Gordon Woodroffe Corp. v. United States

Madden, Judge,

dissenting:

The court’s decision denies enforcement to a contract purportedly made on behalf of the United States by officers of the United States. The denial is upon the ground that those agents lacked authority to contract for the United States. I think the court is wrong in its conclusion that they lacked •authority.

The President was, by the act of May 22, 1947, 61 Stat. 103 , authorized to spend money appropriated for financial •aid to Greece and Turkey. By section 4 he was authorized to purchase articles for transmission to those countries. By section 5 he was authorized to delegate his powers under the ■statute to such department, agency, independent establishment, or officer of the Government as he might direct. By *754 Executive Order 9857 dated May 22,1947, he authorized the Secretary of State to exercise any of the powers given to the President, through such departments, agencies, and independent establishments of the Government as he might designate. He authorized the Chief of Mission to Greece or Turkey to, “under the guidance and instructions of the Secretary of State, direct United States activities within Greece or Turkey, as the case may be, in furnishing assistance under the act.”

Mr. Griswold having been appointed Chief of the American Mission for Aid to Greece, the Secretary of State appointed George C. McGhee, Coordinator, Walter Wild, Deputy Coordinator and Aloysius J. Walsh one of two special assistants to the Coordinator. These few men were the representatives and spokesmen, in the State Department’s Washington office, of a project which had some hundreds of millions of dollars to spend.

Mr. Duke, a representative of the plaintiff, went to Mr. McGhee for the purpose of selling the electric plant here involved to the Government, for transmission to Greece. Mr. McGhee personally took Mr. Duke to Mr. Walsh,^saying that Mr. Walsh was the person to talk to. After extended negotiations, Mr. Walsh agreed to the purchase of the plant and his immediate superior, Mr. Wild, the Deputy Coordinator, signed the telegram to the plaintiff accepting the plaintiff’s offer and purporting to close the contract.

The court’s decision concludes that Mr. Wild and Mr. Walsh did not have authority to do what they did. I think they did have authority. They had been put, by the Secretary of State, into an office which had a title which indicated responsibility. There is not the slightest evidence that Mr. McGhee, the Coordinator, or General Marshall, the Secretary of State, would not have personally signed- the telegram of acceptance if that had been the habit of the department. That it was not the practice was natural because the statute and the Executive Order expressly authorized by the statute permitted sub-delegation, and the Secretary’s appointment of the officials to their designated positions constituted that sub-delegation, and removed the necessity of having papers formally signed by high officials who had, in fact, given no *755 consideration to their content. The court’s opinion treats Mr. Walsh’s communication with the agents of the Mission in Greece as evidence that he himself did not have authority to purchase, except as he obtained delegated authority from them. I do not so regard it. If an enterprise appointed one person, and one person only, as its authorized purchasing agent, it would be only sensible for him, before he purchased, something for use in a distant branch of the enterprise, to consult the persons who were there as to what they needed, and as to whether the thing which he had an opportunity to buy would suit them. In the instant case, where the people in Greece also had authority to purchase, it was natural that Walsh should consult them for the further purpose of learning whether they had obtained the thing needed from another source.

The court’s opinion cites Federal Crop Insurance Corporation v. Merrill, 332 U. S. 380 . In that case the action of the agent which the court held to be unauthorized was directly in the teeth of a valid official rule, promulgated pursuant to a statute, published in the Federal Register, and having the force of law. In the instant case the statute, the Executive Order pursuant to the statute, and the appointment of Wild and Walsh to the offices they held, all support the authority which they, in fact, assumed to exercise.

If, as the court thinks, there is reason to doubt the authority of Wild and Walsh to do what they did, I think the court should reopen the case to take evidence as to what these officers did, in fact, as to other transactions. If, as one may suppose, they made numerous contracts of purchase of things to be sent to Greece, that would seem to eliminate any doubt as to whether they were authorized to do so.

The real problem in this case is that, because of an indistinct telephone conversation and a miscarriage of mail, two agencies of the Government were acting at cross-purposes. The Washington agents were being offered an electric plant, by the plaintiff which had it for sale, at a price considerably higher than the agents in Greece were being offered it by one who, at the time, had no power to sell it. Except for the mistake, the Washington authorities would not, of course, have made the contract. By waiting *756 for the plaintiff’s option to expire, the plant could have been bought for the lower price. But, as I see it, the case is not different from one which might well occur in any large establishment which acts through many agents. Someone authorized to purchase says, we offer $100 per unit. By a mistake in typing, or in the hearing of a telephone conversation, the offer is transmitted to the offeree as being an offer of $200 per unit. The $200 is not so obviously out of line as to put the offeree on notice that it involves, or probably involves, a mistake. The offeree accepts the offer. A contract at $200 per unit is thus made. In this regard, I think there is no difference between the position of the Government and that of a private enterprise. When the Government abandoned its immunity from suit I think it did not intend to assume the status of an infant or an idiot who could repudiate his contracts if they did not turn out to be advantageous.

I would give the plaintiff a judgment.

I am authorized to state that Judge Howell joins in the foregoing dissenting opinion.