A-11627, FEBRUARY 10, 1926, 5 COMP. GEN. 605

A-11627: Feb 10, 1926

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SUCH STIPULATION IS CONCLUSIVE ON THE PARTIES. A CONTRACTOR IS BOUND BY THE AGREEMENT TO WHICH HE HAS ASSENTED AND. IN THE ABSENCE OF EVIDENCE SHOWING THAT HIS ASSENT WAS INFLUENCED BY FRAUD. OFFICERS OF THE GOVERNMENT ARE NOT AUTHORIZED TO MODIFY THE TERMS OF A CONTRACT BY SUPPLEMENTAL AGREEMENT IF SUCH MODIFICATION IS PREJUDICIAL TO THE INTERESTS OF THE UNITED STATES. WHEREIN THERE WAS FOUND DUE THE UNITED STATES FROM DONIGER BROS. A SUPPLEMENTAL AGREEMENT WAS EXECUTED WHEREBY THE PRICE OF THE OVERSEAS CAPS SO PURCHASED WAS INCREASED TO 28 CENTS EACH. 010 OVERSEAS CAPS WERE DELIVERED UNDER THE CONTRACT FOR WHICH THE CONTRACTOR WAS PAID THE PRICE OF 28 CENTS EACH. 000.50 OVERPAYMENT IN QUESTION IS THE DIFFERENCE BETWEEN THE ORIGINAL CONTRACT PRICE OF 23 CENTS EACH FOR THE 100.

A-11627, FEBRUARY 10, 1926, 5 COMP. GEN. 605

CONTRACTS - INCREASED COSTS - SUPPLEMENTAL AGREEMENTS WHERE A CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE AMOUNT OF COMPENSATION, SUCH STIPULATION IS CONCLUSIVE ON THE PARTIES, AND MEASURES THE AMOUNT OF RECOVERY FOR PERFORMANCE. A CONTRACTOR IS BOUND BY THE AGREEMENT TO WHICH HE HAS ASSENTED AND, IN THE ABSENCE OF EVIDENCE SHOWING THAT HIS ASSENT WAS INFLUENCED BY FRAUD, VIOLENCE, UNDUE INFLUENCE, OR THE LIKE, MAY NOT BE PERMITTED TO SAY THAT HE DID NOT INTEND TO AGREE TO ITS TERMS. OFFICERS OF THE GOVERNMENT ARE NOT AUTHORIZED TO MODIFY THE TERMS OF A CONTRACT BY SUPPLEMENTAL AGREEMENT IF SUCH MODIFICATION IS PREJUDICIAL TO THE INTERESTS OF THE UNITED STATES.

DECISION BY COMPTROLLER GENERAL MCCARL, FEBRUARY 10, 1926:

THERE HAS BEEN PRESENTED FOR CONSIDERATION SETTLEMENT NO. US-1858-W, DATED OCTOBER 3, 1925, WHEREIN THERE WAS FOUND DUE THE UNITED STATES FROM DONIGER BROS. THE SUM OF $5,000.50 REPRESENTING ALLEGED OVERPAYMENTS UNDER CONTRACT NO. 6188-N, DATED SEPTEMBER 10, 1918, AND SUPPLEMENTAL CONTRACT DATED NOVEMBER 2, 1918.

UNDER CONTRACT OF SEPTEMBER 10, 1918, DONIGER BROS. AGREED TO MAKE AND DELIVER TO THE UNITED STATES, F.O.B. NEW YORK, N.Y., DEPOT, AT THE TIMES AND IN THE QUANTITIES THEREIN SPECIFIED, APPROXIMATELY 100,000 OVERSEAS CAPS IN THE VARIOUS SIZES STIPULATED AND IN ACCORDANCE WITH SPECIFICATIONS, AT A PRICE OF 23 CENTS EACH, THE NECESSARY O.D. MELTON TO BE FURNISHED BY THE GOVERNMENT. ON NOVEMBER 2, 1918, A SUPPLEMENTAL AGREEMENT WAS EXECUTED WHEREBY THE PRICE OF THE OVERSEAS CAPS SO PURCHASED WAS INCREASED TO 28 CENTS EACH. A TOTAL OF 100,010 OVERSEAS CAPS WERE DELIVERED UNDER THE CONTRACT FOR WHICH THE CONTRACTOR WAS PAID THE PRICE OF 28 CENTS EACH. THE $5,000.50 OVERPAYMENT IN QUESTION IS THE DIFFERENCE BETWEEN THE ORIGINAL CONTRACT PRICE OF 23 CENTS EACH FOR THE 100,010 CAPS DELIVERED AND THE SUPPLEMENTAL CONTRACT PRICE OF 28 CENTS EACH THEREFOR.

THE REASON ASSIGNED FOR THE MODIFICATION OF THE ORIGINAL CONTRACT IS STATED IN THE SECOND WHEREAS OF THE PREAMBLE OF THE SUPPLEMENTAL AGREEMENT TO BE:

* * * THROUGH A TYPOGRAPHICAL ERROR, THE PRICE FOR THE OVERSEAS CAPS TO BE FURNISHED AND DELIVERED UNDER THE SAID ORIGINAL CONTRACT WAS STATED THEREIN TO BE $0.23 EACH WHEREAS IT SHOULD HAVE BEEN STATED AS $0.28, THE PRICE THERETOFORE AGREED UPON BY THE PARTIES THERETO; * * *

THE CONTRACTOR CONTENDS THAT THE BID IT SUBMITTED WAS 28 CENTS PER CAP INSTEAD OF 23 CENTS PER CAP AS SHOWN BY THE EXECUTED CONTRACT, BUT SAID BID IS NOT IN EVIDENCE AND AN EFFORT TO LOCATE SAME HAS BEEN UNSUCCESSFUL.

WHILE RELIEF FROM MISTAKES MAY BE HAD IN SOME CASES, THERE APPEARS NO LAWFUL BASIS FOR RELIEF IN THIS CASE. IT IS ONLY UPON SUBMISSION OF THE MOST CONVINCING EVIDENCE OF THE INTENTION OF THE PARTIES THAT THE ACCOUNTING OFFICERS CAN ALLOW PAYMENT CONTRARY TO THE PLAIN TERMS OF A WRITTEN CONTRACT. OFFICERS OF THE GOVERNMENT ARE NOT AUTHORIZED TO MODIFY THE TERMS OF A CONTRACT WHICH HAS BEEN ENTERED INTO, IF SUCH MODIFICATION WILL BE PREJUDICIAL TO THE UNITED STATES, AS APPEARS TO BE THE CASE HERE. SEE 8 COMP. DEC. 549. IT IS A WELL RECOGNIZED RULE OF LAW THAT WHERE THE CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE AMOUNT OF COMPENSATION, SUCH STIPULATION IS CONCLUSIVE ON THE PARTIES AND MEASURES THE AMOUNT OF RECOVERY FOR PERFORMANCE. BOUVIER'S LAW DICTIONARY, VOL. 3, P. 2777; 13 CORPUS JURIS, P. 584; NEWCOMB V. INSURANCE COMPANY, 51 FED.REP. 725; BRAWLEY V. UNITED STATES, 96 U.S. 168; INTERNATIONAL CONTRACTING COMPANY V. LAMONT, 155 U.S. 310; SIMPSON V. UNITED STATES, 172 U.S. 379.

MR. JUSTICE WHITE, IN DELIVERING THE OPINION OF THE COURT IN SIMPSON V. UNITED STATES, SUPRA, RESTATED THE RULE LAID DOWN IN BRAWLEY V. UNITED STATES, SUPRA, AS FOLLOWS:

* * * THE WRITTEN CONTRACT MERGED ALL PREVIOUS NEGOTIATIONS, AND IS PRESUMED, IN LAW, TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES. THE CONTRACT DID NOT EXPRESS THE TRUE AGREEMENT, IT WAS THE CLAIMANT'S FOLLY TO HAVE SIGNED IT. * * *

THE CONTRACT INVOLVED IS PLAIN AND UNAMBIGUOUS, AND BY ITS TERMS THE AGREED PRICE FOR THE CAPS TO BE DELIVERED THEREUNDER WAS FIXED AT 23 CENTS EACH. IT IS APPARENT FROM THE CONTRACT THAT WHEN IT WAS EXECUTED THE PARTIES INTENDED AND AGREED THAT 23 CENTS EACH WAS THE PRICE TO BE PAID FOR THE CAPS TO BE DELIVERED THEREUNDER, INASMUCH AS IT WAS THEREIN PLAINLY STIPULATED:

5. TOTAL QUANTITY.--- APPROXIMATELY ONE HUNDRED THOUSAND (100,000) CAPS.

6. UNIT PRICE.--- TWENTY-THREE CENTS ($0.23), EACH; TO INCLUDE THE COST OF COMMERCIAL PACKING.

7. TOTAL PRICE.--- APPROXIMATELY $23,000.

INASMUCH AS THE WRITTEN CONTRACT MERGED ALL PREVIOUS NEGOTIATIONS AND IN LAW IS PRESUMED TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES, THE CLAIMANT SHOULD NOT HAVE SIGNED IT IF IT DID NOT EXPRESS THE TRUE AGREEMENT OF THE PARTIES. THE PURPOSE OF THE LAW REQUIRING WAR DEPARTMENT CONTRACTS TO BE REDUCED TO WRITING AND SIGNED AT THE END THEREOF BY THE CONTRACTING PARTIES IS TO MAKE CERTAIN THE TERMS OF THE CONTRACT, CRAMP V. UNITED STATES, 239 U.S. 221; ARCHERLIND V. UNITED STATES, 240 U.S. 531. IT IS A NECESSARY REQUISITE OF ALL VALID CONTRACTS THAT THERE BE A MEETING OF THE MINDS OF THE CONTRACTING PARTIES AND WHERE IT SATISFACTORILY APPEARS THAT THE MINDS OF THE PARTIES NEVER MET IN AGREEING ON THE SUBJECT MATTER OR CONSIDERATION INVOLVED IN A CONTRACT, THERE CAN BE NO CONTRACT. BUT IN THE ABSENCE OF VERY CONCLUSIVE EVIDENCE TO THE CONTRARY, THE PARTIES TO A WRITTEN CONTRACT ARE TO BE TAKEN AS MEANING WHAT THEY SAY AND ARE BOUND BY THE TERMS THEREOF. WHEN THE CONTRACT OF SEPTEMBER 10, 1918, WAS EXECUTED THERE WAS UNQUESTIONABLY A MEETING OF THE MINDS OF THE PARTIES INVOLVED AND THEIR OBLIGATIONS WERE FIXED BY ITS TERMS. THE OBLIGATIONS OF THE UNITED STATES AS SO FIXED COULD NOT BE CHANGED BY A SUPPLEMENTAL AGREEMENT EXCEPT FOR ITS BENEFIT, OR UPON SOME NEW AND VALUABLE CONSIDERATION PASSING TO THE GOVERNMENT, NEITHER OF WHICH IS SHOWN BY THE EVIDENCE IN THIS CASE.

THE GENERAL RULE OF LAW IS THAT A PERSON IS BOUND BY AN AGREEMENT TO WHICH HE HAS ASSENTED, WHERE THIS ASSENT IS UNINFLUENCED BY FRAUD, VIOLENCE, UNDUE INFLUENCE, OR THE LIKE, AND HE WILL NOT BE PERMITTED TO SAY THAT HE DID NOT INTEND TO AGREE TO ITS TERMS. SEE 9 "CYC.' 288, AND CASES THERE CITED.

UPON REVIEW THE SETTLEMENT IS SUSTAINED AND PROPER STEPS WILL BE TAKEN TO SECURE REFUND OF THE $5,000.50 IN QUESTION.