COATES
v.
UNITED STATES.
989
whether mined or not; not whether it exists or not. He contracts for promptitude and thoroughness in mining; not for the productiveness of the mine. Lord Clifford v. Watts, L. R. 5 C. P. 577; Muhlenberg v. Henning, 116 Pa. St. 138, 9 At!. Rep. 144. This covenant is of the second clasa. The rule for judgment is discharged. .
COATES v. UNITED STATES.
(C1rcu1t Court of Appeals, Fourth Circuit. February T, 1893.' No. 26. certaJn contractors agreed to build for the lighthouse board .. steamer for $66,900, payable In Installments at specified stages In the work, the contract and all moneys due thereunder to be forfeited for breach. Material men, who had been promised payment of their claims out of certaln installments, obtained from the contractors a power of attorney authorizing them to collect $6,000 out of the last Installment, and placed it on fUe with the naval secretary of the lighthouse board, who promised that if they would continue the delivery of materials the government would pay their claim to the amount of $6,000. At this time the government had the right to annul the contract for breach. In a correspondence with the naval secretary, who Was In doubt whether the money could be thus paid under .Rev. St. §§ 3477, 3737, the secretary of the treasury stated that the claim could be paid only on condition that the account for the money when due under the contract should be stated In the name of the contractors, and receipted for by them before payment to the material men. several months later the contract was forfeited for breach. The last installment never became due to the contractors, and the vessel was completed by the board at a cost, not Including this claim, of $726.10 less than the contract price. Held, that the material man could recover from the government only thesnm of $726.10. Hughes, J., dissenting. AGAINST THE UNITED STATES-MATERIAL MAN'S CLAIM.
In Error to the Circuit Court of the United States for the Distri,ct of Maryland. At Law. Action by L. Roberts Coates, trading as Coates & Co., against the United States, to recover for materials used in the construction of a steamer. Judgment for defendant. Plaintiff brings error. Reversed. Frank P. Clark, for plaintiff in error. John T. Ensor, U. S. Atty. Before GOFF, Circuit Judge, and HUGHES and SIMONTON, District Judges.
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 per cent., 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; per cent., when all the deeks are laid, masts set up. one fifth, less and fastened m place; one fifth, less 10 per cent., when vessel Is launched, and boiler and engine in place; the remainder, with the re-
FEbElRAt REPORTER', vol. 53.
']wlien the steamer is ,prpVided in case n6noolllplianee witll dle, C:91,lh'a,ct · the RaDlsays, thebghthollse' Mard' could coIltrlWt 'forfeited andannulled,with ·from. its decision, wlietetipbtt 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 forfeited., The lighthouse board completed the vessel at a cost, all told, of $66,173. Ramsay & Son purchased from: Ooates& Co., appellants here, steel ,plates to be used in constructing the vessel. and owed tll-l;l money. Coates & Co. had had previous dealings with the Ramsays,' and had received from them one of instalMents paid by the had been prom. ised paymelit.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 lUldobtalned from Ramsay & Son a power of attorney authorning them "tQ'collect froII). the lighthouse board,. out of the last payment that will be due to ,us on account of our contract with the lighthouse board to. eonstruct the steamer Zizania, the sum of $6,000." At that time llllmsay & Son produced and showed to Coates & Co. their COI1trlWth. Co. took this power of attorney,. with a letter from & to the head of the board, requestmg that it be held, and the amount paid lWcording to its tel'DlS, and delivered them to Commander Evans, the naval secretary, who received the p()wer of attor,ney, and put it on file. They continued the delivery, bUt, again uneasY, one of them went to Washi:ngton, and \'law Commander Evans. He says that Commander Evans told him to go on with the delivery, and that the government would pay the pill or orde.rat;l1ounting to $6,000. This was the latter part of FebrUary, 1888. The record shows that On 21st February, 1888, COmmander to the secreta"ry of the treasury, inclosing the cOI).tract with. the. Ramsays, their lefter, and the power of attorney, asking if the therein contained could be complied with, Whether the paYIhent could be made to Coates & Co., hi 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 aamsays COl1ld.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 tlley be required to sign a receipt for the same before it is paid over to Coates & Co." .The letters ofMI'. Reeve, actsolicitor of the treasury, of 24th February, 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 011 the final paym.ent for said vessel under their contract;" the seco;nd, 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 recui'd it is clear that COates & Co., the lighthonse board,the acting ',johcitor, and the secretary of the treasury dealt with this power of attorne!,
:
COATES V. UNITED STATES.
991
with full knowledge of, and with reference to, the contract; that all of them understood that the money was to be paid out or the lnst moneys coming to the contractor under the contract, and that the stringent provisions as to forfeiture were known to them all. It is als(I deal that the questions which embarrassed Commander Evans were whether such' a power of attorney could be received b, him in sections 3477,3737, Rev. St., the one of which forbade the 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 'L"nited States; and also whether the power of attorney im· paired the. secUlity of the interests of the government. The Dl;;cretary permittM' him to recogniZe the power of attorney to a o-.rtain extent, but he required the account to be stated in the name of Uamsay & Son, and to be receipted by them, before Coa les &. Co. got thelUont:y. In this way aU set-off against Ramsay & Son was secured to tbe governmen'4 tbe contract with them was nut impaired, and all idea of a new contract with Coates & Co. was forbidden. All that Commander Evans could have intended was this. & Co. had l)een disappointed in the receipt of other money due to Ramsay & Son and paid on this account, although it had been promised to them. They now present a power of att.'lruey uuUoJ"izing 1ht'm to receive the last amounts which should become due under the contract. Commander Evans assured them tn'1t. in despite of the provisions of the sections of the Revised Statutes, and without further apprehension from Ramsay & Son, the,Y would get the money which, under the contract, would become due to the Bamsays. If he intended anything more than this, his action was void, and Coates & Co. knew that it was void. He could not make a new contract with Coates & Co. He could not amend that already made with Ramsay, and waive any forfeiture. He could not promise absolutely and at all events to pay Ramsay $6,000 through Coates & Co. Now, Ramsay & Son forfeited their contract. The sum of $6,000 never was due to them on the last installment, or on any installment after the third. .A.s Coates & Co. held a power of attorney for the payment of the money out of this last installment only, their right never came into existence, as there was nothing for it to operate on. They have no right in law and none in equity against the United States which a court can enforce for the $6,000. The jurisdiction of this court is concurrent with that of the court of claims. The court of claims has jurisdiction of all claims founded upon the constitution of the United States or any law of congress except for pensions, or upon any regulation of an executive depart· ment, or upon any contract, expressed or implied, with the govern· ment of the United States, or for damages, liquidated or unliquidated, in cases not sounding in tort, in respect of which claim the party would be entitled to redress against the United States either in a court of law, equity, or admiralty, if the United States were suable. 24 St. at Large, p. 505. "The United States can be sued for such causes, and such causes only, as they have by act of congress per· niitted. Neither the court of claims nor this court can hear and
992
FEDtmAL
vol. 53.
the UID1ied ;State$ ini'cMeS,·aild under the conditions'de!fihed by COI1gre.ss." U. S. v., 124 U. S. 258, 8 ·Sup.Ct.!tep. 502. !tis very clear thatlli this case there was no oontract, 'expressed oriJ:nJ!lied, with CQates &:. COl that they shotild fun:tish, to the' government, and, paid them atltll,events·. ,.The contract was with RalIl$al &; Son, and remained with' them.. When the last payment to 'lWnsay & Son become,'due under the terms of the contraet"the''acoount should was to 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 contJ;act with Ramsay & Son should oontinue un· changed, and should ,be fulfilled; that when under it any money became due as ,the to Ramsay & Son, .they should receipt for, it, and. tp.at then, recognizing the wish of 'Ramsay & Son that Coates & 09. should receive it, it would be paid to them. Coates & Co., with, full knOWledge of the conf;ract, 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. , An9 for the same reasons there are no damages, liquidated oJ: 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. tochan,ge 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 cons.idered this claim, had recognizell. an obligation, and had referred it to the court of daims 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 t4e rules of law, and have considered the hardship of Coates' case. But treating it as we 'Would a case between natura.I we are bOlmd to hold that a principal cannot be held liable for any dealings between his servant and a' third party who had ftill knowledge of the limitations of the authority of the servant with whom he dealt. They have a claim for a part of this money, whicQ, 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 sentire 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 <Jf the claim, it appears that they furnished the plates. and that the
'COATES V. UNITED' STATES.
993
plates went into the vessel,and that they have not been paid. As weh.a.veseen, they have no right in law or equity to hold the' government responsible. But they Mvea strong claim upon the generosity of the government.· This is within the province, not of the courts, but of congress. The dooree 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. HUGHES, District Judge, (dissenting.) Jurisdiction in this case is derived from the judiciary act of March 3, 1887, which authorizes the suit to be in the form of petition, and to be instituted in cases where the petitioner would be entitled to redress against the United States, either in a court of law,equity, or admiralty, if the United States were suable.' Such petition is an action at common law, or a bill in chancery, or a libel in admiralty, according as the redress sought and nature of the claim may determine. In the present case the proceeding is clearly one for relief in equity. The petitioner, while he had redress by atUtchment in his own power, was assured by the agent of the defendant that his claim would be paid, and that the defendant would not take steps apprehended by petitioner that would defeat its payment. Relying upon the good faith ' of the defendant in giving these assurances, petitioner allowed property which he could h.a.ve replevied to be used by the defendant, only to find the payment of his claim defeated by the defendant's resort to the very steps which he had been assured would not be taken. This petition is therefore in the nature of a bill in chancery for equitable relief. Yet we can give no effectual redress. Our decree can be but a mere recommendation to congress for an appropriation. The case in detail is as follows: The naval secretary of the lighthouse board of the United States contracted on the 12th of February, 1887; with Ramsay & Son, of Baltimore, for the construction of a steel twin screw steamer, which was afterwards named the Zizania. The vessel was to be built according to specifications and drawings which were made part of the contract. The amount agreed to be paid and received was $66,900. This sum wa..s to be paid in five installments respectively as the work should reach stages specifically defined in the contract. The contract was to be liable to forfeiture by the secretary of the treasury if the work should not be completed at the end of seven months from the date of its approval by the secretary, and $35 was to be forfeited by Ramsay & Son for each day's delay beyond that period in completing the steamer. Ramsay & Son made poor progress with the work. The ship was not completed by October, 1887. They fell behind not only with their work, but in their payments to men and firms from whom they obtained material. One of the firms to which they became indebted was that of Coates & Co. of Baltimore, for steel plates and other material. On the 18th of February, 1888,-12 months aftE!r the contract had been made, and 5 months after the steamer had become liable to forfeiture by the United States at their discretion,-v.53F.no.l0-63
994
FEDERAL REPORTER,
kSon' & Go. a power of collect fJ:omtU,e,lighthoul!l6 bQar,d, at city, ,$6,000 then due J.Q :CQates &,OQ"fQrplatelil, 'etc" which"Wu'11:>een Iilupplied to Ramsay &; Son for this,v;essel, IllW:lt'of them Iiltillly:l,ng in the ship yard, and not yet put into the steamer. ,, 'A letter, frQlU Ramsay, ,& 2Qn; adE1ressed to the e4airman of the bQard; 9ft a,t4n'Uey, stating the $6,()00 was for value received 'in steel plates furnished fortlte 9Y CQates & Co. The power of attorney and the letter both stated expressly tl;tat,tWs mOJl.fY waalWhe Lpaid out of the tinal' payment t.l:!4t lllight 1:1e d,ne,to ::Ra!llsay; &!ijon of the,steamer Zhania,and the bOard hold order, and: pay the amouJl,t Whe:Q,J,t nlight be due.' The power of attorney, were proIllpt!y presented by :4 R. Coates, of the firm of & Co., to,Oonunander R. D. Evans, at WashingWn; then in"charge of,tlte, bus41eilS, of the 'lighthouse board, who was informed that, ,Jl,Il1eilS t4e 'f,LUlOUnt, due was paid, the firm would attIMID the material in the ship,y.ard;,andpreventits being put into the .L.R. Coates testifies tbfl,tCommander Evans tOok possesshm QJldpl1wed' the:pl on assured him tb.at he would see tlle claim paid. ,.tCoIllIllaDder lj}vaIll;l state.d to this witness that, the government did not care to dechwe the CQJl,tBact forfeited, and that, while he did not believe .·Pis firm a mechanic's lien against the engine, boilers, etc., yet he ,iJ,id not care about the government being put to the «ielay which the would entail, nor desire that COlil.tes & Co. material forilie ship, and thereby causeturther delay...·On the faith of what occurred in this alJowed their material to .be put into the Zizania. Afterwards, 1;0 wit, on the 8th of June, ,1888, the government found it necessary to' its contract with Ramsay & Son, and to the vessel itself. The final payment, therefore, did not become due nor. become paya1;)le to Rltmsay & Son. The cost of completing. the vessel cOIll;lumed the residue of· tl1e· contract price of its .constru.ctiQn, except about and this cost of completion did not embrace. any payment tc;>Coates & Co. for. the material which, On of, Commander, Evans, which has been stated, they had to be built into the Zizania. The recor4 shows that a few· dp,ys .alter the interview between L. It. RiAd.Co:mmander of the claim of Coates &00. was the 1il11pject of officialcCln'espondence among officers of the Solicitor of. tlte ',l'reasury F. A; in a letter to the secretary of the 24th of February, 1888, advises that the claim of Coates ,/tOo. for $6j QOO should be paid .qutof the sum that to Ramsay,&Son, but that the, account should inijle :name of Son, who should be required to for the draft issuedfoljJit, before its delivery to Coates & Co. A letter of March 5, 1888,,;,:(roxn Hugh S. ,Thompson, assistant of the treasury,. to and approving of the letter of .acting solicitor, and to the. chairman of the lighthouse board, inforxns. the chairman that "authority is: .to the i
'COATES V. UNITED STATES.
995
board for the payment of the amount named in the IIlanner suggested in the letter at the acting solicitor." . Nearly three years after the date of the two letters just alluded to, to wit, on the 10th of January, 1891, the acting solicitor of the treas,1':ry, F. A. Roove, addressing the BeCl'etary of the treasury, says, among other things: ' , , "Assuming that the power of attorney dated Febrnary 18, 1888, for $6,000, referred to by Commander EVllllS, is the same power of attorney executed to Coates & Co. by Ramsay & Son, I am of opinion that the sum of $6,000 should be paid to Coates & Co. out of any moneys withheld by the department in the settlement with the contractors. If, however, the money has been disbursed to the contractors or other parties, then I should recommend that uponapplication of Coates & Co. the case be sent to the court of claims, as by Commander Evans 1Ii his letter of January 11th, 1889."
This opinion was written, ,as appears upon its face, apropos of a letter received by the secretary of the treasury from Commander Evans, suggesting his inability to adjudicate "as to what amounts should be paid by the lighthouse board for sums due to creditors of Ramsay & Son for materials furnished and actually built into the Zizania, ,and for money loaned them, ostensibly for the prosecution of the work." Coates & Co. adopted the recommendation of the solicitor of the treasury, except that they brought their suit in the circuit court of the United States for Maryland, under the option given in section 2 of the judiciary act of March 3, 1887, (24 St. at Large, p. 505,) of suing in such cases as the one at bar, either in the court of claims at Washington, or a circuit court of the United States. ,This suit of Coates & Co., petitioners below, was dismissed by that court with cosm, and is here by writ of error. If technicalities could be held to defeat equitable claims, this case would be clearly with the defendant. The power of attorney from Ramsay & Son to Coates & Co. expressly provided for its payment out of the final or fifth installment of money that should be due to Ramsay & Son; and the' fifth installment never fell due. Promises and pledges by individual officers of the government do not, in general, bind the government, and cannot be enforced by suit. Hence suits brought on such promises and pledges against the government cannot and should not be maintained j and so the mere assurances given by Commander Evans to Coates & 00. that his claim should be paid cannot be recognized as binding upon the government. But this is not equivalent to saying that equitable claims cannot arise against the government, just and binding upon im conscience, under any circumstances whatever. In the case before us the plaintiffs supplied a large quantity of material necessary in the construction of the ship which contractors were building for the government. They had been promised payment out of the third and fourth installmenm, of money that should accrue to the contractors, and had found their claim postponed to more exacting creditors. They consented to accept a power of attorney, pledging payment out of the final installment to become due to the contractors. Most of the material for which this claim was aue was in the yard, but not put upon or built into the ship. It was their right to reclaim this material unless payment for it were
vol. 58.
uspre4Theyaccordingly went to Washington city to present their pOwer of attorney, and learn whether or not it 'Y0uld be paid. There. was. one contingency in which it certainly would not be paid, to wit, the forfeiture by the government of its contract with Ramsay & Son. For five months it had been optional with the government to declare this forfeitUre. It was material for COates & Co. to know whether it intended to exercise this option" an act which would nullify their claim; and.this was a chief point of solicitude with the holders of thepo.wer· of attorney, and their chief subject of inquiry at Washington. There' seems to have been a. very full conversati6n on the subject between' Commander Evans and L. R. Coates, the result of which was that Coates became confident that the forfeiture would not be declared, and that the.final iIlStallment of construction money would accrue to the contractors, and would be available for the payment of his claim. BelieVing from what Commander Evans said to him that there. would be no .forfeiture, and that their claim would be protected and honored by the authorities at Washington, Coates & Co. allowed their material to be put into the ship, but only to find in a few m,onths that their confidence in the aSSUrance which had been them had beeen There is nopreterise' that the officers of the government did not actin the utmost good faith. It became necessary in dealing with these contractorl;l to. declare a . forfeiture in June; which they had no iritenti,on of declaring"tn 'the preceding FebrUary. Throughout, their action was taken. ill the, utmost good faith; and it is one of the chief me'fits'of' this that it is due upon'equities not in least tainted with fra"Q.dQl', misconduct. The authorities in chitrge' of. the. matter have' alrell,dY adjudicated thiS' claim in favor Ooates '& Co.,a'.n.d I candisc;o'ver no reason why the court shoultl refuse to do likewise;' . The solicitor of the tioeaswy, :inhis letter Qf 10th of JanU3,l'y, already referred
or
·"'R. A. Ramsay &. Son, of Baltimore, the contractors for bUilding the Zizania for the board, Ming indebted to Coates & Company in a large amount for matel'fals, etc., execlited a power of attorney for $6,000. It was optional with the government to 'recognize or not this power of attorney. It appears that Commander Evans, the:laval secretary of thE! lighthouse board, did reCognize it, and that & CompaIJ,y understood they were to be paid this sum. GOOO. f81th and fair. dealing would reqnire that the arrangement be carried out. There can be but little doubt that the then secretary of the board not only recognlze(L the claim of.Coates & Company, but accepted the power of attorney with the of. payiIlg them $6,000 of the balance due to Ramsay & Son, . In a letter addressed to Henry Williams Elliott under date of May 28th, 1888, (ten days before the forfeiture,) Commander Evans says: 'As it is possible that sOme misapprehension exists as to the amount due to Messrs. Ramsay & Son, it is thought proper to call your attention to the fact that there are now due under. the contracttwt;> payments,-the fourth. amounting to $12,042, and the fifth, amounting t<J$18,732. The entire foUrth payment is plEldged power of attorneY,lP'vell. by Mr. Ramsay. Under the last payillent there were $6,000 pledged, under a power of attorney granted February 18,1888, leaving btit$12,732 to meet any further claims.'''
After quoting the above from Commander Evans, the solicitor continues:
BRYANT V. CHICAGO, ST. P., M. &; O. RY. CO.
997
"r am of the opinion that the sum of $6,000 should be paid to Coates & Company out of any moneys withheld by the department in the settlement with the contractors."
I think that decree ought to be entered here in favor of the plaintift in error, and that the decree of the court below should be re\"ersed. BRYANT v. CmCAGO, ST. P., M. & 0. RY. CO. (Circuit Court of Appeals, Eighth Circuit. February 6, 1893.\ No. 175. CARRIERS OF PASSENGERS-WHO ARE PASSENGERS.
'l'he engineer of a railroad switch engine, whlle under pay for extra hours' labor, went, under the direction of the yard master, to the com· pany's shops, a distance of about two miles, being entirely within the com· pany's yards, and drew a passenger coach full of the company's employes to the depot, where they attended a meeting. After the meeting was over, about 10 o'clock at night, the employes again got into the coach, the yard master acting as conductor, and started on the return trip. A collision shortly ensued, in which plaintiff's intestate received injuries causing his death. The intestate had come in from the shops on the coach, but there was no evidence that he or any of the others paid fare. Hdd, that in view of the presumption that one riding in a passenger coach is lawfully there, by invitation or permission of the carrier's employes, and that these employes have authority to bind the carrier by such inVitation or permission, there was some evidence that the relation of' passenger and carrier existed; and it was error to direct a verdict for defendant on the ground that there was no evidence of such relation.
In Error to the Circuit Court of the United States for the District of Minnesota. . Action by F()[Test E. Bryant, administrator of the estate of James Davidson, deceased, against the Chicago, St. Paul, Minneapolis & Omaha Railway Company, to recover damages for alleged negligence causing the death of said Davidson. A verdict was directed for fendant, and, from the judgment entered thereon, plaintiff brings eITor. Reversed. Statement by Sanborn, Circuit Judge: 'l'he plaintiff in error brought an action for damages for the nt>gligence of the defendant in errol', causing the death of James Davidson. The com· plaint alleged that the defendant was a common carrier between the Union Depot in St. Paul, and a point near its railroad shops, about a mile and a half westerly from the depot, and that while in the course of his transportation by the defendant, as a passenger between these points, the deceased was killed by its negligence. The answer admitted that the defendant was a com· tLne 01' the accident it was a carrier of mon carrier, but denied that at passengers between the points named, and denied that the deceased WitS a passenger at that time on any car operated by it. There was evidenCf; that th<> accident was caused by the negligenre of 1he defendant's employes in the management of certain freight cars that stood on 1ts passenger track, with which the train on which the q.eceased was riding collided. At the close of the plaintiff's evidence the court instructed the jury to return a verdict for the defendant, on the ground that there was no evidence tending to show that the relation of passenger and carrier existed between the deceased and the defendant at the time of the accident, and it is this instruction of which com· plaint Is DOW made. The evidence discloses the following facts: Defendant's
