ant is not liable in a suit for a breach of contract, and plaintiff is not entitled to recover in a suit for damages. Id.
LX. It cannot be held that in the instant case the hospital agreed to become liable as an insurer. Id.
LXI. Where upon presentation to the contracting officer of plaintiff's claim for damages due to delay, plaintiff, contractor, was informed by the con- tracting officer that the department was unable to pass upon the claim and that it should be submitted to the Comptroller General, which was done, and the claim thereupon was denied by the Comptroller General; and where there- upon the contractor wrote the Secretary, as head of the department, and was again informed that the department did not have jurisdiction but that jurisdiction was vested in the Comp- troller General, and that since the Comptroller General had made his decision the department was without authority to take further action; it is held that plaintiff lost no rights by a failure to file formal appeal to the head of the depart- ment from a "decision" of the contracting officer, in accordance with the provision of the contract providing for such appeal. Thomas Earle & Sons, Inc., 494.
LXII. The contracting officer's reply to the contractor, stating that the claim should be presented to the Comptroller General, was not a decision on the merits of the claim but a disclaimer of
LXIII. Where, in a contract for repair of a Government pier, it was provided that "should a greater or less number of bearing piles be necessary ad- justment in the contract price will be made," this provision in connection with other pro- visions of the contract would convey to the mind of a bidder the impression that any and all additional costs to him, of whatever charac- ter, arising out of the necessity for the placing of additional piles would be paid for, including the cost of the necessary suspension of work pending decision as to contemplated changes in the contract, which changes were subse- quently made to the advantage of the Govern- ment, and plaintiff is accordingly entitled to recover. Id.
LXIV. The Government does not have the right to settle the unpaid balance due to a contractor by setting off that balance against a tax debt which the contractor owes to the Government, no tax lien having been perfected, when there is a surety which has been obliged under its payment bond to pay the debts of the contractor for materials and labor used by the contractor in the performance of its contract. Maryland Casualty Company, 513.
LXV. The provisions of section 3466, Revised Statutes, giving the United States as a creditor priority over other creditors of an insolvent debtor are applicable in the case of a living debtor only where his insolvency is a formal one, evidenced by a bankruptcy, receivership or assignment for the benefit of creditors. See United States v. State of Oklahoma, 261 U. S. 253. Id.
LXVI. In the instant case, the Government had no statutory preference which would give its tax claim priority over the plaintiff's claim as surety. Id.
LXVII. Where the plaintiff, as surety on a payment bond, paid the debts of its principal, a contractor, for labor and materials, it is entitled to collect so much of the unpaid balance due its principal from the other contracting party as is necessary to make it whole for payments made by plaintiff under its bond. Globe Indemnity Co. v. United States, 84 C. Cls. 587, distinguished. Prairie State Bank et al v. United States, 27 C. Cls. 185, affirmed 164 U. S. 227, cited. Id.
LXVIII. It has been generally held that in the case of the "performance" bond required by the Govern- ment of contractors, the money retained by the Government until performance is completed is retained for the purpose of securing perform- ance and the contractor's right to that money upon completion belongs to the surety so far as it is necessary to make him whole and his claim to it has priority over claims of other creditors, including claims of the Government which are unrelated to the contract. U. S. Fidelity & Guaranty Company v. United States, 92 C. Cls. 144. Id.
LXIX. In the instant case under its payment bond it was not intended by plaintiff and it was not expected by the Government or by the other contracting
party, that plaintiff was taking the risk, besides other risks, that any part, or perhaps the whole, of the price which the Government promised to pay upon performance, would be "paid" not in money but by a bookkeeping process of crediting these sums against taxes or other debts of the contractor not related to the contract, to the prejudice of the surety. Id.
LXX. The court construes the bond and the transaction as a whole as implying a promise on the part of the Government to the surety that the Govern- ment would not so settle the accounts of the contractor as to leave the surety in the position of paying the contractor's taxes, which it had not agreed to pay. Id.
LXXI. The fact that the Comptroller General, without knowledge of its effect upon the surety's interest, had set off the balance due under the contract against taxes due to the Government from the contractor, had no final effect upon rights of plaintiff, surety, which is entitled to recover an amount sufficient to make it whole for the amounts paid by it under its bond. Id.
See also Special Jurisdictional Act Invalid.
Actual damages must be definitely proven. Eastern Contracting Company v. United States, 97 C. Cls. 341. Langevin, 15.
See also Contracts XXVII; Eminent Domain III.
DEFERRED PAYMENTS.
See Taxes I, II, III.
DELAY, NOTICE OF.
See Contracts IX, X, XI, XIII.
DEPENDENCY.
See Pay and Allowances XI.
DISCHARGE BY TRANSFER.
See Pay and Allowances XIII, XIV, XV, XVI. ECONOMY ACT.
See Contracts XXXIII, XXXIV.
EDUCATIONAL FAIR.
See Taxes XXVII.
EMINENT DOMAIN.
I. The Government has the right to take such measures as to it may seem proper for the im- provement of navigation without liability for injury to property except that located above ordinary high watermark. Marret, Admr., et al.
EMINENT DOMAIN-Continued.
v. United States, 82 C. Cls. 1, 13; 299 U. S. 545, cited. Kelley's Creek and Northwestern Rail- road, et al., 396.
II. The high watermark is the line where the water stands sufficiently long to destroy vegetation below it; and it is not to be determined by arithmetical calculation but is a physical fact to be determined by inspection of the river bank. Union Sand & Gravel Co. v. Northcott, et al., 102 W. Va. 519; 135 S. E. 592, cited. Id. III. Only damages which accrue as the result of a taking can be recovered in a suit against the Government growing out of improvement of river navigation. United States v. Grizzard, 219 U. S. 180, 183. Id.
IV. Under the law of West Virginia a riparian owner on a navigable stream owns the land to low watermark; the title to the bed of the stream beyond low watermark is in the State but the title to the bed of the stream up to ordinary high watermark is subject to a paramount servitude in favor of the United States authoriz- ing it to take all necessary and proper steps in the interest of navigation. Brown Oil Co. v. Caldwell, 35 W. Va. 95; 13 S. E. 43; Gibson v. United States, 166 U. S. 269, 272, and similar cases cited.
V. Any structure erected in the bed of the stream is erected there at the peril of him who erects it, and with the knowledge, actual or constructive, that the Government in the improvement of navigation may so raise the high watermark as to destroy or impair the utility of the struc- ture. Hood v. United States, 49 C. Cls. 669, and other cases cited. Id.
VI. The decision of the Supreme Court in United States v. Chicago, Milwaukee, St. Paul & Pacific Railroad Company, 312 U. S. 592 (over- ruling United States v. Lynah, 188 U. S. 445), holding the United States is not liable for damages to a railroad embankment whose base was in the bed of the stream, is controlling in the instant case, where a colliery company had located a tipple and ice breaker in the bed of a navigable stream under license from the Secre- tary of War. Id.
EQUALIZATION AGREEMENT.
See Transportation of Government Property I, IV, V. EQUITABLE ADJUSTMENT.
See Contracts IV, XIX, XXI.
ESTATE OF DECEDENT.
See Taxes XX, XXI, XXII, XXIII.
EXTENSION OF TIME.
See National Industrial Recovery Administration Act VIII, IX, X, XIII.
EXTRA PAY.
See Contracts L.
EXTRA WORK.
See Contracts L.
FAILURE TO MAKE DECISIONS.
See Contracts II.
"FLYING OFFICER."
The expression "nonflying officer" as used in the Appropriation Act of April 26, 1934 (48 Stat. 614, 618), in the absence of any indication that Congress had in mind any other meaning, may be interpreted in accordance with the definition of a "flying officer" given in Section 2 of the Act of July 2, 1926 (44 Stat. 780,781), which provided that "wherever used in this Act a flying officer in time of peace is defined as one who has received an aero- nautical rating as a pilot of service types of aircraft." Baker, 212.
I. "Misstatements" alleged to have been made by plaintiffs in connection with vouchers for goods sold, previously presented by plaintiffs to the Government and duly paid, do not constitute fraud within the contemplation of section 1086 of the Revised Statutes where such alleged "misstatements" were not made for the purpose of securing the payment of the claim in suit but were made, if at all, with reference to another, previous transaction. Crovo, 368. II. Although it is not necessary to show a pecuniary loss to defeat a fraudulent claim, under section 1086 of the Revised Statutes, it is necessary to show such loss when a claim has been paid and an action is brought to recover the amount paid; and in such case recovery can be had only to the extent of the pecuniary loss sus- tained. Charles v. United States, 19 C. Cls. 316, distinguished. Id.
III. In order to sustain a plea of set-off for fraud com- mitted in connection with a prior transaction, it is necessary to show a pecuniary loss was sustained by the commission of the fraud. Id.
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