#### WHITESIDE & CO.’S CASE. W. H. Whiteside & Co. *v.*The United States.

*On the Proofs.*

*d contract is made by an assistant special agent of the Treasury with the claimants for procuring evidence to establish the right of the Government to cotton and to bring in the cotton. The consideration is one-half of all cotton so recovered and condemned, with a further provision that if the cotton be released after seizure the claimants shall be repaid all their expenses. After they have seized and brought in a quantity of cotton, the supervising special agent approves the eonhraot, subject to the approval of the Secretary of the Treasury. The cotton seized, however, is forcibly taken and given up to the owners by order of the military commander at Camden, Ark., in January,*1866.

I. Where the contractors of a Treasury agent are, by the terms of their agreement, to receive ono-half of such cotton as they may recover for the Government, or, if the cotton be released, are to be paid their expenses, and the cotton which they seize and transport never comes into the possession of the Government, nor is released by the Treasury Department, but is forcibly and illegally taken by military officer in January, 1866, and given up to the alleged owners, the contractors’ loss is due to the unlawful act of the officer, and no action lies against the Government upon the contract for their expenses.

*533II. Where a contract is made subject to the approval of the Secretary of the Treasury, and his approval is not shown, the contract is incomplete; and where no benefit results to the Government no action will lie upon the contract.

*The Reporters’*statement of the case:

The court found the following facts:

“Office Assistant Special Agent

“Treasury Department,

“ *Camden, Arle., Nov.*10,18G5.

“ This contract, made and entered into by and between A. B. Miller, assistant special agent Treasury Department, and W. H. Whiteside *& Go.,*that said Whiteside *&*Co. agree to proceed to La Fayette County, Ark., (distance sixty-five miles,) and procure evidence sufficient to establish the right of the Government to certain lots of cotton, and put the same in shipping order and transport to this place, for and in consideration of one-half interest in all cottons so recovered and condemned; and, in all cases where the cottons are released after the seizure being-made iipon sufficient evidence to warrant the same, said White-side *&*Co. will be repaid for all expenses of transportation, repairing, &c.

“A. B. MILLEB.,

*“Assistant Special Agent Treasury Department.*

“WhllTESIDE & Co.

“Witnessed before me this 10th day of November, I860.

“JOS. TUGS. ELLIOTT,

“ *Judge, &e.”*

IJpon which is the following indorsement:

“Office Supervising Special Agent,

“Third agency, United States Treasury,

*“New Orleans, La., March*28, 1866.

“Subject to the approval of the Secretary of the Treasury, the within contract is approved so far as it conforms to the regulations of the Treasury Department for paying one-fourth-of the cotton condemned, and it is recommended that one-half of said cotton be allowed.

“ O. II. BUBBBIDGE,

“ *Supervising Special Agent.”*

*534During the months of November and December, I860, the claimants so far carried out this contract as to deliver to A. B. Miller, assistant special agent Treasury Department at Camden, Art., the following lots of cotton, viz:

225 bales known as the Harvey cotton.

71 bales known as the Thomas Trigg cotton.

226 bales known as the Jones cotton.

These several lots of cotton were stored in the Camden "warehouse at Camden, Ark., and on or about the 9th of January, 1866, the Harvey cotton, 225 bales, and the Jones cotton, 226 bales, were forcibly taken possession of by order of General May, then commanding the Ouachita River district, headquarters at Camden, Ark., and turned over to 0. M. Harvey as the lawful owner thereof.

For the transportation of these lots of cotton, which were hauled about seventy or eighty miles, the claimants have not been paid as provided by the written contract.

For this service two vouchers "were made out and delivered to the claimants, as follows:

For the following charges incurred upon cotton under seizure by the United States Government, viz:

Hauling by wagons from Lost Prairie, La Fayette

County, Ark., to Camden, 226 bales cotton, at $21 per bale!. $4, 746 00

Rebaling, new bagging, and rope, hauling to press, &c., 226 bales of cotton, at $10 per bale. 2,260 00

Total. 7,006 00

For the following charges incurred upon cotton under seizure by the United States Government, claimed by C. M. Hervey, viz:

Hauling by wagons from Lost Prairie, La Fayette County, Ark., to Camden, Ark., 225 bales cotton, at $21 per bale. $4,725 00

Bailing,'new bagging, and rope furnished, and hauling to press 225 bales cotton, at $10 per bale.... 2,250 00

Ginning 225 bales cotton, at $15 per bale.... 3,375 00

Total 10,350 00

*535Both these accounts are certified in the usual form by A. B. Miller, as assistant supervising special agent third agency, Treasury Department, and approved by O. II. Burbridge, supervising special agent.

Neither of these accounts appear io have been presented to the Treasury Department for payment, nor do either of them bear any date.

It further appears in proof that the Secretary of the Treasury, on the' 14th of December, 1865, telegraphed to General Day, who was under the command of Major-General Reynolds, to furnish no military aid in men or transportation to guard or collect any cotton not included in the classification given by the Secretary, and to withdraw at once all guards not required by these instructions.

The instructions referred to were of the same date, and given to Major-General Reynolds, commanding the department, and are as follows:

“Agents are instructed to take only cotton on confederate lists as its property, or other cotton showu to be such, and that belonging to blockade-running companies. If any agent does more than this, he transcends his authority; and I will thank yon to apply such remedy as you can to stop the abuse.

“HUGH McOULLOGH,

“ *Secretary Treasury*

General May, acting under these instructions, and the order of his superior, Major-General Reynolds, under date of January 4, 1866, directing him to carry out his own decision, and to put the owners in possession of their cotton, did, after examination, as before shown, put Hervey in possession of 225 bales of cotton seized, against the protest of Miller, the assistant supervising special agent.

*Mr. Joseph Casey*for the claimant:

The question does not arise in this case whether Miller and Burbridge had authority, under the act of Congress and the regulations of the Treasury Department, to make a contract to give more than one-fourth part of the cotton or other captured and abandoned property gathered by the individual with whom the contract was made. They had authority under the law and under the regulations of the Treasury Department to gather up *536captured and abandoned property, and for that purpose to employ individuals to perform the labor, and have it transported to a point of shipment, and to pay these expenses out of the captured and abandoned property fund.

The question of the proportion of the property which the agents might give in cases of that kind does not arise in this case. This is not for the proportion of the property specified in the contract. It is *for*the actual outlay and expenses which it was agreed should be paid, in the event the property was released, to Whitesides *& Go.*These expenses, it was proved, were actually incurred, and under all the circumstances, were reasonable and fair and right. They were carefully, cautiously, and diligently examined by the agent at the time. He was satisfied, first, that they were actually *incurred;*second, that they were fair and just and reasonable. The contract was made by persons having competent authority in -the premises. The contract with Whitesides *&*Co. was made with all care and caution, and guarded'by all legal formalities -which the law required in such cases. The only question then is, “were the services rendered, and were the charges fair, just, and reasonable," and of this the evidence in the case furnishes clear, convincing, and complete proof, and there is nothing that we can see, either in the testimony or in the circumstances of the case, to rebut that evidence, or to throw the least suspicion upon the correctness and the fairness of the whole transaction. We therefore think that the case of the claimants is completely made out, and that they are entitled to recover the amount claimed in the petition. For this sum we ask a judgment in their favor.

*Mr. Alexander Johnston*(with whom was the *Assistant Attorney-General)*for the defendant:

Miller had no authority whatever for making such a contract. On the contrary, the Secretary of the Treasury had, by circular of July 22,1865, positively forbidden such contracts. *(Rules and Regulations, reprint of*1872, p. 148.)

The policy of the Government, at the time and place of this transaction, was simply to collect cotton which belonged to the Confederate government at the time of the surrender, or which was the property of blockade-running companies. It was, of course, necessary to have this cotton prepared for shipment; *537and, in order to have this done, assistant agents were authorized to make contracts with the planter or other person having it in custody, “to prepare in proper packages and condition for transportation, and deliver the same at such place of shipment as shall be agreed upon.” *(Bules and*Regulations, p. 150.) Such contracts were to be “for the delivery of *a specific lot*at a designated place.”

“No arrangement,” says the Secretary of the Treasury, in his circular of July 22, “ will be sanctioned which contemplates the scouring of any given portions of the country for projects of the character referred to, by persons who are not bonded officers of the Government.”

Milligan, J.,

delivered the opinion of the court:

The validity of the contract on which this action is founded is called in question by the Assistant Attorney-General, for want of authority at its date, in the assistant special agent of the Treasury, to bind the United States in such contract. It might be interesting to trace the power of such agents, and to determine the limit of their authority, from time to time, under the rules and regulations of the Treasury Department; but this can scarcely be necessary in the view we have taken of this case.

It is proper, however, in passing, to say that the authority of the agent is claimed under Article Nil of the Treasury regulations of September 11,1865, and denied under the circular letters of the Secretary of the Treasury of the 27th of June and the 22d of July following.

But without deciding this question, it may be assumed, for the purposes of this case, that the assistant special agent, with the approval of the supervising agent at New Orleans, had the lawful authority to make the contract set forth at length in the findings of the court. But do the papers set out and relied on as the foundation of this suit constitute a valid and completed agreement, such as this court can enforce? If the contract is incomplete, the work performed under it was without authority, and the Government is responsible only to the extent of the benefit conferred.

The paper brought into court, and filed by the claimants as the contract under which they acted, bears date the 10th of November, 1865; and although they appear to have acted *538under it, its validity is made contingent on the approval of the supervising special agent at New Orleans. He does approve it, but long after the cotton was brought in under it, and subject to the approval of the Secretary of the Treasury, which is not shown in this record ever to have been obtained.

The condition on which the claimants have made the contract to depend has never been fulfilled, either actually or constructively. Had the cotton been sold and the .proceeds paid into the Treasury, it might be regarded as a recognition of the contract under which it was collected, and a constructive ratification thereof. But this was not even done or prevented from being done by any authorized act of the Government.

The contract being incomplete, and no benefit resulting to the United States from its alleged fulfillment, there is no legal or equitable right of recovery.

Coupled with this view of the case, another and perhaps more serious question arises out of the facts. The *Act March*12, 1863, and the regulations of the Treasury made pursuant thereto, contemplate that each lot of captured or abandoned cotton collected and sold by the special agents should, as near as practicable, be made to bear the expenses incurred in its collection and sale; and when it once reached the hands of the agents their duty was to appropriate it to xiublic use on due appraisement and Certificate, or to forward it to a place of sale, there to be sold to the highest bidder, and the proceeds paid into the Treasury. General May, after it reached the hands of the Treasury agent, had no lawful power to wrest it out of his hands, and to turn it over to the lawful owner. His act in doing so (although evidently prompted by the purest motives) was arbitrary and unlawful; and on that account the United States, on well settled principles, are not answerable for it. *Vanpelt & Co.'s*Case, (6 C. Cls. R., p. *103;) Spencer’s Case,*(ante;) Story on Agency, § 307.

The unlawful act of General May constitutes the real and only breach of the contract complained of, and the Government, being in no way responsible for it, cannot be held liable for the services rendered under the alleged agreement, which conferred no benefit whatever upon the United States.

On general principles, if the contract, on further examination, should turn out to be valid under the rules and regulations of the Treasury Department, General May might be held respon*539sible to the claimant; but be is probably protected by the act of July 27,1SGS.

The vouchers resting on the allege 1 contract must fall with it.

Petition dismissed.

Loring, J., did not sit at the trial of this case, and took no part in the decision.