Source: https://supreme.justia.com/cases/federal/us/281/519/
Timestamp: 2019-04-21 08:59:39+00:00

Document:
1. The Fleet Corporation held suable on contracts purporting to bind it, made by it in its own name, as a corporation organized under the laws of the District of Columbia, and describing it as representing and acting for and in behalf of the United States, but containing no words purporting to bind the United States or in terms restricting the liability of the corporation. P. 281 U. S. 524.
2. The quasi-public character of the Fleet Corporation, and the duties imposed upon it as an agency of the United States by Acts of Congress and Executive Orders, do not except it from the rule that an agent may be bound, notwithstanding his known agency, by contracts that he executes in his own name. Id.
3. There is no basis for presuming that the Fleet Corporation is not to be deemed bound by the contracts into which it enters merely because it is acting as a public agency, and its liability as measured by their terms is not to be curtailed by the presumption which might be indulged in favor of an individual acting for the government. P. 281 U. S. 525.
4. Section 2(b)(2) of the Merchant Marine Act, which provides that all rights or remedies accruing as a result of contracts previously made under the Emergency Shipping Fund legislation "shall be in all respects as valid, and may be exercised and enforced in like manner, subject to the provisions of subdivision (c) of this section, as if this Act had not been passed," saves the right to sue the Fleet Corporation on its contracts. P. 281 U. S. 527.
for existing remedies against the Fleet Corporation expressly preserved by subdivision (b)(2), supra. P. 281 U. S. 527.
Certiorari, 280 U.S. 544, to review a judgment of the circuit court of appeals reversing a judgment of the district court in a suit, brought originally in a state court, against the Fleet Corporation to cancel a contract, for duress and fraud, and to secure an accounting under earlier contracts. The district court dismissed the bill upon the ground that the only remedy was against the United States, 26 F.2d 116. The court of appeals held otherwise, but limited the relief to an accounting under the contract sought to be cancelled.
In this case, certiorari was granted, 280 U.S. 544, to review a ruling of the court of appeals for the Second Circuit that the Fleet Corporation is subject to suit upon a contract which it entered into, acting as an agency of the United States under the Urgent Deficiencies Act of June 15, 1917 (40 Stat. 182) as amended.
described the Fleet Corporation as "representing and acting . . . for and in behalf of the United States of America (hereinafter referred to as the owner)." It cancelled the earlier contracts, with some exceptions relating to the completion of the steel ships, and settled and released numerous other claims not now important, saving certain claims growing out of a reconciliation of accounts, then in progress, to determine the amount due for certain work on the wooden ships.
The Iron Works, before its bankruptcy, brought the present suit in the superior court of Connecticut, which was removed to the district court for Connecticut, where, respondent, the trustee in bankruptcy, having intervened, the complaint was reframed so as to pray the cancellation of the contract of March 26, 1920, as procured by duress and fraud, an accounting and judgment for such amounts as should be found to be due for breach of the earlier contracts. A fourth separate defense, which alone is presently involved, set up that, with respect to all the transactions alleged in the bill of complaint, petitioner acted solely as an agency of the United States, under powers delegated to it by the President under the Urgent Deficiencies Act, and that, with respect to those transactions, it was under no personal liability, and respondent's only remedy was against the United States.
The district court confirmed findings of a special master in favor of petitioner on the issues of fraud and duress and his conclusion that the rights of the parties were fixed by the contract of March 26, 1920, but gave judgment, sustaining the fourth defense and dismissing the complaint. Harwood v. United States Shipping Board Emergency Fleet Corp., 26 F.2d 116. The court of appeals reversed the judgment, holding that the suit might be maintained against the petitioner, but limited the relief to an accounting under the contract of March 26, 1920. 32 F.2d 680.
Concededly, as both courts below and the special master agree, in entering into the several contracts referred to, the Fleet Corporation was acting as an agency of the United States, as alleged. But all of the contracts were signed and sealed by the Fleet Corporation, which was referred to as a corporation organized under the laws of the District of Columbia and which promised to pay the stipulated price for the ships and to perform the other obligations of the contracts, in terms imposed on it. They contained no words purporting to bind the United States or in terms restricting the liability of the petitioner.
One acting as a private agent may be bound, notwithstanding his known agency, upon contracts which he executes in his own name. Sprague v. Rosenbaum, 38 F. 386; Guernsey v. Cook, 117 Mass. 548; Brown v. Bradlee, 156 Mass. 28; Sadler v. Young, 78 N.J.Law, 594; McCauley v. Ridgewood Trust Co., 81 N.J.Law, 86; Jones v. Gould, 200 N.Y. 18. See Worthington v. Cowles, 112 Mass. 30; Kean v. Davis, 20 N.J.Law, 425; Cream City Glass Co. v. Friedlander, 84 Wis. 53. Compare Whitney v. Wyman, 101 U. S. 392; Post v. Pearson, 108 U. S. 418. The only question now presented is whether the quasi-public character of the Fleet Corporation and the duties imposed upon it as an agency of the United States by Acts of Congress and Executive Orders, described and considered in earlier opinions of this Court, require a different conclusion with respect to its contracts. Shipping Act of September 7, 1916, c. 431, 39 Stat. 728, 730-732; Urgent Deficiency Act of 1917, supra; Merchant Marine Act of June 5, 1920, c. 250, 41 Stat. 988; Executive Orders No. 2664, July 11, 1917, No. 2888, January 18, 1918, No. 3018, December 3, 1918, No. 3145, August 11, 1919, and see The Lake Monroe, 250 U. S. 246; United States v. Strang, 254 U. S. 491; Sloan Shipyards v. Fleet Corporation, 258 U. S. 549; Skinner & Eddy Corp. v. McCarl, 275 U. S. 1; Emergency Fleet Corp. v. Western Union Tel. Co., 275 U. S. 415, 275 U. S. 421.
The petitioner contends that there is a strong presumption, which is here controlling, that a public officer or agent is not to be deemed bound as an individual upon his contracts made in behalf of the government in the performance of a public duty, since no one participating in such a contract would be justified in assuming, in the absence of a clearly expressed intention otherwise, that the officer intends to bind himself to defray public expense from his private purse. Parks v. Ross, 11 How. 362; Hodgson v. Dexter Co., 1 Cranch 345; Sheets v. Selden's Lessee, 2 Wall. 177. See District of Columbia v. Camden Iron Works, 181 U. S. 453, 181 U. S. 459.
But we need not decide the point or attempt to draw the line where that presumption may be overcome by language of the written contract which falls short of an explicit limitation of the personal liability of the agent. See Hodgson v. Dexter, supra, 5 U. S. 364. For, in the present case, the agent is not an individual, and its liability does not involve any expenditure of private funds for the satisfaction of public obligations. Its entire capital stock is government-owned. Its funds and property were furnished to it by the government. They and government indemnity are alone the sources from which its obligations will be defrayed.
Cong.Rec. 65th Cong., p. 3549; see The Lake Monroe, supra, p. 250 U. S. 254; Skinner & Eddy Corp. v. McCarl, supra, p. 275 U. S. 8. There is thus no basis for presuming that the Fleet Corporation is not to be deemed bound by the contracts into which it enters merely because it is acting as such an agency, and its liability as measured by their terms is not to be curtailed by the presumption which, it is urged, may be indulged in favor of an individual acting for the government.
"The whole frame of the instrument [the contract] seems to us plainly to recognize the Corporation as the immediate party to the contract. . . . If we are right in this, further reasoning seems to us unnecessary to show that there was jurisdiction of the suit. The fact that the corporation was formed under the general laws of the District of Columbia is persuasive, even standing alone, that it was expected to contract and to stand suit in its own person, whatever indemnities might be furnished by the United States."
See United States v. Wood, 290 F. 115, 263 U.S. 680.
"and, for this purpose, the board, instead of the President, shall have and exercise any of such powers and duties relating to the determination and payment of just compensation."
"[a]ny person dissatisfied with any decision of the board shall have the same right to sue to United States as he would have had if the decision had been made by the President of the United States under the Acts"
contract liabilities expressly preserved by subdivision (b)(2). The words of subdivision (b)(2), saving all existing remedies which "may be exercised and enforced in like manner, subject to the provisions of subdivision (c)," must be taken to preserve the old remedies and to give the new one if the matter is one which the Board is authorized to settle by (c). Any other construction would nullify the saving clause of (b)(2), for if the "decision of the Board" as used in the proviso of (c) embraces settlements of all matters arising out of contracts which, by paragraph (b)(1), it was directed to carry out, and in the event that its decision is not accepted, the exclusive remedy is by suit against the United States, then none of the remedies accruing under such contracts and in terms saved by paragraph 2 were preserved.

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