
    THE GEM HAMMOCK AND FLY NET COMPANY v. THE UNITED STATES
    [No. C-963.
    Decided January 26, 1925]
    
      On the Proofs
    
    
      Receipt in full; subject to explanation. — Where plaintiff’s contract with the United States to' manufacture and deliver certain articles is canceled by the Government, and plaintiff files a claim with the War Department Claims Board for the raw materials for said contract on hand at the time of cancellation, and receives an award therefor, and signs a receipt “ in full adjustment, payment and discharge of said agreement,” said receipt is not a bar to recovery on another claim, filed with another Army board for compensation for articles manufactured, delivered, and accepted under said contract.
    
      The Reporter's statement of tbe case:
    
      Mr. William H. DeLacy for the plaintiff.
    
      Mr. Charles M. Nash, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant.
    The following are the facts as found by the court:
    I. The plaintiff, The Gem Hammock and Fly Net Company, is a corporation incorporated and existing under the laws of the State of Wisconsin,' with home offices at Milwaukee, in said State.
    II. On June 4-, 1918, the plaintiff, through its representatives, entered into a contract with the United States, acting by Colonel Samuel McRoberts, Ordnance Department, National Army, by which the plaintiff agreed to manufacture and furnish to the United States 15,000 hair cinchas for McClellan saddles, Model 1904, with schedule of delivery as follows: September, 1918, 25,000; October, 1918, 25,000; and November, 1918, 25,000. The price stipulated to be paid was $0.9148 for each cincha. A copy of said contract and specifications is attached to the petition as Exhibit 1, and made a part of this finding by reference thereto.
    III. The plaintiff continued to manufacture under the contract aforesaid until January 14, 1919, when it was notified by the War Department to make up no further cinchas and keep the raw material on hand, whereupon plaintiff suspended operations under the contract. At this time plaintiff had manufactured and completed 49,204 cinchas which were paid for at contract rate, except 3,202 which had been rejected by the defendant’s inspector, the reason for said rejection being given that the rope did not run uniform as per specifications. Thereafter, on December 1, 1919, upon a reinspection of the 3,202 cinchas above referred to, the same were accepted as being in accordance with the specifications, the certificate of the inspector being as follows: “I certify that the property enumerated hereon has been inspected and accepted by me and that it conforms in all respects to the requirements of the agreement.”
    On'December 19, 1919, the said 3,202 cinchas were received by the zone storage officer at Chicago and receipted for. Several months thereafter the said 3,202 cinchas were returned to plaintiff by order of the Quartermaster General, it being stated that the inspector who reinspected and passed said cinchas had no authority so to do. The plaintiff received and stored the said cinchas under protest.
    IV. Thereafter plaintiff filed claim with War Department Claims Board for the raw materials on hand at the time of the cancellation of the contract, and this claim, in the sum of $2,602.83 was approved by the War Department Claims Board and the Secretary of War, and said sum was paid to the plaintiff on September 26, 1919. Said award, known as P. C. 4650, contained the following language in its printed portion:
    “ The Secretary of War hereby awards to said claimant the sum of $2,602.83, which sum in conjunction with payment hereinabove mentioned, made, or to be made for the articles, work, or service heretofore delivered and accepted, shall be in full adjustment, payment, and discharge of said agreement.”
    V. Before the filing of the claim above referred to, Lieut. J. T. Hains, who was detailed by the War Department to assist in the settlement of contracts, advised plaintiff to omit from said claim. any demand for the 3,202 cinchas, and to file the same as a separate claim. Plaintiff thereupon filed said claim with the Advisory Purchase Board, Chicago, Ill., and on July 14, 1920, received the following letter:
    Juey 14, 1920.
    Depot Officer, Chicago, Illinois.
    (Advisory Purchase Board.)
    Quartermaster General, Director of Purchase & Storage, Washington, D. C.
    Claim — Gem Hammock & Fly Net Company.
    1. Attached hereto find file in the name of the Gem Plammock & Fly Net Company, Milwaukee, Wisconsin.
    2. The Claims Board, Office Director of Purchase, on October 2, 1919, and the War Department Claims Board on October 3, 1919, approved award in the amount of $2,606.83.
    3. During the life of this contract the inspector in charge rejected 3,202 cinchas. On December 1, 1919, Mr. Jolliffe, of this office, ordered the U. S. Ordnance inspector, J. A. Weinand, to have rejected cinchas reinspected and he certified that property conformed in all respects to the requirements of the agreement. Bequest for bill of lading was issued on December 4, 1919, and same was sent to the contractor on even date. The receiving reports attached to the papers enclosed show that cinchas were received at this office on December 19, 1919.
    4. The board of unpaid bills on contracts met on May 8, 1920, and recommended that cinchas be paid for. On May 11, 1920, the board forwarded papers for payment to the deputy zone finance office and they forwarded papers to the Director of Finance, Munitions Building, Washington, D. C., on June 12, 1920. The latter office returned papers on June 28, 1920, and the deputy zone finance office forwarded same to the board of unpaid bills for further action. The letters attached to papers enclosed are self-explanatory. As the cinchas in question were taken in by the Government representative, Government bills of lading were issued by this office; cinchas having been received and now in our warehouse. Government inspector inspected same and certified that they were up to the specifications.
    5. In view of the above facts, this office recommends that funds be allotted and contractor paid for the 3,202 cinchas in the amount of $2,929.18.
    6. It is requested that you give this matter special attention and advise this office what action is to be taken.
    By authority of the acting depot officer:
    NORRIS StaytoN,
    
      Captain Q. M. Corps.
    
    BWL: MAS.
    Ene. (File).
    
      Thereafter the claim was disallowed by the Auditor lor the War Department, and on appeal by the Comptroller General.
    The plaintiff has not been paid in whole or in part for the 3,202 cinchas for which claim is here made.
    The court decided that plaintiff was entitled to recover. •
   Booth, Judge,

delivered the opinion of the court:

The plaintiff contracted to manufacture for the defendant 75,000 cinchas. The contract price was $0.9148 each, and the cinchas were to correspond with certain specifications set forth in the contract. The plaintiff completed 49,204 cinches, of which number 3,202 were in January, 1919, after inspection, rejected as failing to meet the requirements of the specifications. _ This was the state of affairs when the plaintiff’s contract was canceled by the defendant. Thereafter, on June 27, 1919, the plaintiff presented its claim to the proper department for reimbursement for losses occasioned by the cancellation of its contract. This claim enumerates in detail the various items claimed as due, and among them the 3,202 — mistakenly stated as 3,138 — cinchas now in dispute. The War Department, upon receipt of this claim, embracing as it does all of the plaintiff’s demands, detailed Lieut. J. T. Heins to visit the plaintiff’s factory and adjust the claim. Lieutenant Heins, in conference with the plaintiff, disavowed any authority to adjust that item of the claim involving the 3,202 cinchas completed under the contract, and advised the plaintiff to submit the same to the Board of Contract Adjustment in the War Department, and the remaining items of the claim, involving cost of raw material and incidental expenses, to the War Claims Board. The plaintiff did this, insisting, however, that inadvertently and mistakenly, and by error of both parties, he executed, subsequent to the award made by the Claims Board on the adjustment of Lieutenant Heins, a receipt in full for all claims and demands arising out of the contract. That such a receipt was executed appears from the record in award P. C. 4650.

Belief is now asked by way of reformation of the receipt so as to enable the plaintiff to recover for the 3,202 cinchas finally reinspected, accepted, and delivered to the defendant, and for the value of which the claims board on July 14, 1920, made an award.

The defendant declined to pay the award, apparently on the ground of a prior accord and satisfaction of all claims arising under the contract. Two preeminent facts confront the defendant, facts indisputable and which may not be ignored. . The plaintiff at the time the contract was canceled had under the law two valid claims arising out of the contract, a claim for materials furnished and incidental expenses incurred in the performance of its contract, and for the 8,202 cinchas completed but improperly rejected.

When the claims were presented in a single document to the War Department it was obvious that the plaintiff was insisting with equal vigor upon the payment of each. An officer of the defendant detailed for that purpose and clothed with a limited jurisdiction visited the plaintiff to adjust the claimed differences, and he, without equivocation, disclaims authority and thereby refuses to consider the claim for 3,202 cinchas, but does adjust and recommend payment for the other articles of the claim, and the final adjustment, following his recommendation, clearly demonstrates that as to the 3,202 cinchas no action was taken. Emphasizing this fact is another of signal importance, that this same officer advised a division of the claim, one part embracing certain items of demand to go before the claims board, and the. claim here involved to the contract adjustment board. The contractor, was not familiar with the mode of procedure and adopted -the suggestions of one he had a right to assume was so familiar.

The original claim for both items totaled $6,708.79. The claim for materials furnished and incidental expenses incurred totaled $2,838.15, and the award authorized the payment of $2,602.83, a sum $236.32 less than that claimed under this particular item. This, it seems to us, is eviden-tiary of the fact that the item for the 3,202 cinchas was not included, and especially so when the award itself expressly recites that the award is predicated upon 43,568 cinchas, about which there never was any controversy, the entire number having been completed and delivered. It is hardly possible that the defendant would assume an antagonistic attitude toward the plaintiff if the mutual mistake of the parties was manifest, and yet it is difficult to perceive, in the face of the record, how the fact could have escaped notice. The defendant seems to assume that the contractor abandoned his claim for the 3,202 cinchas, an article of merchandise found on subsequent inspection to more than meet the requirements of the contract, and for which he received an award for the amount here claimed. When at the very time it hastily executed a receipt drawn by the defendant and no doubt intended to conclude the plaintiff only as to the subject matter considered, the plaintiff was insisting before the War Adjustment Board that this item of the claim was just and should be paid. This was an emergency contract, a war contract, and when suddenly canceled became part of the incidental confusion respecting claims arising from the sudden termination of the war. It is little wonder that a-mistake as to the effect of the claims boards’ award intervened in the presentation of the claim. The defendant is entitled to the cinchas, and the title to the same is in the defendant. The contractor completed them in accord with his contract, and they were inspected, delivered, and accepted by the defendant. Reformation of the award is unnecessary. A receipt may be explained. The extent and force of its execution in bar of claimed indebtedness is not beyond explanation. The record, we think, clearly discloses that the receipt was never intended to and did not include the claim here sued on.

A disputed claim against the Government which becomes in its entirety a matter of negotiation for settlement is, in the absence of mistake, finally settled where the claimant accepts an agreed sum and receipts in full therefor. United States v. Clyde, 13 Wall. 35. This case, however, reflects an entirely different situation. The plaintiff and defendant were engaged in no serious disputation'. Under authority of law two forums were open to him for the presentation of claims, the War Claims Board and the Contract Adjustment Board. To these boards it presented its claims setting forth in detail the items of loss the plaintiff thought it was entitled to be paid. Plaintiff accepted the award of the claims board without protest or appeal. No effort was made to challenge the legality or justness of the award, and no persistent or extended controversy with respect to it occurred. One board considered certain items of the claim and another board the items here claimed. There is nothing in the record disclosing a consideration of this claim by the claims board. The very fact that it was allowed later on confirms the contention of the plaintiff. To deny relief to a contractor who mistakenly signs a receipt for something he has never received and which the parties never intended as an acquittance of liability for the payment of a just claim, and which was in no wise adjudicated, involves adherence to a technical principle of law which in this instance fails of application.

Judgment for plaintiff'in the sum of $2,929.18. It is so ordered.

Gkaham, Judge; Hat, Judge; DowNey, Judge, and Campbell; Chief Justice, concur.  