Case ID: us-ct-cl_59/html/0566-01.html
Source: Caselaw Access Project
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Date Created: 2024-08-24T03:29:51.129683

WILLIAM S. BOOTON, RECEIVER OF THE NASHVILLE PROTESTANT HOSPITAL, v. THE UNITED STATES
    [No. A-71.
    Decided April 14, 1924]
    
      On the Proofs
    
    
      Dent Act; implied agreement; authority to act. — To entitle a plaintiff to recover under the Dent Act, 40 Stat. 1272, there must have been an agreement implied in fact, and the Government officer or agent with whom it was made must have been acting within the scope of his authority.
    
      The Reporter’s statement of the case:
    
      Mr. George R. Shields, for the plaintiff. Mr. Samuel Herrioh and King <& King were on the briefs.
    
      Mr. Dwight E. Borer, with, whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant. Mr. Charles F. Jones was on the brief.
    The following are the facts of the case as found by the court:
    I. The Nashville Protestant Hospital is a corporation organized under the laws of the State of Tennessee authorizing incorporation for the support of hospitals for the sick and other objects of like nature, as provided for in section 2513 of Shannon’s Compilation of the Laws of Tennessee (Acts of 1875, ch. 142, sec. 1), and acts amendatory thereof. The original application for incorporation was duly filed in the ofiioe of the county court clerk on the 12th day of December, 1918, and the incorporation on December 14, 1918, followed that application.
    II. In June or July, 1918, a number of citizens of the city of Nashville, Tenneessee, some being physicians, believing there was a need for additional hospital facilities in that city, initiated a movement looking to the organization of a new hospital and the purchase of adequate buildings and facilities therefor. Their plans contemplated the acquisition of certain property supposed to belong to- the Nashville College for Young Women, formerly used for school purposes and then in the possession of a caretaker. The plans so far proceeded that on tlie 2d day of November, 1918, an agreement in writing was executed which, recited that a contract had been made in June, 1918, whereby the Nashville College for Young Women had agreed to sell to Dr. Rufus E. Fort and Dr. E. M. Sanders and their associates certain property on the terms and conditions set out in the said contract. This contract does not appear in the record in this case.
    III. The agreement of November 2, 1918, provided that one V. I. Witherspoon should purchase the Nashville College for Young Women property at a foreclosure sale, which had been decreed by the chancery court, the purchase to be on behalf of said doctors and their associates, who were to furnish the necessary cash. The bid of Witherspoon, it was agreed, would be transferred by him to a new corporation upon its formation.
    IV. For some time prior to November, 1918, there was an outstanding mortgage upon the said premises of the Nashville College for Young Women. There was a provision in one of the deeds which prevented the use of the property for a hospital, and in order to clear the title an arrangement was made whereby the mortgage should be foreclosed. The interest due on the bonds of the Nashville College for Young Women for the purchase price of said property was in default as to the installments due on January 1 and July 1, 1918.' Accordingly, proceedings were instituted by bill filed September 18, 1918, in the chancery court of Davidson County to foreclose said mortgage. Other creditors having also filed a bill the causes were consolidated and a consent decree was entered on October 2, 1918, directing the sale of said property by the clerk and master. This sale had been duly advertised to take place on the 2d day of November, 1918, .and it is the proposed sale mentioned in the said agreement of November 2, 1918, whereby Witherspoon was to become the purchaser. The sale was had, the said With-erspoon bid and was declared the purchaser. The sale was duly confirmed on November 15, 1918, by the court’s decree. Thereafter, on December 31, 1918, a consent decree was entered in the consolidated cause, which recited the sale and its confirmation, and that Witherspoon had purchased the property for the promoters of the proposed Nashville Protestant Hospital, and that subsequently to said sale the Nashville Protestant Hospital had been incorporated, and it was decreed, among other things, that Said Witherspoon’s bid and his rights acquired at said sale be divested out of him and be transferred to the Nashville Protestant Hospital, The clerk and master was authorized by the decree to certify a duly authenticated copy of it for registration.
    Y. In the late summer or early fall of 1918 the Surgeon General of the Army had presented a general plan for hospitalization, and this plan was in September, 1918, being considered by the operations division. Recommendation to the effect that the two boards of officers constituted for the purpose were in September about to set out for the examination of suitable buildings for hospital purposes and they be allowed to complete the transaction without further reference to the office of Chief of Staff had been approved by the War Department. The Surgeon General’s plan provided that patients should be placed in hospitals as near their homes as practicable, and he divided the country into hospital districts. In a memorandum for the Acting Secretary of War on this plan it was recommended by the Assistant Chief of Staff, who was “ Director of Operations,” that each project be submitted to the regional adviser of the War Industries Board for his clearance, and also that the two boards report action on each project promptly by telegraph to the Director of Operations, and that “ each board must be unanimous in its opinions,” and under the stated conditions it was recommended “ that the two boards be given authority to close the deals and make contracts.” This memorandum with its recommendation was approved by Benedict Crowell, Acting Secretary of War, on September 21, 1918.
    VI. A board known as a special hospital board was constituted in accordance with the plan outlined in Finding Y, consisting of an officer from the Medical Corps, a member of the construction department, and an officer from the real estate department. The personnel of the board was Lieut. Col. John A. Hornsby, Medical Corps; Maj. L. H. Lewis, of the construction department; and Capt. Guy Kush, of the real estate section of the General Staff. Colonel Hornsbj was chairman of the board, and had authority to bind the United States by contract. This board visited a number of cities and arranged for hospital facilities. This board arrived in Nashville late in October, 1918, and examined several properties. They concluded that the properties best suited, if they could be secured, were the State School for the Blind and some properties belonging to the Vanderbilt University across the street from the State school. The university properties were found to be available, and when the board called upon the governor of the State with reference to the buildings used for the blind he indicated that if some place could be found suitable for the blind children the school buildings could be secured. The chairman of the board directed Mr. Percy Maddin, a resident of Nashville, who was actively assisting the board, to see whether the property of the Nashville School for Young Women, whose buildings were vacant, could be secured in which to house the blind children if the plan was adopted. Upon inquiry it was learned that the legal status of this property of the School for Young Women was in question, but that some doctors were trying to secure the property for hospital purposes. Efforts to get something definite about this property were not successful. The parties controlling it declined to lease it. Finally, it was decided to call a meeting of citizens with the board to, discuss the situation, and a large meeting was held. The chairman of the board informed the citizens that it was necessary that something be done at once; that he was going to Memphis to ascertain if a hospital could be secured there if it could not be secured in Nashville. Being assured that these citizens hoped within a few days to be able to get suitable properties, the chairman agreed that one of the board, Captain Rush, would keep in touch with them and report matters to him.
    VII. Having received notice that the property of the Nashville School for Young Women could be secured, Captain Rush returned to Nashville on November 6, 1918, for the special purpose of having leases signed by the proper parties, the general terms of which had been discussed during the board’s visit. The State was to allow the use of the School for the Blind without compensation, and the Government was to find a place to bouse the blind children.. It was Captain Kush’s duty to prepare the proposed leases,, and he did so. He made a draft of a lease, dated November 8,1918, between Lieutenant Colonel John A. ITornsby, Medical Corps, U. S. Army, for and in behalf of the United States as lessee, as party of the first part, and the Nashville College for Young Women, a corporation, as party of the second part, which provided that the latter, called lessor, lease to the lessee certain described premises for a term beginning November 10,1918, and ending June 30,1919, known as the Nashville School for Young Women,” to be occupied by the Medical Corps of the United States Army as a hospital at a monthly rental of $1,100.00.” The draft of lease provided, among other things, that the' “ lessee shall be entitled to possession of said premises as of November 10, 1918, and from and after said date shall be responsible for all operating expenses of said premises, approved by the Government officer in charge.” The lease was signed in the name of the Nashville College for Young Women by the president and the secretary of that corporation, and these signatures-were witnessed by the said Captain Rush. The execution of' the lease was authorized by the then owners of the property. The foreclosure sale made as above stated was confirmed on November 15, 1918. The Nashville Protestant Hospital, the plaintiff herein, was incorporated on December 14, 1918. Captain Rush took the said lease, signed as stated, and other leases on the different properties, also signed by the lessors, but unsigned by or for the Government, to Washington, and upon his arrival there delivered them to the chief of the real estate division. Captain Rush, as a member of the board, was charged with the duty of preparing the leases. The leases had to be signed and approved by some other officer. He had no authority to make an agreement. The Government did not take possession of said property or authorize anyone to take possession of same. The said lease, signed by the officers of the Nashville College for Young Women, was not signed by any officer of the Government nor was it approved.
    VIII. About the time of the delivery of the said leases to the real estate division, the armistice was signed, and because of that fact Captain Bush caused to be sent to Mr. Percy Maddin, at Nashville, who had worked with said board, as already stated, a telegram on November\16, 1918, to the effect that the matter of establishing a hospital at Nashville must be held in abeyance until further information from overseas was received, and for him to instruct the School for the Blind, Vanderbilt University, and Nashville School for Young Women not to move until further orders, and to make no expenditures for the Government. This information was at once conveyed by Mr. Maddin to the different parties concerned. On December 1, 1918, Captain Bush sent another telegram to Mr. Maddin telling him the Government would abandon the hospital project at Nashville, and adding: “ To settle matter quickly please send me formal request from each lessor asking full release at once, also stating that no expense has been incurred or rental required, also have requests signed same as leases were executed,” and to ascertain promptly and wire him at real estate section, General Staff. Mr. Maddin took the matter up with the Vanderbilt University, the board of control of the Hospital for the Blind, the Galloway Hospital, and the Nashville College for Young-Women. All of these except the last named agreed to cancellation of leases and make no claim. Doctor Fort, representing the owners of the college property, who were the promoters of the Protestant Hospital, agreed to release the Government from any obligation to take the property, but reserved the question of making claim for any expenses incurred and for rentals in the meantime. Beleases duly executed by said parties other than the last named were forwarded by Mr. Maddin to Captain Bush. On December 11, 1918, the Government, through its agency, Goethals Beal Estate Holdings, wired Mr. Maddin to have Nashville College wire “to-day if they want immediate release same basis as others,” to which Mr. Maddin replied on same date that Doctor Fort and associates would “ authorize Nashville College to cancel lease, reserving the right to hereafter present any claims which they think due them,” and that he was forwarding application for cancellation of the other parties named.
    
      On December 11, 1918, a telegram directed to Mr. P. D. Maddin, president, National Bank Building, Nashville, and signed George W. Burr, assistant director of purchase, by James S. Holden, major, was received by Mr. Maddin. It stated that “ pursuant to order of Secretary of War, dated November 29, 1918, formal notice is hereby given that the Government will not require the use of the Galloway Memorial Plospital at Nashville, Tennessee, as a general hospital, and you may reenter into possesion thereof at once.”
    IX. A claim was filed with the Secretary of War on behalf of the Nashville Protestant Hospital under the Dent Act in the sum of $12,398.09 as damages arising out of an alleged agreement between said hospital and the United States for the use and occupation of the said Nashville College for Young Women property, which claim was disallowed by the War Department Board of Appraisers in December, 1919. A petition of the committee for the Protestant Hospital Subscription List and the Nashville College for Young Women to intervene in said claim was overruled on July 27,1920. The War Department Claims Board (formerly War Department Board of Appraisers) at its meeting of November 4, 1920, declined to reopen the case. On November 15, 1920, upon request made upon the Secretary of War by the plaintiff’s attorneys, he caused the claim to be further considered and held that after consideration of the appeal and the record in this matter he was convinced that the action of said board was correct and he denied relief.
    X. On March 24, 1921, the original petition in this cause was filed in the Court of Claims in the name of William S. Booton, as receiver of the Nashville Protestant Hospital, duly appointed as receiver of the property and assets of said hospital by the chancery court of Davidson County, Tennessee, on the 20th day of December, 19201. The petition set forth a claim growing out of an alleged lease above mentioned. It claimed the sum of $2,702.33 as including the cost of necessary changes which it alleged were made at its expense for the use and benefit of the Government “ including the cost of maintenance during the period it was held for the convenience of the lessee, amounting to about $1,000, for which claim is made”; and it also claimed rent
    
      at the rate of $1,100 per month to the amount of $1,702.33. The receivership having ended the plaintiff filed an amended petition on November 6, 1923, wherein claim is made for $5,254.52.
    XI. When the case was being heard by the court a motion was made on behalf of certain parties for leave to file an intervening petition. These parties are designated as “Rufus E. Fort and others acting as the Subscription List for the Nashville Protestant Hospital; V. I. Witherspoon, trustee; and Nashville College for Young Women, a corporation, intervening claimants.” It sets up substantially the same claims that are asserted in said amended petition and prays judgment in the names of said intervenors. The motion to be allowed to file this intervening petition asks that they be allowed to file the same as parties claimant “ owing to some doubt as to whether the original claimant is the proper party in interest.” The intervening petition does not state when the claim of these intervenors was first presented to the Secretary of War, nor does the record in the case disclose that the proposed intervenors filed a claim in their name with the Secretary of War under the terms of the Dent Act prior to June 30,1919.
    XII. The items of claim asserted herein are as follows: Item No. 1, upkeep, interest, insurance, and taxes, 61 days_ $3, 519. 09
    Per day
    Coal-$5.25
    Horse feed- 1. 00
    Gas- . 20
    Water_ .85
    Electricity_ 1'. 15
    Oarpenter-painter_ 6. 00
    Gardener-keeper_ 4. 00
    Watchman_ 2. 50
    Phone_ . 35
    . Supplies_._ 3. 0Ó
    Taxes- 5. 23
    Insurance- 1. 50
    Interest on $215,000- 26. 66
    57. 69.
    In addition, claim is made for rent for a similar period $1,833.33. The several sums set forth in said item No. 1 were sums expended or expenses incurred by the said pro-motors of the Nashville Protestant Iíospital, and the latter, after its incorporation, reimbursed said promotors for their actual expenditures. It does not appear in evidence that the Government or any officer of the Government authorized said expenditures on its account.
   MEMORANDUM BY THE COURT

There can not be a recovery under the Dent Act, 40 Stat. 1272, unless there be an agreement such as the act contemplates, which is an agreement implied in fact as distinguished from an agreement implied in law, and founded upon a meeting of the minds. See Baltimore & Ohio Railroad Co. case, 261 U. S. 592, 597; 57 C. Cls. 140. Unauthorized expenditures are not recoverable. See Baltimore <& Ohio Railroad Go. case, 261 U. S. 385. To entitle a plaintiff to compensation under an alleged implied contract where the Dent Act is relied- upon “ it is essential that the, officer or agent with whom it was entered into should not merely have been holding under the Secretary of War or the President, but that he should have been acting within the scope of his authority.” Baltimore & Ohio Railroad Co. case, 261 U. S. 592, 596.

Captain Push had no authority to make a contract binding upon the Government. When the board left Nashville, no agreement had been made. The promoters of the plaintiff company had refused to agree. When Captain Push returned, he had merely the duty of drafting proper leases from the several parties concerned, to be submitted to others in Washington. If reference be had to the memorandum mentioned in the findings, which was approved by the Assistant Secretary of War, it definitely appears that the hospital board which visited Nashville had to act as a whole; one alone would not be sufficient, if one had acted. The findings also show that Colonel Hornsby could contract, but he did not do so in this case. The whole arrangement was tentative. There was no lease entered into by the Government or by anyone in its behalf duly authorized. Nor were the alleged expenditures authorized by any officer of the Government. They were expenditures (except the interest item) which the parties making them might make in the upkeep of their own property.

The petition must be dismissed.