138 C. Cls.

WILLIAM IRVING WOODFORD, PETITIONER, v. THE UNITED STATES

[No. 225-55]

[138 C. Cls. 228; 355 U. S. 861]

Pay and allowances; retired Army pay. Petition dismissed.

Plaintiff's petition for writ of certiorari denied by the Supreme Court October 28, 1957.

See Contracts X, XI; Statute of Limitations I, II, III, IV, V.
CONTRACTS.

I. Plaintiffs are employees of the Bureau of Engraving and
Printing who, in 1951 and 1952, entered into an
apprentice training program instituted by the Bureau
and which provided that upon completion of a four-
year course successful applicants could qualify as
journeymen plate printers. The program was dis-
continued in 1953. Plaintiffs allege that their par-
ticipation in the program was on a contractual basis
and that they suffered damages by its discontinuance
in that they had accepted demotions from their
former positions and had lost grade increases and
rights to other training under the Servicemen's Re-
adjustment Act. It is held that the institution of the
program was not a contract or an offer to contract and
that consequently there could be no breach thereof.

138 C. Cls.

CONTRACTS-Continued

Defendant's motion for summary judgment is granted

and the petitions are dismissed.

United States 36

Barnes, et al., 76.

II. Prior to entering into the training program plaintiffs
signed waivers of higher grades and salaries applicable
to them. It is held that this was a voluntary act on
the part of plaintiffs and done solely for the purpose
of dispensing with reduction-in-grade procedures
otherwise required under the statutes and regula-
tions. Id.
Officers

72 (1)

III. Plaintiffs' employment as apprentices was the same as
any other civil service employment. They were free
to drop out of the course at any time and the Govern-
ment could dispense with their services when desired,
provided only that procedural requirements as to
dismissal were complied with. Id.

Officers 69.4

IV. Plaintiffs, on behalf of their subcontractor, seek to
recover for extra work required to repair steel towers
damaged by flood waters in the Central Valley of
California. It is held that while the contracting officer
could have treated the repairs as extra work resulting
from damage which was not the fault of the contractor
or subcontractor he was not obligated to do so. In
the instant case he recognized no liability on the part
of the Government and did not order the repairs in
writing as could have been done under the contract.
There was no breach of the contract by the defendant
and the plaintiffs are not entitled to recover. The
petition is dismissed. Donovan Construction Co., 97.
United States 70 (28)

V. Repairs made necessary by floods are not generally
recognized as extra work for which the Government
would be responsible and there was no provision in
the contract which required the defendant to assume
such responsibility. Id.

Officers 70 (22)

VI. Where a contract is silent as to the liability of the prime
contractor to the subcontractor recovery may be
allowed the contractor on behalf of the subcontractor,
but when it expressly negates such liability there
can be no recovery. Id.

United States 74 (1)

138 C. Cls.

CONTRACTS-Continued

VII. Plaintiff sues as trustee in bankruptcy on certain
termination claims arising out of the bankrupt's con-
tract with the United States Maritime Commission.
The Government alleges that some of the bank-
rupt's claims were fraudulent and invokes the general
forfeiture statute, 28 U. S. C. 2514. It also asserts
counterclaims under 41 U. S. C. 119, which is section
19 of the Contract Settlement Act. Plaintiff defends
against the counterclaims on the ground that they
are barred by the statute of limitations. It is held,
under the authority of Erie Basin Metal Products v.
United States, ante, p. 67, that the counterclaims are
civil penalties and subject to the limitation of 28
U. S. C. 2462. The filing of the counterclaims
within the specified time is a condition precedent to
the right to assert them. The statute is never tolled
by the filing of plaintiff's suit, even though the
counterclaims arise out of the same transaction.
The opinion and dissenting opinion of May 1, 1956,
are vacated and this opinion substituted in their
place. Goggin, Trustee, 279.

Limitation of Actions 35 (1), 129

VIII. Plaintiff's motion for rehearing is denied to the extent
that it requests the striking of defendant's affirmative
defense of forfeiture under the general forfeiture
statute. Subject to the qualification that the
Government may have waived its rights to the extent
that it took over raw materials and work in progress
without payment therefor, with knowledge that the
plaintiff's claim was liable to forfeiture, the statute is
applicable if fraud is proved. Id.
Courts

470

IX. The general forfeiture statute may be invoked against a
trustee in bankruptcy the same as against a receiver
in a state court. A trustee in bankruptcy is not a
purchaser for value. His rights are derivative, and
are not superior to those of the bankrupt. Id.
United States 120

X. Plaintiff sues for reimbursement of certain unemploy-
ment taxes which it was compelled to pay to the State
of Illinois as a result of its operations under a Govern-
ment contract. It alleges that its contract was
terminated and the suit is brought under the Contract
Settlement Act of 1944, which would permit recovery
of interest at 21⁄2 percent per annum on the amount

138 C. Cls.

CONTRACTS-Continued

found to be due. The Government contends that
the contract was completed and not terminated and
that plaintiff in any event executed a binding release
to the Government. It is held that the Contract
Settlement Act is applicable and plaintiff is entitled
to recover the sum of $420,212.46, together with
interest to run from the date of payment by plaintiff
of the individual payments which went to make up
the total. Houdaille Industries, Inc., 301.

United States 74 (16)

XI. The Government's contention that the contract was
simply modified under the Changes article is not
sustained. Under the Joint Terminal Regulations
issued pursuant to the Contract Settlement Act a
reduction in the amount of material called for by a
contract was a method of termination specifically
provided for. Id.

XII. It is held that the release executed by plaintiff is not
valid due to a complete lack of consideration. Docu-
ments executed in connection with the release which
plaintiff had not negotiated or bargained for do not
constitute consideration. Nor does the fact that the
release was executed under corporate seal import
consideration. Under the statute in Michigan, where
plaintiff was domiciled, a seal constitutes only a
rebuttable presumption of consideration, and in the
instant case plaintiff had adequately rebutted the
presumption. Id.

XIII. Plaintiff's expenses were of a kind specifically provided
for in the contract and the right to reimbursement is
not affected by the fact that claim for reimbursement
was not made until after the contract had expired.
It is sufficient that the expenses arose on account of
plaintiff's operation under the contract. Id.
United States 74 (16)

XIV. Plaintiffs were found guilty of violations of the Walsh-
Healey Public Contracts Act and were ineligible for a
period of three years to receive Government con-
tracts. Operating under a different name they
obtained two additional contracts which were fully
performed and for which they were paid $181,580.46.