliest possible moment.” This letter further stated: “We would also like to know if you intend to enter any claim outside of the invoices in question,” 'and asked for a prompt reply. ■ .
    On the nest day, March 27, the Globe Company replied to plaintiff’s said letter of March 26 that the claim would come up during the next 10 days before the Government auditors, who were then checking the Globe Company’s claims in connection with the Aircraft contracts, and in its letter stated: “We will make no claim against your company other than the invoices in question.”
    VIII. On April 8, 1919, plaintiff again wrote the Globe Company asking for information about the latter’s claim and urging action. To this letter the Globe Company replied April 11, 1919, to the effect that the Bure'au of Aircraft Production had checked up the disputed invoices and that Lieutenant Hoffman had revised the invoices in question and told the Globe Company the claim would be made up by the Dayton district office, which would send a copy to the Globe Company and the original to plaintiff. This reply further stated that the disputed invoices were then entirely satisfactory to the Globe Company “ and the decision is final,” and added: “ Outside of the invoices in question we have no further claim to submit.”
    IX. On April 14 plaintiff wired the Globe Company, 'asking it to wire plaintiff amount of claim as prepared by Lieutenant Hoffman on “ disputed invoices.” To this telegram the Globe Company replied on April 15 that the figures were not available in its Cleveland office and that Lieutenant -Hoffman advised .plaintiff wiring Bureau Aircraft Pro-, duction at Dayton who- would furnish figures. On April 17 the Globe Company wrote plaintiff confirming its telegram of April 15, and also stated: “ Of course, you under r stand that we have made no claim against your company, the only item being the disputed invoices. They have adjusted these invoices to a basis satisfactory to ourselves and no doubt you have already received these figures.” On April 22 the Globe Company wrote plaintiff relative to the three disputed invoices as follows: “ Be advised that we have to-day received the claim from the Dayton district office, the total amount of the claim being $583.30.”
    X. During part of the time covered by the correspondence mentioned in the foregoing findings between the plaintiff and the Globe Company the plaintiff ahd accredited agents of the Government, were engaged in an effort to make final settlement of the matters involved in the s'aicl contract No. 2793 between plaintiff and the Government, which effort finally resulted in the settlement contract and releases hereafter mentioned.
    XI. Early in April, 1919, steps were taken looking to a settlement between plaintiff and the Government growing out of the termination of their contract and the fixing of the amount due plaintiff under contract No. 2793. The various items involved, including claims of sub-contractors or plaintiff’s vendors, were considered. The first of the conferences was held about April 10th and was brought about by the arrival in Detroit of Captain Lawrence W. Scudder from Washington, representing the Signal Corps. At a conference there were present "Captain White, chief of the Aircraft office in Detroit, Lieutenant Rosenbaum and Captain Scudder, representing the United States, and C. Haynes Wilson, secretary and treasurer, R. W. Allen, Mr. McMullan, plaintiff’s chief bookkeeper, and C. S. Briggs, sales manager and executive of plaintiff. The details of matters and differences were discussed and there was also some discussion about claims that had not yet been received by plaintiff. Mr. Briggs directed plaintiff’s accountants to complete and file all claims immediately. The amount of Globe Company’s claim was not then known. As a result of this conference a termination contract was drawn up in Detroit. The draft of this contract was first made by Captain Scudder and Lieutenant Rosenbaum. This first draft provided among other things for an amount of $15,000 to cover additional amounts that might subsequently come in which bad not been settled and approved before that time. The draft was unchanged in that regard when it was taken to Washington, and as returned to plaintiff for execution the contract omitted said provision. The statement was that no provision could be made in the termination contract for anything except definite and specific amounts. The contract was dated April 14th and was executed by plaintiff on April 29, 1919. A copy of this settlement contract is made Exhibit B to the petition and is made a part of this finding by reference. Several different drafts of proposed contract were made during the negotiations before the final one was adopted and executed. The item of reimbursement for special depreciation, $35,000, stated in Exhibit B, was less than plaintiff demanded, but was fixed by the Government’s representatives.
    XII. The items constituting the basis for the amounts stated in said Exhibit B were made up from the latest evidence or information plaintiff had. At the time of the execution of the contract, Exhibit B, Mr. Briggs, representing the plaintiff in the negotiations, was advised that Globe Company claimed $583.30 and had that amount inserted in the list of subcontractors’ claims. The Globe Company had sent to plaintiff the telegram and letters mentioned in Finding IX. When the contract, Exhibit B, was signed for plaintiff by Mr. Wilson, its secretary and treasurer, he did not. know of any unsettled claim with the Globe Company. Mr. Briggs had charge of the work on this Government contract, and the information which Mr. Wilson had came largely from Mr. Briggs. The Government’s officer urged expedition in making the settlement contract and stated that unless it executed the contract, Exhibit B, the Bureau of Aircraft Production would make no payments to plaintiff, and the latter would have to sue in the Court of Claim's.
    XIII. After the contract, Exhibit B, was signed and payments had been made thereunder by the Government, plaintiff’s officers learned that the Globe Company claimed $3,793.23 as due upon the three invoices under purchase orders 98, 107 and 261. The item for $583.30, it was claimed, was for amount due on undelivered material. On May 16, 1919, the approval officer corrected and approved the bills for said invoices, changing them from $4,393.97 as rendered in December, 1918, and approving them foils,793.23. After this fact came to the attention of Mr. Briggs, the plaintiff’s said sales agent, he caused to be prepared a voucher for this amount, carried it to Captain White who was district approval officer, and stated the details to that officer. The latter wrote a letter detailing these facts, enclosing the said voucher, and sent same to "Washington. The said voucher, prepared at the instance of Mr. Briggs as above stated, was on one of the regular forms, was duly signed by plaintiff, was dated June 9, 1919, and was certified by Captain White. It was never paid.
    XIY. The Globe Company later brought suit against plaintiff for the said sum of $3,793.23 and interest in the circuit court of Wayne County, Michigan. In August, 1920, the plaintiff gave notice to the Bureau of Aircraft Production of said suit. The Globe Company obtained summary judgment for said sum against plaintiff, and on the 31st day of January, 1921, the Globe Company, by its attorneys, acknowledged payment of the judgment. Upon receipt of plaintiff’s notice of August, 1920, the Chief of Air Service, under date of September 7, 1920, informed plaintiff that the Government did not recognize any liability for Globe Company commitment beyond said sum of $583.30.
    XY. The plaintiff presented its claim to the Board of Contract Adjustment and in May, 1920, that board declined to allow the same.
   Campbell, Olvief Justice>,

delivered the opinion of the court.

The plaintiff made a contract with the Government to manufacture or supply certain airplane parts on a cost-plus basis. It purchased materials from others to meet the requirements. In November, 1918, the Government gave notice, as provided for in the contract, of its termination. ^Representatives of the two parties met to effect a settlement of the matters groAving out of the contract and to ascertain the amount of the Government’s liability. These were cov-erecl into a so-called settlement contract, which was duly executed. Before it was executed, however, on behalf of the Government, a draft of the proposed contract was sent to the Bureau of Aircraft Production and the several items entering into it were gone over.

This settlement contract, dated April 14, was not executed until April 29, 1919. The items included in it aggregated over two hundred and fifty thousand dollars. After providing for the payment by the Government of these various items it was also provided: “ The contractor does hereby for itself, its successors and assigns, remise, release, and forever discharge the Government of and from all manner of debts, dues, sums of money, accounts, claims, and demands due or to become due, in law or in equity, under or by reason of, or arising out of, said original contract.” The plaintiff seeks to recover on account of three invoices for goods sold to it by the Globe Machine &• Stamping Company and used in the work plaintiff was doing under its contract. These goods were ordered and shipped and were received by plaintiff but the price was not fixed or agreed upon prior to the suspension notice. The invoices were returned to the Globe Company for correction and were in this condition when the details of the settlement referred to were being worked out. The plaintiff called upon the Globe Company to send in the amounts of its claims and made repeated efforts to get these amounts. After several letters and telegrams had passed between them the Globe Company, on April 17th, notified the plaintiff that its only claim arose out of the disputed invoices; that these had been adjusted to a satisfactory basis and the amount of them was $583.30. It now appears that this item of $583.30 had no connection with the disputed invoices, which were originally in the sum of about $4,300 and afterwards reduced to $3,793.23. It is the last named sum that plaintiff now seeks to recover. The item of $583.30 went into the settlement and appears in the settlement contract. It was for material or parts which were not completed or were not delivered when the. suspension took place.

The statement by the Globe Company to the plaintiff as 1o "the amount of the unsettled invoices was in error, but neither the Government’s representatives nor the plaintiff’s agents engaged in the settlement knew of the error. The Government insisted that all items of claim be definite and specific and declined plaintiff’s proposition to be allowed a certain sum to cover unsettled claims that might later appear. There was no such mistake as would authorize relief in this case. Indeed, as between the parties making the settlement, there was no mistake. If relief could be had in view of the release actually executed, it would seem useless to have a release. It is comprehensive in terms and was intended to make definite conclusion and end of matters or disputes growing out of the contract. See William Cramp & Sons Co. Case, 206 U. S. 118, 128. In this case it was said (p. 128) : “ Stipulations of this kind are. not to be shorn of their efficiency by any narrow, technical, and close construction. The general language ‘ all and all manner of debts,’ etc., indicates a purpose to make an ending of every matter arising under or by virtue of the contract. If parties intend to leave some things open and unsettled, their intent so to do should be made manifest.”

The contention that the claim in question should be included in the class of claims referred to in Article IY of the settlement contract as calling for payment of claims that had already been “ vouchered by the contractor and heretofore approved for payment by the Government ” can not be sustainéd. Not only does the petition aver it, but the facts clearly establish that the claims in question were not approved by the approval officer until May 16, long after the release was finally executed. The voucher which the contractor prepared and asked the Government officer to transmit is dated June 9, 1919. It is impossible that these matters, happening long after, could have been included in the provision mentioned. The petition should be dismissed. And it is so ordered.

Hat, Judge; DowNet, Judge, and Booth. Judge, concur.