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Reporter's Statement of the Case financed the Fleet Corporation. Title to the two hulls constructed under the contracts hereinbefore mentioned was taken in the name of the United States.
The parties stipulate that if recovery on the counterclaim is not barred by the statute of limitation and if the United States is entitled to assert the claim for the overpayment made to plaintiff, then there is due and owing the defendant, from plaintiff, on the counterclaim the principal amount of $299,918.27. The plaintiff has waived of record any and all claims that it may have against the United States arising out of the two contracts of June 15 and November 22, 1917.
The Merchant Marine Act, approved June 5, 1920 (41 Stat. 988–990, 993), repealed the shipping fund provision of the Appropriation Act of June 15, 1917, but provided that such repeal should be subject to the following limitations:
(1) All contracts or agreements lawfully entered into before the passage of this Act under any such Act or part of Act shall be assumed and carried out by the United States Shipping Board, * * *
(2) All rights, interests, or remedies accruing or to accrue as a result of any such contract or agreement or of any action taken in pursuance of any such Act or parts of Acts shall be in all respects as valid, and may be exercised and enforced in like manner, subject to the provisions of Subdivision (c) of this section, as if this Act had not been passed. *'* *
(c) As soon as practicable after the passage of this Act the board shall adjust, settle, and liquidate all matters arising out of or incident to the exercise by or through the President of any of the powers or duties conferred or imposed upon the President by any such Act or parts of Acts; and for this purpose the board, instead of the President, shall have and exercise any of such powers and duties relating to the determination and payment of just compensation : Provided, That any person dissatisfied with any decision of the board shall have the same right to sue the United States as he would have had if the decision had been made by the President of the United States under the Acts hereby repealed. * * *
SEC. 4. That all vessels and other property or interests of whatsoever kind, including vessels or property in course of construction or contracted for, acquired by the President through any agencies whatsoever in pur
Opinion of the Court suance of authority conferred by the Acts or parts of Acts repealed by Section 2 of this Act, *
are hereby transferred to the board. * *
SEC. 13. That the board is further authorized to sell all property other than vessels transferred to it under section 4 upon such terms and conditions as the board may determine and prescribe.
SEC. 14. That the net proceeds derived by the board prior to July 1, 1921, from any activities authorized by this Act, or by the “Shipping Act, 1916,” or by the Acts specified in Section 2 of this Act, * * * shall be covered into the Treasury of the United States to the credit of the board and may be expended by it, within the limits of the amounts heretofore or hereafter authorized, for the construction, requisitioning, or purchasing of vessels. After July 1, 1921, such net proceeds * * * shall be covered into the Treasury of
the United States as miscellaneous receipts. * On February 28, 1922, the Shipping Board Emergency Fleet Corporation stated an account with reference to the cost of construction of the two hulls in accordance with the two contracts which account showed a balance of $488,310.24 due from plaintiff. The account, as so stated, and a demand for payment by plaintiff of the balance shown to be due, which balance included the amount here stipulated to be due, were duly delivered to plaintiff on or before March 18, 1922. Subsequent demands for payment were made by the General Counsel of the United States Shipping Board, and acting also as special counsel for the United States Shipping Board Emergency Fleet Corporation. No payment thereon was ever made by plaintiff.
The court decided, as a conclusion of law, that plaintiff was not entitled to recover.
The court further decided, as a conclusion of law, that the defendant on its counterclaim was entitled to recover the principal sum of $299,918.27 with interest thereon at six percent per annum from March 18, 1922, to April 1, 1940, in the amount of $324,561.62, or a total amount of $624,479.89.
LITTLETON, Judge, delivered the opinion of the court:
Plaintiff claims that on August 9, 1921, the United States through the Shipping Board unconditionally accepted its Opinion of the Court bid for 268 wooden ships with machinery, equipment, spare parts, and supplies, as amended by its bid of August 5, 1921, and that such bid and such alleged actions constituted a legal and binding contract between the parties which it is alleged the defendant breached between August 9 and September 27, 1921, by refusing to deliver the ships in accordance with the terms and conditions of the bid as amended. Whether there was a legal and binding contract between the parties constitutes the first and principal question in plaintiff's case.
Plaintiff computes its claim as follows: Alleged fair market value of
100 ships for operation at $13,000 each.------------- $1,300,000 168 ships for dismantling, $10,500 each.-
- 1, 764, 000
168/200ths of $900,000, the alleged fair market value of
equipment, spare parts, and supplies belonging to the ships stored for safekeeping when the ships were laid
up and not put on the ships to be dismantled-Expenses for attorneys, engineers, officers' expense, and
expenses of making preparations to perform incurred between August 9 and September 27, 1921_-Interest on $10,000 from September 27, 1921.--.
10,000 10, 000
------- $562, 800
leged market value for operation of ---- 78, 902
3, 198, 298 The essential facts as established by the record are set forth in the findings. Plaintiff bases its claim for the amount above stated solely on the contention that the Shipping Board on August 9, 1921, adopted the resolution embodied in the document furnished to plaintiff by the secretary of the Shipping Board on August 12, 1921, which is set forth in finding 4, and that its bid and this resolution, which plaintiff contends was an unconditional acceptance by the board, constituted a legal and binding contract. We are of opinion that this contention is not sustained by the
Opinion of the Court record. As a general rule when a written offer on specific terms and conditions is made and the terms and conditions proposed therein are accepted without further conditions, and, upon the basis of such action, nothing further remains to be done, except the signing of a formal contract embodying such terms and conditions, there exists a valid contract between the parties in the absence of a statute or regulation imposing further requirements. It is further the general rule that if parties dealing with each other with the view of arriving at a contract intend that their negotiations shall be finally reduced to writing and signed by them as evidence of the terms and conditions of the agreement, there exists no binding contract until the written contract setting forth such terms and conditions is executed. The fact that, as in the case at bar, a representative of the government or the governmental agency mistakenly and without authority incorrectly advises the other party, or the bidder, that its proposition or bid has been accepted by the government, or such governmental contracting agency, does not bind the government, and such action gives the other party no rights in the premises to any greater degree than exist upon the basis of the action which was actually taken by the agency or board possessing the authority to fix the terms and conditions upon which the government shall be bound. Cases to this effect are uniform and the proposition mentioned is so well established as not to require citation of authority. It is also an established proposition that estoppel cannot be set up against the government on the basis of an unauthorized representation or act of an officer or employee who is without authority in his individual capacity to bind the government.
The Shipping Board, which was the agency authorized by statute to act for the United States in the sale of the wooden fleet at private or public competitive sale, was composed of seven members. The evidence clearly shows that after the bids were opened on July 30, 1921, the board without acting upon any of the bids or upon the general question of the sale of ships or the terms and conditions upon which they would be sold directed one of the commissioners of the board and the assistant to the chairman of the board to Opinion of the Court investigate and consider the terms and conditions of the bids in connection with the information and data disclosed by the records of the Emergency Fleet Corporation, all of which were in possession of the board. The Shipping Board, as such, did not consider or take any action with reference to the general question as to the sale of the wooden ships or with reference to plaintiff's bid until August 9, 1921. In the meantime the plaintiff, who was the highest bidder for the largest number of ships, submitted to the Board on August 5, 1921, an amended bid in which certain of the terms and conditions of the original bid were modified. At a meeting of the board, at which six commissioners were present, the question of sale of the wooden ships in connection with plaintiff's bid was taken up by the board for consideration. At this meeting, as the record discloses, the outstanding questions before the board, and which it then took under consideration, were, in substance: first, should the board at that time authorize and proceed with the sale of the wooden fleet; second, should the board then proceed to take definite and final action to bind the United States on a sale of the fleet; and, third, should it fix and finally act upon the terms and conditions upon which a stated number of ships and/or equipment would be sold to plaintiff under its bid. There was a great deal of discussion with reference to these matters by the board. The meeting of the board at which these questions were considered and discussed lasted from 9 to 11:15 a. m., and from 1:15 to 4:20 p. m. During the course of the general discussion with reference to these matters it was suggested by a member of the board that a resolution indicating the action which the board desired to take be prepared; however, the board did not direct that this be done and the discussion continued. Commissioner Plummer was not always present in the board room; he was frequently called out, because of other duties, and he was absent from the meeting during much of the discussion of matters by the board. Later, during the meeting, Commissioner Plummer drafted a proposed resolution substantially in accordance with the document subsequently prepared and delivered to plaintiff on August 12, 1921, as set forth in finding 4, but