Case Name: Jonathan McCollum v. The United States
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1881-12
Citations: 17 Ct. Cl. 92
Docket Number: 
Parties: Jonathan McCollum v. The United States.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 17
Pages: 92–104

Head Matter:
Jonathan McCollum v. The United States.
On the Proofs.
The claimant writes to the First Assistant Postmaster-General, proposing to lease his premises for a designated term ancl rental. A letter in reply is sent to the postmaster at the place, accepting the p>roposiiion and directing him to notify the claimant; which is done. Subsequently, before a formal lease is executed, the First Assistant Postmaster-General withdraws his acceptance.
I.Tlie acceptance by an executive officer acting within the scope of his authority of a proposal by an individual creates a contract having the same force and effect that a formal written agreement would have if one had been signed by the parties.
II.The duties of Assistant Secretaries and assistant Postmasters-General are not speeifially assigned by law, but are left to the direction and regulation of the superior officers.
III. The Assistant Secretaries are officially engaged in carrying out the will of their principals in the details of the wort.
IV. The order of an Assistant Postmaster-General found in the archives of the department unrevoked must be deemed, in the absence of fraud or mistake, to bo within the scope of his delegated authority and the act of his principal.
Y. Leases to the government entered into under an appropriation for one fiscal year though for a term of years are binding on the lessee, the government, only for the year covered by the apfiropriation act, but the extended term named in the lease in effect gives an option to the government to continue it, holding, if subsequent appropriations be made, until the expiration of the designated term.
The Reporters’ statement of tlie case:
Tbe following are the facts of tbis case as found by tlie court:
I. On the 23d of March, 1878, the claimant made a proposition to the Post-Office Department as follows:
“Oil City, Penn’a, March 23, 1878.
“Hon. JAMBS N. Tyner,
“1 st Assistant Postmaster-General, Washington, D. 0.;
“Dear Sir: By direction of Mr. H. Olay Hopkins, special agent, I send you the following proposition: I will lease to the department, to he used as a post-office, in my brick block on tbe corner of Centre and Elm streets, Oil City, the east store in tbe block, from April 1st, 1878, to April 1,1879, and tbe corner store in tbe block, wliick will then become vacant, from Aiiril 1, 1879, to April 1, 1883, at an annual rental of sis hundred ($000) dollars.
“Tbe width of these rooms is seventeen and a half (17J) feet, and the depth of the block sixty-five (65), with sixty feet vacant lot in the rear. T will assume the lease of the present location of the post-office, and will also assume the expense incurred in moving.
“Will it not be necessary for Mr. Hopkins to come here ? I wotdd like to see a copy of your present lease. Since the 1st day of April is the time all changes aré made here, I would like a decision as soon as possible. Our representative, Mr. Watson, is fully informed of the necessity of moving the post-office into more commodious quarters.
“Yours, respectfuUy,
“J. McCollum.”
The following letters and telegrams were sent at the dates therein specified, and on receipt thereof were at once communicated to the claimant:
“Oeeice of the
“First Assistant Postmaster-General,
“ Washington, D. 0., March 27, 1878.
“Postmaster, Oil City, Pa. :
“Sir: In accordance with the recommendations contained in the report of Special Agent Hopkins, who lately investigated the question of location of your office, the proposition of J. McCollum, dated March 23rd, 1878, to lease the east room in his brick block, corner of Centre and Elm streets, Oil City, for the use of the post-office thereat, from April 1st, 1878, to April 1st, 1879, and then to lease the corner room, which will then be vacant, for a term of 4 years, from April 1st, 1879, assuming the present lease and expense of moving, is this day accepted.
“You will notify Mr. McCollum of this fact, and have the accompanying queries properly answered and returned to this office, when a lease will be prepared to be executed by the contracting parties.
“Yery respectfully,
“James H. Marr,
“ For 1st Ass’t P. M. GenH.”
[Telegram dated Washington, D. C., 27, 1878.]
“To Postmaster:
“McCollum’s proposition accepted, to date from first prox.; notice mailed to you to-day; would suggest moving'Saturday next.
“H. Clay Hopkins,
“ Sp’l AgHP
[Telegram dated Pittsburgh, 3, 29, 1878; received at 3.16.]
“To POSTMASTER:
“Your dispatch received; wbat is difficulty about moving? If yon bold official notice, move. Answer bere.
“H. Clay Hopkins,
“ Stfl Ag’t, P. O. D”
[Telegram dated Washington, D. C., 29, 1878; received at 3.59.]
“ To F. Bishop, P. Master:
“Inform this office wbat tbe obstructions are to having tbe post-office removed to McCollum block by Ap’l first. Hon. L. F. Watson has submitted your telegram of this date asking for delay to tbe dep’t.
“Jas. N. Tyner,
“1st A. P. M. Gen’l”
[Telegram dated Pittsburgh, 3, 30, 1878; received 10.35.]
“To F. Bishop, P. M.:
“Am informed questions have been answered and papers signed by McCollum; only thing for you to do is to move, which is expected by department.
“H. Clay Hopkins,
“ Special Agent.”
Tbe “queries” referred to in the letter of Mr. Marr, above sot forth, were set out in a paper sent by tbe department to Postmaster Bishop, who submitted them to the claimant. They were duly answered and signed by tbe claimant and forwarded to tbe department by tbe postmaster on tbe 29th of March.
II. Subsequently tbe following correspondence took place:
[Telegram dated Washington, D. C., 3, 30, 1878.]
“To Postmaster, Oil City, Pa.:
“If you have not communicated to McCollum acceptance of bis proposition, withhold it till further orders; if you have communicated it, tell him to regard it as in abeyance for tbe present ; instructions in letter to-day.
“Jas. N. Tyner,
“1 st A. P. M. Gen’l.”
“Oeeice op the First Assistant P. M. General,
“ Washington, P. (7., March 30th, 1878.
“SIR: We do not understand your vacillation in regard to the removal of the post-office at Oil City from tbe premises now occupied to those owned by Mr. McCollum.
“Under date of Oot. 17th, 3877, you notified the department that the growing business of your office required a larger room, and when in reply to that you were informed that the department had a lease on the premises now occupied, which did not expire for some years yet, you responded that you desired the department to inform you whether or not you could move to a more commodious and suitable room, provided it did not involve additional expense to the department. Upon receipt of-that letter the whole matter was referred to Special Agent Hopkins for investigation and report. . He advised the department that the room of McGolluin could be obtained at the same price as that now leased of Eeynolds and Lamberton; that the last-named firm would assume the lease of the department to McCollum, and that the proposition to move into the building owned by McCollum was approved by you. Upon the receipt of this report, and after a personal interview with Mr. Hopkins, it was decided to accept the McCollum proposition, and you were accordingly notified to move to-day. Your telegram to Mr. -Watson was the first intimation that the department had that you disapproved of the arrangement.
“The department is in receipt of a telegram from Reynolds and Lamberton, saying they have arranged for ample space where the office is now kept, without extra rent,.and that they will accept Special Agent Hopkins’s proposition made to them a short time since, or make a new arrangement entirely satisfactory to you and the department. I take it for granted that your telegram and the telegram of Reynolds and Lamberton indicate that you have been negotiating with them for additional space, or for some arrangement that will accommodate your office fully and be entirely satisfactory to its patrons. I have just telegraphed you to withhold the notification to Mc-Collum, or, if it has already been given, to tell him to regard the acceptance of his proposition as in abeyance. I now desire to inquire of you about the entire state of affairs concerning the proposition to move your office. Can Reynolds and Lamberton accommodate you as well as you can be accommodated in any other building? . Will they do it without additioual expense to the department ? Obtain from them a written proposition of what they offer to do, with your indorsement thereon, giving an expression of your opinion concerning it. Upon receipt of the papers, if you have not already bound the department by positively accepting McCollum’s proposition, the whole case will be reviewed, and you will be advised of the decision.
“Very respectfully,
“Jas. N. Tynek,,
“1 st Asst. P. M. General.
“Mr. F. Bishop,
“Postmaster, Oil City, Pa.”
“Oil City, Pa., August 6, 1878.
“Hon. Jas. N. Tyner,
“Is# AssH P. M. General:
“ Deae Sib : I notice your return from Europe, and jjresume the matter of carrying out my agreement with the department for rent of my corner store for a post-office will be no longer held in abeyance.
“ My letters of April 1st & 20th, Mayllth &29th, & June22nd, are all on file in your department.' The last three still remain unanswered, doubtless awaiting your return. From these letters you will see that I have at all times, and at considerable trouble and expense, arranged to give you just what jou have asked for. Colonel Parker was evidently satisfied with my corner room, and must have so reported, and no other agent you could send would fail to make the same report. Please let me hear from you at once, & oblige,
“Yours, respectfully,
“J. McCollum:.”
“Office of the Fibst Assistant P. M. General, “Washington, D. 0., August IQth, 1878.
“J. McCollum,
“Oil City, Pa.:
“ Sib: Referring to your letter of August 16th, addressed to Hon. Jas. N. Tyner, 1st Ass’t P. M. Gen’l, relative to what action the dep’t had taken in the question of the removal, of the Oil City P. O., to which communication attention has been called by a request of August 14th, I have now to say that the letter of the 6th did not receive immediate reply, as it was supposed Chief Special Ag’t Parker would be in Óil City shortly, to give you the facts relative to the settlement recently made with the lessors of the present premises. However, the dep’t, after a full consideration of all questions appertaining to the case, has deemed it inadvisable to order a removal of the post-office from the present location until the expiration of the lease.
“Very respectfully,
“James H. Marr,
“Act’g First AssH P. M. GenHP
III. At the time of the correspondence above set forth, and until the bringing of this action, the postmaster at said Oil City occupied premises under a lease made December 23,1871, between J. B. & E. M. Hukill, and Samuel H. Lamberton, of the first part, and J. A. J. Ores well, Postmaster-General, of the second part, whereby said parties of the first part granted and leased to said party of the second part all t-liat certain room, being- No. 7, in a certain large brick building known as “Reynolds and Hukill’s block,” in said city of Oil City, fronting on Sycamore street, measuring 40 feet in depth by 18 feet in width, together with a passageway through room No. 2 to Seneca street, for a post-office at said Oil City, for, during, and until the full end and term of ten years then next ensuing-,.from the first day of January, A. D. 1872, yielding and paying therefor unto the said parties of the. first part, their heirs and assigns, yearly and every year from and after the said first day of January during- the said term, the yearly rental or sum of $600, in quarter-yearly payments, to wit, on the first days of April, July, October, and January in each and every year, to be made at the post-office in Oil City aforesaid out of the revenue of said •office.
This is the lease referred to in the correspondence between the First Assistant Postmaster-G-eneral and McCollum, which the latter was required to assume.
IV. At the time of the acceptance of the claimant’s proposition, the appropriation “for rent” contained in the post-office appropriation bill for the year ending June 30, 1878 (19 Stat. L., 384), had not been exhausted, but there remained of it a sum adequate to fulfill this contract for the remainder of the fiscal year.
The claimant has been ready and willing to execute a lease, and comply with the terms of his offer, but the defendants have not performed nor offered, or been willing- to perform, the terms required of them thereby, and have not occupied the claimant’s premises.
The claimant has received from another tenant, who occupies the same, rent for the east store of his block from April 1,1878, to April 1, 1879, to the amount of $600.
Upon the foregoing- findings the court decides, as a conclusion of law, that the claimant is not entitled to recover, and that his petition be dismissed.'
Mr. George L. Douglas for the claimant:
The practical question is one of damages alone. Claimant lays his damages at $3,000; though there would seem to be little doubt that, directly and indirectly, they considerably exceeded -this sum, which is merely the amount of rent he would have -received from the government under the terms of the contract.
The rale for the assessment of damages in such cases is well settled. The effort of the courts is to put the plaintiff in as good a position as if the contract had been carried out on both sides; and, while he cannot needlessly increase the damages to be charged to the defendants, he is entitled to such a sum as will make good not only his actual present losses, but also any profits which would have resulted naturally and immediately from the transaction.
The rule of damages, as laid down by this court in Moore’s Case, 1 C. Ols. R., 95; Adams’s Case, id., 100; McKee’s Case, id., 342; Floyd & Speed’s Cases, 2 O. Ols. R., 429, affirmed by the Supreme Court in 8 Wall., 77 (and long ago held by the latter court in 13 How., 344), maybe fairly stated as follows: Where the contract is terminated by the United States against the will of the contractor, all the prospective gain or profit of which the contractor was thereby deprived is the proper measure of damages.
In Wormer’s Case (4 C. Ols. R., 258), the court held that “the rule of damages, where the government has prevented the performance of a contract, is such damages as would put the contractor as nearly as possible in the same situation which he would have been in if he had been allowed to perform according to his contract.” The judgment in this case was overruled in the Supreme Court on other grounds, but the doctrine quoted was subsequently affirmed in Smith’s Case, 94 U. S.
So in Bulldeys Case (7 O. Ols. R., 544), “The law contemplates in cases of contracts broken two elements of damages: first, losses sustained; second, gains prevented.” (See, also, 6 L/& E., 230; 7 Hill, 62; 1 Denio, 317, 602, 606; Saylor’s Case, 14 C. Ols. R., 443; Yates’s Case, 15 O. Ols. R., 120.)
The fact that the contract was only allowed by the defendants to stand three days is wholly immaterial. That it ivas complete in its terms; that it was valuable to the claimant; that it was violated by the defendants against the claimant’s protest; and that the latter was thereby deprived of an amount of legitimate gain not less than the damages laid in the petition, is all that the court is called upon to consider. Under the rules of, law, as laid down by the courts, it is difficult to discover any ground of defense to the present action.
Mr. John 8. Blair (with whom was the Assistant Attorney-General) for the defendants:
The case is analogous to that of Herndon (15 C. Gis. B., 446). Certainly no power to rent has been vested in the First Assistant Post-master- General.
At the time of the alleged contract with claimant, two appropriations were under the control of the Postmaster-General— Act of March 3,1877 (19 Stat. L., 383), for the fiscal year ending June 30, 1878, “For rent, light, and fuel, $400,000,” and the Act of March 3, 1879, for the fiscal year ending June 30, 1879 (20 Stat. L., 140), “For rent, light, and fuel, $380,000” (p. 142). As no money at that time had been appropriated for a period beyond June 30, 1880, it is submitted that so much of the alleged contract as involved the government for payments after that date was in violation of section 3679 Bevised Statutes.
The Assistant Postmasters-General are not clothed with any statutory authority whatever. Section 3860 Bevised Statutes requires that the allowance for rent shall be only upon the order of the Postmaster-General. Therefore, if claimant relies upon section 3860 to support the contract in question, he should show the express authority of the Postmaster-General.

Opinion:
BichaedsoN, J.,
delivered the opinion of the court:
The claimant alleges that in March, 1878, he entered into a contract with the defendants to lease to them for a post-office, certain premises in Oil City, Pa., for five years from April 1, 1878, at an annual rental of $600 a year, and that the defendants have never performed their agreements, whereby he claims damages for breach of contract on their part.
The findings disclose substantially the following facts:
On the 23d of March, 1878, the claimant, by direction of a special agent of the Post-Office Department, addressed a letter to the First Assistant Postmaster-General proposing to lease the premises for five years from April 1, 1878, at an annual rental of $600, upon certain terms therein specified. On the 27th of March a letter was addressed, for the First Assistant Postmaster-General, to the postmaster at Oil City, accepting the proposition and directing the postmaster to so notify the claimant.
Notice was at once given to the claimant accordingly, and certain questions which he was required to answer were duly answered, signed by him, and returned to the department at Washington.
Subsequently, on the 30th of March, the First Assistant Postmaster-General telegraphed and wrote to the postmaster at Oil City, directing him to withhold the acceptance of the proposition until further orders if he had not communicated it to the claimant, and if he had done so, to tell him to regard it as in abeyance for "the present. This was forthwith communicated to the claimant. No formal lease was ever entered into, and nothing further was done, except that the department refused to carry out- the contract or to accept and occupy the premises, or to pay any rent therefor, although the claimant was ever ready and willing to perform his part of the contract.
The defendants deny that these proceedings constituted a contract on their part, even if the First Assistant Postmaster-General had authority to take a lease of the premises.
In the case of Garfielde v. The United States (11 C. Cls. R., 601) the claimant had made proposals to the Post-Office Department for carrying the mails on the routes therein specifled, and the same had been accepted by the Postmaster-General, but no formal contract was written out and signed by the parties as contemplated, because the Postmaster-General suspended his action thereon, precisely as in the present case. This court held that a valid binding contract was made thereby, and the Supreme Court on appeal approved and adopted our views in that regard. Mr. Justice Hunt, speaking for the Supreme Court, says, in his opinion: u The Court of Claims holds that the proposal on the part of Garfielde, and the acceptance of the proposal by the department, created a contract of the same force and effect as if a formal contract had been written out and signed by the parties. Many authorities are cited to sustain the proposition. We believe it to be sound, and that it should be so held in the present case." (93 U. S., 244; 11 C. Cls. R., 339.)
That exposition of the law, affirmed by the court of last resort, when applied to the present case leads to the inevitable conclusion that the proceedings set forth in the findings must toe held to have created a binding contract between the parties, if the First Assistant Postmaster-General acted within the scope of his authority.
In several of the executive departments the statutes provide for assistants to the heads thereof, and also assistants and deputies to the heads of some of the bureaus. (Rev. Stat., § 200, 234, 303, 314, 322, 348, 349, 389, 390, 438, 1168, &c.)
The duties of these assistants are generally not specifically defined by law, but are left to the direction and regulation of superior officers. Such assistants are supposed to have the confidence of those immediately above them, and to be officially engaged in carrying out the will of their principals in the details of the work of the department or bureau in which they are employed.
When their acts, decisions, or directions are reduced to writing, signed by them in their official capacity, filed or recorded among the archives of the department, and do not appear to have been revoked, annulled, or modified by the head of the department or bureau, they must be held, in the absence of fraud, mistake, or irregularity, to have been done within the scope of the authority of the assistant, and to be as binding on the government as though expressly ordered by the superior. Especially is that so when copies of such written documents are sent to this court by the head of the department in which they are found, without objection on his part to their having been made in the due and regular course of business under his control.
In Parish v. The United States (100 U. S., 504), where the authority of an assistant surgeon-general of the Army was called in question as being without the direct approval of the Surgeon-General himself, Mr. Justice Miller, in the opinion given by him for the whole court, reviews this very subject. He says:
'The office of Surgeon-General is one of the distinct or separate bureaus of the administrative service of the War Department. It has been found, in regard to many of these bureaus, and even to the heads of departments, that it is impossible for a single individual to perform in person all the duties imposed on him by his office. Hence statutes have been made creating the office of Assistant Secretaries for all the heads of departments.
" It would be a very singular doctrine, and subversive of the purposes for wliicb these latter offices were created, if their acts are to be held of no force until ratified by the principal Secretary or head of department. It was to relieve the overburdened principal of some part of those duties that the office of assistant was created. In the immense increase of business in the office of Surgeon-General during the war, similar relief was found necessary, and the office of Assistant Surgeon-General was created.
"For the very reason that the prompt exercise of the powers of the bureau was essential in the field of operations of the Army, the assistant in this case was located at Saint Louis, over a thousand miles from the city of Washington. He was appointed for- the purpose of exercising at that place the functions of the office of Surgeon-General. He was by law the Assistant Surgeon-General. If no virtue attached to his acts until approved by the Surgeon-General, at Washington, any inferior clerk would have answered the imrpose as well.
"It is not intended to deny that he was subordinate to the chief of his bureau, could be ordered to do or not to do particular things, and when an order made by him was disapproved, it might be revoked by that officer. But until so revoked or disapproved it was valid, and parties required to act under it had a right to rely on it."
So it has been held tiiat as "the President speaks and acts through the heads of the severaldepartments in relation to subjects which appertain to their respective duties," their acts in such matters may be presumed to have been done by the approbation and direction of the President, and may be considered, in legal contemplation, as his acts. (Wilcox v. Jackson, 13 Pet., 513; McElrath's Case, 12 C. Cls. R., 201, and on appeal, 102 U. S., 436; United States v. Eliason, 16 Pet., 302 ; The Confiscation Cases, 20 Wall., 109.)
In the present case there is nothing in the findings to show that the Assistant Postmaster-General was not acting throughout with the approbation of the head of the department, and the presumption, arising from their official relation to each other, that he was doing so stands unrebutted.
We shall treat the contract as though it were a lease for five years from April 1,1878, made by the claimant to the defendants, and as valid so far, and so far only, as the Post-Office Department or the Postmaster-General had authority to bind the government thereby. As was said in a former case:
"The United States, as a body politic, act only by public officers, who are special agents intrusted with specific, defined duties, and who can bind, the government only to tbe extent of tlie authority conferred upon them. The state has no general agents; the'President is limited in power and authority; Congress must keep within the bounds of the Constitution; the courts are restrained in jurisdiction by statute, and all public officers must obey the law. But the acts of special agents within the scope of their authority are as binding upon the principal as are the acts of general agents." (McKee's Case. 12 C. Cls. R., 552; see also Whiteside v. The United States, 93 U. S., 257, and 12 C. Cls. R., 24.)
The authority of such agents is found in the statutes of t Congress, and all citizens dealing with the government are] bound to know the law. In every contract, by lease or other-/ wise, with any public officer, all laws applicable to such contract, as to its extent, operation, and the authority for making it, must be considered as stamped thereon and as forming part of the same.
It was said by the Supreme Court, in Pierce v. The United States (7 Wall., 666, and 7 C. Cls. R., 72), that "our statute books are filled with acts authorizing the making of contracts with the government through its various officers and departments; but, in every instance, the person entering into such a contract must look to the statute under which it is made, and see for himself that his contract comes within the terms of the law."
There are two sections of the Revised Statutes which bear directly on the contract here in suit. They arenas follows:
" Sec. 3679. No department of the government shall expend, in any one fiscal year, any sum in excess of appropriations made by Congress for that fiscal year, or involve the government in any contract for the future payment of money in excess of such appropriations.
" Se ). 3732. No contract or purchase on behalf of the United States shall be made, unless the same is authorized by law or is under an appropriation adequate to its fulfillment, 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."
As this contract, like many, if not most, of the leases for post-offices, is not expressly authorized by any law, it is therefore valid only so far as it is under an appropriation adequate to its fulfillment and is not in excess of such appropriation.
The contract; was made in the latter part of March, 1878. It must be construed with reference to the statutes then in force. At that time there was but one appropriation under which it could be made. This is found in the Act of March 3, 1877, ch. 110 (19 Stat. L., 384), making appropriations for the service of the Post-Office Department for the fiscal year ending June 30, 1878, in these words: " For rent, light, and fuel, four hundred thousand dollars." This had not been exhausted, but there remained of it sufficient to meet the requirements of the contract up to the end of that fiscal year. So far, therefore, as the contract relates to that fiscal year it was lawfully made and was binding on the defendants. Beyond that its only force was to give the Postmaster-General each fiscal year thereafter, when a new appropriation should be made, the option to adopt and ratify the contract for another year. This he might do by express notice to that effect, or by entry and occupation of the premises after the commencement of the year. If he should occupy the premises after the beginning of the new year, he might be held to have renewed the obligation on the part of the defendants for that one year.
In other words, a lease for a term of years founded on an annual appropriation is binding on the government only until the end of that year, with a future option from year to year till the end of the lease. Such is the effect of the contract and statutes taken together, to which the contracting parties must be held to have agreed.
In this case the Post-Office Department abandoned the contract before the next appropriation act was passed, and never occupied the premises.
The claimant is therefore entitled to recover the damages which he has suffered by the non-fulfillment of the contract on the part of the defendants for the three months from April 1, 1878, to June 30,1878, the end of the fiscal year, and nothing further. The measure of damages is the rent agreed to be paid by the defendants for that period of time, less whatever rent the claimant received from other tenants of tbe premises. It appears by the findings that the room to which the contract relates was occupied by another party for the entire year, from April 1, 3878, to April 1, 1879, and that the claimant collected from the occupant exactly the same amount of rent therefor as was to have been paid by the defendants. Thus the claimant has suffered no real damages, and his petition must be dismissed.