Case ID: us-ct-cl_51/html/0478-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Day", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIAM CRAMP AND SONS SHIP AND ENGINE BUILDING COMPANY v. THE UNITED STATES.
    [46 O. Ols. R„ 521; 239 U. S. R., 221.]
    
      On the plaintiffs appeal.
    
    The contract in this case for the battleship Massachusetts is identical with that between the same parties for the construction of the Indiana. There this court held that the release “of all claims of any kind or description under or by virtue of this contract,” not being supported by a new consideration, did extend to breaches of the defendants in relation to work which was not under the contract. (41 O. Ols. R., 164.) The Supreme Oourt ascribed greater significance to the term “ by virtue of,” and held that “ strictly speaking they were not claims under the contract but were clearly claims by virtue of the contract," and that the release extended to them, and was intended by the contract to extend to them, so that nothing should be “ left open and unsettled.”
    
    The court below decides:
    Whether at the time of the execution of the contract it was or was not within the intent of the parties that the final release to be given by the contractors before final payment should embrace “ all claims of any ki/nd or description under or by virtue of this contract ” was the question determined by the Supreme Oourt in the case of the Indiana (41 O. Ols. R., 164; 206 U. S. R., 118) ; and as this case is between the same parties this court is not at liberty to give a different construction to the language used.
    This decision of the Supreme Oourt held that the release given by the contractors at the time of payment extended to claims of an unliquidated character, though the Secretary of the Navy, who exacted the release, was himself without authority to settle such claims.
    
      While the contracts in the three cases of the Indiana, the Alabama and this, the Massachusetts, are identical, the releases are not. That of the Alabama (43 O. Cls. ft., 202, 210) provides “ that nothing herein shall operate as a waiver of this company’s right to sue for damages incurred or losses sustained ” “ which were occasioned by delays or defaults on the part of the United States.”
    
    The fact that a contractor executed under the pressure of impending solvency, caused by the other party withholding funds due under the contract, is not proof that he executed it in mistake of fact; and the mistake of one party can not take the place of the mutual mistake of both. The reformation of a contract by a court is not to make a new contract but to give effect to the original intent of both parties.
    Since the decision of the Supreme Court in the case of the Alabama (supra) it must be held that the contractors in this case could have' protected themselves at the time of signing the final release by excepting therefrom their claims for unliquidated damages, notwithstanding the decision in the ease of the Indiana that it was intended by the contract that a release should be given at the time of final- settlement by which nothing should be “ left open and unsettled.”
    
    It may be laid down as an established rule that where there is no mixed question of law and fact and no fraud, undue influence, or deceit, a court of equity will not interpose to reform a contract.
    Where the sole ground for the reformation of a final release is the misconception of the party who gave it as to his legal rights under the contract to which the release relates his mistake is one of law.
    The decision of the court below is affirmed.
   Mr. Justice Day

delivered the opinion of the Supreme Court November 29,1915.