B-141033, NOV. 4, 1959

B-141033, NOV. 4, 1959

TO NIPPON KENSETSU KOGYO COMPANY, LTD.:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 12, 1959, REQUESTING RECONSIDERATION OF SETTLEMENT DATED MARCH 26, 1959, WHICH DISALLOWED YOUR RESPECTIVE CLAIMS FOR EXTRA WORK ALLEGEDLY PERFORMED UNDER AND APART FROM CONTRACTS DA-92-557-FEC-10361, -10362 AND -10363 PRIMARILY FOR THE REASON THAT THE FAR EAST COMMAND BOARD OF CONTRACT APPEALS (FECBCA) FOUND THAT YOU HAD VOLUNTARILY EXECUTED UNQUALIFIED RELEASES UNDER THE THREE CONTRACTS AS A CONDITION OF RECEIVING FINAL PAYMENT.

YOUR REQUEST FOR REVIEW IS BASED UPON THE CONTENTION THAT THE RELEASES WERE OBTAINED UNDER DURESS IN THAT UNLESS YOU EXECUTED THEM YOU WOULD NOT BE PAID EARNINGS NEEDED TO SATISFY YOUR CREDITORS. YOU CONTEND FURTHER THAT IT WAS NEVER SUGGESTED THAT YOU COULD INCLUDE RESERVATION CLAUSES IN THE RELEASES AND THAT THE PURPOSE IN OBTAINING UNQUALIFIED RELEASES WAS TO BAR RECOVERY FOR THE EXTRA WORK PERFORMED.

ALTHOUGH FINANCIAL DISTRESS MAY HAVE COMPELLED YOU TO EXECUTE THE RELEASES, THAT DOES NOT WARRANT A HOLDING THAT THEY WERE EXECUTED UNDER THE PRESSURE OF SUCH CIRCUMSTANCES AS AMOUNTED TO DURESS OF THE CHARACTER WHICH WOULD RENDER THEM VOID. THE RELEASES WERE EXECUTED IN DUE COMPLIANCE WITH THE REQUIREMENTS OF THE CONTRACT AND WHILE IT WAS NOT MANDATORY UNDER THE TERMS OF THE CONTRACT THAT THEY BE SECURED, ONCE REQUESTED AND OBTAINED THEY BECAME FULLY EFFECTIVE AND ENFORCEABLE. THAT RELEASES WERE NOT REQUESTED UNDER TWO OTHER RELATED CONTRACTS DOES NOT ALTER THE FORCE OF THOSE THAT WERE REQUIRED. INASMUCH AS THE RELEASES WERE FURNISHED PRIOR TO PAYMENT OF THE FINAL ESTIMATE AS PERMITTED UNDER CONTRACT ARTICLE 7 (D),"PAYMENTS TO CONTRACTOR," STATING THAT "THE AMOUNT DUE THE CONTRACTOR UNDER THIS CONTRACT WILL BE PAID UPON THE PRESENTATION OF A PROPERLY EXECUTED AND DULY CERTIFIED VOUCHER THEREFOR, AFTER THE CONTRACTOR SHALL HAVE FURNISHED THE GOVERNMENT WITH A RELEASE, IF REQUIRED, OF ALL CLAIMS AGAINST THE GOVERNMENT ARISING UNDER AND BY VIRTUE OF THIS CONTRACT," THEY MUST BE CONSIDERED AS HAVING BECOME FINAL WHEN THE FINAL PAYMENT WAS ACCEPTED WITHOUT PROTEST AFTER THE FINAL ESTIMATE AND VOUCHER WERE SIGNED WITHOUT RESERVATION.

YOU SHOULD HAVE KNOWN THAT YOU COULD RESERVE ANY CLAIMS FROM THE OPERATION OF THE RELEASES AS CONTRACT ARTICLE 7 (D) CLEARLY STATED THAT ANY CLAIMS MIGHT BE "SPECIFICALLY EXCEPTED BY THE CONTRACTOR FROM THE OPERATION OF THE RELEASE IN STATED AMOUNTS TO BE SET FORTH THEREIN.' SUCH RESERVATION WAS MADE AND THE GENERAL LANGUAGE OF THE RELEASES INDICATES A PURPOSE TO MAKE AN END OF EVERY MATTER ARISING UNDER THE CONTRACTS. ALSO, THERE WAS NOTHING UNUSUAL ABOUT REQUIRING RELEASES IN THE FACE OF POSSIBLE CLAIMS. IT CAN HARDLY BE QUESTIONED THAT THE VERY PURPOSE OF EVERY AND ANY UNCONDITIONAL RELEASE IS TO SETTLE ALL CLAIMS AND TO PUT THEM OUT OF THE POWER OF FURTHER QUESTION.

YOU MAINTAIN THAT YOUR CLAIM FOR THE OUTDOOR DRAINAGE WORK IS UNRELATED TO ANY OF THE CONTRACTS AND THAT YOU SHOULD BE COMPENSATED FOR THAT ITEM INDEPENDENT OF THEM. EVEN IF THE WORK IS OUTSIDE THE REQUIREMENTS OF THE CONTRACTS, YOU COULD NOT BE COMPENSATED ON THAT BASIS. MR. SAMMONS, THE SUPERVISING ENGINEER, UNDER WHOSE DIRECTION YOU PERFORMED THE ALLEGED WORK WAS WITHOUT OFFICIAL CAPACITY TO BIND THE GOVERNMENT, AND IT IS CLEAR THAT AN OFFICER'S UNAUTHORIZED ACTS CANNOT ESTOP THE GOVERNMENT FROM INSISTING UPON THEIR INVALIDITY, HOWEVER BENEFICIAL THEY MAY HAVE PROVED TO THE UNITED STATES. FILOR V. UNITED STATES, 9 WALL. 45, 49.

IN LIGHT OF THE FOREGOING, THERE APPEARS TO BE NO BASIS UPON WHICH OUR OFFICE WOULD BE WARRANTED IN AUTHORIZING THE ALLOWANCE OF ANY PART OF YOUR CLAIMS. ACCORDINGLY, THE SETTLEMENT OF MARCH 26, 1959, IS SUSTAINED.