the defendant was entitled to recover a like amount from the plaintiff. While the court's opinion is self-explanatory, we do wish to invite attention to the court's holding that the contract of June 16, 1950, was breached by the plaintiff and that by reason thereof the defendant was entitled to recover the sum of $27,930 on its counterclaims. The court stated, however, that since the defendant had only requested judgment on its counterclaims to the extent required to offset any judgment awarded the plaintiff on her principal claim, that offsetting judgments would be allowed with no net judgment to be allowed in favor of either party, and that this would result in substantial justice to both parties. It appears from the holding of the court that a net judgment for a considerable amount would have been entered in favor of the United States on its counterclaims except for the position taken by the Department of Justice based on the plaintiff's insolvency. Under the circumstances we do not disagree with the Department's action, since it seems clear that a net judgment in favor of the Government would not have been collectible. If H.R. 6012 is enacted into law the administratrix of the estate of Mr. Rumley will be entitled to receive the sum of $12,840, notwithstanding the court's holding as shown by the enclosed opinion. In other words, if the Congress should conclude to give favorable consideration to the pending bill, we wish to make it clear that such action would constitute a gift of the amount involved. We say this because the rights of the parties were judicially determined by the Court of Claims in the cited opinion. There has been no appeal from the court's holding and thus it has become final and binding on the parties. Accordingly, for the reasons set forth above, we recommend against favorable consideration of the bill. Sincerely yours, JOSEPH CAMPBELL, Comptroller General of the United States. 2 O NELLIE V. LOHRY JUNE 12, 1961.-Committed to the Committee of the Whole House and ordered to be printed Mr. LIBONATI, from the Committee on the Judiciary, submitted the following REPORT [To accompany S. 452] The Committee on the Judiciary to whom was referred the bill (S. 452) for the relief of Nellie V. Lohry, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. PURPOSE The purpose of the bill is to pay the sum of $3,000 to Nellie V. Lohry of Ashland, Nebr., as an additional amount for certain property purchased from the said Nellie V. Lohry and Fred H. Lohry (deceased), pursuant to an option signed by them on November 14, 1941, by the United States in connection with the construction of an Army ordnance plant, such option having been exercised by the United States notwithstanding a previous attempt made on behalf of the said Nellie V. Lohry and the said Fred H. Lohry (deceased) by the project officer acquiring such property to have such option withdrawn on the grounds that it did not adequately reflect the value of the property. STATEMENT The claimant, and her deceased husband, owned a tract of 160 acres of land in Saunders County, Nebr., in 1941. The Department of the Army acquired fee title to more than 17,000 acres of land in Saunders County, including the Lohry tract, to accommodate the Nebraska Ordnance Plant. - A field representative of the Quartermaster Corps appraised the value of the Lohry land and the owners executed an option on November 14, 1941, agreeing to convey the land to the Government at a purchase price of $16,505.50, approximately $102 per acre. November 25, 1941, the option was accepted by the Quartermaster General's Office on behalf of the United States. On Ten days after the option was executed, the project supervisor wrote a letter to the Quartermaster General concerning the Lohry land in which he stated, "the appraisers have made a very careful review of this farm, and after comparing the appraisal of this farm with those of adjoining farms, have decided that the value of this farm should be increased." This letter was received in Washington 1 day after the option agreement had been accepted by the United States. He On November 29, 1941, the chairman of the Saunders County Defense Committee wrote a letter to the Quartermaster General on behalf of the Lohrys in which he stated that the Lohrys had signed an option based on a price of $102 per acre, but that other farms of the same type are being optioned at $145 to $160 per acre. requested that the option agreement be reconsidered. The Office of the Quartermaster General advised the project supervisor that as the option had been accepted on November 25, 1951, it became a binding contract as of that date and that consequently there was authority to return options to landowners for the purpose of increasing the purchase price of land after an agreement as to price has been reached." The land was conveyed to the Government at the option price less certain agreed deductions representing salvage value of minor structures. 66* ** no Information in the files of the Department of the Army indicates that Mrs. Lohry signed the option only because she felt that her husband was going to have a relapse of his mental condition and, as he was in such a highly nervous state, she thought it would be better to get it over with. The Department of the Army admits in its report to Congress that, while the records do not show that a formal reappraisal of the Lohrys' property was made, "it appears quite likely that if the acquisition project supervisor in Nebraska had telephoned Washington, or if the acceptance had been delayed at least 1 day, that a reappraisal would have been completed and an increase in price would have been recommended." The properties surrounding the Lohrys' farm were acquired by direct purchase at a range of $119 to $126 an acre. The report furnished the Senate committee by the Department of the Army evidences the fact that if it were not for the lack of authority in the Department of the Army to increase the purchase price in accordance with the recommendation of the project supervisor, the Lohrys would have received between $2,560 and $3,680 more than was received. The figures result from the difference between the amount actually paid per acre ($103) and the range of prevailing prices paid per acre ($119 to $126). The amount of $3,000 in the bill is therefore a fair and equitable compromise. The committee believes that the peculiar factual situation in this claim warrants and justifies the exercise of compassion on the part of Congress. That this is a case which contains equitable and compassionate aspects is expressly recognized in the Army report. Further, that report reflects that this is a unique case which would not set a precedent in that it shows that the farms surrounding the Lohry farm which were acquired by purchase were acquired at higher figures per acre than that paid the Lohrys. In particular the report stated: *** However it is noted for the committee's information that properties surrounding the Lohrys' farm were acquired by direct purchase at a range of $119 to $126 an acre. The price of those properties acquired by condemnation proceed- It is also pertinent to again observe that this case involves the fact that the project supervisor wrote a letter recommending an increase in the value. It has therefore been concluded that these facts would not be encountered in other cases. The committee has arrived at the conclusion that this is an appropriate case for legislative relief on the premise that its action will not establish a precedent and that it should not be so construed. On this basis it is recommended that the bill be considered favorably. The following is a letter dated July 19, 1960, from the Department of the Army directed to the Senate Committee on the Judiciary relating to an identical bill: Hon. JAMES O. EASTLAND, DEPARTMENT OF THE ARMY, Chairman, Committee on the Judiciary, U.S. Senate. DEAR MR. CHAIRMAN: Reference is made to your request for the views of the Department of the Army with respect to S. 3040, 86th Congress, a bill for the relief of Nellie V. Lohry. This bill provides as follows: "That the Secretary of the Treasury is authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to Nellie V. Lohry of Ashland, Nebr., the sum of $3,000. The payment of such sum shall be in full settlement of all her claims against the United States for payment of an additional amount for certain property purchased from the said Nellie V. Lohry and Fred H. Lohry (deceased), pursuant to an option signed by them on November 14, 1941, by the United States in connection with the construction of an Army ordnance plant, such option having been exercised by the United States notwithstanding a previous attempt made on behalf of the said Nellie V. Lohry and the said Fred H. Lohry (deceased) by the project officer acquiring such property to have such option withdrawn on the grounds that it did not adequately reflect the value of the property. The Department of the Army is opposed to the enactment of the above-mentioned bill. Records of the Department of the Army show that the United States. in 1942 acquired fee title to 17,258 acres of land in Saunders County, Nebr., for the establishment and construction of the Nebraska Ordnance Plant. The beneficiary of S. 3040 and her husband, Fred H. Lohry, were the owners of a 160-acre tract which was part of the proposed plant area. An appraisal was made of the Lohrys' land by a field representative of the Quartermaster Corps, and based on this appraisal an option contract was signed by the Lohrys on November 14, 1941. The net purchase price stated in the contract was $16,505.50. The option agreement was forwarded by the project manager in Nebraska to the War Department in Washington, D.C., on Novem ber 19, 1942, for acceptance and execution on behalf of the United States. On November 25, 1941, a contracting officer in the Office of the Quartermaster General accepted the option on behalf of the United States, and on the same day mailed notice of the acceptance to Mr. Lohry. On November 24, 1941, the acquisition project supervisor wrote a letter concerning the Lohrys' property to the Office of the Quartermaster General in which he stated "* * *the appraisers have made a very careful review of this farm, and after comparing the appraisal of this farm with those on adjoining farms, have decided that the value of this farm should be increased." This letter was received in Washington on November 26, 1941, 1 day after the option agreement had been accepted by the United States. no On November 29, 1941, the chairman of the Saunders County Defense Committee wrote a letter to the Office of the Quartermaster General on behalf of the Lohrys. The letter stated that the Lohrys had signed an option based on the price of $102 an acre, but that other farms of the same type 66* * * are being optioned at $145 to $160 per acre." The chairman of the committee, after discussing the Lohrys' situation, requested that the option agreement be reconsidered. On December 1, 1941, the Office of the Quartermaster General advised the acquisition project supervisor that as the option had been accepted on November 25, 1941, it became a binding contract as of that date and that consequently there was authority to return options to landowners for the purpose of increasing the purchase price of land after an agreement as to price has been reached." On December 6, 1941, the chairman of the Saunders County Defense Committee was likewise advised that the Government had no authority to renegotiate the contract. Accordingly, on December 9, 1941, the Lohrys agreed to go through with the contract as agreed upon. Nevertheless, the chairman of the Saunders County Defense Committee stated that he was told that Mrs. Lohry "signed the option only because she felt that he [Mr. Lohry] was going to have a relapse of his mental condition and as he was in such a highly nervous state she thought it would be better to get it over with." The purchase of the Lohrys' farm was closed by the delivery of a deed from the Lohrys to the United States on January 20, 1942, at which time payment of the purchase price was made. At the time of closing, a further deduction of $12 was agreed upon, representing the salvage value of some minor structures which the Lohrys were allowed to remove. Although records of the Department of the Army do not show that a formal reappraisal of the Lohrys' property was made, it appears quite likely that if the acquisition project supervisor in Nebraska had telephoned Washington, or if the acceptance of the option by the Government had been delayed at least 1 day, that a reappraisal would have been completed and an increase in price would have been recommended. However, as a binding agreement had been entered into, the War Department (now the Department of the Army) was and is without authority to modify the contract for the purpose of increasing the purchase price, in spite of the equitable and compassionate aspects of this case. The necessity for uniformity of contract administration and the continuing validity of Government contracts require that this Department not report favorably on this bill. Due to the fact that a formal reappraisal was not made, this Department is unable to state what the increase in the purchase price would have been if the recommendation of the acquisition project supervisor |