Gormley v. United States

86 Ct. Cl. 523, 1938 U.S. Ct. Cl. LEXIS 222, 1938 WL 4081
CourtUnited States Court of Claims
DecidedMarch 7, 1938
DocketNo. 42437
StatusPublished

This text of 86 Ct. Cl. 523 (Gormley v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gormley v. United States, 86 Ct. Cl. 523, 1938 U.S. Ct. Cl. LEXIS 222, 1938 WL 4081 (cc 1938).

Opinion

Green, Judge,

delivered the opinion of the court:

This action is begun pursuant to a joint resolution of Congress approved March 4, 1933, reading as follows:

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That jurisdiction is hereby conferred upon the Court of Claims of the United States, notwithstanding the lapse of time or any statute of limitations, to hear the claim of P. F. Gormley Company for payment at the contract price of $106 per ton for structural steel furnished and used in the performance of its contract numbered 2304 with the Navy Department, dated March 10, 1917, for construction of structural shop building at the navy yard, Philadelphia, Pennsylvania, for such amount as will equitably compensate said company for said steel not in excess of the price aforesaid; and also claims for damages or extra costs occasioned by orders of the Navy Department requiring the contractor to pay wages at rates fixed by war-time wage boards; by the commandeering of contractor’s labor for use on war-time work considered more urgent; for increased costs due to extended period of performance necessitated by wartime conditions and war orders, with the right on the pan of the Government to present any legal and equitable set-offs and defenses and to render findings of fact, and upon such findings of fact to render judgment, but without any allowance for interest on the determined amount for damages prior to its rendition.

It appears that plaintiff entered into a contract for the construction of a building and that the contract provided that plaintiff should be paid $106 per ton for the structural steel erected and used therein. After the contract had been signed by plaintiff and by the Acting Secretary of the Navy, it was altered by one of the defendant’s officials and when the contract was completed the plaintiff was paid only in accordance with the alteration which fixed the price at $98 per ton for the structural steel, and not in accordance with the contract as originally executed.

The defense set up is that the alteration was made before delivery of the contract and that defendant’s officials had a right to change the same. It is also alleged that plaintiff consented to the alteration.

[532]*532The findings show that on March 2,1917, the Chief of the Burean of Yards and Docks, Navy Department, accepted a bid of plaintiff for the construction and completion of a structural shop building at the Navy Yard at Philadelphia,, at various unit prices, the one here material being $106 per ton for structural steel. Plaintiff made this bid on structural steel for the reason that he had an understanding with one J. B. Bonner, who was vice chairman of the Subcommittee on Steel Distribution of the American Iron & Steel Institute and a representative of the Carnegie Steel Company, and who solicited the order for erecting the structural steel, that the cost to plaintiff of this material would be $90 a ton erected and in place. Bonner urged plaintiff to place an order for the structural steel with the American Bridge Company at $106 and if that was done promised that he, Bonner, would see that plaintiff was reimbursed the difference of $16 a ton. This arrangement plaintiff agreed to. It does not appear that Bonner was legally authorized to make such an agreement. The Carnegie Steel Company and the American Bridge Company were subsidiaries of the United States Steel Corporation. The United States Steel Corporation was a holding company, the Carnegie Steel Company a rolling mill, and the American Bridge Company a fabricating and erecting concern. Pursuant to this arrangement the American Bridge Company on January 27, 1917, proposed to the plaintiff in writing to furnish and erect the structural steel in question for $106 per net ton.

On March 10, 1917, plaintiff signed a form of contract which had been forwarded to him by the Bureau of Yards and Docks in which the price of $106 per ton for structural steel was fixed in conformity with the accepted bid, and the contract together with the bond required was delivered to the Bureau of Yards and Docks.

The Bureau of Yards and Docks the same day forwarded the contract to the Secretary’s office for signature and it was signed by the Acting Secretary of the Navy, March 13,1917, with bond approved and returned the same day to the Bureau of Yards and Docks.

[533]*533Work under the contract was commenced by the plaintiff March 10, 1917, and from that time on, with the knowledge of defendant, was prosecuted continuously except for necessary delays.

About April 6, 1917, the president of the United States Steel Corporation agreed with, the Secretary of the Navy after some negotiations to furnish steel for Navy construction at certain maximum prices, and April 11, 1917, the American Bridge Company notified the plaintiff that in accordance with an agreement with the Navy Department they quoted a revised price of $98 per ton for the structural steel entering into the building to be constructed by him. The plaintiff immediately thereafter conferred with the Chief of the Bureau of Yards and Docks, Admiral Harris, and protested against any reduction in his contract price. Plaintiff was told by Harris that if the change was not agreeable to him he [Harris] would take the contract from him and readvertise it and tried to prevail on plaintiff to give up the job, but plaintiff said he wanted it and nothing-definite was agreed upon. On April 14, 1917, Harris wrote the plaintiff a letter among other things stating that the contract would be modified so as to pay for the structural steel at the rate of $98 per ton instead of the price bid by him. The letter was not received by plaintiff and he did not reply thereto.

On April 23,1917, Harris wrote again to the plaintiff with reference to the contract, stating among other things, that “it is proposed to change the provisions of this contract * * * the compensation to be paid for structural steel will be changed from $106 per ton to $98 per ton.” This letter was not received by the plaintiff and the plaintiff did not at any time express a consent to the proposed changes or request or obtain from the surety its consent to the changes. The surety company, however, did forward to the Bureau of Yards and Docks a written consent to the changes and thereafter an officer in the Bureau of Yards and Docks, without authority to contract for the Government, changed or caused to be changed the contract by erasing the words “one hundred and six dollars” and writing in their stead [534]*534“ninety-eight dollars” so that Item 14 read: “Item 14, for .structural steel, ninety-eight dollars ($106.00) per ton.” After these changes had been made a copy of the contract ■was on May 4, 1917, delivered to the plaintiff showing the ■changes. The original date of the contract, March 10, 1917, was not changed.

On May 9, 1917, the Bureau of Yards and Docks sent a letter to plaintiff and a copy thereof each to J. B. Bonner, to the Navy Yard at Philadelphia, and to the Bureau of ■Supplies & Accounts, Navy Department, in which plaintiff was requested to place his orders for structural steel required by the contract direct with the American Bridge Company. Later, a contract was entered into between the American Bridge Company and the plaintiff for the structural steel required at the price of $98 per ton. It was dated March 12, 1917.

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Cite This Page — Counsel Stack

Bluebook (online)
86 Ct. Cl. 523, 1938 U.S. Ct. Cl. LEXIS 222, 1938 WL 4081, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gormley-v-united-states-cc-1938.