REDUCTION IN FORCE.
Reinstatement.
Annual leave credit.
Court of Claims-jurisdiction.
The Court of Claims does not have jurisdiction to order an employ- ing agency to recredit an employee's leave account with annual leave where, upon his reinstatement, his administrative back-pay payment was reduced by the lump-sum annual leave payment made to him upon his wrongful separation. However, if leave is ultimately denied him, an action will lie. Pechette, 189.
Annual leave payment.
Computation of.
Where a Government employee is restored to employment after it has been determined that his removal through reduction in force was improper, he is entitled to receive his back salary for the entire period of his separation, less the lump-sum annual leave payment he received when separated. Upon his repayment of the lump-sum annual leave payment, the employee is entitled to have his leave account recredited. Pechette, 189.
Back pay.
Computation of.
A Government employee who has been improperly reduced in force and later reinstated is entitled to receive the pay he would have earned had he been working during the entire period of wrongful separation, and the employing agency was not justified in paying his salary for only part of the time and in giving him a lump-sum payment representing annual leave for the balance of the time. Pechette, 189.
A Government employee who was illegally separated from his posi- tion by reduction in force and was subsequently reinstated to a position carrying a lower grade than the one from which he was separated, is entitled to receive back pay for the period of separation at the rate applicable to the position to which he was reinstated rather than the higher pay of the position from which he was separated. He is not entitled to any statutory or in-grade pay increases which he would have received had he not been separated. (Act of June 10, 1948, 5 U.S.C. (1952) § 652(b)(3).) Pechette, 189. United States 39 (8)
CIVILIAN PAY-Continued
REDUCTION IN GRADE.
Civil Service Commission decision.
In the absence of procedural error or arbitrary and capricious action, the decision of the Civil Service Commission adverse to an employee claiming illegal reduction in grade is final and will not be disturbed by the Court of Claims. Thompson, 200. Officers
Disciplinary reduction in grade.
Notice of proposed adverse action.
Where a Government employee has received a notice that it is pro- posed to dismiss him for unsatisfactory work and it is later decided by the employing agency to take less severe action, i.e., demotion, for the same reasons as those set forth in the notice of proposed dismissal, civil service regulations issued pursuant to the Veterans' Preference Act, 58 Stat. 390, provide that no new notice is required and the less severe action may be taken on the basis of the original notice. 5 C.F.R. chap. 22; Federal Personnel Manual, chap. S1, p. S1-30. Collins, 382.
CIVIL SERVICE ACT OF 1883. See Civilian Pay.
CONGRESSIONAL REFERENCE.
EQUITABLE CLAIMS.
Failure to award contract.
Where the Government has induced a contractor to incur expense in making surveys and planning a project which both parties in- tended should ripen into a contract but the Government ultimately decided that it did not wish the project completed, the contractor is at least equitably entitled to relief at the hands of Congress to the extent of its out-of-pocket expenses. Geo. D. Emery Co., 71. United States 69 (6)
In determining, in a congressional reference case, whether the claimant has an equitable claim, the court is applying that concept in its broad moral sense so that any recovery on that basis amounts to a gratuity warranted by conscience rather than by law. Gay Street Corporation v. United States, 130 C. Cls. 341. Georgia Kaolin Co., 39.
CONGRESSIONAL REFERENCE-Continued
EQUITABLE CLAIMS-Continued
Breach of covenant to restore premises.
Where the United States leased for $1 a year land on which the plaintiff-owner had conducted a profitable kaolin mining operation, and where the defendant did not fulfill its covenant to restore the land to its original condition by removing from the ground live ammunition, with the result that the plaintiff's cost of using its land for its normal and usual mining purposes was materially increased and the cost of restoring the land was in excess of the fair market value of the land determined either at the time the lease was executed or at the time the land was returned to the plaintiff, equity and good conscience require that plaintiff be reim- bursed for such additional cost. Georgia Kaolin Co., 39. United States 74(3)
Uncertainty in law as basis for claim.
Compromise judgments are frequently sought because of the uncer- tainty of the outcome of the particular litigation. Accordingly, the uncertainty which existed in the law of family partnerships in 1950—that is, whether or not a purported family partnership could establish its bona fides as a partnership, would not void a settle- ment agreement entered into by the taxpayers and the Government and made the basis for a judgment of the Tax Court of the United States, nor render the Government equitably liable to refund the amount of the compromise judgment. Maher, 701.
CONSTITUTIONAL LAW.
FEDERAL-STATE RELATIONS.
State regulation of carriers transporting Government property. A motor carrier may agree to give the United States a rate on intrastate shipments of goods which are lower than the State's published tariff without first obtaining the permission of the State public service commission. Public Utilities Commission of Cali- fornia v. United States, 355 U.S. 534. Benton Rapid Express, 360. Carriers 192
PROPERTY OF THE UNITED STATES.
Disposal of Federal property.
The power to release or otherwise dispose of rights or property of the United States is lodged in Congress by article IV, section 3, clause 2, of the Constitution, and where authority is neither found in a statute nor can be implied from other powers granted by
CONSTITUTIONAL LAW-Continued
PROPERTY OF THE UNITED STATES-Continued
Disposal of Federal property-Continued
statute, a Government agency which has made overpayments under a contract must seek to recover such overpayments.
demnity Co. v. United States, 313 U.S. 289. Fansteel Metallurgical Corp., 496.
CONTINUANCE. See Pleading and Practice-Trial.
CONTRACTS. See also Congressional Reference; Counterclaims. ACCOUNT STATED.
Payments prior to final audit.
In the absence of an express or implied agreement by the parties to a contract that the balance shown on a statement of account is correct, there is no account stated, American Steam Conveyor Corp. v. United States, 81 C. Cls. 151, cert. denied 296 U.S. 599, and where no determination as to the correctness of a charge was made until a final Government audit, at which time the Government immedi- ately charged the plaintiff with receiving an overpayment, there was no account stated. Fansteel Metallurgical Corp., 496. Account Stated
Assignment for benefit of creditors as breach.
Where the contract required the contractor to keep its records and equipment in readiness for 6 years to enable it to produce certain items for the Government upon demand, its assignment for the benefit of its creditors operated as a total breach of the contract since it is an implied condition of all contracts that the promisor will not permit itself, through insolvency or acts of bankruptcy, to become disabled from performing. Pennsylvania Exchange Bank, Assignee, 216.
Prevention or hindrance of performance by other party.
There is an implied condition in every contract that neither party will do anything to hinder or prevent the other party in the per- formance of the contract. Thus, if the Corps of Engineers, U.S. Army, knew, at the time it was soliciting bids on a construction project, that the Atomic Energy Commission was contemplating a huge project in the area in the near future which would so increase the demand for construction labor that labor from high-wage rate urban areas would be required, and that the prevailing wages of the area would immediately increase, the Corps of Engineers was under an obligation to so advise the plaintiff-contractor unless the infor-
CONTRACTS-Continued
BREACH-Continued
mation was readily obtainable by plaintiff with the exercise of reasonable diligence. Bateson-Stolte, 387.
United States 70(24)
CONSIDERATION.
Adequacy of.
The contractor's acquisition, at the Government's expense, of the ability to promptly manufacture microwave magic tees in volume under an industrial mobilization preparedness contract with the Government, placed the contractor in a position to realize a profit from the manufacture of any tees that might be ordered and was adequate consideration for the contractor's promise to the Govern- ment to stand ready for a six-year period to produce such tees when and if required to do so. Pennsylvania Exchange Bank, Assignee, 216.
Caused by Government.
Notice to proceed.
Where the contract expressly provides that the Government will give notice to proceed within a certain number of days after the date of award to the contractor and the Government gives such notice but also includes therein a notice of suspension of the con- tract work, there is a breach of an express covenant of the contract and plaintiff is entitled to recover damages representing the in- creased cost of performance resulting from the ensuing delays. Abbett Electric Corp. v. United States, 142 C. Cls. 609. A. S. Schulman Electric Co., 399.
United States 70(24), 73(22)
Administrative decisions.
Question of law.
Where a contractor is forced by duress to agree to an amendment to its contract, which amendment is by its terms not appealable and is in effect a determination that plaintiff is obligated to bear the cost of the extra work required by the amendment, the resulting dispute concerns a question of law and plaintiff need not appeal from an adverse decision thereon under the "Disputes" article of its contract. Universal Sportswear, 209.
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