
    SNELLENBURG CLOTHING CO. v. THE UNITED STATES
    [No. C-1017.
    Decided April 20, 1925]
    
      On the Proofs
    
    
      Contract; reformation; intention. — Where the formal contract with, plaintiff! names the article and specifies the price, but the-intention of both parties thereto is to leave the price to be adjusted by a Government expert, and by mutual arrangement different articles are delivered under the contract, the court will reform the contract to express such intention, and plaintiff is entitled to the price fixed by the expert for the articles furnished.
    
      The Reporter’s statement of the case:
    
      Mr. M. Walton Hendry for the plaintiff.
    
      Mr. Edw. D. Hays, with whom ivas Mr. Assistant Attorney General William J. Donovan, for the' defendant.
    
      The following are the facts as found by the court:
    I. The plaintiff is a partnership and has been continuously for a period antedating the dates of the transaction involved in this cause engaged in the sale and manufacture of clothing, and having its principal place of business at Broad and Wallace Streets, Philadelphia, Pa.
    II. On or about October 2, 1918, a duly authorized representative of the War Department, Capt. William Brooks, advised the plaintiff that the War Department was in urgent need of 10,000 pea jackets for the use of the motor cycle troops in Siberia. He showed plaintiff a coat and said that that was the coat to be copied and the price would be $1.75 each. Plaintiff advised him that it did not believe that the price was a fair price, but Captain Brooks advised the plaintiff that he was under the impression there were some coats being made in New York just like that and for that money. Shortly thereafter Captain Brooks advised plaintiff verbally that it had been awarded an order for manufacturing the said 10,000 pea jackets, that work must be started immediately, and that the price to be put in the contract would be $1.75, but that since his last conversation he had learned that the coat in New York which he thought was being made for $1.75 was a different coat entirely, so that the price named in the contract of $1.75 would be tentative only. Captain Brooks further stated that the defendant would have an investigation made by their cost experts to determine what a fair price would be for the garments manufactured and that the plaintiff would be paid the amount certified to be fair by the defendant’s cost expert.
    III. Thereafter various changes were ordered and made in the garment from time to time until finally plaintiff submitted three different coats before all of the improvements wanted by the defendant were incorporated in the coat, and each time plaintiff was told verbally by the Government’s duly authorized officers and agents that they need have no concern about a fair price for the coats, as the defendant would have its cost expert check over the cost of manufacturing the coat in question and pay the plaintiff accordingly.
    
      IY. Thereafter, under date of October 14, 1918, a formal contract was submitted to plaintiff for signature which provided for the manufacture of 10,002 pea jackets at $1.75 per garment. The plaintiff again protested the price named in the contract and also invited attention to the fact that the garment plaintiff was now required to manufacture was not the garment specified in the contract, but plaintiff was then again advised by the defendant that this price was tentative only; that their cost expert would fix a fair price; that plaintiff would be paid in accordance with the amount fixed by the cost expert, but that it was necessary for the plaintiff to sign the written contract immediately so' that the defendant could ship the goods to plaintiff for the manufacture of said garments, and with the above understanding the plaintiff executed the formal contract of October 14, 1918.
    V. The coat called for under the said formal contract of October 14, 1918, was known as a “pea jacket,” but the coat that was finally determined upon for delivery by the plaintiff under this contract was an entirely different coat than that called for in the contract and was known as a “ mackinaw,” and plaintiff produced and delivered 10,002 mackinaw coats to the defendant, but was only paid at the contract price of $1.75 each for pea jackets, payment at which rate the plaintiff protested both orally and in writing.
    VI. During the manufacture of the said mackinaw coats the defendant, pursuant to its oral agreement made with the plaintiff, sent its cost experts to plaintiff’s factory in order to determine during the process of manufacture the cost of the manufacture and a fair price for the article being manufactured and delivered. The said Government cost expert, Dr. N. I. Stone, after spending considerable time at plaintiff’s factory and investigating the cost and a fair price for the said garments, fixed $2.25 as a fair and suitable price and immediately recommended that plaintiff be paid that price instead of $1.75 named in the formal contract for the said coats. This price the plaintiff agreed to accept, and Capt. William Brooks, Q. M. C., an officer acting under the authority of the Secretary of War, agreed to pay the same.
    VII. Thereafter the plaintiff filed a claim with the War Department for the difference between the price which it had been paid and the price fixed by the Government cost ■expert, namely, 50 cents per garment on the 10,002 garments delivered, or for a total sum of $5,001, the amount now •claimed in this suit. This claim was referred to the Board of Contract Adjustment of the War Department, and under ■date of January 30, 1920, the said Board of Contract Adjustment sustained the plaintiff’s contentions and held that duly authorized officers of the War Department had entered into a verbal agreement with the plaintiff whereby it was agreed that both the price and specifications were tentative; that the coat delivered was so changed from that specified that it became a mackinaw instead of a pea jacket; that a fair price for the said coat, as fixed by the Government cost expert, Dr. N. I. Stone, was $2.25 each, and recommended that the plaintiff be paid the full amount of their •claim in the sum of $5,001, and thereupon the said decision •of the Board of Contract Adjustment was duly approved by the Secretary of War and an award was made by the .Secretary of War for the full sum of $5,001. The said .amount awarded to plaintiff was disallowed by the Comptroller of the Treasury and no part of the same has ever .been paid.
    The court decided that plaintiff was entitled to recover.
   Hay, Judge,

delivered the opinion of the court:

On October 14, 1918, the plaintiff entered into a contract in writing with the United States whereby it agreed to manufacture certain coats for the United States at the price of $1.75 per coat. Before signing the contract the plaintiff •called attention to the fact that the coats provided for in the contract were not the kind of coats which had been described to it in the preliminary negotiation, and stated that the price fixed in the contract was too low, and that it could .not manufacture the coats at the price fixed in the contract. The officers of the United States urged the plaintiff to sign the contract, as the material for the coats could not be turned •over to it until the contract was signed; that it was necessary to begin work at once; and that the price could and would ,be adjusted after the contract was signed and work under it begun. Thereafter, while the work was in progress, the-United States sent to the plant of the plaintiff certain expert price fixers, who, after an inspection of the work, fixed the price at $2.25 per coat, 50 cents more per coat than, the contract price. The plaintiff agreed to accept this price, and Capt. William Brooks, Q. M. C., an officer acting under the authority of the Secretary of War, agreed to pay the-same, he having at the time the contract was signed agreed that the price should be adjusted after the work had been, inspected.

The United States paid the plaintiff the price per coat which was stated in the contract to be $1.75 per coat, but declined to pay the price of $2.25 per coat. Thereupon the plaintiff filed a claim in the War Department for the difference between the price which it had been paid and the-price agreed upon between it and Captain Brooks; namely, 50 cents per coat on the 10,002 coats delivered, or the sum of $5,001, which is the amount claimed in this suit.

This claim was referred by the Secretary of War to the Board of 'Contract Adjustment, and on January 30, 1920, the said board, treating the claim as a Dent Act claim, allowed the claim in full and gave the following reasons for so doing:

“ In the matter of the claim of Snellenberg Clothing Co., Philadelphia, Pa. Document setting forth the nature, terms, and conditions of the agreement for manufacture of pea jackets. Case No. 150-C-2119.
“ 1. On or about October 14, 1918, a formal contract was entered into between the claimant and Philip W. Tucker, second lieutenant, Q. M. C., purchasing and contracting-officer, by which the claimant was to furnish the Government with 10,000 pea jackets from November 2, 1918, to November 30, 1918, at $1.75 per garment, according to specifications attached. It was agreed at the time that both price and specifications .were tentative, and that the price should be changed to meet any change in specifications.
“ 2. Subsequent to the date of the contract, and soon after deliveries were to be begun under it, the specifications of the articles to be manufactured were changed by Capt. William Brooks, an officer authorized to make such changes, so that the garments when completed were not the specified pea jackets but were of a kind familiarly known as mackinaws. The cost of manufacture was thereby increased.
“ 3. The .Government cost expert, Dr. N. I. Stone, fixed :$2.25 as a suitable price for the changed garment.
“ 4. Thereupon Capt. William Brooks, authorized thereto by Harry L. Wells, acting chief of the uniform section, •entered into an oral supplementary contract, on or about November 2,1918, with the claimant whereby the claimant was to manufacture and deliver to the Government the garments .•according to the changed specifications, and whereby the -Government should pay therefor a reasonable price.
“Approved and certified this 30th day of January, 1920.
“BOARD OF CONTRACT ADJUSTMENT,
“ By Charles F. Harding, Member.
“ Willard A. Doerr,
Major, F. A., Recorder?

Whereupon the Secretary of War approved the decision ■of the said board and made an award to the plaintiff for the :sum of $5,001.

The Comptroller of the Treasury, upon the request of a •disbursing officer for a decision, held that the award of the Secretary of War was not conclusive in this case, and that the same should not be paid. And it has not been paid.

The Board of Contract Adjustment made the following ■certificate:

War Department,
Board of Contract Adjustment,
Washington.
Form C. Claim No. 150-C-2119.
CERTIFICATE OF THE BOARD OF CONTRACT ADJUSTMENT
We, the Board of Contract Adjustment, having made due ■and proper investigation, find that an agreement was entered into in good faith between Snellenberg Clothing Co., Philadelphia, Pa., and Captain William Brooks, Q. M. C., an officer or agent acting under the authority, direction, or instruction of the Secretary of War (the President of the United States), on or about the 2d day of November, 1918, during the emergency arising from the declaration of war with the German Empire and prior to November 12, 1918, for a purpose connected with the prosecution of the war; that the agreement had been performed in whole or in part, ■or expenditures had been made or obligations incurred by .the claimant on the faith of such agreement, prior to November 12, 1918; that the agreement had not been executed in the manner prescribed by law, and is within the provisions of section 1 of the act of Congress approved March 2, 1919, entitled, “An act to provide relief in cases of contracts’ connected with the prosecution, of the war, and for other purposes,” and that the documents attached hereto constitute a detailed statement showing the nature, terms, and conditions of said agreement; and.we hereby recommend that the Secretary of War proceed to adjust, pay, or discharge-the said agreement.
Board of Contract Adjustment,
By John Ross Delafield,
Colonel, Ordnance, CTwknrum.
Dated January 30, 1920.
Attest:
William A. Doerr,
mMajor, F. A., Recorder.

From this certificate it will be seen that the Said board certified to the Secretary of War that the claim of the-plaintiff came under the provisions of the act of March 2, 1919, 40 Stat. 1272. The Secretary of War proceeded to a consideration of the claim and made an award in favor of the plaintiff for the sum of $5,001.

We are of opinion that the Secretary of War had no jurisdiction under the Dent Act of this claim. The claim is one which grows out of a written contract, and one which was “ executed in the manner prescribed by law,” and is therefore not within the provisions of that act.

However, the facts in this case show that both parties understood that the price written into the contract at the time it was made was not the price which was finally to be paid. They agreed that the price was to be fixed when it was finally determined upon what kind of a coat was to be manufactured and delivered, the character of coat finally agreed upon being an entirely different coat than that called for in the contract. The defendant, in pursuance of the understanding had when the contract was signed, sent its cost experts to the plaintiff’s factory to determine a fair price for the coat which was being manufactured and delivered. These experts of the Government fixed the price at $2.25 per coat instead of $1.75 per coat named in the contract. Thus the real understanding of the parties as to price when the contract was signed was arrived at, and the obligation is upon the Government to pay it. We are therefore of opinion that the plaintiff is entitled to have the contract reformed so as to make it speak the intention of the parties on the basis of cost fixed by the Government through its agents sent to the plaintiff’s factory for the purpose of ascertaining a fair price for the article being manufactured and delivered under the contract. Upon such reformation the plaintiff is entitled to recover the sum of $5,001. Hygienic Fibre Co. v. United States, 59 C. Cls. 598. Poole Engineering & Machine Co. v. United States, 58 C. Cls. 9.

Judgment for the plaintiff in the sum of $5,001. It is so ordered.

Gkaham, Judge; DowNet, Judge; Booth, Judge; and Campbell, Chief Justice, concur.  