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A claim was submitted to the General Accounting Office by the contractor for the cost of the additional lumber which he was required to purchase, but the claim was disallowed. In the decision rendered by the Comptroller General it is stated that the lumber had been obtained from salvaged Army training camps and was rough lumber; that the evidence is conflicting as to just how “rough" the lumber may have been; that the contractor submitted affidavits of certain of its workmen to the effect that a sawmill had to be installed to resize the lumber, and that when it had been resized it was insufficient in quantity and that building paper had to be placed over the nail holes to prevent the concrete from running out.

Because of the conflicting evidence in this case, your committee feel that claimant should be afforded an opportunity to present the facts to the District Court for the Western District of Kentucky in order that the matter may be finally determined. It is accordingly recommended that the bill do pass without amendment.

The letter of the Acting Comptroller General is appended hereto and made a part of this report.

A-4296.

GENERAL ACCOUNTING OFFICE,

Washington, March 11, 1940. Hon. EDWARD R. BURKE,

Chairman, Committee on Claims, United States Senate. MY DEAR MR. CHAIRMAN: Further reference is made to your letter of February 26, 1940, acknowledged February 27, requesting a report on S. 2833, Seventysixth Congress, first session, entitled "A bill for the relief of Theodore R. Troendie and the Dawson Springs Construction Co.

The bill provides: "That the Secretary of the Treasury is hereby authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to Theodore R. Troendle for the Dawson Springs Construction Company, the sum of $6,019.34, in full settlement of his claim growing out of the construction of the Dawson Springs Hospital hy the Dawson Springs Construction Company."

Under the terms of a contract dated February 2, 1920, the Dawson Springs Construction Co. agreed to furnish (with certain exceptions) all labor and materials required for construction of eight buildings for the United States Public Health Service Sanatorium at Dawson Springs, Ky. Among the materials excepted from the contract requirements was a quantity of rough lumber which the Government agreed to supply to the contractor for use in construction of concrete forms, scaffolding, etc.

The record indicates that the Government furnished the required lumber in the quantities and at the times requested by the contractor. The contractor alleged, however, that a large portion of the lumber was unsuited for the purposes for which it was required, and that it was obliged to purchase additional lumber at a cost of $6,019.54 (substantially the amount stated in the bill) in order to complete the contract work. Later, the contractor increased its claim for this item to $7,166.84,

The claim of the Dawson Springs Construction Co. for $7,166.84 was considered in a decision, A-4296, rendered to said company September 13, 1924, by Comptroller General McCarl, in which the claim was disallowed for reasons therein set forth as follows:

“The records show clearly that every requisition of the contractor for additional rough lumber was promptly supplied by the United States, and in March 1921, the contractor notified the superintending architect that the total amount of rough lumber required had been delivered by the United States at the site of the work. The lumber had been obtained from salvaged Army training camps and was rough lumber. The evidence is conflicting as to just how frough the lumber may have been. The contractor has submitted affidavits of certain of its workmen to the effect that a sawmill had to be installed to resize the lumber and that when it had been resized it was insufficient in quantity and that building paper had to be placed over the nail holes to prevent the concrete from running out. The Supervising Architect invites attention to the fact that the contractor

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was engaged in the construction of the road and bridge approaches under other contracts which did not require the United States to furnish lumber; that lumber the contractor alleges to have purchased could have been used on the bridge or construction work at the hospital, where the contractor was required to furnish the lumber; that allowances were made in all shipments for the split ends of planks; that the United States furnished all rough lumber requested by the contractor, and that there was no agreement between him and the contractor for the furnishing by the contractor of extra lumber for concrete forms and scaffolding.

“The contract provided, lines 29 to 37, inclusive, that

“ 'It is further covenanted and agreed that no claim for compensation for any extra materials or work is to be made or allowed, unless the same be specifically agreed upon in writing or directed in writing by the party of the first part; and that no addition to, omission from, or changes in the work or material herein specifically provided for shall make void or affect the other provisions or covenants of this contract, but the difference in the cost thereby occasioned, as the case may be, shall be added to or deducted from the amount of the contract; and in the absence of an express agreement or provision to the contrary, no addition to, or omission from, or changes in the work or material herein specifically provided for shall be construed to extend the time fixed herein for the final completion of the work.'

“The obligation of the United States was to furnish the rough lumber. The contractor reported in March 1921 that the rough lumber theretofore delivered was sufficient for its requirements. There was neither agreement in writing nor direction in writing for the furnishing by the contractor of extra lumber. It was agreed in the contract that in the absence of such an agreement or direction in writing ‘no claim for compensation for any extra materials or work is to be made or allowed.' This provision is umambiguous and the contractor is not entitled to the reimbursement now claimed. (See Plumley v. United States (226 U. S., 545); Sanford-Brooks Company v. United States (58 Ct. Cl. 158).) This view of the matter renders it unnecessary to consider the effect of acceptance of final settlement of the contract or the disputed questions of fact as to whether the lumber furnished by the United States was sufficient in quantity or quality for the rough work of scaffolding or concrete forms (but see 2 Comp. Dec. 242; 3 Comp. Gen. 51; Ripley v. United States, 223 U. S. 695).

“The claim must be, and is, disallowed."

By letter of December 30, 1929, from the contractor's attorney, further consideration of the claim was requested. However, neither the letter of December 30, 1929, nor other letters subsequently received from the contractor's attorney contained any new or material evidence, and the decision denying payment of the claim was affirmed in letters or January 11, January 28, and February 14, 1930, to the contractor, on the basis of the matters set forth in the above-quoted portion of the decision of September 13, 1924.

Since no suit was brought by the claimant either in a district court or in the Court of Claims within 6 years after accrual of the right for which claim is made, such a suit apparently would be barred by sections 24 and 156 of the Judicial Code, as amended (28 U. S. C., sec. 41 (20) and 262).

In view of the foregoing, this Office has no recommendation to make in the matter. Sincerely yours,

R. N. ELLIOTT, Acting Comptroller General of the United States.

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SENATE

76TH CONGRESS

3d Session

REPORT No. 1777

M. SELLER & CO.

JUNE 6 (legislative day, May 28), 1940.-Ordered to be printed

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Mr. SchwARTZ, from the Committee on Claims, submitted the

following

REPORT

[To accompany S. 2171)

The Committee on Claims, to whom was referred the bill (S. 2171) for the relief of M. Seller & Co., having considered the same, report favorably thereon with the recommendation that the bill do pass with the following amendment:

Strike out all after the enacting clause and insert in lieu thereof the following: That the Secretary of the Treasury be, and he is hereby, authorized and directed to refund to M. Seller and Company, Portland, Oregon, certain penalties in the amount of $5,210.36, paid to the collectors of customs at Portland, Oregon, and Seattle, Washington, on April 28, 1927. Said penalties were incurred under the customs laws in the entry of certain merchandise from Germany at a less value than that returned upon final appraisement, such entry having been made without any intention to defraud the revenues of the United States or to conceal or misrepresent the facts of the case or to deceive the appraiser as to the value of the merchandise: Provided, That no part of the amount appropriated in this Act in excess of 10 per centum thereof shall be paid or delivered to or received by any agent or attorney on account of services rendered in connection with this claim, and the same shall be unlawful, any contract to the contrary notwithstanding. Any person violating the provisions of this Act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding $1,000.

The bill, as amended, authorizes and directs the Secretary of the Treasury to refund to M. Seller & Co., Portland, Oreg., certain penalties in the amount of $5,210.36, paid to the collectors of customs at Portland, Oreg., and Seattle, Wash., on April 28, 1927.

In the first session of the Seventieth Congress a similar bill for relief of claimant, S. 2304, was favorably reported to the Senate from the Committee on Claims (S. Rept. No. 975, May 1, 1928, 70th Cong., 1st sess.).

In June 1920 claimant company purchased in Germany certain lots of decorated chinaware for importation and sale within the United States. Claimant previously had made several entries of goods of this

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character under paragraph 1, section 3, of the Tariff Act of October 3, 1913 (38 Stat. 184), which provided:

That the owner, consignee, or agent of any imported merchandise may, at the time when he shall make entry of such merchandise, but not after either the invoice or the merchandise has come under the observation of the appraiser, make such addition in the entry to or such deduction from the cost or value given in the invoice or pro forma invoice or statement in form of an invoice, which he shall produce with his entry, as in his opinion may raise or lower the same to the actual market value or wholesale price of such merchandise at the time of exportation to the United States, in the principal markets of the country from which the same has been imported; and the collector within whose district any merchandise may be imported or entered, whether the same has been actually purchased or procured otherwise than by purchase, shall cause the actual market value or wholesale price of such merchandise to be appraised; and if the appraised value of any article of imported merchandise subject to an ad valorem duty or to a duty based upon or regulated in any manner by the value thereof shall exceed the value declared in the entry, there shall be levied, collected, and paid, an additional duty of 1 percent of the total appraised value thereof for each 1 percent that such appraised value exceeds the value declared in the entry.

Such additional duties shall not be construed to be penal, and shali not be remitted nor payment thereof in any way avoided except in cases arising from a manifest clerical error, nor shall they be refunded in case of exportation of the merchandise, or on any other account, nor shall they be subject to the benefit of drawback. Under this provision claimant had made entry of similar goods at values varying either above or below the invoice values.

In the summer of 1920, following purchase of the goods here involved, claimant inquired at the Customs Division of the Treasury Department in Washington to determine whether by law or regulations that method of making entry had been altered. Claimant was advised the entry value might be based upon the market value in the country of origin.

The Emergency Tariff Act of May 27, 1921 (42 Stat. 16), provided in section 301:

That whenever merchandise which is imported into the United States is subject to an ad valorem rate of duty, or a duty based upon or regulated in any way upon the value thereof, duty shall in no case be assessed on a value less than the export value of such merchandise.

Section 303a provided:

That wherever in Title I of this Act, or in the Tariff Act of 1913, as amended, or in any law of the United States in existence at the time of the enactment of this Act relative to the appraisement of imported merchandise (except sections 2874, 2976, and 3016 of the Revised Statutes, and section 801 of the Revenue Act of 1916), reference is made to the value of imported merchandise (irrespective of the particular phraseology used and irrespective of whether or not such phraseology is limited or qualified by words referring to country or port of exportation or principal markets), such reference shall, in respect to all merchandise imported on or after the day this Act takes effect, be construed to refer, except as provided in subdivision (b) to actual market value as defined by the law in existence at the time of the enactment of this Act, or to export value as defined by section 302 of this Act, whichever is higher. Thus, under the 1921 act entry value of imports had to be based upon their export prices and could not be based upon the market value of the goods in the export countries at the time of exportation. However, the penalties applicable when the appraised value of imports exceeded the value declared in the entry, and the provision such penalties could not be remitted or avoided except in cases arising from manifest clerical error, were not affected by the 1921 act.

Merchandise here involved arrived in this country and was entered by claimant between July 8 and August 17, 1921. Entry papers filed

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