The opinion of the court was delivered by: Getzendanner, District Judge.
MEMORANDUM OPINION AND ORDER
Plaintiff A.C. Davenport & Son Co. ("Davenport")*fn* brings
this action for the purchase price of products delivered to
the General Services Administration ("GSA"), an agency of
defendant United States. The matter is before the court on the
Government's motion to dismiss for lack of jurisdiction and on
the parties' cross motions for summary judgment. The court
denies defendant's motions to dismiss and for summary judgment
and grants plaintiff's motion for summary judgment.
The parties agree that there is no genuine dispute as to any
material fact and that the following facts are undisputed.
In December, 1975, the GSA contracted with Almark, Inc., of
Arlington, Virginia, for the purchase of bulletin boards. In
early 1976, Almark agreed with Davenport that the latter was
to supply the bulletin boards that Almark was obligated to
deliver under its contract with the GSA. Later that year,
Davenport had reason to question Almark's ability to meet its
payments under the subcontracting agreement and Davenport
insisted on some arrangement to secure these payments. (See
Affidavit of Duane Conwell and Plaintiff's Ex. #2.)
As a result, Almark modified its contract with the GSA,
changing the payment address from "Almark, Inc., 542 So.
23rd Street, Arlington, Virginia 22202" to "Almark, Inc., c/o
Davson, 306 East Helen[sic] Road, Palatine, IL 60067." A
Government Contracting Officer approved and signed this
modification. A few days later, Almark executed a corporate
resolution authorizing the First National Bank to accept for
deposit in a special account checks that were endorsed
"Almark, Inc., c/o Davson." The resolution further authorized
the Bank to pay out funds from this account only in the name
of Davenport by its president, Frank A. Davenport.
Almark executed the contract modification and corporate
resolution pursuant to an agreement with Davenport. The
parties intended that the combined effect of the modification
and resolution would be that Davenport would receive Almark's
checks directly from the Government, that it could then
deposit them in the special account, and that only Davenport,
through its president, could withdraw the proceeds from the
account.[fn**] The purpose of this arrangement was to secure
Almark's payment to Davenport under the subcontracting
Between February and April, 1977, the GSA issued checks
pursuant to its contract with Almark. Despite the contract
modification in effect, the GSA sent these checks to Almark's
Virginia address. On April 4, 1977, Davenport's Account
Manager wrote the Government informing it that Davenport had
not received checks for shipments made in January and
February, 1977, under Almark's contract as modified.
Plaintiff's Ex. #3. The second sheet of this letter bears the
following handwritten note:
(1) All payment gone to Almark by Alton Franklin
(2) Carol Dameron put stop payment on all Almark
The record is not clear on this point, but apparently the stop
order was ineffective as to one or more of the checks sent to
Almark's Virginia address for a total of $11,822.89.
On April 28, 1977, the GSA issued what it terms a
"duplicate" check for the same amount and sent this check to
"Almark, Inc., c/o A.C. Davenport & Son Co." in Palatine,
Illinois. Davenport endorsed and deposited this check in the
special account and withdrew the funds, according to its
agreement with Almark.
For some reason,*fn1 the Government did nothing more until
November, 1977, when it wrote Davenport questioning the
propriety of the latter's endorsement and deposit of the
second Almark check. In July, 1978, the Government sent a
formal demand to Davenport for the $11,822 and indicated that
it would offset amounts due Davenport on totally unrelated
contracts. Portions of this letter are significant:
"It is [the GSA's] opinion that a duplicate
payment was made to Almark, Inc. The first series
of payments totalling $11,822.89 was made to
Almark, Inc. between the period February 2, 1977,
and April 4, 1977. . . . The payment of
$11,822.89 made to Almark, Inc., c/o A.C.
Davenport and Son on April 28, 1977, by Treasury
check No. 1400521, ...