COATES v. UNITED STATES, 53 F. 989

SIMONTON, District Judge.

The facts of this case are these: Ramsay & Son were under contract to build for the lighthouse board a twin screw steamer, afterwards known as the “Zizania.” The contract price was $66,900, to be paid as follows: One fifth, less 10 percent., when the vessel was framed and up; one fifth, less 10 per cent., when she was fully plated and keelson fitted and fastened in place; one fifth, less 10 per cent., when all the decks are laid, masts set np and fastened in place; one fifth, less 10 per cent., when vessel is launched, and boiler and engine in place; the remainder, with the reserved percentages, when the steamer is completed, received, and accepted.

It was also provided that, in case of noncompliance with che contract on the part of the Ramsays, the lighthouse board could declare the contract forfeited and annulled, with no appeal from its decision, whereupon all money due under the contract would also be forfeited. Seven months was the time limited for completion of the work. The contract was entered into 5th October, 1887. On 8th June, 1888, it was declared forfeited. The lighthouse board completed the vessel at a cost, all told, of $66,173.

Ramsay & Son purchased from Coates & Co., appellants here, steel plates to be used in constructing the vessel, and owed the money. Coates & Co. had had previous dealings with the Ramsays, and had received from them one of the installments paid by the government. They had been promised payment out of others, but the second and third installments had been diverted by the Ramsays to other creditors.

In February, 1888, a part of the plates having been delivered, Coates & Co. became uneasy, and obtained from Ramsay & Son a power of attorney authorizing them “to collect from the lighthouse board, out of the last payment that will be due to us on account of our contract with the lighthouse board to construct the steamer Zizania, the sum of $6,000.” At that time Ramsay & Son produced and showed to Coates & Co. their contract.

Coates & Co. took this power of attorney, with a letter from Ramsay & Son, to the head of the board, requesting that it be held, and the amount paid according to its terms, and delivered them to Commander Evans, the naval secretary, who received the power of attorney, and put it on file. They continued the delivery, but, again becoming uneasy, one of them went to Washington, and saw Commander Evans. He says that Commander Evans told him to go on with the delivery, and that the government would pay the bill or order amounting to $6,000. This was the latter part of February, 1888.

The record shows that on 21st February, 1888, Commander Evans wrote -to the secretary of the treasury, inclosing the contract with the Ramsays, their letter, and the power of attorney, and asking if the request therein contained could be complied with, whether the payment could be made to Coates & Co., in consideration of sections 3477, 3737, Rev. St. 'U. S., and whether the instrument inclosed was in such form as to thoroughly secure the interests of the government.

The secretary replied that the request of the Ramsays could only be complied with upon the condition “that the account for the payment of the money in question, when due under the provisions of the contract, be stated in the name of Messrs. Ramsay & Son, and that they be required to sign a receipt for the same before it is paid over to Coates & Co.” The letters of Mr.

Reeve, acting solicitor of the treasury, of 24th February, 1888, and of 10th January, 1891, speak of this power of attorney; the first of these letters as a request for the payment “of $6,000 due on the final payment for said vessel under their contract;” the second, for the payment of the sum of $6,000 out of any money withheld by the department in the settlement with the contractors.” From the record it is clear that Coates & Co., the lighthouse board, the acting solicitor, and the secretary of the treasury dealt with this power of attorney witli full knowledge of, and with reference to, the contract; that all of them understood that ¡.lie money was to he paid out of the hist moneys coming to the contractor under the contract, and ilrat the stringent provisions as to forfeiture were known to them all.

It is also clear that the questions which embarrassed Commander Evans were whether such a power of attorney could he received by him in view of sections 3477, 3737, Itev. St., the one of which forbade the assignment of a claim against the government until the claim had been allowed, the amount due ascertained, and a warrant issued therefor; the other forbidding the assignment of any claim or order on the United Btates; and also whether the power of attorney impaired the security of the interests of the government.

The Secretary permitted him to recognizer the power of attorney to a o-.rtain extent, but he required the account to be stated in the name of Kamsay & Bon, and to be receipted by them, before Coates <& Co. got the money. In this way all set-off against Kamsay & Son was secured to (he government^ the contract with them was not impaired, and all idea of a new contract, with Coates & Co. was forbidden. A i! that Commander Evans could have intended was this. Coates A- Co. had been disappointed in the receipt of other money due to Kamsay & Bon and ¡raid on this account, although it lsad been promised to them.

They now present, a power of attorney authorizing them to receive the last amounts which should become due under the contract. Commander Evans assured them that, in despite of the provisions of the sections of the Revised Statutes, and without further apprehension from Kamsay & Bon, they would get, the money which, under the contract, would become due to the Ramsays. If-he intended anything more than this, his action was void, and Coates & Co. knew that it was void. lie could not make a new contract with Coates & Co. lie could not, amend that already made with Kamsay, and waive any forfeiture.

Tier could not promise absolutely and at ah events to ¡ray Kamsay $6,000 through Cerates & Co. Now, Kamsay & Bon forfeilud them- contract. The sum of $6,000 never was due to them on tin* last installment, err on any installment after the third. As Cerate's & Co. herid a ¡rower erf attorney for the payment, of the; money out erf this last installment only, their right never came info existence, as there was, nerfclrihg for it to operate on. They haver no right in Jaw and none in ereprity against the United Hiatus which a court can enforce for the $6,000.

The jurisdiction of this court is concummt with that erf tíre cerurt erf claims.

The court of claims has jurisdiction erf all claims founded upon the constitution erf the Uniterd Btates or any law of congress except for pensions, err upon any regulation of an executive department, or upon any contrae*.!, expresserd err implied, with the gerverrninent of the United Btates, or for damages, liquidated or unliquidated, in erases not sounding in tort, in re'spe*ct erf whierh claim the party would he entitled to redress against the United Btates either* in a court erf law, equity, err admiralty, if the* Unite'd Btates we>re suable. 24 St, a,t Larger, p. 505. “The 'United Btates can he suerd for such causes, and such causers only, as. ihery have1 by act of congress permitted.

Neither the court of claims nor this court can hear and determine any claim against tlie United States except in cases and under the conditions defined by congress.” U. S. v. Gleeson, 124 U. S. 258, 8 Sup. Ct. Rep. 502. It is very clear that in this case there was no contract, expressed or implied, with Coates & Co. that they should furnish plates to the government, and should be paid for them at all events. The contract was with Ramsay & Son, and remained with them.

When the last payment to Ramsay & Son should have become due under the terms of the contract, the account was to have been made out in their name, and receipted by them; and when this was done it was promised by the disbursing officer that he would turn over the money to Coates & Co. The conditions then were that the contract with Ramsay & Son should continue unchanged, and should be fulfilled; that when under it any money became due as the last payment to Ramsay & Son, they should receipt for it, and that then, recognizing the wish of Ramsay & Son that Coates & Co. should receive it, it would be paid to them.

Coates & Co., with full knowledge of the contract, assented to be reimbursed out of the last payment which should become due to Ramsay & Son, of course with the understanding if any should become due. This is the full extent of any contract with them. It is only a contract authorized by law that the court of claims can consider. Bonner v. U. S., 9 Wall. 160. And for the same reasons there are no damages, liquidated or unliquidated, to which Coates & Co. are entitled against the United States. They could not have been misled.

They knew the contract, that it was liable to forfeiture, and that no one had the right to change its terms. In this connection it must be borne in mind that the whole appropriation for this vessel was $68,230. 24 St. at Large, p. 225. Her cost was $66,193, not including the bill of Coates & Co. If congress had considered this claim, had recognized an obligation, and had referred it to the court of claims or to this court, as in Roberts v. U. S., 92 U. S. 46, and in Vigo’s Case, 21 Wall. 648, the court might perhaps have gone outside the rules of law, and have considered the hardship of Coates’ case.

But treating it as we would a case between natural persons, we are bound to hold that a principal cannot be held liable for any dealings between his servant and a third party who had full knowledge of the limitations of the authority of the servant with whom he dealt. They have a claim for a part of this money, which we can allow. The contract price was $66,900; the actual cost, $66,173; leaving $726.10.

In the contract it is provided that in case of noncompliance the contract may be forfeited, but even in case of forfeiture the contractor would be liable to the government for all damages occasioned by the noncompliance. It appears that no damages have accrued, and that, on the contrary, the government is better off by $726.10. As the contractors would have suffered the result if it occasioned loss, they should enjoy the result as it has been a gain. The maxim “qui sentit commodum sentiré debet et onus” is true when reversed. He who bears the burden should enjoy all advantage accruing from it.

A decree should be entered for appellant for this sum of $726.10. ■ With regard to the remainder of the claim, it appears that they furnished the plates, and that the plates went into the vessel, and that they have not been paid. As we have seen, they have no right in law or equity to hold the government responsible. But they have a strong claim upon the generosity of the government. This is within the province, not of the courts, hut of congress. The decree of the circuit court is reversed and the case remanded, with instructions to enter judgment for the plaintiff in the sum of §726.10 and costs.