Cramp v. United States, 239 U.S. 221 (1915)

William Cramp & Sons Ship &

Engine Building Co. v. United States
No. 3

Argued November 8, 1915
Decided November 29, 1915
239 U.S. 221

APPEAL FROM THE COURT OF CLAIMS

Syllabus

A finding by the Court of Claims that there was no mutual mistake between the parties in executing a release but that the instrument expressed the intention of the United States as previously agreed upon, although the other party had mistaken its legal rights without the fault of the United States or its officers, and that such failure to apprehend the legal effect of the release did not make it the subject of reformation, held in this case to be binding upon this Court.

The Court of Claims was established for the purpose of considering the right of claimants to recover against the United States, and its findings of fact upon matters within its authority should be conclusive unless Congress otherwise provides.

When Congress, by special act, refers a case to the Court of Claims with right of appeal to this Court, such appeal, unless the act otherwise provides, is governed by rules applicable to cases arising under the general jurisdiction of the court.

In this case, there being ample testimony to support the finding of the Court of Claims that there was no mutual mistake in the execution of a complete release, and there being no mistake in the form of the instrument, held that claimant was not entitled to recover damages caused by delay in the government furnishing material, as the release executed covered all such claims, although the representative of the claimant may not have so understood it.

In cases within its general jurisdiction, the Court of Claims has jurisdiction to reform a contract for the purpose of determining whether the claim, if established, is a valid one against the United States. United States v. Milliken Imprinting Co., 202 U.S. 168.

46 Ct.Cl. 521 affirmed.

This action was brought in the Court of Claims to recover damages on account of delay alleged to be the fault of the United States in preventing completion according to contract of the battleship Massachusetts. The Court of Claims dismissed the petition (46 Ct.Cls. 521).

Large sums were demanded for delays covering other periods than are involved in this appeal, and the case as now presented concerns the right to recover the sum of $27,984.99, being the damages which the Court of Claims found accrued to the claimant for the period of delay after February 1, 1896, for the period of three months and twenty-nine days. The Court of Claims made certain findings of fact, from which it appears that, after the making of the contract, claimant arranged a systematic working program for the construction of the vessel within the contract time, and would have completed the vessel within time had it not been for the failure of the United States to furnish materials to properly carry on the work, which, by the terms of the contract, they had agreed to furnish; that, by reason of such failure of the government, the completion of the vessel was delayed for two years, six months, and nine days beyond the contract period; that the armor to be furnished in accordance with said clause was obtained by the United States from other contractors, who, without any fault on the part of the claimant, failed to complete the manufacture thereof in time to deliver the same to the claimants as they had agreed. Omitting the findings covered by the release and contract made on May 26th, 1896, and on February 1, 1896, and the amount of damages accruing for such delay, as to the sum now in controversy the court found that, on November 23, 1896, after the completion and delivery of the vessel in accordance with the sixth paragraph of the nineteenth clause of the contract, the balance of the amount due thereunder, but held in accordance therewith until the final acceptance of the vessel, was paid to the claimant, and the same was accepted and a release approved by the Secretary of the Navy was entered into by it without any written protest, in the terms following:

Whereas by the eleventh clause of the contract, dated November 18, 1890, by and between the William Cramp & Sons Ship & Engine Building Company, a corporation created under the laws of the State of Pennsylvania, and doing business at Philadelphia, in said state, represented by the president of said corporation, party of the first part, and the United States, represented by the Secretary of the Navy, party of the second part, for the construction of a coast line battleship of about 10,000 tons displacement, which for the purposes of said contract is designated and known as coast line battleship No. 2, it is agreed that a special reserve of sixty thousand dollars ($60,000) shall be held until the vessel has been finally tried, provided that such final trial shall take place within five months from and after the date of the preliminary acceptance of the vessel; and

Whereas, by the sixth paragraph of the nineteenth clause of said contract, it is further provided that, when all the conditions, covenants, and provisions of said contract shall have been performed and fulfilled by and on the part of the party of the first part, said party of the first part shall be entitled, within ten days after the filing and acceptance of its claims, to receive the said special reserve, or so much thereof as it may be entitled to, on the execution of a final release to the United States in such form as shall be approved by the Secretary of the Navy, of all claims of any kind or description under or by virtue of said contract; and

Whereas the final trial of said vessel was completed on the 24th day of October, 1896; and

Whereas all the conditions, covenants, and provisions of said contract have been performed and fulfilled by and on the part of the party of the first part;

Now therefore in consideration of the premises, the sum of $57,536.60, being the balance of the aforesaid special reserve to which the party of the first part is entitled, being to me, in hand, paid by the United States, represented by the Secretary of the Navy, the receipt whereof is hereby acknowledged, the William Cramp & Sons Ship & Engine Building Company, represented by me, Charles H. Cramp, president of said corporation, does hereby, for itself, and its successors and assigns, and its legal representatives, remise, release, and forever discharge the United States of and from all and all manner of debts, dues, sum and sums of money, accounts, reckonings, claims, and demands whatsoever, in law or in equity, for or by reason of, or on account of, the construction of said vessel under the contract aforesaid.

In witness whereof I have hereunto set my hand and affixed the seal of the William Cramp & Sons Ship & Engine Building Company this 23d day of November, A.D. 1896.

The Wm. Cramp & Sons Ship & Engine

Building Company,

(Seal.) Chas. H. Cramp, President.

Attest:

Theodore W. Cramp

Assistant Secretary

The court sets forth the Act of June 10, 1896,* referring certain claims to the Secretary of the Navy for investigation and report, and, in part, the report of the Secretary, made December 9th, 1896, as follows:

I have considered carefully the nature of these claims and the circumstances out of which they arose, and, while not attempting to pass on the merits of the same or to determine the amount, if any, that should be allowed on account of the matters mentioned, the fact exists that there was delay in the completion of the contracts beyond the time prescribed therein, and that such delay was, in some measure at least, due to failure on part of the government to obtain and furnish the contractors the armor for the vessels as required, and, in my judgment, the interests of justice demand that they should be referred to the Court of Claims, which can consider these matters with more deliberation and care than could be devoted to them by the committees of the two Houses of Congress . . .

It will be observed that the contractors claim relief from the binding force of these agreements on the ground that the same were entered into by them under duress.

After consideration, the court finds the items of cost and expense during the period of delay now under consideration, three months and twenty-nine days, after February 1st, 1896, to amount to the sum of $27,984.99, as already stated, and further finds:

The claimant company submits for the consideration of the court the evidence of the then Secretary of the Navy and the president of the claimant company, who signed the contract on behalf of their respective principals, along with certain other testimony, taken since the decision in the case of the Indiana, to prove that, at the time of the signing of the contract as aforesaid, it was not within the minds of the parties so signing said contract that the language of paragraph six of the nineteenth clause of said contract, to-wit:

On the execution of a final release to the United States, in such form as shall be approved by the Secretary of the Navy, of all claims of any kind or description under or by virtue of this contract

should embrace claims for unliquidated damages of the character herein sued for, and that, insofar as the language of said final release includes such unliquidated claims, it was inserted by mistake, inadvertence, or accident, and did not express the true intent of the parties, and that the same should be so reformed as to exclude such claims.

The court, after due consideration of the evidence aforesaid as well as the evidence adduced on behalf of the defendants, finds that there was no mutual mistake between the parties in the execution of the contract or the releases thereunder; that the language of said contract and releases expressed the intention and purpose of the United States as previously agreed upon, though the contracting party on behalf of the claimant company may have mistaken its legal rights thereunder.

Upon the foregoing findings of fact, the court finds the ultimate facts, so far as they are questions of fact: (1) that, at the time of the execution of the releases set forth in finding V, the claimant company was not, by reason of the acts or delays of the government, under duress, and (2) that there was no mutual mistake between the parties in the execution of the contract or the final release thereunder, as the same expressed the true intent and purpose of the United States, and the failure of the officers of the claimant company to apprehend the legal effect thereof was not the fault of the United States or their officers, and that therefore the same are not the subject of reformation.

As a conclusion of law, the court decided on the authority of United States v. Cramp, 206 U.S. 118, that the claimant was not entitled to recover, and dismissed the petition.