REDUCTION IN FORCE.
Reinstatement.
Annual leave credit.
Court of Claims-jurisdiction.
The Court of Claims does not have jurisdiction to order an employ-
ing agency to recredit an employee's leave account with annual leave
where, upon his reinstatement, his administrative back-pay payment
was reduced by the lump-sum annual leave payment made to him
upon his wrongful separation. However, if leave is ultimately
denied him, an action will lie. Pechette, 189.
Annual leave payment.
Computation of.
Where a Government employee is restored to employment after it
has been determined that his removal through reduction in force
was improper, he is entitled to receive his back salary for the entire
period of his separation, less the lump-sum annual leave payment
he received when separated. Upon his repayment of the lump-sum
annual leave payment, the employee is entitled to have his leave
account recredited. Pechette, 189.
Back pay.
Computation of.
A Government employee who has been improperly reduced in force
and later reinstated is entitled to receive the pay he would have
earned had he been working during the entire period of wrongful
separation, and the employing agency was not justified in paying his
salary for only part of the time and in giving him a lump-sum
payment representing annual leave for the balance of the time.
Pechette, 189.
United States
A Government employee who was illegally separated from his posi-
tion by reduction in force and was subsequently reinstated to a
position carrying a lower grade than the one from which he was
separated, is entitled to receive back pay for the period of separation
at the rate applicable to the position to which he was reinstated
rather than the higher pay of the position from which he was
separated. He is not entitled to any statutory or in-grade pay
increases which he would have received had he not been separated.
(Act of June 10, 1948, 5 U.S.C. (1952) § 652(b)(3).) Pechette, 189.
United States 39(8)
CIVILIAN PAY-Continued
REDUCTION IN GRADE.
Civil Service Commission decision.
In the absence of procedural error or arbitrary and capricious
action, the decision of the Civil Service Commission adverse to
an employee claiming illegal reduction in grade is final and will
not be disturbed by the Court of Claims. Thompson, 200.
Where a Government employee has received a notice that it is pro-
posed to dismiss him for unsatisfactory work and it is later decided
by the employing agency to take less severe action, i.e., demotion,
for the same reasons as those set forth in the notice of proposed
dismissal, civil service regulations issued pursuant to the Veterans'
Preference Act, 58 Stat. 390, provide that no new notice is required
and the less severe action may be taken on the basis of the original
notice. 5 C.F.R. chap. 22; Federal Personnel Manual, chap. $1,
p. S1-30. Collins, 382.
CIVIL SERVICE ACT OF 1883. See Civilian Pay.
CONGRESSIONAL REFERENCE.
EQUITABLE CLAIMS.
Failure to award contract.
Where the Government has induced a contractor to incur expense
in making surveys and planning a project which both parties in-
tended should ripen into a contract but the Government ultimately
decided that it did not wish the project completed, the contractor
is at least equitably entitled to relief at the hands of Congress to
the extent of its out-of-pocket expenses. Geo. D. Emery Co., 71.
United States 69(6)
In determining, in a congressional reference case, whether the
claimant has an equitable claim, the court is applying that concept
in its broad moral sense so that any recovery on that basis amounts
to a gratuity warranted by conscience rather than by law. Gay
Street Corporation v. United States, 130 C. Cls. 341. Georgia Kaolin
Co., 39.
CONGRESSIONAL REFERENCE-Continued
EQUITABLE CLAIMS-Continued
Breach of covenant to restore premises.
Where the United States leased for $1 a year land on which the
plaintiff-owner had conducted a profitable kaolin mining operation,
and where the defendant did not fulfill its covenant to restore the
land to its original condition by removing from the ground live
ammunition, with the result that the plaintiff's cost of using its
land for its normal and usual mining purposes was materially
increased and the cost of restoring the land was in excess of the
fair market value of the land determined either at the time the
lease was executed or at the time the land was returned to the
plaintiff, equity and good conscience require that plaintiff be reim-
bursed for such additional cost. Georgia Kaolin Co., 39.
United States 74(3)
Uncertainty in law as basis for claim.
Compromise judgments are frequently sought because of the uncer-
tainty of the outcome of the particular litigation. Accordingly, the
uncertainty which existed in the law of family partnerships in
1950—that is, whether or not a purported family partnership could
establish its bona fides as a partnership, would not void a settle
ment agreement entered into by the taxpayers and the Government
and made the basis for a judgment of the Tax Court of the United
States, nor render the Government equitably liable to refund the
amount of the compromise judgment. Maher, 701.
CONSTITUTIONAL LAW.
FEDERAL-STATE RELATIONS.
State regulation of carriers transporting Government property.
A motor carrier may agree to give the United States a rate on
intrastate shipments of goods which are lower than the State's
published tariff without first obtaining the permission of the State
public service commission. Public Utilities Commission of Cali-
fornia v. United States, 355 U.S. 534. Benton Rapid Express, 360.
Carriers 192
PROPERTY OF THE UNITED STATES.
Disposal of Federal property.
The power to release or otherwise dispose of rights or property of
the United States is lodged in Congress by article IV, section 3,
clause 2, of the Constitution, and where authority is neither found
in a statute nor can be implied from other powers granted by
CONSTITUTIONAL LAW-Continued
PROPERTY OF THE UNITED STATES-Continued
Disposal of Federal property-Continued
statute, a Government agency which has made overpayments under
a contract must seek to recover such overpayments.
demnity Co. v. United States, 313 U.S. 289. Fansteel Metallurgical
Corp., 496.
See Pleading and Practice-Trial.
CONTRACTS. See also Congressional Reference; Counterclaims.
ACCOUNT STATED.
Payments prior to final audit.
In the absence of an express or implied agreement by the parties
to a contract that the balance shown on a statement of account is
correct, there is no account stated, American Steam Conveyor Corp.
v. United States, 81 C. Cls. 151, cert. denied 296 U.S. 599, and where
no determination as to the correctness of a charge was made until
a final Government audit, at which time the Government immedi-
ately charged the plaintiff with receiving an overpayment, there
was no account stated. Fansteel Metallurgical Corp., 496.
Account Stated
Assignment for benefit of creditors as breach.
Where the contract required the contractor to keep its records and
equipment in readiness for 6 years to enable it to produce certain
items for the Government upon demand, its assignment for the
benefit of its creditors operated as a total breach of the contract
since it is an implied condition of all contracts that the promisor
will not permit itself, through insolvency or acts of bankruptcy, to
become disabled from performing. Pennsylvania Exchange Bank,
Assignee, 216.
Prevention or hindrance of performance by other party.
There is an implied condition in every contract that neither party
will do anything to hinder or prevent the other party in the per-
formance of the contract. Thus, if the Corps of Engineers, U.S.
Army, knew, at the time it was soliciting bids on a construction
project, that the Atomic Energy Commission was contemplating a
huge project in the area in the near future which would so increase
the demand for construction labor that labor from high-wage rate
urban areas would be required, and that the prevailing wages of the
area would immediately increase, the Corps of Engineers was under
an obligation to so advise the plaintiff-contractor unless the infor-
mation was readily obtainable by plaintiff with the exercise of
reasonable diligence. Bateson-Stolte, 387.
United States 70(24)
CONSIDERATION.
Adequacy of.
The contractor's acquisition, at the Government's expense, of the
ability to promptly manufacture microwave magic tees in volume
under an industrial mobilization preparedness contract with the
Government, placed the contractor in a position to realize a profit
from the manufacture of any tees that might be ordered and was
adequate consideration for the contractor's promise to the Govern-
ment to stand ready for a six-year period to produce such tees when
and if required to do so. Pennsylvania Exchange Bank, Assignee,
216.
Caused by Government.
Notice to proceed.
Where the contract expressly provides that the Government will
give notice to proceed within a certain number of days after the
date of award to the contractor and the Government gives such
notice but also includes therein a notice of suspension of the con-
tract work, there is a breach of an express covenant of the contract
and plaintiff is entitled to recover damages representing the in-
creased cost of performance resulting from the ensuing delays.
Abbett Electric Corp. v. United States, 142 C. Cls. 609. A. S.
Schulman Electric Co., 399.
United States 70(24), 73 (22)
Administrative decisions.
Where a contractor is forced by duress to agree to an amendment
to its contract, which amendment is by its terms not appealable
and is in effect a determination that plaintiff is obligated to bear
the cost of the extra work required by the amendment, the resulting
dispute concerns a question of law and plaintiff need not appeal
from an adverse decision thereon under the "Disputes" article of
its contract. Universal Sportswear, 209.
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