Byrne Organization, Inc. v. United States

• Decision Date: 01 March 1961
• Docket Number: No. 286-53,287-53.,286-53
• Citation: 287 F.2d 582,152 Ct. Cl. 578
• Parties: BYRNE ORGANIZATION, INC., v. UNITED STATES. GARDNER DISPLAYS OF NEW YORK, INC., v. UNITED STATES.
• Court: U.S. Claims Court

152 Ct. Cl. 578, 287 F.2d 582 (1961)

BYRNE ORGANIZATION, INC., v. UNITED STATES.

GARDNER DISPLAYS OF NEW YORK, INC., v. UNITED STATES.

Nos. 286-53, 287-53.

United States Court of Claims.

March 1, 1961.

Geoffrey Creyke, Jr., Washington, D. C., for plaintiffs; Hudson & Creyke, Washington, D. C., on the briefs.

M. Morton Weinstein, Washington, D. C., with whom was George Cochran Doub, Asst. Atty. Gen., for defendant.

LARAMORE, Judge, delivered the opinion of the court:

This suit was originally two actions brought by plaintiffs to recover a sum of money which plaintiffs allege is due them under separate contracts with defendant's National Capital Sesquicentennial Commission. These actions were consolidated for purposes of trial with the consent of the parties and pursuant to the court's order of October 19, 1955.

Plaintiffs seek a money judgment against the United States basing their claim alternatively upon either the terms of a written unexecuted contract or on the reasonable value of the services rendered under letters of intent dated October 20, 1949. The defendant denies all liability and presents a counterclaim demanding return of all moneys previously paid.

The facts are summarized as follows: Late in 1946, at a Washington citizen's meeting, a plan to sponsor legislation for an appropriate commemoration, in 1950, of the one hundred and fiftieth anniversary of the establishment of the seat of the Federal Government in the District of Columbia, was adopted. As a result of this meeting a committee was organized and they drafted a bill for congressional action. This bill led to the passing of a Joint Resolution by Congress, July 18, 1947, 47 Stat. 396, creating the National Capital Sesquicentennial Commission. Section 4 of this resolution provided that the Commission should select an executive vice chairman and might employ a director. Pursuant to this section, Carter T. Barron was elected executive vice chairman, and became the chief administrative officer of the Commission. At the same time an executive committee was established and authorized to act for the Commission. In June 1948, Mr. Edward Boykin was appointed director. Proposed plans for a sesquicentennial celebration were studied and developed during 1948-1949, and many proposals were considered.

On June 25, 1948, 62 Stat. 1034, Congress appropriated $15,000 for expenses necessary for the Commission to carry out a program of commemoration, and by a Joint Resolution of May 31, 1949, 63 Stat. 140, Congress authorized the Commission to proceed with plans for the celebration. No description of the celebration was specified.

In August 1948, George M. Rowland, vice president of plaintiff (Gardner), after reading an account of the proposed celebration in a New York newspaper, came to Washington, D. C., to see Mr. Boykin with regard to plans for the celebration. He was aware that no funds were available to compensate him for any services he might render, and he was cautioned that he was operating on his own, voluntarily, in soliciting business. Mr. Boykin did tell him that if any of his proposals were acceptable to the Commission, Boykin would recommend that Gardner receive a contract. At the same time Mr. Boykin informed Mr. Rowland that, as director, he had no authority to give Gardner any business.

Director Boykin was in charge of the overall planning for the celebration. These plans were taken up individually, item-by-item, by the executive committee and most of them were approved. These original plans were known as Plan A. The plans that were approved were executed in connection with the sesquicentennial celebration and are not directly involved in this action. Subsequent plans to produce an exposition in the nature of a world's fair, popularly called Freedom Fair, became part of Plan B. It is in connection with Plan B that activities lead to the litigation involved in the instant case.

The general theme of Freedom Fair was conceived by Gardner and it was presented to the Commission on April 15, 1949. However, expert advice with regard to accurate estimates and construction of Freedom Fair was required before any definite plans could be initiated. Minor Hudson, attorney for Gardner, and previously attorney for Byrne, suggested to Mr. Barron that Byrne be contacted for this purpose. Byrne agreed to volunteer services with the hope of eventually receiving a contract for architectural, engineering, and construction management services for Freedom Fair, when and if an adequate appropriation was obtained and the proposed fair became a reality.

On June 27, 1949, Byrne presented Mr. Barron with a budget of estimated cost and income expected from Freedom Fair:

Total Cost $17,888,750. Advanced Requirements $15,112,500. Income $20,875,000. Profit $2,986,250.

A meeting of the commission was then held on June 28, 1949, and these figures were presented. It was the opinion of the majority, including Carter Barron, that such an ambitious and extensive program should not be undertaken until firm commitments from industry were obtained to purchase sufficient exhibit space to make the project feasible. These commitments were never obtained.

Carter Barron was very enthusiastic about plans for Freedom Fair from the initial conception of the idea. He was so anxious to make the plans a reality that he preferred to make such progress as he could without taking up all matters with the commission.

From the very beginning the prospect of making Freedom Fair a reality encountered various legal difficulties, due mainly to the restrictive nature of the enabling legislation which created the Sesquicentennial Commission. Minor Hudson, a registered lobbyist for both plaintiffs and a legal advisor to Carter Barron, suggested that the only possible solution to the problems would be to form a private, non-profit corporation, to plan, build, operate, and enter into the various contracts necessary to put on Freedom Fair. Consideration was given to a plan to have the legislation amended to include authority to form a non-profit corporation. Attorney James Howe, on loan from the White House Staff, advised both Barron and Hudson that the formation of the proposed corporation was contrary to the Government Corporation Control Act, 59 Stat. 597, 31 U.S.C.A. § 841 et seq., unless specifically authorized by Congress. He further advised them that the legislation passed on May 31, 1949, did not include this authority. Further, Mr. Howe strenuously objected to proposed contracts by Byrne and Gardner, as drafted by Minor Hudson. On August 23, 1949, by way of a memorandum addressed to Mr. Boykin, Howe submitted his objections to the proposed contracts, and he orally advised Barron that as executive vice chairman he had no statutory authority to execute such a contract.

In order to obtain an appropriation from Congress both Messrs. Barron and Boykin testified before the House Committee on Appropriations and the Senate Subcommittee of the Committee on Appropriations. Both men made it quite clear that only $600,000 of the requested $3,000,000 would be used for Plan A, and that the remainder would be a "capital prestige loan" to be used only after other income producing sources made the operation of the fair feasible.

On October 14, 1949, 63 Stat. 872, Congress appropriated $3,000,000 for the Commission. Immediately after the appropriation was enacted, Minor Hudson prepared letters of intent addressed to his clients and delivered them to Mr. Barron for signature. On or about November 1, 1949, Carter Barron sent unsigned drafts of the letters of intent to Mr. Boykin to read and return. Boykin discussed the matter with attorney Howe, who advised Boykin the letters of intent were out of order and that there was no authority to execute them. Boykin conferred with Carter Barron on a number of occasions about the letters, informing Barron that he (Barron) had no authority to execute them. These letters remained on Boykin's desk approximately three or four weeks without signatures. Minor Hudson went to Boykin's office and told the secretary that Carter Barron had requested that she retype the letters of intent in final form for his signature. She complied with this request. Later, these letters, dated October 20, 1949, were signed by Carter Barron.

Mr. Barron had neither requested nor received authority from the Commission to issue letters of intent to plaintiffs, nor did he notify the Commission of his intention to give letters of intent to plaintiffs.

In the meantime, on October 19, 1949, Minor Hudson prepared a letter for Carter Barron to the Attorney General for an opinion as to whether the Commission had authority to form a non-profit corporation. He was informed of the Attorney General's negative opinion on November 23, 1949, the same day he had the letters of intent retyped, but suggested a formal answer would not be necessary as he would withdraw the inquiry.

No meetings of the Commission or executive committee were held between June 28, 1949 and November 17, 1949. Shortly after the appropriations bill was passed by the Congress on October 14, 1949 the chairman of the executive committee, Mr. McGarraghy, attempted to arrange an executive committee meeting, but was told by Mr. Boykin that there was nothing to present to the executive committee on which it might take action. However, a meeting of the executive committee was held on November 17, 1949, at which time, Walter Bastian was designated as general counsel for the Commission. Mr. McGarraghy requested at this meeting that a report be prepared for submission at the next meeting of the executive committee, on December 2, 1949, of all commitments made by the director and the executive vice chairman in behalf of the Commission. At the following meeting of the executive committee on December 2, 1949, Mr. Barron's report on commitments was presented with the various letters of intent, including those to plaintiffs, Gardner and...