United States v. George A. Fuller Co., Inc.

• Decision Date: 07 November 1923
• Docket Number: 2485.
• Citation: 296 F. 178
• Parties: UNITED STATES v. GEORGE A. FULLER CO., Inc.
• Court: U.S. District Court — District of Kansas

296 F. 178

UNITED STATES v. GEORGE A. FULLER CO., Inc.

No. 2485.

United States District Court, D. Kansas, First Division.

November 7, 1923

Al. F Williams, U.S. Atty., of Topeka, Kan., and Roscoe C.McCulloch, William T. Chantland, and Ralph E. Moody, Sp Asst. Attys. Gen., for the United States.

Weymouth Kirkland and Robert N. Golding, both of Chicago, Ill., and John S. Dean, of Topeka, Kan., for defendant.

POLLOCK District Judge.

This action arises over the construction of what is commonly known as Camp Funston Cantonment, at Ft. Riley, this state. As brought, it is an action at law to recover a very large sum of money alleged to be the difference between what the construction of this cantonment actually cost the government and the fair and reasonable cost of the same. To this petition defendant has interposed a motion to make definite and certain, a motion to strike out from the pleading, and a demurrer thereto.

The demurrer was interposed on the theory, as the contract requires an inspection of the work done as it proceeded and interval payments of the cost of construction, together with a portion of the consideration paid defendant for its services agreed to be paid under the contract, on what is known as the cost plus plan for the doing of the work, and as it would be assumed the officials of the government charged with the performance of these duties had done their full duty, and the work after inspection made and acceptance thereof by the government, and full payment therefor, that a settlement in law had resulted which would conclude the government, unless and until the same was impeached in a court of equity for actual fraud, or such gross mistakes of the representatives of the government as would imply fraud. However, as the petition alleges, 'from the 28th day of June, 1917, when the defendant entered upon the execution of said contract, until on or about the 1st day of November 1917, when it ceased its operations under said contract without having completed the same,' etc., I am of the opinion the present petition contains sufficient to escape demurrer.

Coming now to a consideration of the motions interposed, which will be considered together, it may be said: The theory of the pleader in drafting the petition was that the plus cost contract entered into between the parties under which the camp was constructed created a confidential trust relation somewhat resembling that of guardian and ward. Therefore any departure from the strictest care in protecting the interests of the government in all things done under the contract was a breach of the same, because a breach of the confidence reposed in the defendant. A consideration of the contract itself and the rules of law applicable thereto, however induces my mind to the conclusion any such contention of the government in this case is untenable. While it is true defendant knew the urgent necessity of the government for the completed use of the camp and the consequent haste in performance required, yet this very fact renders the measure of damages as pleaded and relied upon by the government, to wit, the difference in cost between the actual sum paid and the fair and reasonable cost of construction under ordinary circumstances, of very doubtful accuracy in this case, for, it must be presumed, I think, to construct a very large property, such as is involved in this controversy, with great haste and dispatch, must be far more expensive than if the work could have been proceeded with more slowly, deliberately and carefully.

It has been firmly held, when the sovereign or any branch thereof, national or state, enters into a contract with a private individual, natural or corporate, it does so in its private or business capacity, and not by virtue of its sovereign power, and in so doing submits itself to the same rules of law that under like circumstances govern and control the individual. Cooke v. United States, 91 U.S. 389, 23 L.Ed. 237; Hollerbach v. United States, 233 U.S. 165, 34 Sup.Ct. 553, 58 L.Ed. 898. In this latter case it is said by Mr. Justice Day, delivering the OPINION:

'A government contract should be interpreted as are contracts between individuals, with a view to ascertaining the intention of the parties and to give it effect accordingly, if that can be done consistently with the terms of the instrument.'

See, also, United States v. North American Construction Co. (C.C.) 74 F. 145; Mann v. United States, 3 Ct.Cl. 404.

As the contract here involved was entered into in the exercise of the business powers of the government, and not in the exercise of its sovereign or governmental powers with an individual, it follows no special trust was imposed more in behalf of the government in the...