Case ID: us-ct-cl_3/html/0043-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Casky, C. J., \n      Loring, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles Fowler v. The United States.
    
      On the Proofs. .
    
    
      Congress authorize the enlargement of the Library of Congress in a certain specified manner, and appropriate $160,000 for that purpose, “to be expended under the direction of the Secretary of the Interior.'’ The Secretary, loithovt advertising, contracts for the extension to the amount of $169,900. A subsequent Sec- ■ retary annuls the contract as illegal.
    
    I. Where an act of Congress authorizes an enlargement of the Library of Congress according to a certain specified plan, and prescribes the length and breadth and position of the enlargement, it is “a laio authorizing” a contract within the meaning of the act 1st May, 1820, section 6, (3 Stat. L , p. 508,) even though the contract slightly exceeds the appropriation made for that purpose.
    II. Where the expenditure of an appropriation is specially confided to the discretion of the Secretary of the Interior Department, he has discretionary power to award contracts therefor without advertising under the act 2d March, 1861. (12 Stat.'L., p. 220.) '
    Messrs. Carlisle and McPherson for the claimant:
    This is a claim founded upon an express contract in writing, and it is brought into the court by original petition.
    On the 2d of March, 1865, (13 Stat., 448,) Congress made an appropriation of $160,000 for an-enlargement of the congressional library, in accordance with a plan to be approved by the Committee on the Library, which appropriation was “ to be expended under the direction of the Secretary of the Interior.”
    For reasons, in the opinion of’ the Secretary of the Interior, constituting such an exigency as justified the measure, and such as in fact did justify it/instead of advertising in newspapers he had circulars addressed ta> all the builders who he supposed would bid, and invited them to proposé for the work. Of the six who were thus addressed, four proposed, and this claimant’s proposal being the lowest, was accepted by the Secretary of the Interior, by whose order a contract was made with him for-the work. He immediately entered upon the performance of the contract, and had-incurred some expense and made some progress in the execution of it, when a new Secretary, Hon. Jámes Harlan,-came into the department and forthwith stopped the work, declaring tlie contract void because no advertisement bad been made inviting proposals for the work.
    This suit is brought to recover the contract price of the work, less the amount which was saved to the claimant by the stoppage of the work.
    The work for which the claimant contracted was expressly authorized by an act of Congress, and the money to pay for it was thereby expressly appropriated, and by the same act it was expressly provided that the expenditure for the work should be under the direction of the Secretary of the Interior ; thus the whole subject was committed to his discretion, and the contract set forth in the petition, having been made by his direction, was binding upon the United States, and was unlawfully set aside by his successor.
    If, notwithstanding the terms of the act of Congress by which this particular work was authorized, the Secretary was required to proceed in conformity with the general provisions of the law respecting contracts, then he was authorized to contract as he did, by the act of March 2, 1861. (12 Stat., 220.)
    The United States having refused to allow the claimant to proceed with and perform his contract while he was ready, willing, and able to perform it, and actually engaged in its performance, without any default on his part, the measure of damages is the difference between the contract price and the sum which it would have cost him to complete it. Theodore Adams v. The United States, 1 Nott and Huntington, p. 106; Howard v. P. W. fy B. R. R. Company, 13 Howard, p. 344.
    The Solicitor for the defendants:
    The contract provided for the payment of a sum in excess of the appropriation, and was made without advertisement.
    A contract for a price exceeding the appropriation made by Congress is unauthorized and void. (4 Opinions, 602 ; 9 Opinions, 602.)
    Attorney General Black, in 9 Opinions, 19, says:
    “ This statute ought to be so construed as to carry out its wise and beneficial object. I incline, therefore, to think that a contract made in violation of it is utterly void, and without more validity than a piece of blank paper.”
    Contracts that grow out of the infringement of a statute are void.-(Sedgwick on Statutory and Constitutional Law, 84.)
    Agreements contrary to the policy of statutes are equally void. (Ibid., 86.)
   Casky, C. J.,

delivered the opinion of the court.

The act of Congress making appropriations for sundry- expenses of the government, approved March 2, 1865, contained the following provision:

“For an enlargement of the library of Congress so as' to include two wings, built fire-proof, the space at either end of the present •library, measuring about eighty feet in length by abouj; thirty feet in width, in accordance with a plan to be-approved by the Committee on the Library, one hundred and sixty thousand dollars, to be expended under the direction of the Secretary of the Interior.'’

Mr. Usher, who was then Secretary of the Interior, directed the architect of the Capitol extension, Mr. Thomas U. Walter, to prepare plans in accordance with this law. These plans were approved by the Joint Committee on the Library, and on the 14th of April, 1865, circular letters were sent to all the principal establishments making the kind of work required, containing plans and specifications of the enlargement of the rooms, and inviting from them proposals for the necessary, work and materials required ; such proposals to be put in on or before the 26th day of April, 1865. A number of bids were received, among others that of the claimant, proposing to furnish all the material and perform all the work required for the sum of $169,900. These proposals were submitted to Senator Oollamer, chairman of the Joint-Committee on the Library, Congress not being in session, who advised that the bid of Mr. Fowler be accepted. The architect concurred in this recommendation, and thereupon the Secretary directed the architect to enter into a written contract with Mr. Fowler, which was accordingly done.

This contract was executed on the 12th day of May, 1865, and the claimant immediately entered upon its performance. He prepared materials and performed labor to the amount of five thousand five hundred and twenty-two dollars and forty-eight cents, ($5,522 48,) and which materials were worth to him, after the rescission of the contract, the sum of three thousand one hundred and forty dollars and nine cents, ($3,140 09.)

About this time Mr. Usher retired from the Department of the Interior, and Hon. James Harlan became his successor. Mr. Harlan, on the 25th May, 1865, notified the claimant that his contract would be held void, because no advertisement for proposals had been published as required by law, and that no accounts' or claims for work performed or materials furnished under the contract wonld be allowed. Mr. Fowler thereupon ceased work, giving notice that he was fully prepared to perform bis contract, and expected the government to live up to its part of it, or respond to him in damages for breach of it.

Proposals were then advertised in the newspapers, and the contract was relet to the Architectural Iron Works at about $146,000.

The actual cost of performing the'work, according to the evidence, was $130,747. The difference between that sum and the contract price is claimed as damages for the breach.

The United States, by their Solicitor, resist a recovery, on the ground that the contract, made with claimant under the authority of Secretary Usher, was void by reason of the following acts of Congress :

On the 2d day of March,, 1861, Congress passed the following statute :

“All purchases and contracts for supplies or services in any of the departments of the government, except for personal services, when the public exigencies do not require the immediate delivery of the article or articles, or performance of the same, shall be made by advertising a sufficient time previously for proposals respecting the same. When immediate delivery or performance is required by the public exigency, the articles or service required may he procured by open purchase or contract at the places and in the manner in which such articles are usually bought and sold, or such services engaged, between individuals. No contract or purchase shall hereafter be made unless the same be authorized by law, or be under an appropriation adequate to its fulfilment, except in the War and Navy Departments, for clothing, subsistence, forage, fuel, quarters, or transportation, which, however, shall not exceed the necessities of the current year.” (12 Stat., 220.)

The language of the statute of May 1, 1820-, sec. 6, is—

“That no contract shall hereafter be made by the Secretary of State, or of the Treasury, or of the Department of War, or of the Navy, except under a law authorizing the same, or under an appropriation adequate to its fulfilment;, and excepting also contracts for the-subsistence and clothing of the army or navy, and contracts by the quartermasters’ department, which may be made by the Secretaries of those departments.” (3 Stat., 50S.) "

Upon these facts the court held—

1. That the contract between the claimant and the United States was a valid and binding contract.

2. That it was not subject to the provisions of the act of 2d March, 1861, being specially confided to the judgment and discretion of the Secretary of the Interior, under the advice and approval of the joint committee of Congress, by the act directing the work to be done.

3. It did not come within the prohibition of the act of May 1, 1820, as there was a law authorizing the work to be done, although the appropriation was not entirely adequate to its fulfilment.

4. That the annulment of the claimant’s contract was unauthorized and unlawful, and he is entitled to recover such damages as he has sustained by reason of the violation of the agreement. ■

5. That the measure, of damages is the difference between what the work would have cost and the price the claimant was to have received for its performance, deducting therefrom for his -time, trouble, risk, and use of capital, from which he was relieved by the annulment.

The main question discussed in this case has been whether the contract entered into under the direction of Secretary Usher with the claimant was a valid and binding contract as against the United States. Secretary Harlan assumed that it was null and void, and that he had the power and authority to so declare. That assumption was based on the facts that there had been no such advertisement for proposals as the law requires, and that there was no law authorizing such a contract, or any appropriation, adequate to its fulfilment.

In what instances an advertisement is necessary, and how far its omission by the officer charged with making the contract will affect the validity of the agreement made, are matters that have given rise to much discussion and difference of opinion in this .court. It is still unsettled whether the mandate in the act to advertise is prescribed as a rule of conduct for the officer whose duty it is to make the contract, .or whether it enters into the agreement as a condition of its validity. Or, where the officer has decided that an exigency exists which justifies him in omitting the advertisement, is the other party bound to know and inquire into the soundness of that opinion, or the existence of such a state of facts as will support it? Is the court or the reviewing officer in such case to re-examine the foundation and accuracy of the conclusion reached? If-so, what constitutes an exigency? By what amount of public interest, convenience, or necessity is it to be determined ? If founded upon state secrets, military or diplomatic, how is the party, who is to judge of them at his peril, to know anything of them ? Or, how can he be informed of the facts supposed to create such exigency? Some of us think these considerations show that Congress meant to prescribe as a-general rule of conduct to contracting officers, the duty of advertising, leaving such officers, in each instance, to judge of whether the exigency that allows of its omission does or does not exist. And while the officer who should wilfully, negligently, or corruptly omit the duty would render himself amenable to the animadversion of the government, it would not affect the validity of the contract unless the party had knowingly or corruptly participated in the officer’s default. But as a majority of the court are not entirely agreed upon these views, we place our decision upon different grounds. A majority hold that the act directing this work to be done, and making an appropriation for its execution, did not require an advertisement in the newspapers. We think that Secretary Usher, by virtue of the power conferred in that act, had power to make the contract with Fowler in the manner in which he did. We think that the law authorized the contract, although the appropriation was not quite adequate to its fulfilment. The act of 1820, as well as that of 1861, only forbids a contract to be made when there'is neither a law authorizing it nor an appropriation adequate to its fulfilment. Where there is either, the contract may be made. Here there was a law, in express terms, directing a certain work to be done, and in a certain manner, and according to the specified plans; and the appropriation made was to be expended under the direction of the Secretary of the Interior. The work was to be done. It was to be done under the direction of the Secretary of the Interior. There are no words of limitation or restriction, and he therefore could make a contract even beyond the amount of the appropriation.

This contract, if made in accordance with Jaw, was beyond the power of any Secretary to revoke or annul. There appears to have prevailed extensively a practice for one Secretary of a department to annul the contracts made by his predecessors. If made in accordance with law and without fraud, the contracts of this government with its citizens are no more subject to rescission by the United States than are ordinary engagements between man and man without the consent of both parties. Any other rule would work to the injury of the government itself, and be highly derogatory to - its character and credit; and in this we all concur.

We see nothing in this case to induce the belief that the transaction was otherwise than perfectly fair and honest. Before the contract was made proposals were invited from all the principal manufacturers of the particular ornamental iron-work of which the main library was composed, and with which the additions were to correspond. Proposals were received from a number, and, among the rest, from the parties to whom it was ■ eventually let by Secretary Harlan. The claimant’s bid was the lowest. He was well known to the Secretary and the architect. He had constructed the main library, He had furnished the material for the dome of the Capitol. He possessed every means and facility to do the work; and in all his previous dealings appeared to have given satisfaction to the officers and agents of the United States under whom be had performed work, or to whom he had furnished materials.

From all these considerations we think he was wrongfully deprived of the fruits and benefits of his contract, although we have no doubt that the Secretary who acted in the matter did so from considerations of duty, believing that the contract had been illegally entered into. The ultimate expense to the United States, we believe, exceeded the price named in claimant’s contract. We regret that we are compelled to still add to that the damage the claimant has sustained.

The measure of that damage is the difference between what the work would have cost the claimant and the price he was to have received for its performance, deducting a reasonable sum for his time, trouble, risk, and the use of his capital for the time in which he would have been employed in its execution.

The best criterion of the cost of the work is what it actually cost the party who performed it. That, Mr. Cheney, the gentleman who superintended the performance of the work under the contract with the Architectural Iron Works, swears was $130,747. To which is to be added the sum of $9,000 received from old material out of the library, making the entire cost $139,747. But these old materials in the specifications, No. 29, would have belonged to the contractor, so that the exact cost of the work is the sum first stated.

As to the other matters which are to be deducted, we have been furnished with no evidence on either side to show their value or amount. Parties are so loth to accept our rule of damages in these cases, laid down by us -in numerous instances, that they leave us to guess on the subject. If they are injured by that, they must place it to account of their own omission. We do the best we can with the light they furnish.

The account will stand :

Contract price. $169,900 00
Deduct actual outlay.$130, 747 00
Time and superintendence. 5, 000 00
Bisk, insurance, interest, &e. 5, 000 00
- 140,747 00
29, 153 00
Deduct for materials on hand. 3,140 09
26, 012 91

The court therefore enter judgment for claimant for the sum of $26,012 91. ■

Loring, J.,

dissenting:

The statute of 2d March, 1861, (12 Stat., 1820,) “prohibits” a contract “ unless the same be authorized by law or be under an appropriation adequate to its fulfilment.”

The Solicitor objects to this action “ that the contract provided for the payment of a sum in excess of the appropriation.” This is admitted ; but it is contended for the petitioner that the contract was “ authorized by law” within the meaning of those words in the statute cited.

The only authority for the contract is the appropriation act of 2d March, 1865, (13 Stat., 1848,) which appropriated to the enlargement of the library of Congress, according to a plan to be approved by the Committee on the Library, $160,000, “ to be expended under the direction of the Secretary of the Interior.” And on this act the question is, not whether it authorized the Secretary to contract for the work, but whether it authorized him to make this contract exceeding the appropriation. I think it does not, either by its express terms or by any necessary or other implication. It does not in terms direct or mention a contract, and it does not authorize this contract by any necessary implication, because Congress may have contemplated a contract not exceeding the appropriation, and I think the legal inference is that they did, and this is not weakened by the fact shown that the appropriation was adequate for the work specified in the contract, which was done within the appropriation under the second contract.

Where an act of Congress directs an officer 'to contract for the construction of a work and makes no appropriation for it, then the power to contract for its cost is a necessary implication, because neither the act of Congress or the work could be executed otherwise. But where the act of Congress makes a specific appropriation for the work no such necessary implication arises, and it is repelled by the maxim “ exyressio unius est exclusio alterius.” The cases cited by the Solicitor from the opinions of the Attorney G-eneral show that the rule was officially settled in the departments twenty years ago and has been been adhered to since. If the rule were not so, every appropriation for a work might be exceeded.

The petitioner claims that by the contract he was entitled to do the work for the amount of the appropriation, and is therefore entitled to the difference between the appropriation and the proper cost of the work.

But he never proposed to do the work for the amount of the appropria tion or for any other amount than the contract price, and although there are cases where the principal is bound for as much as was within his agent’s authority, and not for the excess, yet those are cases in which the thing authorized and its price are severable from the excess, and the party dealing with the agent was ignorant of the limits of his authority. But this is not such a case. Here the contract is for an entire thing for an entire price, and it never was held that in such case the principal was hound at all by á contract which stipulated a price beyond that to which the agent was limited. And here it is to be held that the petitioner knew the statute, and therefore that he knew the contract was beyond the officer’s authority and prohibited by law, and I think he acquired no rights by such a contract and that a court cannot legalize it by changing its terms.

It is also objected by the Solicitor “ that the contract was made without advertisement.” This was admitted, but it was contended for the petitioner that an immediate delivery or performance was necessary, so that there was an exigency of time within the statute of March 2, 1861, and that it is to be presumed that it was so adjudged by Mr. Usher, and that he was the person to adjudge it.

But I think the case does not admit of the exigency of time contemplated in the statute, which is where immediate performance or delivery is necessary to the accomplishment of some public purpose, which the delay required for advertisements might defeat, such as the feeding and furnishing of troops, the movement of an expedition by sea or land, &c., &c. But this is not such a case; here the matter was the enlargement of the library for the keeping and use of books, and the delay of this enlarged accommodation, by the time required for advertisements, might in this case, as in the occupation of any other public building, postpone a convenience, but I do not think that makes an exigency in which cost is not to be considered and which should except contracts for public buildings from the provision of the statute requiring advertisement.

Then the exigency claimed is not proved; on the other hand, the evidence shows that for the second contract advertisements were made, and it is not shown that any injury or inconvenience was sustained thereby, or that a book was injured, or anybody delayed in getting a book. Moreover, it is not shown that any time was saved by the mode of proceeding substituted for advertisements, viz: That of letters addressed to individuals. This mode occupied two months from the time it was ordered till the contract was made, and, for all that appears,, that would have sufficed for advertisements.

If the evidence shows that there was no exigency of time, then it is not to be presumed that Mr. Usher adjudged there was one, for he is to be presumed to know the facts of the case as well as the law.

And I think, for the reasons stated by me in the case of Floyd v. The United States, 2 C. Cls. R. 429, that the question, whether or not there was an exigency of time, is to he adjudged for the parties here, not by Mr. Usher, hut by the court which is to decide upon the legality of the contract and of the action of the officer who made it, upon evidence of the circumstances in which the contract was made. These were shown here and may always be shown.

Upon the whole case I am of opinion that both of the objections made by the Solicitor are well founded, and that either is fatal to this action, for that a contract was “ authorized by law” does not remove it from the provision of the statute requiring advertisements or from its reasons.

If the contract was illegally made it was not the act of the United States, and they were never bound by it and are not liable on it now.