B-145061, MAY 4, 1961

B-145061, MAY 4, 1961

TO WHEELDEX AND SIMPLA PRODUCTS, INC.:

FURTHER REFERENCE IS MADE TO A LETTER DATED JANUARY 27, 1961, FROM SAMUEL EDEN, ESQUIRE, REQUESTING ON YOUR BEHALF RECONSIDERATION OF SETTLEMENT DATED JANUARY 11, 1961, BY WHICH OUR CLAIMS DIVISION DISALLOWED YOUR CLAIM FOR THE SUM OF $1,777.97, REPRESENTING AN AMOUNT ALLEGED TO BE DUE FOR THE DELIVERY OF A ROTARY FILE TO THE DEPARTMENT OF THE ARMY AT FORT SILL, OKLAHOMA, UNDER PURCHASE ORDER NO. E-1925, DATED AUGUST 12, 1959. ALSO, THERE WAS RECEIVED MR. EDEN'S LETTER OF FEBRUARY 20, 1961, WITH ENCLOSURES, RELATING TO YOUR CLAIM.

AS A BASIS FOR REQUESTING RECONSIDERATION OF THE SETTLEMENT ACTION TAKEN BY OUR CLAIMS DIVISION, IT WAS STATED IN THE LETTER OF JANUARY 27, 1961, THAT FEDERAL SUPPLY CONTRACT NO. GS-00S-22636, UNDER WHICH THE ORDER IN QUESTION WAS PLACED, WAS WITH YOUR COMPANY AND THAT, THEREFORE, PAYMENT TO ANY OTHER FIRM WHICH HAD NO AUTHORIZATION AND WHICH WAS NOT LISTED AS AN APPROVED SUPPLIER UNDER ANY FEDERAL SUPPLY CONTRACT WAS IMPROPER. IN THAT CONNECTION, MR. EDEN STATED THAT PARAGRAPH 7 OF THE GENERAL PROVISIONS OF THE INDICATED CONTRACT PROVIDED FOR PAYMENT TO THE CONTRACTOR ONLY UPON SUBMISSION OF PROPER INVOICES AND THAT THE DEPARTMENT OF THE ARMY HAD NO RIGHT TO PAY OR AUTHORIZE PAYMENT TO ANOTHER COMPANY. WITH THE LETTER OF FEBRUARY 20, 1961, MR. EDEN TRANSMITTED PHOTOSTATIC COPIES OF CERTAIN DOCUMENTS PERTAINING TO AN ORDER PLACED WITH YOUR COMPANY BY THE DOBBINS AIR FORCE BASE, GEORGIA.

IN ORDER THAT YOU MAY BE FULLY INFORMED CONCERNING THE BASIS FOR OUR ACTION IN THIS CASE WE CONSIDER IT ADVISABLE TO SET FORTH THE FACTS AS SHOWN BY OUR RECORDS. UNDER DATE OF JULY 31, 1959, THE PURCHASING AND CONTRACTING OFFICER, DEPARTMENT OF THE ARMY, FORT SILL, OKLAHOMA, ADDRESSED A LETTER TO YOUR COMPANY REQUESTING INFORMATION AS TO WHETHER MODEL NO. SW-860X-7 ON PAGE EIGHT OF U.S. GOVERNMENT PRICE LIST, AUGUST 5, 1958, THROUGH JUNE 30, 1959, WAS COVERED BY A CURRENT CONTRACT. YOUR COMPANY MADE NO DIRECT REPLY TO THAT LETTER BUT TURNED THE SAME OVER TO THE WHEELDEX-SIMPLA SOUTHWEST COMPANY, DALLAS, TEXAS, FOR APPROPRIATE ACTION. THAT CONCERN, BY MR. FELIX H. OLIM, ADDRESSED A LETTER TO THE PURCHASING AND CONTRACTING OFFICER AT FORT SILL UNDER DATE OF AUGUST 7, 1959, ADVISING, AMONG OTHER THINGS, THAT THE ENTIRE LINE OF WHEELDEX AND SIMPLA PRODUCTS WAS COVERED BY GSA CONTRACT NO. GS-OOS-22636. IT WAS STATED, HOWEVER, THAT THE ENTIRE ,SIMPLASHEEL" LINE HAS BEEN REVISED,ETC., AND THAT MODEL NO. SW-860X-7 HAD BEEN SUPERSEDED BY FOUR NEW MODELS AS THEREIN INDICATED. THE LETTERHEAD OF THE LETTER OF AUGUST 7, 1959, REPRESENTED THAT THE WHEELDEX-SIMPLA SOUTHWEST COMPANY WAS A DISTRIBUTOR FOR YOUR COMPANY, YOUR ADDRESS BEING SHOWN AS 40 BANK STREET, WHITE PLAINS, NEW YORK.

UNDER DATE OF AUGUST 12, 1959, THE PURCHASING AND CONTRACTING OFFICER AT FORT SILL TRANSMITTED TO THE WHEELDEX-SIMPLA SOUTHWEST COMPANY PURCHASE ORDER NO. E-1925 CALLING FOR THE DELIVERY OF ONE 7110 NS ROTARY FILE, MODEL NO. SW-15-7467T, FOR THE PRICE OF $1,777.97. THEREAFTER, YOUR COMPANY SUBMITTED TO THE U.S. ARMY ORDNANCE AND MISSILE CENTER AT FORT SILL AN INVOICE DATED OCTOBER 12, 1959, IN THE AMOUNT OF $1,777.97, AND UNDER DATE OF NOVEMBER 4, 1959, THE FINANCE AND ACCOUNTING OFFICER AT FORT SILL ISSUED CHECK NO. 722333 IN FAVOR OF WHEELDEX-SIMPLA SOUTHWEST COMPANY IN THE NET AMOUNT OF $1,769.30, IN ACCORDANCE WITH THE INDICATED PURCHASE ORDER. THE ENCLOSED COPY OF THE CHECK SHOWS THAT THE SAME WAS ENDORSED BY FELIX H. OLIM FOR DEPOSIT TO THE ACCOUNT OF THE FELIX OLIM COMPANY.

IN VIEW OF THE FACTUAL SITUATION INVOLVED, WE ADDRESSED A LETTER TO MR. OLIM UNDER DATE OF MARCH 16, 1961, IN WHICH WE SET FORTH THE FOREGOING FACTS, AND WE REQUESTED TO BE ADVISED AS TO THE RELATIONSHIP EXISTING BETWEEN HIM AND YOUR COMPANY AT THE TIME OF THE PURCHASE. ALSO, WE INQUIRED WHETHER THE LETTER OF INQUIRY DATED JULY 31, 1959, WAS TURNED OVER BY YOUR COMPANY TO MR. OLIM FOR REPLY AND WHETHER UPON RECEIPT OF PURCHASE ORDER NO. E-1925 HE TURNED THE SAME OVER TO YOUR COMPANY FOR COMPLIANCE THEREWITH. IN OTHER WORDS, WE WERE SEEKING INFORMATION AS TO WHETHER IN ACCEPTING THE PURCHASE ORDER MR. OLIM WAS ACTING AS YOUR AUTHORIZED REPRESENTATIVE. WE THEN ASKED MR. OLIM WHETHER THE INDICATED AMOUNT OF $1,769.30 WAS TURNED OVER TO YOUR COMPANY ON THE BASIS THAT YOU WERE ENTITLED TO PAYMENT BECAUSE OF HAVING MADE DELIVERY OF THE ROTARY FILE, AND, IF NOT, WE REQUESTED TO BE ADVISED AS TO THE REASONS THEREFOR.

THERE IS NOW ENCLOSED FOR YOUR INFORMATION A COPY OF A LETTER DATED APRIL 14, 1961, FROM PASSMAN, JONES AND WHITENER, ESQUIRES, DALLAS, TEXAS, IN REPLY TO OUR LETTER OF MARCH 16, 1961, STATING THAT MR. FELIX H. OLIM, D/B/A WHEELDEX-SIMPLA SOUTHWEST COMPANY, WAS AN AUTHORIZED REPRESENTATIVE OF YOUR COMPANY, BEING YOUR SOLE AUTHORIZED REPRESENTATIVE IN THE FORT SILL AREA BY WRITTEN CONTRACT, AND THAT DURING THE COURSE OF HIS CONNECTION WITH YOUR COMPANY HE CONTINUALLY HANDLED BUSINESS FOR YOUR COMPANY AT YOUR REQUEST. THE LETTER THEN REFERRED TO A CONTROVERSY APPARENTLY EXISTING BETWEEN YOUR COMPANY AND MR. OLIM, AND IT WAS STATED THAT HE REFUSES TO REMIT THE MONEY TO YOU UNLESS YOUR COMPANY IS WILLING TO ADJUST THE EXISTING DISPUTES. THE REPORTED CONTROVERSY BETWEEN YOUR COMPANY AND MR. OLIM DOES NOT, OF COURSE, HAVE ANY BEARING ON OUR DISPOSITION OF THE INSTANT CLAIM.

UNDER THE FACTS REPORTED IN THIS CASE WE ARE OF THE VIEW THAT THE GOVERNMENT IS WITHOUT LEGAL LIABILITY IN THE MATTER. THE ATTORNEYS FOR MR. OLIM HAVE STATED THAT HE WAS YOUR AUTHORIZED REPRESENTATIVE IN THE FORT SILL AREA UNDER WRITTEN CONTRACT AND IT IS APPARENT THAT YOU TURNED OVER THE LETTER OF JULY 31, 1959, TO MR. OLIM FOR REPLY IN THE CAPACITY OF YOUR AUTHORIZED REPRESENTATIVE, AND THAT YOUR COMPANY ACCEPTED--- IN THE SAME CAPACITY--- THE PURCHASE ORDER ISSUED TO THE WHEELDEX-SIMPLA SOUTHWEST COMPANY UNDER DATE OF AUGUST 12, 1959. IT SEEMS CLEAR THAT IN SUBMITTING ON YOUR BEHALF QUOTATIONS OF PRICES AND IN ACCEPTING THE PURCHASE ORDER IN QUESTION, MR. OLIM WAS ACTING AS YOUR AUTHORIZED AGENT, AND IT IS OUR VIEW THAT YOU MAY NOT NOW DENY THE EXISTENCE OF SUCH AGENCY.

THE GENERAL RULE APPEARS TO BE THAT WHERE A PRINCIPAL HAS, BY HIS VOLUNTARY ACT, PLACED AN AGENT IN SUCH A SITUATION THAT A PERSON OF ORDINARY PRUDENCE, CONSONANT WITH BUSINESS USAGES AND THE NATURE OF THE PARTICULAR BUSINESS, IS JUSTIFIED IN PRESUMING THAT SUCH AGENT HAS AUTHORITY TO COLLECT OR RECEIVE PAYMENTS DUE THE PRINCIPAL, THE DEBTOR WILL BE PROTECTED IN CASE HE RELIES UPON THE APPEARANCES OF SUCH AUTHORITY. 2 AMER.JUR., AGENCY, SECTION 159. AS TO THE AUTHORITY OF AN AGENT TO BRING A THIRD PARTY INTO A CONTRACTUAL RELATIONSHIP WITH HIS PRINCIPAL, SEE 2 AMER.JUR., AGENCY, SECTION 107. SEE ALSO THE CASE OF WINDSOR STEEL PRODUCTS V. WHIZZER INDUSTRIES, 157 F.SUPP. 284.

FOR THE REASONS SET FORTH ABOVE, IT IS OUR VIEW THAT THE SETTLEMENT ACTION TAKEN IN THIS CASE ..END :