#### ST. LOUIS CAR COMPANY v. THE UNITED STATES1

[No. B-146.

Decided March 31, 1924]

*On the Proofs*

*Contract; settlement; acquiescence.*— Where plaintiff ‘enters into a supplemental contract, called a “ Full Settlement Contract ”, by the terms of which it agrees to accept a specified sum “ in full and final compensation ” for work performed under the original contract, and “ in full satisfaction of any and all claims or demands in law or in equity which the contractor * * * may have, growing out of or incident to said original contract ”, and that such settlement shall constitute “ a complete termination of every question or claim, legal or equitable, liquidated or unliquidated, by or on behalf of the contractor, pertaining to or growing out of said original contract ”, he is bound by the terms of such settlement and can not assert claim for a greater amount under the original contract.

*The Reporter's*statement of the case:

*Mr. Raymond M. Hudson*for the plaintiff.

*Mr. John E.*Hoover, with whom was *Mr. Assistant Attorney General Robert H.*Lovett, for the defendant.

The following are the facts of the case as found by the court:

I. The plaintiff, the St. Louis Car Company, is a corporation duly organized and existing under the laws of the State of Missouri and has its principal office in the city of St. Louis.

II. On August 5,1918, plaintiff entered into a written contract with the United States, which contract was executed by Lieutenant Colonel A. W. Fairchild, Ordance Department, United States Army, on behalf of the United States, *548whereby the plaintiff agreed to build 7,003 ammunition carts at $71.00 each, and 6,843 gun carts at $74.00 each, the total price of which was $1,003,595. A copy of the said contract is filed as Exhibit A to the petition and is made a part hereof by reference.

III. On October 22, 1919, plaintiff and the United States entered into a supplemental contract, which was executed by Lieutenant Colonel E. W. Eedd, Ordnance, Department United States Army, on behalf of the United States, whereby the plaintiff agreed to discontinue work under the original contract, and agreed to accept as full compensation for the work performed under the original contract the sum of $118,874.04, “ and such additional sums, if any, as the Secretary of War may deem necessary fairly and justly to compensate to the contractor for expenditures, obligations, and liabilities necessarily incurred, and for work, labor, and service necessarily rendered, under the original contract or in preparation for the performance thereof, or under this supplemental agreement.” Said supplemental contract reads as follows:

“ This contract, made this 22nd day of October, 1919, between the United States of America by E. W. Eedd, Lieut. Col., Ordnance Department, United States Army (hereinafter called “ Contracting officer”), acting by direction of the Chief of Ordance, United States Army, and under authority of the Secretary of War, party of the first part, and the St. Louis Car Company, a corporation organized and existing under and by virtue of the laws of the State of Missouri and having an office at St. Louis, Missouri (hereinafter called “Contractor”), party of the second part:

Witnesseth, that—

Whereas the United States and the contractor heretofore executed a certain contract No. P 13037-2160 SA, dated August 5th, 1918 (hereinafter called “original contract,” which term _also includes, wherever used herein, all agreements, if any, supplementary to said original contract except this agreement and any other supplemental agreements which may be dated subsequent to the date of this agreement) ; and

Whereas the original contract has not been completely performed, but in preparation for, and as part of complete performance, the contractor has employed capital, performed services, expended money, and incurred liabilities and obligations for which he has not been paid; and

*549Whereas because of the suspension of hostilities it has become desirable and is to the best interest of the United States to reduce the amount of deliveries to be made under the original contract and to that end, on the fourteenth day of January, 1919, the contractor, at the request of the United States has temporarily suspended operations under the original contract,, and it is now the purpose of the parties, hereto to provide for complete termination of operations under the original contract; and

Whereas the contractor has properly made expenditures and incurred obligations, including work, labor, and services necessarily rendered, in connection with the performance of said contract, and the contracting officey has made a preliminary examination of the items of said expenditures and obligations and finds that the total amount thereof properly and fairly apportionable to the uncompleted portion of said contact, over and above any sums that may be due to the United States arising out of or incident to the said contract, other than advances by the United States, will be not less than the sum of two hundred thousand dollars ($200,000.00), and the contractor represents that said amount is in excess of the sum of .one hundred eighteen thousand eight hundred seventy-three dollars and four cents ($118,873.04) ; and

Whereas the contractor is willing to agree to a complete termination of operations under the original contract, and to agree to waive all rights to prospective profits thereunder if he can secure forthwith reimbursement of a portion of the expenditures made and obligations necessarily incurred by him in performance of the uncompleted portion of said contract, and provision for the speedy determination and payment of the various items of reimbursement and remuneration hereinafter set forth.

Now, therefore, the parties hereto agree as follows:

ARTICLE 1. The existing rights and obligations of the parties hereto under the original contract shall remain in full force and effect except as herein expressly provided.

.Article 2. The total quantity of articles or work to be delivered or performed under the original contract and this supplemental agreement, including all deliveries heretofore made, shall be none.

Article 3. The contractor agrees that it will not perform any further work or services, or incur any further expense or obligations in connection with the performance of the uncompleted portion of said original contract, and will use his best efforts in every proper way to reduce such liabilities or obligations as have already been incurred in connection with such performance; and the contractor hereby, and for all time, waives all claim to the prospective *550profits which he might have made from the performance of that portion of said original contract which under the terms of this supplemental agreement will not be performed.

Article 4. In consideration of the premises and that faithful performance by the contractor of the foregoing-covenant, the United States shall forthwith pay to the contractor the sum of one hundred eighteen thousand eight hundred seventy-three dollars and four cents ($118,873.04). No advances have been made by the United States to the contractor under the original contract.

Article 5. In further consideration of the premises, the United States agree to pay to the contractor an additional sum or sums which, together with the sum of ($118,873.04) one hundred eighteen thousand eight hundred seventy-three dollars and four cents, provided for in article 4 hereof, will reimburse and remunerate the contractor for such portion of his expenditures, obligations, and liabilities necessarily incurred, and for work, labor, and services rendered in connection with the performance of the original contract,, as is properly and fairly apportionable to the uncompleted portion théreof, and for expenditures incurred and services properly rendered under this supplemental agreement, as follows:

SectioN A. For raw materials, direct and indirect, and component parts on hand, in an amount not exceeding the requirements for the completion of the contract: Cost-plus inward handling charges plus such portion of overhead; as is directly applicable,, less such sums-as may represent the fair agreed value of all or any portion thereof, if the title and possession of the same are retained by the contractor.

Section B. For articles in process, in an amount not exceeding the requirements for the completion of the contract: Cost of raw material and labor plus such portion of overhead as is directly applicable, less such sums as may represent the fair agreed value of all or any portion thereof, if the title and possession of the same are retained by the contractor.

Section C. A fair and equitable remuneration (1) for expenses and sendees of the contractor in connection with the items included in Section A of this article,, but not to exceed interest at 6 per cent per annum on the capital invested therein, or if the capital was borrowed, interest at the rate paid by the contractor; and (2) for expenses and services of the contractor in connection with the items included in Section B of this-article, but "not to exceed 10 per cent of the cost, thereof.

*551SeotioN D. Such amounts as are properly paid by the contractor in the adjustment and termination of unperformed commitments for supplies which were properly entered into or made in connection with the performance of said original contract.

Section E. Pay rolls and expenses paid or incurred with the approval of the contracting officer, or properly paid or incurred without such approval for the custody and protection of property, since the date of suspension above recited and pending final settlement.

Section F. Where special facilities were properly provided in connection^, with the performance of the original contract, necessity of ivliich was contemplated by the contractor and included in his estimate of cost at the time the original contarct was made, such portion of the cost thereof as would reasonably have been recouped had the uncompleted portion of the original contract been performed. The amount so allowed shall not exceed a sum which shall be computed as follows: From the cost of such special facilities deduct their fair value at the date hereof, and state such portion of the remainder as is represented by the ratio of the uncompleted portion to the whole of the original contract.

Section Gr. Such additional sums, if any, as the Secretary of War may deem necessary fairly and justly to compensate to the contractor for expenditures, obligations, and liabilities necessarily incurred and for work, labor, and service necessarily rendered, under the original contract or in preparation for the performance thereof, or under this supplemental agreement.

Article 6. Title to all property paid for the United States made under the original contract or under this supplemental agreement shall vest in the United States immediately upon payment therefor.

Article Y. The United States shall proceed with the contractor to determine the exact amount of the several items which make up the total amount payable to the contractor under the original contract and this supplemental agreement. When any sum is so found to be justly due the finding shall be evidenced by a certificate of the contracting officer, or other officer duly authorized by the Secretary of War, which certificate shall state the amount found to be •due and the item or items with respect to which the finding is made, and if any property is to be transferred in connection with or as a consideration for such payment, the said certificate shall list the property so to be transferred *552or delivered. Upon approval by the contractor of such certificate or certificates the amount thereof up to the sum of one hundred eighteen thousand eight hundred seventy-three dollars and four cents (118,873.04) agreed to be paid under article 4 hereof shall be offset against the said sum and the United States will pay to the contractor any additional sum or sums found and certified to be due; provided, however, that in no event shall the aggregate payments made or to be made under this supplementary agreement and under the original contract exceed the amounts which would have been payable under the original contract if the said contract has been fully performed. The approval by the contractor of any such certificate up to the amount specified in article 4 hereof, or the acceptance of payment under any certificate for any additional sum, shall constitute a release of all the contractor’s rights then existing or which may thereafter exist growing out of or relating to the item or items covered by any such certificate.

Article 8. In the event of the transfer or delivery to the United States of any property the contractor shall expressly warrant all such property as free and clear of all encumbrances, either legal or equitable, and shall either deliver the same to the United States or if requested shall care for, mark for identification, and arrange for storage of same in a manner which shall be mutually agreeable.

Article 9. This agreement shall not become a valid or binding obligation of either party hereto unless and until the approval of the St. Louis Claims Board has been noted at the end of this instrument.

In witness whereof, .the parties hereto have caused this agreement to be duly executed in five parts as of the date first hereinabove written.

Witnesses :

Paul A. Thomas as to E. W. Redd,

*Lieut.*Gol., *OrcL Dept., U. S. A.,*

*Contracting Officer.*

M. Atwater,, as to St. Louis Car Company, *Assistant Secretary. Contractor.*

[seal.] By Edwin B. Meissner,

*Vice President.*

Approved: .

St Louis District Claims Board,

By M. E. Singleton.

Dated, St. Louis, Mo., the 22d day of October, 1919.

The Secretary.of War has made no award of any additional sum, but has affirmed the decision of the Board of *553Contract Adjustment denying the plaintiff’s claim which it is now setting up in this suit.

IV. The plaintiff presented its claim for $90,000 to the St. Louis' Ordnance Claims Board, and this board allowed the plaintiff the sum of $29,345.13; from this decision an appeal was taken by the United States to' the Board of Contract Adjustment, which latter board reversed the decision of the St. Louis board, and refused to allow the plaintiff any part of its claim. From this decision an appeal was taken by the plaintiff .to the Secretary of War, who affirmed the decision of the Board of Contract Adjustment.

V. On November 20, 1920, the plaintiff entered into another contract in writing with the United States entitled “ Full Settlement Contract,” whereby the plaintiff agreed to accept the sum of $199,309.40, less the sum of $118,873.04 which had already been paid to it under the contract of October 22, 1919. The full settlement contract provided: “The payment of $80,436.38 (the difference between $199,-309.49 and $118,873.04) shall be in full and final compensation for articles or work delivered, services rendered, arid expenses incurred by the contractor under the original contract and in full satisfaction of any and all claims or demands in law or in equity which the contractor * * * may have,

growing out of or incident to said original contract; and said contractor hereby expressly agrees that such settlement when made shall constitute a complete termination of every question or claim, legal or equitable, liquidated or unliquidated, by or on behalf of the contractor, pertaining to or growing out of said original contract, except as provided in paragraph 1 hereof.” Paragraph 1 of the contract refers to articles of work delivered and accepted on or before the date of the contract, and does not embrace the claims herein set up by the plaintiff.

VI. The plaintiff held the “ Full Settlement Contract ” until March 22,1921, when it wrote the defendant as follows:

“ * * * We return herewith, duly executed in our behalf, seven copies of full and final settlement contract in connection with Ordnance Claim 2941 P. 13037-2160 S. A. These papers were sent us by Captain Foster on November *55418th, 1920. Will you kindly acknowledge receipt of these documents, and advise how soon we may expect to receive payment for which it is needless to say, our needs are urgent.

*553“ St. Louis, Mo., *March*’&?.

*554“ The time elapsing since November has been utilized in making a new audit of this transaction, and conferring with Ordnance Officials respecting award, which is not entirely satisfactory to us, hut which we have now decided to accept in order to avoid legal action against the Government.

“ Statement showing authority of our Vice President to sign for the Company is attached as requested.

“ Yours very truly,

“ EdwiN B. MeissNER,

*Vice President.*”

The plaintiff duly received the sum of $80,436.38 provided for in “ Full Settlement Contract.”

1

 Appealed.

MEMORANDUM BT THE COURT

See *Savage*v. *United*States, 92 U. S. 382, 388; *Baird*v. *United*States, 96 U. S. 430; *Pelton Water Wheel Co.*v. *United*States, 55 C. Cls. 31, 36; *Poole Engineering & Machine Co.*v. *United*States, 57 C. Cls. 232, 235, 236; *Francis*v. *United*States, 96 U. S. 354, 360.

The petition is dismissed..