AIR MAIL CONTRACTS-Continued.
be continuity in its service, utilizing on the ex-
tension the facilities already existing on the
line; and to grant an extension to an existing
line flown by A, with the understanding that the
extension was to be immediately sublet to B
who would fly the extension and receive the pay
for it, was the opposite of such purpose; and
such procedure, as used in the instant cases, was
a device for awarding an air mail contract to
B without competitive bidding; and was an eva-
sion of the statute requiring advertisements for
bids.
V. An agreement among operators of air mail lines
to carry out a device by which extensions of
existing lines would be granted and contracts for
such extensions would be sublet to other selected
operators was a combination to avoid competi-
tive bidding for such contracts. Id.
VI. An agreement on the part of operators of air
mail routes, including plaintiffs, to accept "ex-
tensions" of such routes as requested by the
Postmaster General and to sublet such extensions
to nominees of the Postmaster General, so far
as participants in such agreements were con-
cerned, could have no other effect than to give to
selected operators the emoluments of air mail
contracts without giving an opportunity to bid
to competitors who might be willing to do the
work for less, and such agreement was in this
respect in violation of section 3950, R. S., and
contracts of operators who entered into such con-
tracts were under the provisions of the statute
liable to annulment. Id.
VII. In the instant cases the agreement among operators
of air mail routes, including plaintiffs, as to the
allocation of certain air mail routes among them-
selves evolved, as the necessity for such evolution
is shown to have developed, into an understand-
ing that even if the Postmaster General should
be required to advertise for bids covering certain
routes still there would be no competitive bidding
by those, including plaintiffs, who had partic-
ipated in such agreement in conference; and the
evidence adduced shows that such understand-
ing was scrupulously followed by all the principal
participants, including plaintiffs. Id.
AIR MAIL CONTRACTS-Continued.
VIII. In the matter of the establishment of the "southern
transcontinental route," which under the policy
of the then Postmaster General, had been allo-
cated to the Aviation Corporation (not a plaintiff)
in accordance with the conference agreement
to which plaintiffs were parties, it is established
by the evidence adduced that said Aviation Cor-
poration before bids were asked for or submitted
had proceeded to comply with the Postmaster
General's desires that Aviation Corporation "take
care of the equities" of other operators who had
been carrying passengers, and in some cases mail,
between some of the towns along the proposed
route, by buying out or absorbing such operators;
and advertisements for bids for said southern
transcontinental route were withheld until said
Aviation Corporation notified the Post Office De-
partment by telegram that it "was satisfied to
have advertisement published tomorrow"; and
such advertisement was so published; and Avia-
tion Corporation, bidding 100% of the maximum
permissible rate, was the sole bidder.
IX. In the matter of the establishment of "the middle
transcontinental route", it is established by the
evidence adduced that Transcontinental Air
Transport and Western Air Express (both of
which had participated with plaintiffs in a con-
ference called by the Postmaster General, but
neither of which is a party to the instant suits),
had been informed by Postmaster General
Brown, in accordance with the agreement arrived
at in such conference, that if the said two com-
panies would form a combination to operate said
route as a single unit he would give them the air
mail contract; and when such combination was
formed and submitted a bid and a third company,
United Avigation, Inc., not a party to said agree-
ment, also submitted a bid, it is established by
the evidence adduced that representatives of
plaintiffs and of other companies which were
parties to said agreement exerted themselves to
secure the withdrawal of said bid by said United
Avigation, Inc. Id.
X. In the matter of the establishment of an air mail
line from Omaha, Nebraska, to Watertown, South
Dakota, it is established by the evidence adduced
that in response to pressure to establish such
AIR MAIL CONTRACTS-Continued.
line, Postmaster General Brown requested the
plaintiff, Boeing Air Transport, Inc., which was
one of the group having the northern transcon-
tinental route through Omaha, to take this
lateral line as an "extension", on the understand-
ing that the line would be sublet to some oper-
ator to be nominated by the Postmaster General,
and plaintiff, Boeing Air Transport, Inc., so
agreed and did take said Watertown line, thus
obviating advertisement for bids, in violation of
section 3950, Revised Statutes, and consequently
the air mail contracts of said Boeing Air Trans-
port, Inc., became liable to annulment under the
provisions of the statute. Id.
XI. Where on February 9, 1934, the then Postmaster
General, pursuant to the authority vested in him
by section 3950, Revised Statutes, and by virtue
of the general powers of the Postmaster Gen-
eral issued an order (No. 4959) annulling as of
February 19, 1934, the air mail contracts then
held by the plaintiffs; it is held that such annul-
ment did not forfeit air mail pay earned by
plaintiffs under said contracts before such an-
nulment, and not paid to plaintiffs at the time
of such annulment; and plaintiffs are therefore
entitled to recover the amount of such accrued
pay. Id.
XII. It is held upon the evidence adduced that plain-
tiffs in three respects engaged in violation of the
provisions of section 3950, Revised Statutes; that
there were accordingly valid grounds for the
annulment of plaintiffs' air mail route certifi-
cates; and that the several annulments did not
constitute breaches of contract for which plain-
tiffs would be entitled to recover damages. Id.
XIII. It is not established that plaintiffs improperly se-
cured their air mail route certificates, and de-
fendant is therefore not entitled to recover back
all moneys paid plaintiff for carrying the mail in
excess of the reasonable value of services ren-
dered. (Section 3950 R. S.). Id.
XIV. If the contractor against whom the Government
asserted the claim had been the contractor who
was awarded the contract concerning which com-
petitive bidding was suppressed, so that said con-
tractor profited directly from the suppression,
the relation of cause and effect between the tort
AIR MAIL CONTRACTS—Continued.
and the payments received under the contract
might have been such that the defendant would
have been entitled to recover on the theory of
quantum meruit; here, however, two of plain-
tiffs' five routes were awarded before the con-
ference and one during the conference and on
two others the certificates were issued even
earlier.
XV. It is not established that plaintiffs were paid more
for their services than the statute authorized.
Id.
XVI. It is not established that plaintiffs did not comply
with departmental regulations as to mail space
furnished and rates charged therefor. Id.
XVII. The Watres Act (46 Stat. 259) removed the pro-
hibition (45 Stat. 594) against paying a higher
rate under a "route certificate" than the rate
set in the contract superseded by such certifi-
cate. Id.
Contractor, aware of an ambiguity in the govern-
ment's invitation to bid, cannot accept the con-
tract and then claim that the ambiguity shall be
resolved favorably to contractor. Consolidated
Engineering Company, 256.
See also Contracts XXXVI.
AMBIGUOUS DRAWING.
See Contracts XXXVI.
ANNULMENT UNDER SECTION 3950, R. S.
See Air Mail Contracts I, III, VI, XI, XII, XIII.
ANTICIPATION.
See Patents IV, V.
APPEAL.
I. There can be no appeal to the "head of the de-
partment," as provided in Government contract,
where the executive officer of the Commission
which made the contract is also the contracting
officer. Grier-Lowrance, 434.
II. Contractor may not recover for the amount by
which the contract price was reduced nor for
liquidated damages withheld for delay in com-
pletion where contractor protested the terms of
the change order but took no appeal to the head
of the department, as stipulated by the contract.
Diamond (No. 45420), 493.
ARMY OFFICER DISCHARGED.
I. Where plaintiff, a major in the Reserve Corps of
the Army on active duty, after a hearing before
a lawfully constituted board of Army Officers,
which board recommended that he be reclassified,
was notified by a letter signed by the Adjutant
General that "by order of the Secretary of War"
plaintiff was "by direction of the President honor-
ably discharged"; it is held that such discharge
was valid and plaintiff, accordingly, is not
entitled to recover. Seltzer, 554.
II. Under the provisions of Section 11 of the Army
Regulations, the Adjutant General and the higher
authorities are not bound to follow the recom-
mendation of a reclassification board, "and may
take such action as the circumstances of each
case may require, irrespective of the recommenda-
tion, provided such action is within the provi-
sions of these regulations." Id.
III. It appears from the allegations of the petition that
in the instant case plaintiff had a fair hearing
and there is nothing to show that the recommen-
dation of the reclassification board and the final
action taken were dictated by any motive other
than the good of the service. Id.
IV. The President has power as Commander-in-Chief
of the Army and Navy to establish rules and
regulations for the government of the Army; and
the Secretary of War is the regular constitutional
organ of the President for the administration of
the military establishment of the nation; and
rules and orders publicly promulgated through
the Secretary must be treated as the acts of the
President, and, as such, are binding upon all
within the military establishment. United
States v. Eliason, 16 Peters (U. S.) 295, 301.
See also Blake v. United States, 103 U. S. 227,
231, 232; In re Brodie, 128 Fed. 668; Davis v.
Woodring, 111 Fed. (2d) 523; Myers v. United
States, 58 C. Cis. 199, affirmed, 272 U. S. 52, 117;
In re Smith, 23 C. Cls. 452, 458, cited. Runkle v.
United States, 122 U. S. 543, 557, distinguished.
Id.
V. If Congressional authority were necessary to enable
the President to promulgate regulations for the
Army such power is expressly granted by the Act
of March 1, 1875; 18 Stat. 337. Id.
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