B-159859, AUG. 26, 1966

B-159859: Aug 26, 1966

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF AGRICULTURE: REFERENCE IS MADE TO LETTER DATED AUGUST 8. WHEN THE TRACTOR WAS ENGAGED BY AN EMPLOYEE OF THE CONTRACTOR IN THE CONSTRUCTION OF A FIRE LINE ON THE "PINE FIRE.'. SINCE THERE WAS NO LINE OF RETREAT AND IN ORDER TO SAVE THE LIVES OF THE MEN WORKING AT THIS LOCATION. THE TRACTOR WAS DAMAGED SEVERELY BY THE FIRE AND THE CLAIM FOR $1. IT IS THE VIEW OF THE ADMINISTRATIVE OFFICE THAT THE CLAIM CANNOT BE ALLOWED UNDER THE AGREEMENT BECAUSE OF THE LITERAL INTERPRETATION OF THE CLAUSE ON RISK OF LOSS. WHICH ARE NORMALLY COMPLETED ONLY WHEN THE GOVERNMENT ASSUMES ALL OR PARTIAL RISK OF LOSS. WERE FILLED IN. WHICH IS SUPPORTED BY AN AFFIDAVIT EXECUTED BY THE CONTRACTOR.

B-159859, AUG. 26, 1966

TO THE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO LETTER DATED AUGUST 8, 1966, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY, REQUESTING A DECISION AS TO WHETHER AN EQUIPMENT RENTAL AGREEMENT BETWEEN THE U.S. FOREST SERVICE AND GEORGE H. MORRIS OF PAYSON, ARIZONA, COVERING A D-4 CATERPILLAR TRACTOR DOZER WITH OPERATOR FOR FOREST FIRE SUPPRESSION WORK ON THE TONTO NATIONAL FOREST, MAY BE REFORMED.

THE QUESTION AROSE BECAUSE OF A CLAIM SUBMITTED BY THE CONTRACTOR IN THE AMOUNT OF $1,671.85 FOR FIRE DAMAGES TO THE MACHINE WHICH OCCURRED ON JUNE 24, 1964, AT APPROXIMATELY 3:00 A.M., WHEN THE TRACTOR WAS ENGAGED BY AN EMPLOYEE OF THE CONTRACTOR IN THE CONSTRUCTION OF A FIRE LINE ON THE "PINE FIRE.' THE FIRE JUMPED THE FIRE LINE AND GOT OUT OF CONTROL, ENDANGERING THE LIVES OF THE FIRE CREW. SINCE THERE WAS NO LINE OF RETREAT AND IN ORDER TO SAVE THE LIVES OF THE MEN WORKING AT THIS LOCATION, THE FOREST SERVICE EMPLOYEE IN CHARGE OF THE GROUP ORDERED THE OPERATOR TO ABANDON THE MACHINE AND LEAVE THE AREA IN AN ALL-OUT EFFORT TO SAVE THEIR LIVES. THE MEN SUCCEEDED IN REACHING SAFETY. HOWEVER, THE TRACTOR WAS DAMAGED SEVERELY BY THE FIRE AND THE CLAIM FOR $1,671.85 RESULTED. IT IS THE VIEW OF THE ADMINISTRATIVE OFFICE THAT THE CLAIM CANNOT BE ALLOWED UNDER THE AGREEMENT BECAUSE OF THE LITERAL INTERPRETATION OF THE CLAUSE ON RISK OF LOSS.

THE AGREEMENT PROVIDED THAT "RISK OF LOSS, DAMAGE, OR DESTRUCTION OF HIRED EQUIPMENT ASSUMED BY OWNER.' HOWEVER, THE SPACES ON THE REVERSE OF THE AGREEMENT RELATING TO DESCRIPTION AND VALUATION OF THE EQUIPMENT, WHICH ARE NORMALLY COMPLETED ONLY WHEN THE GOVERNMENT ASSUMES ALL OR PARTIAL RISK OF LOSS, DAMAGE OR DESTRUCTION, WERE FILLED IN, THEREBY CREATING A CONFLICT IN THE TERMS OF THE AGREEMENT. THE CONTRACTING OFFICER'S STATEMENT SUBMITTED WITH THE FILE, WHICH IS SUPPORTED BY AN AFFIDAVIT EXECUTED BY THE CONTRACTOR, IS AS FOLLOWS:

"MY INTENT WHEN MAKING THE EQUIPMENT AGREEMENT WITH MORRIS BROTHERS ON THEIR TRACTOR WAS THAT THEY WERE TO ASSUME ALL RISKS OF LOSS, DAMAGE, OR DESTRUCTION, IF SUCH RESULTED FROM OWNERS OR OPERATORS NEGLIGENCE. DAMAGE OR LOSS WAS CAUSED BY WILD FIRE AND NO NEGLIGENCE WAS INVOLVED, THE RISK WOULD BE ASSUMED BY THE GOVERNMENT.

"MY FILLING IN THE "DESCRIPTION AND VALUE" SECTION ON THE REVERSE SIDE SHOWS THAT MY INTENT WAS THAT THE GOVERNMENT WOULD ASSUME THE RISK FOR DAMAGES NOT DUE TO OPERATOR NEGLIGENCE.'

IT IS WELL SETTLED THAT WHERE, AS HERE, BY REASON OF MUTUAL MISTAKE, A CONTRACT AS REDUCED TO WRITING DOES NOT REFLECT THE ACTUAL AGREEMENT OF THE PARTIES, THE WRITTEN INSTRUMENT MAY BE REFORMED PROVIDED THAT THE INTENDED AGREEMENT CAN BE ESTABLISHED. 30 COMP. GEN. 220; 26 COMP. GEN. 899; 20 COMP. GEN. 533. SINCE IT HAS BEEN ESTABLISHED THAT IT WAS THE MUTUAL INTENTION OF THE PARTIES THAT THE GOVERNMENT WAS TO ASSUME RISK OF DAMAGE TO THE HIRED EQUIPMENT NOT CAUSED BY THE CONTRACTOR'S NEGLIGENCE, REFORMATION WOULD APPEAR TO BE IN ORDER. HOWEVER, SINCE THE AGREEMENT HAS NOW BEEN FULLY PERFORMED, REFORMATION MAY NOT BE ACCOMPLISHED. BUT THE CONTRACT MAY BE VIEWED IN THE LIGHT OF THE TRUE INTENTIONS OF THE PARTIES, AND YOU ARE ADVISED THAT PAYMENT OF THE AMOUNT CLAIMED, IF OTHERWISE PROPER, MAY BE MADE TO THE CONTRACTOR.

A COPY OF THIS DECISION SHOULD BE ATTACHED TO THE VOUCHER COVERING THE ADDITIONAL PAYMENT.