Opinion of the Court

certain overpayments were made to them under their contract of 1923 to the amount of $276.06.

The court decided that plaintiffs were entitled to recover $11,387.72, made up of $11,745.18 (Finding III) and $450.32 (Finding VI), less $276.06 (Finding VI) and $531.72 ( Finding VI).

CAMPBELL, Chief Justice, delivered the opinion of the

court:

A contract was made June 26, 1923, between the United States Veterans' Bureau and George H. Michel and others, partners under the firm name of the Philadelphia Mechanical and Electrical Schools and Shops, of Philadelphia, Pennsylvania, by which the latter agreed to furnish tuition and supplies to persons entitled thereto under the vocational rehabilitation act. The services were rendered and no question is raised as to the amount due the plaintiffs if that contract alone is to be considered. It appears, however, that prior to this contract there had been another one involving the same character of service, in which the contracting party was a corporation of the same name that plaintiffs' partnership has, and this corporation's contract was acquired by the plaintiffs in March, 1923, by assignment. By its terms it would expire on June 30, 1923. The services called for by this corporation contract were after the assignment rendered by the plaintiffs and payment was made for these services except a small balance of about $450 yet due. It developed that at the time of the assignment the Government had paid to the corporation a sum of $531.72 in excess of the amount properly due under the terms of the contract, and the question is whether this amount is deductible from the sum otherwise due the plaintiffs, a part of which sum is the small balance above mentioned, about $450.

The plaintiffs are claiming the benefits of the corporation's contract from the date of its assignment to them until the time of its expiration. When they took it over the corporation had been overpaid, and in a final settlement the corporation would have to answer for this overpayment. The Government could accordingly have withheld the amount out of

Syllabus

any moneys accruing or payable to the corporation. The plaintiffs as assignees took the contract subject to the equities existing between the corporation and the Government and growing out of the contract. See Baker v. Wood, 157 U. S. 212-216. They could not acquire greater rights than their assignor had. See Campbell v. Dist. Col., 117 U. S. 615. The Government has not recognized the assignment as releasing the corporation from anything, but has made payments from time to time, at least nominally to the corporation, which the plaintiffs have received besides the small balance above mentioned arising out of services rendered by plaintiffs since the assignment. To the extent of the moneys thus arising out of the corporation's contract which the plaintiff's have received they stand just where the corporation itself would have stood at the end of the contract period. We think, therefore, the plaintiffs must be held liable for the $531.72, but they will be entitled to receive, in addition to the amount due upon their own contract, the said balance of $450.32. Judgment should be rendered accordingly for the plaintiffs. And it is so ordered.

GRAHAM, Judge; HAY, Judge; DOWNEY, Judge; and BOOTH, Judge, concur.

METAL PRODUCTS COMPANY v. THE UNITED STATES1

[No. 34685]

On the Proofs

Contract; breach.-Notice that no more work or material under a contract will be accepted is a breach of said contract where the termination clause provides that the contractor shall complete the manufacture of articles then in process.

Same; measure of damages; deduction for release from trouble, care, risk, and responsibility. See Broadbent Portable Laundry case, 56 C. Cls. 128.

'Appealed.

Reporter's Statement of the Case

Same; supplemental; additional expense.-Where after execution of the original contract it becomes necessary to install additional facilities to meet unanticipated requirements by the Government, and a supplemental contract is entered into again stipulating the original contract price, plaintiff can not recover the expense of such installation.

Same; proxy-signed.-A person duly authorized to do so may sign the name of an authorized contracting officer to a contract with the Government.

The Reporter's statement of the case:

Messrs. John S. Flannery and Thomas Patterson for the plaintiff. McKenney & Flannery and Patterson, Crawford, Miller & Arensberg were on the briefs.

Mr. George H. Foster, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant. Messrs. W. L. Cole, Arthur Cobb, Roscoe R. Koch, and Charles M. Nash were on the briefs.

Decided May 21, 1923. Motion for new trial overruled April 20, 1925. Previously reported, 60 C. Cls. 1. Reported again to correct error in list of attorneys participating.

The following are the facts as found by the court:

I. The plaintiff is a corporation of the State of Pennsylvania, having its principal office and place of business at Beaver, in that State, and at and before the time here involved was engaged in the business of manufacturing steel products. During the years 1916 and 1917 it had been engaged in manufacturing 3-inch high-explosive shells for the Russian Government and during the years 1917 and 1918 in the fabrication of 4.7-inch shrapnel cases for the Frankfort Arsenal, under a contract with the United States. In preparation for the performance of the contract here involved it made such necessary additions to its plant as to sufficiently equip it for the manufacture of 725 completed shrapnel per day.

II. After preliminary negotiations by way of correspondence, proposal, procurement order, and acceptance, the plaintiff entered into a contract with the United States represented in the making and execution thereof by Samuel McRoberts, colonel, Ordnance Department, National Army,

Reporter's Statement of the Case

therein called the contracting officer, acting by and under authority of the Chief of Ordnance, and under the direction of the Secretary of War, by which the plaintiff agreed to manufacture, complete, 150,000 4.7-inch shrapnel, in accordance with specifications attached to and made a part of the contract, for a fixed price of $6.90 for each complete shrapnel unit delivered and accepted and $7.06 for each such completed unit for which the plaintiff was required to furnish shipping boxes, with obligations imposed upon the United States with reference to the furnishing of component parts. A copy of said contract which was dated January 1, 1918, but which was not actually executed until March 4, 1918, together with the specifications, is attached to plaintiff's petition, marked "Exhibit A," and is made a part hereof by reference. Said contract was numbered "G 1793-981 A."

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III. Thereafter, for reasons stated therein, relating particularly to delays on the part of the United States in furnishing certain component parts, and consequent inability to make payments to the contractor on an equitable basis, a supplemental contract, dated August 2, 1918, and executed on the part of the United States by Charles N. Black, lieutenant colonel, Ordnance Department, National Army, acting by direction of the Chief of Ordnance, United States Army, and under the authority of the Secretary of War, was entered into. A copy of said supplemental contract marked "Exhibit B" is attached to plaintiff's petition as a part thereof and is made a part hereof by reference.

IV. When the original contract was executed the specifications attached to and made a part thereof, in their provisions with reference to heat treatment, prescribed certain tests as to physical properties, but omitted the prescribed physical properties required. The omission was called to the attention of proper representatives of the United States by the plaintiff, resulting by correspondence in a statement by the defendant as to what the requirements would be, which were objected to by the plaintiff as more rigorous than those which had theretofore been applied, and which it was understood by the plaintiff would be applied to this contract, and after some concessions the particular require

Reporter's Statement of the Case

ments in this respect were finally determined as between the parties, in the month of July. The additional requirements with reference to heat-treatment processes over those which it was understood at the time of the execution of the contract would be applied necessitated the addition to its plant by the plaintiff of certain other heat-treating facilities, which it installed at an expense to it of $16,302.52, and which additional facilities were of no value to the plaintiff except for the purposes of this contract.

V. After the signing of the armistice, the plaintiff, in common with other contractors, was notified" that no abrupt or drastic action is contemplated in dealing with ordnance contractors under the changed military situation. The whole situation is having consideration and will be dealt with carefully," and thereafter various instructions were sent out to ordnance contractors with reference to cessation of overtime and Sunday work and like matters. Under date of December 12, 1918, a communication, signed by the contracting officer at Pittsburgh district ordnance office, was sent to the plaintiff, reading as follows:

"METAL PRODUCTS COMPANY,

"Beaver, Pennsylvania.

"GENTLEMEN: 1. By direction of the Chief of Ordnance you are requested in the public interest immediately to suspend further operation under your contract with the United States, War-Ord.-No. G1793-981A, except such operations as may be necessary to complete material now in process in your plant, but in no case shall work continue beyond January 31, 1919, and to order no further materials or facilities and, except in cases of proved necessity, enter into no further subcontracts, make no further commitments, and incur no further expenses in connection with the performance of said contract.

"2. That this request is made with a view to the negotiation of a supplemental contract providing for the concellation, settlement, and adjustment of your existing contract in a manner which will permit of a more prompt settlement and payment than will be practicable under the terms of said existing contract.

"3. Please acknowledge receipt of this notice immediately and indicate your decision as to compliance with or rejec