You had experience with H. R. 3812, which had to do with the Saturday-leave bill. It had to come back under the situation that may be possible in dealing with the bill now before you. Again, you had experience with H. R. 7663, which has to do with substitutes. Then you have before the committee currently H. R. 8069, to reform the lease for the Sellwood station of the Portland, Oreg., post office, which involves the "tremendous" sum of 50 cents a day and has probably cost the Government about that much for correspondence, while God alone knows how much it has cost by way of wasting the time of executives. Mr. JENSEN. Is not this proposed legislation necessitated or considered to be necessary because of the condition that exists in the letting of mail contracts? For example, a man may be carrying the mail under contract. That contract comes up for renewal; the carrier has been perfectly satisfactory; he has done a good job, yet he has to rebid at the termination of his contract. When the route is thrown open for bids several may bid against the incumbent contractor. All the bidders know what the current contractor is getting, and they underbid him. It is possible that many bidders are not responsible in the sense that the Department would care to have them in its employ; still the man who has a contract and is doing a good job is always subjected to this cutthroat competition, which does not seem exactly fair. Mr. BEESLEY. That is correct. Mr. JENSEN. I have felt many times that we should effect legislation curing that undesirable condition. I think these star-route carriers are, possibly, the lowest-paid employees of the Government. Mr. BEESLEY. They are, on the basis of the bids, not only the lowest paid but I think some of them are even losing money. Mr. JENSEN. I would favor legislation that would grant to one of these star-route carriers continuity of employment so long as he did a good job. I would not subject him to unfair competition. Mr. MASON. We have passed such legislation. Mr. BEESLEY. Yes; but the President, following the recommendation of the Bureau of the Budget, vetoed it. Mr. MASON. He vetoed the bill because we were setting aside competition. The Bureau of the Budget caused a veto of that bill, and no doubt it would recommend that the pending bill be vetoed if the suggested amendment be included. Mr. JENSEN. When was such a bill vetoed? Mr. MASON. Only a year ago. Mr. BEESLEY. The communications and the bill I have mentioned follow: DIRECTOR OF THE BUDGET. GENERAL ACCOUNTING OFFICE, SIR: There has been received your letter of August 14, 1939, requesting an expression of the views of this office with respect to a letter proposed by the Postmaster General to be sent to the President of the United States Senate, as follows: "The Acting Postmaster General has submitted to this Office, in accordance with established procedure, a proposed draft of bill to reform the lease for the Sellwood station of the Portland, Oreg., post office, together with letters of transmittal to the Congress. "Before replying to the Postmaster General, the Director would appreciate, with the return of the enclosures, an expression of your views regarding the proposed draft of bill." The referred-to section 6 of the lease of November 29, 1935, which it is proposed by the Post Office Department to request the Congress to reform, is as follows: "The lessor shall furnish to the Government, during the occupancy of said premises, under the terms of this lease, as part of the rental consideration, the following: said room, fitted and supplied by the lessor with the present equipment consisting of all boxes, fixtures, and furniture requisite to make the said room or rooms in every way satisfactory for use as a post office, provided that after acceptance of such equipment no additional equipment shall be required except for replacements. The lessor shall keep the said boxes, fixtures, and furniture in good repair and condition, to the satisfaction of the Post Office Department. The lessor shall pay all taxes and water rates, and shall have this lease duly recorded, and shall properly protect all windows and doors in the workroom by iron bars or wire gratings according to requirements. The lessor shall furnish approved heating and lighting fixtures, plumbing and toilet facilities as now installed, the necessary water and electric meters; satisfactory heat, light, power, water, and janitor service. The lessor shall keep the said heating and lighting fixtures, plumbing and toilet facilities in satisfactory repair and condition during the term of this lease." It will be noted that the lease obligates the lessors to furnish janitor service and that the proposed reformation would release them from such obligation except as to the services necessary in caring for the heating plant and the cleaning of windows. It would appear to be a most unusual procedure to request the Congress to enact a statute to reform a contract with the United States. If it can be established that due to a mutual mistake, the contract as entered into in fact failed to express the true intentions of the parties, as alleged, the contract can be reformed without legislative action. See in this connection, Hygienic Fibre Company v. United States (59 Ct. Cls. 598, 611). However, a mere misunderstanding of the import or effect of the provisions in a contract is not necessarily ground for correction or reformation when the import or effect of such provisions is otherwise clear. In that connection attention is invited to the case of Simpson v. United States (172 U. S. 372, 379), in which the court said: * * The written contract merged all previous negotiations, and is presumed, in law, to express the final understanding of the parties. If the contract did not express the true agreement, it was the claimant's folly to have signed it. * * If there was, in fact, a mutual mistake in reducing the lease to writing, and the documents evidencing that mistake should be submitted to this office there might be obviated any necessity for presenting the matter to the Congress. However, there are no documents of record in this office evidencing negotiations on a different basis than as set forth in the lease. The enclosures transmitted with your letter are returned herewith, as requested. Respectfully, R. N. ELLIOTT, Acting Comptroller General of the United States. SEPTEMBER 30, 1939. Hon. HAROLD D. SMITH, Director, Bureau of the Budget, Washington, D. C. MY DEAR MR. SMITH: Your letter of the 16th instant requested a further expression of the views of this Department with respect to proposed legislation designed to reform the lease between Flora Noble and the United States for premises in use by the Sellwood Station of the Portland, Oreg., post office, in the light of statements contained in a letter addressed to you by the Acting Comptroller General, a copy of which accompanied your communication. The letter from the Acting Comptroller General states: "It will be noted that the lease obligates the lessors to furnish janitor service and that the proposed reformation would release them from such obligation except as to the services necessary in caring for the heating plant and the cleaning of windows. It would appear to be a most unusual procedure to request the Congress to enact a statute to reform a contract with the United States. If it can be established that due to a mutual mistake, the contract as entered into in fact failed to express the true intentions of the parties, as alleged, the contract can be reformed without legislative action. See in this connection, Hygienic Fibre Company v. United States (59 Ct. Cls. 598, 611). However, a mere misunderstanding of the import or effect of the provisions in a contract is not necessarily ground for correction or reformation when the import or effect of such provisions is otherwise clear. In that connection attention is invited to the case of Simpson v. United States (172 U. S. 372, 379), in which the court said: * * The written contract merged all previous negotiations, and is presumed, in law, to express the final understanding of the parties. If the contract did not express the true agreement, it was the claimant's folly to have signed it. * "If there was, in fact, a mutual mistake in reducing the lease to writing, and the documents evidencing that mistake should be submitted to this office there might be obviated any necessity for presenting the matter to the Congress. However, there are not documents of record in this office evidencing negotiations on a different basis than as set forth in the lease." The statement of the Acting Comptroller General that it would appear to be a most unusual procedure to request the Congress to enact a statute to reform a contract with the United States seems to overlook the fact that there are illustrations of such procedure in recent years. An extensive research. seems hardly justified, but attention is invited to the act approved June 16, 1934 (48 Stat. 974, 41 U. S. C., secs. 28-33), which provided: "That the Comptroller General of the United States be, and he is hereby, authorized and directed to adjust and settle on a fair and equitable basis claims of persons who entered into a contract or contracts with the United States prior to August 10, 1933, including subcontractors and materialmen performing work or furnishing material or necessary fuel direct to the contractor under such contracts, for additional costs incurred by reason of compliance on and after August 10, 1933, with a code or codes of fair competition approved by the President under section 3 of the act, approved June 16, 1933, known as the National Industrial Recovery Act, or by reason of compliance with an agreement with the President executed under section 4 (a) of said act in the performance after August 10, 1933, of the contract or any part thereof. ** " And section 4 of the act, approved July 2, 1918 (40 Stat. 753), authorizes the Postmaster General to investigate, adjust, or cancel certain types of contracts. In the present instance there is a specific term in the lease calling for rectification and, accordingly, there is no occasion for broad blanket authority under which could be exercised judgment and discretion by administrative or accounting officers. Thus, it is appropriate for Congress to rectify by specific enactment the only condition demanding adjustment. As to the case of Hygienic Fibre Co. v. United States, a reading thereof will show that it contains no statement that "the contract can be reformed without legislative action." Although far more money was involved, the case there decided was similar in principle to the one before us, as the contract contained a clause constituting a mutual mistake. The contractor had submitted a supplemental claim to cover the additional amount deemed to be due it to the auditor for the War Department who disallowed it. Subsequently, the Comptroller of the Treasury (predecessor of the Comptroller General) affirmed the disallowance and said, "If it (contractor) is to be afforded relief, it must be by special authority of Congress" (XXV Comp. Dec. 735). However, the contractor did not appeal to Congress but chose to file suit in the Court of Claims seeking (p. 606) "reformation or cancelation of the contract and a recovery" of the amount claimed, a usual, appropriate, and sometimes necessary form of action where the circumstances warrant it. The court found for the plaintiff, ordered the reformation of the contract and gave judgment for a sum based upon such reformation. In urging the submission of this lease reformation to Congress, this Department was fully aware of the right of the lessors of the premises involved to file a suit to have the lease judicially reformed, but because of the small amount involved it regarded it as proper to spare the claimants the expense of litigating a matter, the facts and merits of which were not contested. Judicial or legislative reformation of the lease appear to us to be the only remedies. The purpose of the quotation from the case of Simpson v. United States is not understood. The Simpson case did not involve a mutual mistake as did the case of Hygienic Fibre Co. v. United States and as is the case in the matter under discussion. In the Simpson case the United States strongly contended, and was upheld by the court in its contention, that the contract as signed expressed the real agreement between the parties. It is our view that the suggestion of the Acting Comptroller General that his office might grant the necessary relief is based upon a misconception of the scope of authority of the Comptroller General. Recognizing that in Simpson v. United States, supra, the Supreme Court stated a firmly established principle of law when it said, “The written contract merged all previous negotiations and is presumed, in law, to express the final understanding of the parties," and being convinced that authority to re-form a contract with the United States reposes only in the courts and Congress, we cannot consistently request the Comptroller General to take action which, in our opinion, would constitute a violation of law. Under date of December 14, 1831 (2 Ops. Atty. Gen. 480, 481), the Attorney General rendered an opinion to the President, in which it is stated: "As soon as the contract is made by the Navy commissioners, or any other agents authorized to make contracts for the public, the rights of the United States become vested according to the terms of the contract, and it is not in the power of the agents to modify or release them. The power of the Navy commissioners in relation to the terms of this contract was fully executed as soon as it was made, and they can exercise no further control over it, except insofar as the power is reserved to them by the contract itself. "The contract as made by the Navy commissioners must be returned to the Comptroller. And in settling the account and ascertaining the balance, the accounting officers must be guided by the instrument itself. Neither the Auditor nor Comptroller can undertake to absolve the contractor from any of the stipulations contained in the contract, however harshly and severely they may be supposed to bear upon him. The duty of the accounting officers is a special and limited one, and they are not authorized to depart from the terms of the instrument nor relinquish to the contractor any of the rights of the United States. "It will, without doubt, sometimes happen that circumstances would render it unjust and inequitable for the United States to exact of the party all of the advantages to which they are legally entitled, and I am persuaded that in the case before me Mr. Grice has strong claims upon the justice of the public; but the accounting officers have not the power to administer relief of this description, nor will an appeal lie from their decision to the President. The power to give relief resides in Congress, and to them, in my opinion, the application must be made." Even were the course suggested by the Acting Comptroller General lawful, it would not seem to be the appropriate remedy. The lease runs for 10 years from November 29, 1935, and it is believed that the rights of the parties under the lease should be fixed at this time so that there may be left nothing to the discretion of future individuals who may occupy the offices of Postmaster General, Comptroller General, and postmaster at Portland, Oreg. For the foregoing reasons we renew the request of August 3, 1939, looking to the submission to Congress of a request for the legislation proposed. Very truly yours, JAMES A. FARLEY, Another instance of legislative re-formation of contract was the act of March 1, 1933, directing the Postmaster General to readjust the rental and the purchase options in the existing lease for the Boston post-office garage (47 Stat. 1412). [H. R. 8069, 76th Cong., 3d sess.] A BILL To re-form the lease for the Sellwood station of the Portland (Oregon) post office Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That paragraph 6 of the lease entered into on November 29, 1935, by and between Flora Noble and W. F. Noble, her husband, and the United States of America is, in order to correct a mutual mistake and to effectuate the intention of the parties to the lease at the time of its making, hereby re-formed, from the date of the execution of the lease and for its entire term of ten years, to read as follows: "6. The Lessor shall furnish to the Government, during the occupancy of said premises, under the terms of this lease, as part of the rental consideration, the following: Said room, fitted and supplied by the Lessor with the present equipment consisting of all boxes, fixtures, and furniture requisite to make the said room or rooms in every way satisfactory for use as a post offiec, provided that after acceptance of such equipment no additional equipment shall be required except for replacements. The Lessor shall keep the said boxes, fixtures, and furniture in good repair and condition, to the satisfaction of the Post Office Department. The Lessor shall pay all taxes and water rates, and shall have this lease duly recorded, and shall properly protect all windows and doors in the workroom by iron bars or wire gratings according to requirements. The Lessor shall furnish approved heating and lighting fixtures, plumbing and toilet facilities as now installed, the necessary water and electric meters; satisfactory heat, light, power, water, and janitor service, to the extent of caring for the heating plant and the cleaning of windows when required, but all other work requiring the services of a janitor to be assumed and provided by the Lessee. The Lessor shall keep the said heating and lighting fixtures, plumbing and toilet facilities, in satisfactory repair and condition during the term of this lease." SEC. 2. The Post Office Department, the General Accounting Office, and all concerned shall amend their records accordingly, discharging the lessor from any alleged liability for janitor service other than as undertaken in the lease as herein re-formed and making proper allowances to the postmaster at Portland, Oregon, for expenditures made by him in supplying those janitor services not imposed by the re-formed lease upon the lessor. So much of the amount heretofore expended by the postmaster for janitor services not covered by the re-formed lease, as may not be charged to the appropriation for the fiscal years affected, because of lapse of appropriation, or otherwise, may be charged to the current appropriation "For miscellaneous items necessary and incidental to the operation and protection of post offices of the first and second classes, and the business conducted in connection therewith, not provided for in other appropriations." Hereafter, obligations arising against the United States for janitor services pursuant to the re-formed lease shall be charged to the aforesaid appropriation for the appropriate fiscal year. STATEMENT OF FRANK RUSSELL—Continued Mr. SECCOMBE. Let us hear from Mr. Russell again. Mr. RUSSELL. Naturally, I am most interested in trying to obtain remedial legislation for these long-suffering star-route carriers and I would therefore hesitate to do anything that might in any way jeopardize the favorable chances of this bill for enactment into law. I am especially anxious that something be done in view of the agreement reached by the representatives of the Post Office Department and the representatives of the star-route carriers. As I understand, we are considering only the addition of two amendments to this bill. In my opinion, and this is only a personal opinion, the amendment in question would probably not cause a veto of the bill. I do not see how it could in justice cause a veto. The amendment we have heard discussed is already in other law, as we have been told. If it is in one place in the law, why should this bill containing the same language be vetoed? That is, however, something for the members of the committee to decide. I am only giving you my personal view of the matter, for whatever it may be worth. Mr. SECCOMBE. You have just told us that this proposed amendment is in other places in the law. Do you mean that the responsibility of the Postmaster General is fixed in other laws? Mr. RUSSELL. No; the responsibility of other governmental agencies is fixed by law, in the same manner as is suggested in the pending amendment. In other words, the law places the responsibility within a certain department or agency. I have specific reference to the Army and the Navy laws. They tie down responsibility; just as the proposed amendment would do. |