B-127657, JUL. 16, 1956

B-127657, JUL. 16, 1956

TO MINERA FERNANDEZ, S.A.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED FEBRUARY 6 AND MARCH 5, 1956, RELATIVE TO YOUR REPORTED INDEBTEDNESS TO THE UNITED STATES DUE TO OVERPAYMENTS MADE TO YOU BY THE GENERAL SERVICES ADMINISTRATION UNDER CONTRACT NO. GS-00P-2410/SCM), DATED OCTOBER 20, 1951.

YOU AGREED TO FURNISH THE GENERAL SERVICES ADMINISTRATION 100,000 LONG DRY TONS OF MANGANESE ORE FOR $0.93 PER LONG TON UNIT OF CONTAINED MANGANESE. ARTICLE 4/B) OF SPECIAL TERMS, CONDITIONS, AND SPECIFICATIONS OF THE CONTRACT PROVIDED THAT THE CONTRACT PRICE WAS BASED ON THE PRESENT OFFICIAL RATE OF EXCHANGE BETWEEN THE UNITED STATES DOLLAR AND THE MEXICAN PESO OF 8.65 PESOS TO ONE DOLLAR, AND MEXICAN FREIGHT RATES IN EXISTENCE ON OCTOBER 15, 1951, AND THAT ANY INCREASE OR DECREASE IN SUCH RATE OF EXCHANGE AND/OR MEXICAN FREIGHT RATES WOULD BE FOR THE ACCOUNT OF THE GOVERNMENT.

THE RECORD SHOWS THAT THE MEXICAN PESO WAS REVALUED APRIL 19, 1954, FROM 8.65 MEXICAN PESOS TO ONE DOLLAR UNITED STATES CURRENCY, TO 12.50 MEXICAN PESOS TO ONE DOLLAR UNITED STATES CURRENCY. THE GENERAL SERVICES ADMINISTRATION DID NOT BECOME AWARE OF THE FLUCTUATION IN THE VALUE OF THE PESO UNTIL MAY 13, 1955. IN THE MEANTIME, HOWEVER, IT CONTINUED TO PAY FOR ORE DELIVERED UNDER THE CONTRACT BASED ON THE EXCHANGE RATE OF 8.65 MEXICAN PESOS TO ONE DOLLAR. THEREAFTER, ALL PAYMENTS MADE FOR MATERIALS DELIVERED SUBSEQUENT TO APRIL 19, 1954, WERE RECOMPUTED ON THE BASIS OF THE REVALUED PESO, AND IT WAS DETERMINED THAT AN OVERPAYMENT HAD BEEN MADE IN THE TOTAL AMOUNT OF $164,264.27. FROM THE TOTAL INDEBTEDNESS, THE AMOUNT OF $73,645.49, REPRESENTING UNPAID INVOICES, WAS SET OFF BY THE ADMINISTRATION AGAINST THE INDEBTEDNESS. IN ADDITION TO THIS OVERPAYMENT THE GENERAL SERVICES ADMINISTRATION HAS REPORTED THAT YOU OWE FOR SAMPLING AND ANALYZING SERVICES IN THE AMOUNT OF $1,095, WHICH RESULTS IN A TOTAL INDEBTEDNESS OF $91,713.78.

YOU CONTEND THAT THE PHRASEOLOGY OF THE CONTRACT, AS IT WAS ACTUALLY DRAWN, DID NOT REFLECT THE INTENTION OF THE PARTIES AND THAT IT WAS YOUR INTENTION THAT THE COST OF PRODUCTION AND NOT THE FLUCTUATION OF THE PESO WOULD BE THE DETERMINING FACTOR. ALSO, YOU STATE THAT YOU WERE MATERIALLY INJURED BECAUSE THE GENERAL SERVICES ADMINISTRATION FAILED EARLIER TO NOTIFY YOU OF THE DEVALUATION OF THE PESO.

IT IS UNFORTUNATE THAT THE GENERAL SERVICES ADMINISTRATION DID NOT BECOME AWARE OF THE FACT THAT THE PESO HAD BEEN DEVALUED UNTIL MAY 13, 1955. HOWEVER, THIS IN NO WAY AFFECTS THE LEGAL RIGHTS OF THE GOVERNMENT UNDER THE CONTRACT.

WHERE, BY REASON OF THE MUTUAL MISTAKE, THE CONTRACT, AS REDUCED TO WRITING, DOES NOT REFLECT THE ACTUAL AGREEMENT OF THE PARTIES, SUCH MISTAKE IS GROUND FOR REFORMING THE WRITTEN INSTRUMENT IF IT CAN BE ESTABLISHED WHAT THE CONTRACT ACTUALLY WAS OR WOULD HAVE BEEN BUT FOR THE MISTAKE. 20 COMP. GEN. 533, AND CASES THERE CITED. HOWEVER, THERE IS A PRESUMPTION OF LAW THAT A WRITTEN INSTRUMENT WAS CAREFULLY PREPARED AND EXECUTED, THAT THE PARTIES KNEW ITS CONTENTS AND THAT IT SETS FORTH FULLY AND CORRECTLY THEIR FINAL AGREEMENT. 45 AM.JUR. 649; 53 C.J. 1025, 1026; FIRST NAT. BANK V. OCEAN ACCIDENT AND GUARANTEE CORPORATION, 294 F. 91. HENCE, THE BURDEN IS ON THE PARTY SEEKING REFORMATION TO PRODUCE EVIDENCE SUFFICIENT TO OVERCOME SUCH PRESUMPTIONS. MARYLAND CASUALTY CO. V. STATE OF ARKANSAS (C.C.A.), 40 F.2D 395; ROGERS V. JONES, ET AL. (C.C.A.), 40 F.2D 333; GAUNT V. VANCE LUMBER CO. (C.C.A.), 31 F.2D 503. BUT A MERE PREPONDERANCE OF THE EVIDENCE IS NOT SUFFICIENT. RELIEF BY WAY OF REFORMATION WILL NOT BE GRANTED UNLESS THE PROOF OF MUTUAL MISTAKE BE OF THE CLEAREST AND MOST SATISFACTORY CHARACTER--- PROOF THAT IS CONVINCING BEYOND REASONABLE CONTROVERSY. PHILIPPINE SUGAR ESTATES DEVELOPMENT CO. V. GOVERNMENT OF THE PHILIPPINE ISLANDS, 247 U.S. 385; SNELL V. INSURANCE CO., 98 U.S. 85.

THE CONTRACTING OFFICER WHO SIGNED THE CONTRACT FOR THE GOVERNMENT HAS NOT CONCEDED THAT THERE WAS A MUTUAL MISTAKE. ON THE CONTRARY HE HAS STATED IN WRITING THAT THE LANGUAGE USED IN ARTICLE 4/B) CLEARLY AND EXPLICITLY EXPRESSED HIS INTENTION AT THE TIME THE CONTRACT WAS EXECUTED. HENCE, ANY MISTAKE THAT WAS MADE IN REDUCING THE CONTRACT TO WRITING WAS UNILATERAL, NOT MUTUAL. IT WOULD APPEAR THAT THE MEANING OF THE LANGUAGE USED IS QUITE CLEAR ON ITS FACE AND IS SUSCEPTIBLE TO ONLY ONE REASONABLE INTERPRETATION, WHICH IS THAT ANY CHANGE IN THE OFFICIAL RATE OF EXCHANGE WOULD RESULT IN A CORRESPONDING CHANGE IN THE UNIT PRICE AND FREIGHT RATES.

ACCORDINGLY, THERE APPEARS NO LEGAL BASIS FOR RELIEVING YOU OF THE REPORTED INDEBTEDNESS. UNLESS PROMPT ARRANGEMENTS ARE MADE WITH OUR OFFICE FOR THE SATISFACTION OF THE FULL AMOUNT OF YOUR INDEBTEDNESS, THE MATTER NECESSARILY WILL BE REFERRED TO THE ATTORNEY GENERAL FOR FURTHER COLLECTION ACTION IN ACCORDANCE WITH THE USUAL PROCEDURE.