Berkeley v. United States

• Decision Date: 06 April 1960
• Docket Number: No. 113-58.,113-58.
• Citation: 276 F.2d 9,149 Ct. Cl. 549
• Parties: F. B. BERKELEY v. UNITED STATES.
• Court: U.S. Claims Court

149 Ct. Cl. 549, 276 F.2d 9 (1960)

F. B. BERKELEY v. UNITED STATES.

No. 113-58.

United States Court of Claims.

April 6, 1960.

Stanford E. Parris, Alexandria, Va., for plaintiff.

Earl L. Huntington, Arlington, Va., with whom was George Cochran Doub, Asst. Atty. Gen., for defendant.

LARAMORE, Judge.

Plaintiff, the alleged holder of a note made by the Peoria Consolidated Manufacturers, Inc., a Government contractor, to Jefferson Trust and Savings Bank of Peoria, Illinois, said contractor's assignee, seeks to recover the amount of $12,822.45 purportedly due from the United States to Peoria Consolidated Manufacturers, Inc.

Defendant has filed motion for summary judgment and in its brief in support thereof contends (1) that plaintiff is not in privity of contract with the United States; (2) plaintiff acquired no rights against the United States by reason of her financial transactions with the contractor's assignee; and (3) plaintiff's petition fails to state a claim against the United States upon which this court may grant relief.

Defendant's first contention simply stated is that plaintiff was not a party to the facilities contract between the United States and Peoria Consolidated. That any dealing regarding the purchase of the machine in question by the contractor from plaintiff was a matter between the contractor and plaintiff.

Defendant's second contention is that the statute prohibits voluntary assignments of any unallowed claim against the United States and prevents a person in plaintiff's position from acquiring any standing to sue the United States on the type of claim here presented.

Defendant's third contention is that plaintiff's claim, if any, is against private parties which cannot be litigated in this court and in any event no liability of the United States exists in this transaction.

We believe in the circumstances of this case as later disclosed that all three defenses asserted by the defendant are valid and are hurdles over which plaintiff cannot lift herself. However, plaintiff in her brief in opposition to defendant's motion for summary judgment takes the position that she was not a party to the contract nor was she an assignee of the contractor. "Her position is based solely on that of a subrogee to the right of the Jefferson Bank who is a valid assignee of the contractor."

In the light of the above position taken by plaintiff, the court will address itself in the main to that contention.

The facts as disclosed by the petition and exhibits are as follows:

Under date of June 30, 1952, defendant, represented by the Ordnance Corps, Department of the Army, entered into a "facilities contract" No. DA-11-022-ORD-1062 with Peoria Consolidated Manufacturers, Inc., under which the contractor was to procure for resale to defendant certain machine tools and facilities required in the performance of a certain supply contract covering cartridge storage cases.

Under the terms of Article II-A.1. of said facilities contract, the contractor was to be reimbursed "for such costs and expenditures as may be approved or ratified by the Contracting Officer." Pursuant to Article II-E.2. of the contract, payments for designated facilities procured by the contractor were to be made by the Government "upon inspection and acceptance in writing by the Contracting Officer" of such facilities, and certification and submission by the Contracting Officer to the Finance Officer of proper vouchers prepared by the contractor.

Thereafter, defendant received a notice dated September 24, 1952, of the assignment by the contractor of all monies due or to become due under said contract to Jefferson Trust & Savings Bank of Peoria, together with a copy of the instrument of assignment, and as of October 1, 1952, defendant acknowledged receipt of said notice.

The contractor prepared Bureau Voucher No. 78 in the amount of $12,822.45 dated June 16, 1953, to the United States for payment to Jefferson Trust & Savings Bank of Peoria as the contractor's assignee. This voucher covered reimbursement to the contractor for the alleged purchase by it of a longitudinal seam welder under the provisions of said facilities contract from the Berkeley Equipment Company. The voucher, together with the seller's invoice and the contractor's receiving report covering this machine, was transmitted to defendant and was reviewed and "provisionally approved" by a Government auditor for the amount stated, "subject to audit prior to final settlement."

By letter dated October 26, 1953, defendant advised the contractor that payment was being temporarily withheld pending investigation of a report that the machine did not give proper performance. By letter dated December 28, 1953, from the attorneys representing Berkeley Equipment Company and plaintiff, defendant was advised, among other things, that at the time of the purchase of the machine Peoria Consolidated Manufacturers, Inc., was unable to pay for it and, therefore, could not present a voucher to the Government for reimbursement; that the assignee bank would not extend further credit to the contractor without cash collateral; and that:

"The Berkeley Company was advised that the only way it could get its money in this matter was to put up cash collateral for the note of the Peoria Consolidated Manufacturers with the Jefferson Trust & Savings Bank, which bank would then advance on this note a sum sufficient to pay the Berkeley Equipment Company, and then the voucher could be sent in for payment, the proceeds of which were assigned as security for the advance. In accordance with the foregoing, F. B. Berkeley

...