Case ID: us-ct-cl_2/html/0353-01.html
Source: Caselaw Access Project
Author: {"author": "Casey, C. J„ Boring, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE GIBBONS AND KELLY CASE. Francis A. Gibbons and Francis X. Kelly v. The United States.
    
      On the Proofs.
    
    
      In a building contract made by the Treasury "Department, certain materials purchased by the con' tractor, with money advanced by the United States, are transferred to the latter> The contractor and Secretary of the Treasury treat those materials as the property of the United States. The materials having been accidentally destroyed, this court, under its former organization, held that the loss fell upon the United States as the oumer. Congress approve the finding, and paid the amount, and then pass an act referring the case bach to this court, to ascertain whether the full value of the property had been allowed in the former case.
    
    When a certain construction is given to a contract by the Treasury Department by this court, (under its former organization,) by Congress, (upon the report of the Court of Claims, and again-by a resolution granting the claimants a rehearing,) and finally by the claimants, that con-stniction will be adopted by the court on a second trial, and the rights of the parties determined thereunder.
    Mr. Enoch Totten for the claimants :
    This cause is founded upon a contract executed by the petitioners and the United States on the 30th day of April, 1852, whereby the petitioners agreed to erect eight light-houses on the Pacific coast. The cause was first brought into court on an original petition, whereon were had certain proceedings, and a part of the claim was paid, and now comes up in pursuance of a joint resolution of Congress, passed on the second day of March, 1867, as follows, to wit:
    “ Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the papers in the case of Francis A. Gibbons and F. X. Kelly be referred back to the Court of Claims, and the court shall be authorized, if of opinion that the ends of justice will be subserved thereby, to grant a rehearing of the case on an amended petition, without prejudice to the claim by reason of the formér decision of said court.”
    The materials for the light-houses and the illuminating apparatus were to be purchased by the contractors in the Atlantic States. Everything connected with the “ lighting apparatus” was to be purchased from the parties who regularly furnished (under contract) such things to the government. On the shipment of the materials, their insurance, and the assignment of the bills of lading and policies of insurance to the government by the contractors, and on their giving a penal bond in the Slim of $75,000, conditioned for the faithful performance of the said contract, the government, in consideration of the advances of money by the contractors, was to pay and advance to them the sum of $35,000.
    The materials for the light-houses, were then to be transported to San Francisco, and delivered to the collector at that port, and to remain in his possession until required by the contractors to be delivered at the several places where they were to be used, and were to be transported on revenue cutters of the United States, under the authority of the said collector.
    The materials were duly shipped at Baltimore, two insurance policies procured, the bills of lading and insurance policies formally assigned to the government, the said penal bond given, and the sum of $35,000 paid to the contractors for their expenditures, their time and trouble.
    In due season the vessel arrived at the port of San Francisco, and the materials were delivered to the collector there, Afterwards, and in pursuance of the contract, four of the light houses were constructed. When the materials for the construction of the remaining light-houses at Point Loma, Point Conception, Humboldt Harbor, and Cape Disappointment, were required by the contractors at those several localities, a charter-party was entered into for the use of the barque Oriole, between the government (through the collector) and the contractors, who owned her, for the purpose of transporting these materials, and she was placed in charge of a government officer. On the voyage, and at the mouth of the Columbia river, the vessel, with all the materials for those light-houses on board, was lost. The contractors then demanded other materials from the collector, to enable them to accomplish these four light-houses. He told the contractors to go on and complete the light-houses, and either he or the government would pay for them. Mr. Gibbons also applied to the Secretary to furnish the materials, but was directed to furnish them himself.
    The contractors then proceeded to procure the materials to replace those which had been lost, and transported them at their own expense to the several localities where they were required, and completed the light-houses according to contract. They were inspected by the government, accepted, and the original contract price paid for them, without any allowance whatever for the materials so replaced, or for the transportation thereof. This court afterwards rendered a judgment in favor of claimants for $10,558 for the materials, (the cost of like . materials in Baltimore) and $18,000 for transportation.
    Tliis suit is brought to recover the amount paid for these materials on the Pacific coast, less the $10,568, and for $13,500, the balance due for the transportation, being for 10¿ instead of six months (as allowed by the court) at $3,000 per month, together with interest on the whole amount.
    The advance payment of $35,000 was an equivalent for'the value of the articles previously delivered, and the services rendered by the contractors in purchasing and shipping materials. The statute of 1823 makes any other advancement unlawful. (3 Stat., 723.) When a contract is susceptible of two interpretations, one of which brings it in conflict, and the other in conformity with law, the courts will adopt the latter construction. (2 Parsons on Con., 10 ; Coke upon Litt., 620.) Upon the assignment of the bill of lading and policies of insurance, and the delivery of the bill of sale by the contractors to the United States, the absolute property in the materials on board the Oriole passed to and vested in the government. (Caldwell v. Ball, 1 T. R., 205 ; Uibbert v. Carter, 1 T. R., 705 ; Godfrey v. Furzo, 3 P. Williams, 185.)
    The United States having made an unqualified agreement in the contract to deliver the materials at the several localities where they were to be used, when requested so to do by the contractors, they were bound to deliver them, and the subsequent loss of the materials by shipwreck did not excuse them. The accident did not prevent them from substantially performing their contract. (Bulloch v. Dom-mitt, 6 T. R., 650 ; 2 Parsons on Contracts, 185.)
    The charter-party imposed no greater responsibilities upon the owners of the Oriole than those of private carriers for hire; they were responsible for no more than ordinary neglect, and bound to exert no more than ordinary diligence. (2 Kent’s Com., 597 ; Coggs v. Barnard, Ld. Raymond, 909, 917, 918 ; Story on Bailments, § 457.)
    After the loss of the materials on board of the Oriole, the United States authorized the contractors to replace them by purchase, accepted the light-houses when completed, and received the full benefit of the claimants’ labor and materials ; they are therefore bound to pay for them what they were reasonably worth. (Hayward v. Seward, 7 Pick., 181; Olmstead v. Beale, 19 Pick., 528; Taft v. Montague, 14 Mass., 282.)
    The government is bound to pay interest. The claimants paid three per cent, per month for the money used in. constructing these four light-houses.
    The Assistant SolicitoR for defendants:
    From the testimony, it must be apparent that the whole business was transacted very loosely; that no such care was exercised in preserving the evidence of the cost of these materials and expenses as the government had a right to expect, when it is sought to make it liable for a large sum of money; and that it is neither harsh nor unjust for me to say, that it places the claimant in a very unfavorable attitude before this court.
    The claim for interest from the 1st of January, 1854, cannot be allowed, of course.
    Congress having referred the case to this court for a rehearing, it must be presumed that the national legislature reached the conclusion that the claim now made was a meritorious one. It is a case entirely dependent upon the weight to be given to the evidence by this court; and with the consciousness that your honors will examine and weigh it in the light of justice and equity toward both the government and the claimant, I respectfully submit it to your judgment.
   Casey, C. J„

delivered the opinion of the court :

On the 30th April, 1852, the claimants entered into a contract with the Secretary of the Treasury, by which they agreed to erect for the United States eight light-houses, on the coasts of Oregon and California, for the stipulated sum of one hundred and thirty-six thousand dollars ($136,000 ) The materials for these erections were to be procured and prepared on the Atlantic coast by the contractors. When so prepared and ready for shipment, and insured for the voyage, and the policies assigned to the United States, the contractors were to be paid the sum of thirty-five thousand dollars, the estimated cost of these materials, and they thereupon were to become the property of the United States.

The latter were to be at the expense of the transportation, and to be delivered to the contractors at the points designated by the contract for the respective light-houses. With the approval of the Treasury Department and Light-house Board, the contractors purchased the bark Oriole, and shipped the materials on board of her. She arrived safely at San Francisco, where the materials were delivered, as the contract provided, to tbe collector of that port, for the United States. He was to provide transportation thence to 'the sites of the respective liglit-houses. Finding it difficult to charter any vessels, he entered-into an agreement with the claimants, by which he chartered their vessel, the Oriole, for that service, for three thousand dollars per month.

After she had delivered the materials for several of the light-houses, and proceeding on a voyage with that of the others, she was wrecked and totally lost off the mouth of the Columbia river, in the beginning of September, 1853. The first cost of the materials lost by the wrecking of the vessel, in Baltimore, where they were procured and prepared, was ten thousand five hundred and fifty-eight dollars ($10,558.)

The claimants’ agent thereupon returned to San Francisco, reported the loss of the materials to the collector of the port there, and requested him, as the agent and depositary of the United States designated by the contract, to replace such materials, that the contractors might proceed with the erection of the light-houses, as provided by the ■ contract. The collector declined to act in the premises without special authority and instructions from the department at Washington.

The claimants, however, proceeded and purchased the materials and prepared them at San Francisco, and procured and hired the necessary conveyance and transportation. They completed all the lighthouses according to their contract; and having been examined and inspected by United States officers designated for that purpose, they were accepted and turned over to the United States.

The United States paid to claimants the original amount agreed upon for the materials and light-houses; but the department declined to pay for the materials purchased by the claimants instead of those lost on the Oriole, or for the transportation which by the contract was to have been furnished by the United States, but was procured and paid for by the claimants. To recover these the claimants brought suit in this court, in 1S55. Upon hearing, the court ruled that the materials belonged to the United States, and that they must bear the loss of them. It also held that they were liable for the transportation of the various materials from San Francisco to the respective sites of the light-houses, together with some other items.

By either an inadvertence, or for want of proof, the materials were estimated at their cost in Baltimore, while their actual cost in California was three or four times as great. 'The amount allowed on these two items was as follows :

For materials, the cost in Baltimore. $10, 558

Transportation. 18, 000

28, 558

There were some other allowances for matters notin dispute, which made the aggregate allowance thirty-one thousand one hundred and ninety .dollars and fifty-four cents ($31,190 54.) A hill for this amount was reported to Congress, who approved the finding, and made an appropriation to pay the same, and which was received by the claimants.

The claimants again petitioned Congress for an additional allowance paid for materials at San Francisco, and for the balance of the transportation not allowed them on the former trial. Thereupon Congress passed the following joint resolution :

Resolved, fyc., That the papers in the case of Francis A. Gibbons and Francis X. Kelly he referred to the Court of Claims, and the court shall be authorized, if of the opinion that the ends of justice will be served thereby, to grant a rehearing of the same on an amended petition, without prejudice to the claim by reason of the former decision of the court.”

The motion for a rehearing under the joint resolution passed by Congress involves the entire merits of the case. And therefore we have held that motion over until we had before us all the evidence on the one side and the other in relation thereto. The payment of the amount heretofore reported by this court, by a special appropriation, was, of course, a clear and explicit legislative sanction and approval of the principles decided and the justice of the claim. All we have now to do is to determine whether the ends of justice will be served by a rehearing and an additional allowance.

The evidence conclusively establishes the fact, that the materials purchased and prepared at San Francisco cost the claimants from three to four times the amount which the court before allowed to them. The cost of labor and materials in California, according to the undisputed proof, was from three to five times as much as they could be procured for in the east. So the allowance of eighteen thousand dollars for transportation was considerably less than the actual outlay for that item.

We have some difficulty in reference to the kind and character of the testimony offered. Instead of showing what the materials they procured actually cost them, they prove the relative value of such materials and the labor necessary to produce, between the Pacific coast and the Atlantic cities at that time.

Ordinarily, they should have been able to show by their books, accounts, and vouchers, the exact value or price of each thing bought or made to replace those lost by the wreck. They excuse themselves from this by saying that this accident occurred when the claimants were absent in Baltimore. That their agent, having applied to the proper officer and agent of the United States at San Francisco to replace the materials and furnish transportation, as they were bound to do, and he having declined, and their agent being then obliged to go into the market and purchase as best he could, is not to be held to the most rigid and strict proof. That their agent, though a good workman and superintendent, and efficient in every way for the purpose for which he was employed, was not accustomed to the business of making purchases and keeping complicated accounts. Nor was it contemplated when he was placed in charge of the works that it would be necessary to do so, as their material had been provided and the workmen employed at stipulated wages.

There is some force in these suggestions. Yet, making all due allowance for the unexpected situation and circumstances’ brought about by the wrecking of the vessel, the want of specific and definite proof must operate against the claimants. Against such proof, so indefinite and general, we make every intendment, and can only draw such conclusions as we are sure will ’come within the proofs. After carefully considering the evidence, we value the articles purchased in Sau Francisco at three times their cost in Baltimore — this cost the proof made $10,558. Its value therefore, on this basis, would be $31,674. From, this is to be deducted the amount allowed before, viz: $10,558, leaving $21,116 due for material. The transportation we estimate upon the basis of the contract between the collector at San Francisco, the agent of the United States, and the claimants. That was three thousand dollars per month. This, we presume, was fair and reasonable, as it was agreed to on both sides, and furnishes the best evidence of its value. The time was not so clearly proved. The claimants allege they were employed ten months after the wreck of the Oriole, and are' entitled to the agreed rate for that time. The proof fails to show the precise time, and here again we make every intendment against the party whose duty it was to furnish the evidence. From the testimony we cannot be certain that more than seven and a half months’ transportation was required; and for that period we allow them tbe formerly agreed rate, making $22,500, and from tliat deduct tbe amount received by tbe former award or report of tbis court, viz: $18,000, leaving due on tbis account the sum of $4,500, which, added to tbe balance of tbe materials, $21,116, makes the amount due tbe claimants tbe sum of $25,616.

We think the construction put upon the contract by tbe Treasury Department and the claimant by this court at the former trial, which was approved and affirmed by Congress, confirming the report and appropriating the money to pay the amount, and by the passage of the joint resolution under which it is here now, are executive, judicial, and legislative concurrence in its interpretation, acquiesced in by the claimants, which is not now to be gainsaid or departed from. Adopting that as the true and legitimate construction, we are clearly of the opinion that the ends of justice will be served by granting them a rehearing. And that upon that rehearing they are entitled to recover the sum of twenty-five thousand six hundred and sixteen dollars. And for that sum we direct a judgment to be entered in their favor.

Boring, J.,

dissenting:

'Phis case was heard and decided in this court in 1856, and before any of the present members of the court belonged to it. It is now referred back to us by the following joint resolution:

Resolved, S¡v., That the papers in the case of Francis A. Gibbons and Francis K. Kelly be referred to the Court of Claims; and the court shall be authorized, if they are of opinion that the ends of justice will he served thereby, to grant a rehearing of the same on an amended petition, without prejudice to the claim by reason of the former decision of said court.”

By this resolution the case is returned to this court for a rehearing, and that rehearing is to be of the whole case, for no part of it is specified or excepted; and I understand that the provision that the rehearing shall be without prejudice to the claim by reason of the former decision of this court sets aside that decision, so as to prevent its action as a bar to the claim now made, that justice may be done to the petitioners under their contract, if it has not been. But I do not understand that we are bound by that decision or anything heretofore found, so that, if by any misapprehension of facts or law, the petitioners have been overpaid, before they are to be overpaid again, the United States are to be credited with what they have paid as so much paid on account of the contract. If it is less than was due, they are to make up the deficiency; if it was all that or more than was due, they are not to pay still further.

The first thing to be determined is the construction of the contract, and as to this the petitioners aver as follows in their present petition:

“ The petitioners further show that, by the true construction of their contract, they were only bound to erect said light-houses with the materials purchased and transported by the government.”

Now, the materials for the light-houses consisted of the lanterns and illuminating apparatus and articles necessary thereto, and also of the stone, mortar, joists and timbers, and wood-work and iron-work, &e., for the eight structures, and each of these were by the contract to be a hundred feet high, at least; and as to whether such masses of material were to be furnished and transported by the government or by the petitioners, they must necessarily and positively know, and if they were to be furnished and transported by them, then their averment in their petition that, by the construction of the contract, they were to be furnished and transported by the United States, is, at the least, a dis-ingenous pretence.

Now, the claim that they were only to erect the structures from materials to be furnished and transported by the government, was never made before in the application to the department or to Congress, or in the previous litigation in this court; on the other hand, the petitioners and their counsel have before always emphatically declared the contrary.

In their memorial to the Senate committee, (Sen. Doc. 7, pp. 140, 141, 1854, 1855,) the petitioners construe their contract and argue their case, and they say thus : “ Two distinct and separate duties were to be performed by the contractors. They were bound, in the first place, to furnish the materials and build the wood and stone-work of the light-houses, in whatever way and from whatever sources they chose. Upon this part of the contract they were to make whatever profit might accrue to them from their agreement.

“ In the second place, they were bound to provide (and here they quote from the contract) every article and thing connected with the lighting apparatus, and to purchase the same from the persons who had contracted with the United States to furnish such .apparatus for all the light-houses, and to pay therefor the price stipulated in their said contract with the United States.” And to this quotation from the contract the petitioners add, “ Upon this part of their agreement they could make no profit — they could gain no advantage. It was on their part an undertaking to fulfil the contract of the United States, and to advance tbe moneys required for the payment of the prices so stipulated.”

Then, their counsel, in the printed argument in this court at the former trial of this case, says: “ It is true that, by the contract, the government is only hound to transport the materials shipped from the Atlantic States, and to deliver them at the sites, and the petitioners were to transport other materials, say brick and stone, or to furnish them on the sites, if they could he procured there,” (Reports pp. 50, 51, 1865-’56.)

In the former trial of this case, it was held by a majority of the court that the goods lost in the Oriole were the property of the United States. I do not concur in that opinion. I think the contract and the evidence show that the $35,000 was an advance of part of the contract price, made, as is usual by the United States, to the contractors on the partial performance of the contract by them in purchasing the illuminating apparatus of the persons of whom the United States had agreed to purchase it and on the security of the property assigned to the United States.

The contract speaks of the $35,000 as an advance, and what I think is conclusive that it was so is, that by the express provision of the contract it was to be deducted from the contract price; and this shows, also, that the property lost on board the Oriole was the property of the petitioners, held as security by the United States, and the petitioners purchased it, and shipped it, and insured it, and transferred it, and the policy of assurance and the transfer by the bills of lading and invoice, and policy of insurance, is the usual way of taking as security property shipped. Then the witnesses speak of it as security for the $35,000 advanced. Mr. William Hodge, the Assistant Treasurer of the United States at the time, who made the arrangement, after stating the advance of the $35,000, says, “ As security to the United States, all these materials, including the entire cargo on board the vessel in which they were shipped, were transferred to the United States by invoice and bill of lading,” (R. p. 42,) and Mr. Hemmick, the agent of the petititioners, in his affidavit, adduced by the petitioners, says : “ The said policies were, to the positive knowledge of the deponent, assigned over to the United States as security for advances made to Messrs. Gibbons & Kelly,” and it is not credible that men of even ordinary business capacity and experience should represent property held by its owner as security for advances to others’; and besides all this testimony, that of the petitioners themselves is most express- In their memorial to Congress, quoted from before, they say : “ All the property of your memorialists on. board the said bark Oriole had been some time before transferred to the government, as security for certain, advances made by the government.” This is their statement of the facts. Then they state their conclusion as to its legal effect, as follows : “ It was, therefore, in fact the property of the government, and was at the risk of the government when it was lost.” But this conclusion is not only a non sequitur from the premises, but it is disproved by them. For if, as they state, the property was theirs, held by the government as security, the risk of the property was theirs and the risk of the security was the government’s, and when the property was lost, they lost their property and the government lost their security; and I think that, by the contract, the testimony and the unequivocal declarations of the petitioners, the property in the Oriole was their property, held by the government as security only, and that, therefore, the government were not bound or legally liable to pay for it. They have, however, under the previous decision of this court, paid for it once, at its full value, and I think they are not bound to pay for it again, and that at four times its original cost; and the claim for the property lost in the Oriole is the only claim for materials now made.

Then, as to the transportation, I think, on the evidence, that the petitioners have been paid the cost of that many times over.

It has been seen that the counsel for the petitioner in the former trial said that the government was only bound to transport the materials shipped from the Atlantic States, and to deliver them at the sites of the light-houses. That transportation has been paid to the petitioners at $5,413, and no claim is made for that now.

The transportation from San Francisco to the light-houses was to be of the lantern lenses, See., (R. p. 7,) by one trip to each of the eight light-houses, (R. p. 6,) the most distant of which was only seven hundred miles from San Francisco, and for this transportation the petitioners have been paid $66,000, (R. C. of Cls., Gibbons & Kelley v. U. S., p. 58, and references and Sen. Doe. 53,) and they had claim for it $31,000 more.

I think that on the whole case the petitioners have been paid more than they were entitled to, and that the defendants are entiled to judg ment.