B-126160, JAN. 10, 1956

B-126160, JAN. 10, 1956

TO MR. PAUL CATTRONE, MRS. TALIA CATTRONE:

REFERENCE IS MADE TO A LETTER OF NOVEMBER 8, 1955, FROM YOUR ATTORNEYS, REQUESTING REVIEW OF YOUR INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $1,100, AS STATED IN CLAIMS DIVISION LETTER OF OCTOBER 25, 1955, TO YOU.

THE INDEBTEDNESS RESULTED FROM YOUR DEFAULT OF A CONTRACT, CONSISTING OF YOUR PROPOSAL DATED SEPTEMBER 25, 1950, AS AMENDED, AND ACCEPTANCE BY THE POST OFFICE DEPARTMENT DATED NOVEMBER 10, 1950, COVERING THE CONSTRUCTION AND LEASING OF THE PREMISES DESCRIBED THEREIN AT AN ANNUAL RENTAL OF $3,950 FOR A TEN-YEAR PERIOD BEGINNING FEBRUARY 1, 1951. YOUR PROPOSAL ORIGINALLY LIMITED THE ACCEPTANCE TO OCTOBER 30, 1950; HOWEVER, BY YOUR LETTER OF OCTOBER 6, 1950, YOU EXTENDED THE FINAL DATE OF ACCEPTANCE TO NOVEMBER 10, 1950. YOUR PROPOSAL, AS AMENDED, WAS FORMALLY ACCEPTED ON NOVEMBER 10, 1950, NOTICE THEREOF HAVING BEEN GIVEN YOU BY TELEGRAM DATED NOVEMBER 10, 1950, AND CONFIRMED BY LETTER MAILED THE SAME DATE. YOUR RECEIPT OF THE NOTICE OF ACCEPTANCE IS A MATTER OF RECORD. THE TRANSACTION UNDER THESE CIRCUMSTANCES CONSTITUTED A VALID AND BINDING CONTRACT AND OBLIGATED BOTH PARTIES TO PERFORM IN ACCORDANCE THEREWITH. UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 295 U.S. 75.

THE RECORD SHOWS THAT BECAUSE OF YOUR FAILURE TO CARRY OUT THE TERMS OF THE CONTRACT YOU WERE FORMALLY DECLARED IN DEFAULT ON SEPTEMBER 28, 1951, AT WHICH TIME YOU WERE ADVISED REGARDING YOUR LIABILITY FOR POSSIBLE EXCESS COSTS FOLLOWING READVERTISING OF THE GOVERNMENT'S NEED. THE STATEMENT OF YOUR INDEBTEDNESS REFLECTS THAT THE ADDITIONAL AMOUNT OF $1,100 WAS NECESSARY TO SECURE THE LEASE OF SIMILAR PREMISES FOR THE USE OF THE POST OFFICE DEPARTMENT AT STOCKTON, CALIFORNIA. THE MATTER OF YOUR INDEBTEDNESS WAS TRANSMITTED TO OUR OFFICE FOR DISPOSITION UNDER APPLICABLE LAW AND THE CLAIMS DIVISION OF OUR OFFICE, IN A LETTER OF OCTOBER 25, 1955, MADE A FORMAL DEMAND UPON YOU FOR PAYMENT OF THE EXCESS COSTS OF $1,100 TO THE GOVERNMENT OCCASIONED BY YOUR DEFAULT.

IN THE REQUEST FOR REVIEW, WHILE FURNISHING NO ADDITIONAL INFORMATION NOT HERETOFORE CONSIDERED BY THE ADMINISTRATIVE OFFICE AND OUR OFFICE, IT IS STRESSED THAT THE OFFER WAS NOT ACCEPTED FOR SOME PERIOD OF TIME DURING WHICH THERE DEVELOPED A TREMENDOUS RISE IN CONSTRUCTION COSTS. AMONG OTHER THINGS, IT IS CONTENDED THAT THERE WAS NEVER A VALID ACCEPTANCE BY THE GOVERNMENT AND THUS NO CONTRACT WAS FORMED.

IT APPEARS THAT YOUR GRANTING AN EXTENSION OF TIME TO PERMIT ACCEPTANCE OF THE PROPOSAL BY NOVEMBER 10, 1950, WAS A MATTER OF PERSONAL ELECTION. THE PRINTED PROPOSAL MADE NO MENTION AS TO THE METHOD OF COMMUNICATING THE NOTICE OF ACCEPTANCE. HOWEVER, IN CONSIDERATION OF THE DISTANCE SEPARATING YOU AND THE AUTHORIZED CONTRACTING OFFICIAL OF THE GOVERNMENT IT REASONABLY MAY BE PRESUMED THAT YOU CONTEMPLATED THE RECEIPT OF NOTICE OF ACCEPTANCE BY TELEGRAM OR MAIL. IN CASES WHERE THE NOTICE OF ACCEPTANCE IS GIVEN THEN THE DATE OF ACCEPTANCE IS ESTABLISHED BY DELIVERY OF THE MESSAGE TO THE TELEGRAPH OFFICE (NORTH TEXAS OIL CO. V. FULLER, REASER AND CO., 276 F. 708) AND, WHERE THE ACCEPTANCE BY MAIL IS AUTHORIZED, THE ACCEPTANCE, UNLESS OTHERWISE SPECIFIED, BECOMES EFFECTIVE AS OF THE DATE OF POSTING. SEE BURTON V. UNITED STATES, 202 U.S. 344; PATRICK V. BOWMAN, 149 U.S. 411; TAYLOS V. MERCHANTS' FIRE INSURANCE CO., 9 HOW. 390; WERTHEIMER V. WEHLE-HARTFORD CO., 9 A.2D 279. IT WILL BE OBSERVED THAT THE ACCEPTANCE IN THIS INSTANCE WAS ACCOMPLISHED BY THE USE OF BOTH METHODS OF COMMUNICATION, EACH HAVING BEEN MADE ON NOVEMBER 10, 1950, OR WITHIN THE EXTENSION PERIOD VOLUNTARILY GRANTED BY YOU. WITH RESPECT TO YOUR OTHER CONTENTIONS, THE REPORT OF THE POST OFFICE INSPECTOR SHOWS THAT WHILE ORIGINALLY SOME QUESTIONS AROSE CONCERNING CERTAIN LOCAL ZONING AND PROPERTY LINE REQUIREMENTS THESE OBJECTIONS WERE PROMPTLY AND SATISFACTORILY CLEARED WITH THE APPROPRIATE CITY OFFICIALS. SO FAR AS CONCERNS THE POSSIBILITY OF YOUR ENCOUNTERING INCREASED CONSTRUCTION COSTS, IT IS A SETTLED PRINCIPLE OF LAW THAT VALID CONTRACTS, INCLUDING LEASES, ARE TO BE ENFORCED AND PERFORMED AS WRITTEN AND THE FACT THAT SUPERVENING OR UNFORESEEN CAUSES RENDER PERFORMANCE MORE BURDENSOME OR LESS PROFITABLE, OR EVEN OCCASION A LOSS, IS NOT SUFFICIENT TO EXCUSE PERFORMANCE OR TO ENTITLE A CONTRACTOR TO AN INCREASE IN THE CONTRACT PRICE. SEE COLUMBUS RY. POWER AND LIGHT CO. V. COLUMBUS, 249 U.S. 399, 412. NOTHING HAS BEEN FURNISHED BY YOU WHICH CAN BE REGARDED AS RELIEVING YOU OF LIABILITY FOR THE EXCESS COSTS HERE INCURRED BY THE GOVERNMENT.

ACCORDINGLY, ON THE BASIS OF THE FOREGOING, THE ACTION TAKEN IN THE CLAIMS DIVISION LETTER OF OCTOBER 25, 1955, IS SUSTAINED. THEREFORE, UNLESS OUR OFFICE IS ADVISED BY YOU WITHIN 30 DAYS FROM THE DATE OF THIS LETTER OF YOUR ARRANGEMENTS FOR COMPLETE LIQUIDATION OF THE INDEBTEDNESS, THE MATTER WILL BE REPORTED TO THE DEPARTMENT OF JUSTICE FOR INSTITUTION OF APPROPRIATE COLLECTION PROCEEDINGS.