Case: The Neuchatel Paving Company v. The District of Columbia
Abbreviation: Neuchatel Paving Co. v. District of Columbia
Decision Date: 1881-12
Docket Number: 
Citation: 17 Ct. Cl. 386
Volume: 17
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: The Neuchatel Paving Company v. The District of Columbia.
Judges: Nott, J., was not present at the trial of this case,-and took no part in its decision.
Pages: 386–401

Head Matter:
The Neuchatel Paving Company v. The District of Columbia.
On the Proofs.
A contractor of the former hoard of public works receives certificates of indebtedness for work done instead of cash, as Ms contract provided. While the work is still in progress the contractor goes to the president of the hoard and demands cash. The president advises thé contractor to hypothecate the certificates and continue the work, andxiromises that funds shall he provided to redeem them. The contractor does so, hut funds are not provided, and the hypothecated certificates are sold hy the pledgee at a loss.
I,The powers of the hoard of public works were not vestedin its members jointly and severally, but jointly oply; and the board could not be bound by the aots or words of a minority thereof.
II.A contractor with the board of public works was bound to know its statutory flowers, and see that they were not exceeded; and no claim against the District can be based on any act of the board in excess of its powers.
III.The District claims Act, 1880 (1 Supphnt. R., S. 5G2), giving the Court of Claims-jurisdiction of claims against- the District of Columbia arising out of contracts made by the board of public works, was not designed to ratify contracts illegally made.
IY. All contracts made by the board of public works, the Act 21 February, 1871 (16 Stat. L., 419, § 37), required should be in writing and in pursuance of appropriations made by law. Tho president of the board had no lawful power to bind the board by any oral contract-, nor could the board bind itself in that way.
Y. An oral promise by the president of the board of public works to a contractor, that certificates of indebtedness issued to the latter by tho auditor of the board should be paid if tho contractor would hypothecate them so as to enable him to go on with the work, could not bind tho District to make good losses sustained through the forced sale of the certificates occasioned by tho neglect of the District to furnish the promised funds.
The Reporters’ statement of the case :
The following are t lie facts of tbis case as found by t-lie court:
I. On the 8th of July, 1873, the claimant entered into a written contract with the board of public works of the District of Columbia for the laying down in the city of Washington of a large quantity of pavement, and doing other work in connection therewith; the clauses and provisions of which contract having relation to the matter in controversy in this suit are as follows:
“Eighth. Anti it is further agreed that partial payments shall be made by the duly authorized financial agent of the said party of the first part on the monthly estimates of the chief engineer of the board of public works aforesaid, and that whenever the said chief engineer aforesaid shall certify, in writing, that the party of the second part has completely performed this contract on his part-, and shall submit, with said certificate, his estimate of the amount due the party of the second part, then, within thirty (30) days, as hereinafter provided, the said party of the second part shall be entitled to receive the full amount due under this contract, deducting therefrom all previous partial payments Avhich may have been made as hereinafter mentioned.
“And it is further expressly agreed that no money shall become due and payable under this contract except upon the certificate of said engineer, as hereinbefore provided; and the said party of the second part further agrees that he shall not be entitled to demand or receive payment for any portion of the aforesaid work except in the manner set forth in this agreement; and when each and all of the stipulations hereinbefore mentioned are complied with, and the engineer shall have given his certificate to that effect, a final settlement shall be made in writing between the parties, and the whole amount found due the party of the second part under this contract shall be imid to him, excepting such sum or sums as may be retained under any provision of this contract: Provided, That partial payments may be made, under direction of the said party of the first part-, otherwise than upon the estimates of the said engineer, as provided above, if, in the opinion of the said party of the first part, the vigorous prosecution of the work will be promoted thereby.
“Twelfth. It is further agreed that the measurements shall be made by the engineer of the said party of the first part or his assistants.
“Thirteenth. And the said party constituting and composing the board of public works in and for the District of Columbia aforesaid agree with the said party of the second part to perform all the stipulations of this contract obligatory in it, and to pay or cause to be paid to the said party of the second part, or to his heirs, executors, or administrators, in lawful money of the United States, the amount which may be found, from time to time, due him according- to the contract.
“Fourteenth. It is further agreed that this contract shall be subject to any and all provisions of an act entitled ‘An act to provide a government for the District of Columbia,’ approved February 21,1871, so far as the same shall or may be in any respect applicable to said contract, and also to any law of the District of Columbia pertinent thereto, or to any part thereof, as fully as if the same were particularly set forth herein.”
II. The claimant proceeded to perforin the work required by said contract, and between the date of the contract and the 20th of June, 1874, did a large amount of work thereunder. In regard to such work, one Charles E. Creecy was* the duly constituted attorney of the claimant, with general power to transact all business in connection therewith.
III. On the 10th of October, 1873, the auditor of said board issued to the claimant and delivered to said Creecy, on account of work done under said contract, four certificates of different amounts, based on estimates of the chief engineer of the board, and all in the form following:
“No. 3453.1 Office of the Board of Public Works,
“ Washington, 1). G., October 16, 1873.
“I hereby certify that I have this day audited and allowed the account of Neuchatel Paving Co., per E. E. Gaskin, ag’t, per O. E. Creecy, att’y, for work (here the work is set out), amounting to five thousand dollars, $5,000.'
“ J. O. Lay, Auditor.”
The said four certificates amounted in the aggregate to $9,142.60.
IV. The said Creecy immediately presented said certificates to the treasurer of the said board, and asked for payment of them, who informed him that he had no money and did not know when ho would have any. Creecy told him that he expected the board to cany out its part of the contract and pay him, or else it would be impossible for the company to go on with the work. The treasurer then suggested that Creecy should call on the governor of the District and president of the board, A. E. Shepherd, who he said was the executive officer of the board, and ask him to raise funds. Creecy called on Shepherd, who said that it was impossible to pay him any money, as there was not a cent in the treasury at that time; but he advised Creecy to borrow some funds on the certificates, and said if Oreecy would do that, he, Shepherd, would see that the hypothecated certificates were cashed by the board in time to prevent any loss to the company; and he urged Creecy to go on with the work, and said that Greecy would be paid; that Oougress would certainly appropriate money for its -share of the improvements; and that the claimant should be among the first settled with.
Creecy then hypothecated the said four certificates as col-' lateral security for his note payable thirty days after date, with •authority to the lender to sell the certificates upon default of payment of the notes at maturity. He borrowed in that way very near the market value of the certificates, and used the money so borrowed in paying off the laborers and material men,, and postponed such bills as he could, including his own, until he could get the certificates cashed by the board.
V. On the 5th of November ensuing the said auditor issued to the claimant, and delivered to Creecy, on account of other work done under said contract, six other certificates of audit and allowance, of different amounts, based on estimates of said chief engineer, and in the same form as that given in Finding III, and amounting in the aggregate to $11,657.40. Creecy presented those certificates to the said treasurer and demanded payment thereof; who replied that he had no funds. Creecy then called on Governor Shepherd, and stated to him that, upon his suggestion and promise to see that the certificates were not forfeited, he, Creecy, had raised money for 30 days on the first batch of the 16th of October, and he asked Shepherd if it was not possible for him to give him cash, or part cash, on the second batch. Shepherd said it was not possible, but repeated his opinion that Congress would make an appropriation as soon as it met, which would enable him to meet the obligations of the District, so far as the claimant’s contract was concerned. Creecy repeated the embarrassment under which he was laboring as an agent merely for a foreign corporation, and that he could not explain to them satisfactorily why it was that the government of the capital of the United States could not meet its obligations and contracts. Shepherd said he would give an order on the treasurer to issue to Creecy $5,000 of sewer bonds in lieu of $5,000 of the auditor’s certificates which Creecy then had in his possession; and he said that was the only mode of relief that he could offer. The sewer bonds being then worth some 20 cents more on the dollar, in open market, than the board of public works certificates, Creecy accepted the sewer bonds for $5,000, with the understanding that he was to receive cash for them as soon as the board was in funds, and that tliey were not to be considered as in lieu of money, bat merely for the purpose of euabling bim to borrow more money than he could upon the audit,or’s certificates, in order to go on with •the work. Shepherd told him to g.o ahead with the work, not to be discouraged, and that he had better borrow some more money on the certificates, and pay such debts as were pressing.' Creecy told him that he feared, unless Shepherd gave him cash within 30 days, he, Creecy, would forfeit the entire amount received on the 16th of October, which he had hypothecated in order to carry out the contract, in accordance with Shepherd’s request. Shepherd said that he would cash the hypothecated certificates before Oreeey’s notes matured, if in his power.
In accordance with Shepherd’s promises and suggestions, Creecy hypothecated the second batch of certificates, received by him on the 5th of November, except those in lieu of which lie had received sewer bonds; but those bonds were hypothecated with the remaining certificates, so that the nominal amount hypothecated was the same, to wit, $11,657.40; and the hypothecation was to secure his notes at 30 days, for which he received very nearly the market value of those certificates and bonds; and the discount paid on his notes was about at the rate of two per cent, a month.
VT. Upon the maturity of the notes for which the certificates of October 16 were hypothecated, those certificates had fallen considerably in market value, so that their market value was below what the notes called for. Creec3 called upon the brokers who held those notes, and endeavored to get them to renew the notes, butthey would notdo so, and the pledged certificates were finally sold by them and the notes canceled, Creecy having to pay a few dollars difference. Before calling on the brokers, however, Creecy again called on the treasurer of the Bsitrict and Governor Shepherd, and they could not cash the certificates. Precisely the same result happened with the second batch of certificates. The market value of the certificates kept running down, and all of the certificates issued November 5 were sacrificed, although Creecy appealed in every way to both the treasurer and Governor Shepherd, whose invariable answer was that they regretted they had not money to cash a sufficient number of the certificates to enable him to take up the notes and save the remainder of the certificates from forfeiture.
The money received from the discount of the notes for which tlie certificates of November 5 were hypothecated was used entirely in carrying out the contract, paying for labor and materials, and other necessary expenses.
VII. The said auditor issued to the claimant, and delivered' to Creecy, on account of other work done under said contract, a certificate of audit and allowance for the sum of $4,983.98, dated March 14, 1874; and also a like certificate for $1,500, dated March 27,1874; each of which was in the same form as that given iu Finding III, and was issued on estimates of said chief engineer. These certificates were hypothecated in'the same way upon the same promises, and the money was used for the same purposes; and' the certificates' were forfeited within one or two months after Creecy received them, because of his inability-to pay notes for which he had pledged them.
VIÍI. The total amount of the auditor’s certificates and sewer ' boiids hereinbefore described, which were hypothecated and sold by brokers as aforesaid, was $27,283.90; and the following is a statement of the sales :
Sold at 44 cents on the dollar. 1, 000
“ “48 “ “ “ 3,000
“ “49 “ “ “ 2,000
“ “50 “ “ “ 16,283 90
“ “64 “ “ “ 5,000
' $27,283 90
IX. Aside from and in addition to all the foregoing matters, the claimant, through said Creecy, received from the board of ‘ audit established under section 6 of the Act of June 20, 1874 (18 Stat. L., 116), certificates of the following dates and amounts-on account of work done by claimant under the aforesaid contract :
No. 1, dated November 9, 1874. 1, 000 00
No. 2, “ December 4, ■ “ . 6,021 00-
No.. 3, “ “ 12, “ 232 26.
No. 4, “ January 6,1875. 2,934 25 *
No. 5, “ “ * 22, “ 227 60
No. 6, “ February 24, “ ..'. 85 15
No. 7, “ May. 11, “ 217 85
$10,717 61
Nos. 1, 2, and 4 were exchanged by Creecy for 3.65 bonds authorized by said act to be issued, which bonds he sold at 70 cents on the dollar. He also sold No. 3 at 70, and Nos. 5, 6, and 7 at 75 cents on the dollar. -
Mr. V. B. Edwards and Mr. Montgomery Blair for the claimant:
The claimant having a valid written contract whereby it was agreed and stipulated that the claimant should be paid in lawful money for all work done under said contract, the measure of damages is the difference between the market value of the certificates and lawful money at the date said certificates were received by claimant, and interest thereon until paid. (20 Wall., 289.)' Nothing can be regarded as payment to claimant except lawful money of the United States. When the defendant claims that it paid claimant under his contract in something else than money, it must show that it was actually received by claimant as money, and the burden of proof in this respect is on the defendant.
As a matter of law the receipt by claimant of auditor certificates under the finding of the facts was not payment, but only to be accounted for in the sums received therefor, in the use of reasonable diligence and discretion on the part of claimant. (Memphis v. Brown, 20 Wall., 289; Yandenburg v. Cowdrey, 101 U. S. R., 572.)
The claimant is entitled to the amount of the certificates with interest from their date, to be credited by the amount received on sale of said certificates at the date of their sale.
The defendant is bound to make good any loss to claimant growing out of the sale of the certificates pledged as security for money borrowed on the promise of defendant to pay certificates, before the claimant was bound to repay the borrowed money. The defendant is bound to make good any loss to claimaut growing out of sale by himself of certificates which he was compelled to sell to carry on his contract by reason of the failure of defendant to pay in lawful money when the certificates were issued.
The failure of the defendant to provide means to carry on the work by paying the allowances found due to claimant by the auditor from time to time as the work progressed, as stipulated in the contract, and the request by defendant’s officers that claimant should supply the necessary means for that purpose by pledging or selling the certificates of the auditor, stating the amounts clue claimant, authorized the complainant to pledge or sell said certificates, and bound defendant to make g'ood the difference between the amounts received by claimant on account of said certificate and the face value thereof with interest thereon.
Mr. Assistant Attorney-General Simons (with whom was Mr. J. G. Fay) for the defendant.

Opinion:
Drake, Gh. J.,
delivered the opinion of the court:
The decision of this case brings under review the powers and duties of the board of public works of the District of Columbia, established under section 37 of the Act of February 21, 1871, " to provide a government for the District of ColumbiaA (16 Stat. I/., 419). The portion of that section here involved is as follows:
"The board of public works shall have entire control of and make all regulations which they shall deem necessary for keeping in repair the streets, avenues, alleys, and sewers of the city, and all other works which may be intrusted to their charge by the legislative assembly or Congress. They shall disburse upon their warrant all moneys appropriated by the United States, or the District of Columbia, or collected from property holders, in pursuance of law, for the improvement of streets, avenues, alleys, and sewers, and roads and bridges, and shall assess, in such manner as shall be prescribed by law, upon the property adjoining and to be specially benefited by the improvements authorized by law and made by them, a reasonable proportion of the cost of the improvement, not exceeding one-tliird of such cost, which sum shall be collected as all other taxes are collected. They shall make all necessary regulations respecting the construction of private buildings in tbe District of Columbia, subject to the supervision of the legislative assembly."
Those three sentences define and enumerate all the powers and capacities conferred upon the board by its organic law. Beyond those powers and capacities, and such, not named, as might beheld to be necessarily incident to them, the board had no powers whatever. It was a body with a limited range of powers, but within that range having great capacity.
A necessary incident of the exercise of the functions delegated to it was the power to enter into contracts for the performance of the various descriptions of work which it was authorized to have done; but its power to contract was limited, as to subjects-matter, and as to the form which its contracts should assume. The words of limitation in the act are as follows :
"All contracts made by the said board of public works shall bedn writing, and shall be signed by the parties making the same, and a copy thereof shall be filed in the office of the secretary of the District; and said board of public works shall have no power to make contracts to bind said District to the payment of any sums of money except in pursuance of appropriations made by law, and not until such appropriations shall have been made."
Under the law as thus stated the transactions upon which the claimant bases its demand took place. We have set forth those transactions very fully in the findings, but will state, as succinctly as may be, the particular facts on which a recovery here is sought.
The claimant entered into a written contract with the board of public works to perform a large quantity of work in paving-streets. In the contract it was provided that partial payments on account of the work should be made by the financial agent of the board, on the monthly estimate of the board's chief engineer.
In regard to the work done under the contracts, one Oreecy was the claimant's attorney, with general power to transact all business in connection therewith.
In conformity with estimates made by the chief engineer, the auditor of the board issued to the claimant and delivered to its said attorney twelve certificates on account of work done, one of which is the following, and all the rest were similar in form:
"No. 3453.] Office of the Board op Public Works, "Washington, D. G., October IQ, 1873.
"I hereby certify that I have this day audited and allowed the account of Neueliatel Paving Co., per E. E. Gaskin, ag't, per C. E. Oreecy, att'y, for work (here the work is set out), amounting to five thousand dollars,.$5,000.
" J. C. Lay, Auditor,"
Four certificates of this description, dated October 16,1873, were delivered to Creecy, the aggregate amount of which was $9,142.60.
Oreecy presented those certificates to the treasurer of the board for payment; who informed him thathehad no money, and did not know when be should have any. Oreecy told Mm that he expected the board to carry out its part of the contract and pay him, or else it would be impossible for the claimant to go on with the work. The .treasurer suggested to Oreecy to call on the president of the board, and ask him to raise funds. Creecy did So, and a good deal of conversation occurred between him and the president, the details of which are given in the findings, and need not.be repeated here. The substantial part relied on by the claimant was the president's advice to Creecy to borrow money on the certificates; his assurance that, if Creecy would do so, he would see that the hypothecated cer-. tificates' were cashed in time to prevent any loss to the claim - ant'; that Congress would certainly appropriate for its share of the improvements; and that the claimant should be among the first settled with. Oreecy hypothecated the certificates as collateral security for his notes, payable thirty days after date, for an amount almost equal to the market Amlue of the certificates.
On the 5th of November ensuing, Creecy received six other like certificates, aggregating $11,657.40, which he presented to the treasurer for payment, who replied that he had no funds. Creecy then applied again to the president, and urged him to prOAdde him with money, or the previously hypothecated certificates would become forfeited. The president gave him an order for $5,000 in sewer bonds in exchange for a certificate of like amount, those bonds being then worth 20 per cent, more on the dollar than the certificates; and told him to go'ahead with the work and not be discouraged; that he had better borrow some more money on the certificates; and that he, the president-,- would cash the hypothecated certificates before Creecy's notes matured, if in his power. Creecy hypothecated this second batch of certificates (less one) and the sewer bonds, to secure the payment of his note at 30 days.
Again, on the 14th of March, 1874, Creecy received a like certificate for $4,983.98, and on the 27th of that month another for'$l,500; the history of both of Avhich was the same, in effect, as that of the two preceding batches.
The result of the whole matter was that all of the certificates were sold to pay Creecy's notes, at 44, 48, 49, and 50 cents on the dollar, and the sewer bonds at 64; whereby the claimant avers that it sustained a loss of $19,429.25; and to subject the defendant to the payment of that loss this suit is brought.
That, to all appearance, the claimant suffered the loss complained of seems plain; but it is to us equally plain that the defendant is not bound to make good that loss.
The claimant's counsel, at the argument, laid great stress on the fact that the act under which this court has cognizance of claims against the District of Columbia vests the court with equitable as well as legal jurisdiction ; and assuming that the facts entitle the claimant to equitable relief, they appealed to us to administer it. But this is simply a suit for damages, which may, and must, be recovered, if at all, by an action at law; and it is an elementary and fundamental principle, that equity cannot interpose where there is an available and complete remedy at law. To invoke the exercise of equity jurisdiction, there must be a case presented in which there is no such remedy, and this case is certainly not of that description. Treating it, therefore, simply as an action at law, we will consider it in the light of legal principles.
Deduced to its simplest form, it is an action to fix upon the defendant a liability wholly based on the conversations of the president of the board of public works; which conversations, it is claimed, constituted a contract binding the defendant to indemnify the claimant against the loss it suffered through forced sales of the certificates and sewer bonds, made necessary by the failure of the board of public works to pay them. Was that the effect, in law, of those conversations ?
In Barnes v. District of Columbia (91 U. S. R., 540) the Supreme Court of the United States elaborately considered the legal status of the District and of the board of public works, under the Act of February 21, 1871, and held, 1. That the District is a municipial corporation; and 2. That the board of public works was not an independent body, acting for itself alone, and forming no part of the-corporation; but was a portion of the corporation, to which was given the exclusive control of the streets and alleys; and the court likened the board "to an ordinary agent of the corporation."
This decision settles those points, and necessarily, also, another point — the authority and right of the board to bind the District by contracts lawfully entered into by the board in relation to the matters committed to its exclusive coutrol.
This briugs up the question whether, in this case, the board did contract with the claimant to make good to it the loss it .sustained, ns before stated. The answer to this question depends on the legal authority of the president of the board by his conversations to make a contract for the board.
It was not contended at the trial that any express authority had ever been given by the board to its president to contract verbally on its behalf in regard to anything. It seems to have been assumed that his position as president and executive officer, or, as lie is styled in claimant's brief, "the recognized./actoium of the board, necessarily embodied in him the rightful authority to bind the board by his mere words. If this view be correct, then we should have to inquire whether his words amounted to a contract; but we are quite clear that it is not correct, in view of principles and doctrines which are too well settled to be questioned or disregarded.
The board of public works, as we have seen, was held by the Supreme Court to have been a mere agency of the District of Columbia. .The powers of this agency were vested in five individuals, having no corporate capacity, but merely acting as individuals intrusted with capacities and functions defined by law. The exercise of those capacities and functions was not committed to them jointly and severally, but jointly only. The language is — "The board ol' public works shall have entire control"; " They shall disburse upon their warrant all moneys"; "They shall make all regulations which they deem necessary"; and there is nothing in the statute giving to any other than the collective body the power to contract.
In such a case the whole tenor of the authorities is adverse to the exercise by one of the agents of a power to bind the collective body, unless he were expressly authorized to do so. Dillon, in the third edition of his very able work on Municipal Corporations, says: "As a general rule it maybe stated that not only where the corporate power resides i n a select body, as a city council, but where it lias been delegated to a committee or to agents, then, in the absence of special provisions otherwise, a minority of the select body, or of the committee or agents, are powerless to bind the majority or do any valid act. If all the members of the select body or committee, or if all the agents are assembled, or if all have been duly notified, and the minority refuse or neglect to meet with the others, a majority of those present may act, provided those present constitute a majority of the whole number. In other words, in such case, a major part of tbe whole is necessary to constitute a quorum, and a majority of tbe quorum may act." (§ 283.) . We have no doubt that this is sound law.' Applied in this case, it is fatal to any claim to bind tbe defendant by tbe acts aud words of a minority of tbe board, particularly where it is a minority of one.
Another rule of law bearing here is thus stated in tbe same work: " Tbe general principle of law is settled beyond controversy, that tbe agents, officers, or even city council of a municipal corporation cannot bind tbe corporation by any contract which is beyond the scope of its powers. This doctrine grows out of the nature of such institutions, aud rests upon reasonable and solid grounds. The inhabitants are tbe corporators; the officers are but tbe public agents of the corporation. .The duties and powers' of the officers of the corporation are prescribed by statute or charter, which all persons not.only may .know, but are bound to know. Tbe opposite doctrine .would be fraught with such danger aud accompanied with such abuse, that it would soon end in tbe ruin of municipalities, or be legislatively overthrown. These considerations vindicate both tbe reasonableness and necessity of tbe rule that tbe corporation is bound only when its agents or officers, by whom it can alone act, if it acts at all, keep within tbe limits of tbe chartered authority of tbe corporation." (§ 457.)
Now, even supposing that the president of tbe board had a general authority to bind that body by bis verbal engagements, he could do so only to such extent and in regard to such matters as the board itself, even by its unanimous action, might have done) for tbe powers of a representative can never exceed those of bis constituent. We must look, then, for the board's power, after work was done under a contract with it, and its auditor's certificates of indebtedness therefor bad been issued to the contractor, to agree to make good to him any loss be might thereafter sustain through tbe hypothecation, and consequent forced sale, of tbe certificates, to pay debts contracted by him in connection with the fulfillment of his contract. We look in vain for any words in the law conferring any such extraordinary and dangerous power; and we cannot conceive it to be constructively incident to any power there granted.
But were all the preceding views unsound, that organic law contains two clauses which seem, to us irresistibly conclusive against tbe claimant's demand. Tbe first clause is tbis: All contracts made by said board of public works shall be in writing, and shall be signed by the parties making the same."
At tbe trial tbe attention of claimant's counsel was called to tbis language; and to avoid its effect be referred to tbe clause in tbe Act June 15, 1880 (1 Súpplmt. E. S., 502), giving tbis court jurisdiction of u all claims now existing against tbe District of Columbia arising out of contracts madé by the late board of public works"; and be contended that those words included all engagements made by or on behalf of tbe board, whether they were, when made, lawful or unlawful. This is tantamount to saying that tbe statute was intended to ratify every such engagement, written or oral, and, ex post facto, to give legal vitality and validity to what, when done, might have been wholly without either. It is not easy to conceive of a more indefensible position, and we shall not stop to discuss it. The inanifestintention of Congress wms to leave to the judiciary tbe determination, in each case, of tbe question whether the claim arose out of a contract of tbe board; and the decision of that question would necessarily require tbe court to declare whether the engagement relied on did, in law, constitute a contract. No decision on that point could be made without bringing into consideration tbe words — 11 all contracts made by said board shall be in writing." If the board was legally incapable of making an unwritten contract, it could not in any possible way authorize its agent to make one.- The question, therefore, comes back to the effect of those words. Are they only directory, or are they mandatory'? If we had any doubt on this point, we should consider it settled by the Supreme Court of the United States in the recent' case of Clark v. United States (95 U. S. R., 539), which was decided on appeal from this court.
In that case the Act of June 2, 1862 " to prevent and punish fraud on the part of officers intrusted with the making of contracts for the government" (12 Stat. L., 411), was construed. Its terms were as follows:
"Sec. 1. That it shall be the duty of the Secretary of War, of the Secretary of the Navy, and of the Secretary of the Interior, immediately after the passage of this act, to cause and require every contract made by them, severally, on behalf of the government, or by their officers under them appointed to make such contracts, to be reduced to writing, and signed by the contracting parties with their names at the end thereof, a copy of wbicli shall be filed by the officer making and signing the said contract in the 'returns office' of the Department of the Interior (hereinafter established for that purpose), as soon after the contract is made as possible, and within thirty days, together with all bids, offers, and proposals to him made by persons to obtain the same, as also a copy of any advertisement he may have published inviting' bids, offers, or proposals for the same; all the said copies and papers in relation to each contract to be attached together by a ribbon and seal, and numbered in regular order numerically, according to the number of papers composing the whole return."
The case presented a claim which rested wholly on an oral agreement made by an officer of the Army, and the question was, whether such an agreement was forbidden by that act; and that involved 'the point whether the act was merely directory, or was mandatory. The court held -it to be mandatory, and thus expressed its views:
" It is contended on the part of the government that this act is mandatory and binding, both on the officers making contracts and on the parties contracting with them; whilst the claimant insists that it is merely directory to the officers of the government, and cannot affect the validity of contracts actually made though not in writing. The Court of Claims has heretofore held the act to be mandatory, and as requiring all contracts made with the departments named to be in conformity with it. The arguments by which this view lias been enforced by that court are of great weight, and, in our judgment, conclusive. The facility with which the government may be pillaged by the presentment of claims of the most extraordinary character, if allowed to be sustained by parol evidence, which can always be produced to any required extent, renders it highly desirable that all contracts which are made the basis of demands against the government should be in writing. Perhaps the primary object of the statute was to impose a restraint upon the officers themselves, and prevent them from making' reckless engagements for the government; but the considerations referred to make it manifest that there is no class of cases in which a statute for preventing frauds and perjuries is more needed than in this. And we think that the statute in question was intended to operate as such. It makes it unlawful for contracting officers to make contracts in any other way than by writing signed by the parties. This is equivalent to prohibiting any other mode of making contracts. Every man is supposed to know the law. A party who makes a contract with an officer without having it reduced to writing is knowingly accessory to a violation of duty on his part. Such a party aids in the violation of the law. We are of opinion, therefore, that the contract itself is affected, and must conform to the requirements of the statute until it passes from the observation and control of the party who enters into it. After that, if the officer fails to follow the further directions of the act with regard to affixing bis affidavit and returning a copy of the contract to the proper office, the party is not responsible for this neglect."
This decision bears with controlling force on the present case. If the Supreme Court would express those views in regard to an act which merely imposed on heads of executive departments the duty to see that all contracts made by their officers should be reduced to writing, much more, it seems to us, would it apply them to a statute declaring that ali contracts made by said board shall he in writing." We hold, therefore, that the words of the president of the board of public works constituted no contract whatever on the part of that board, or of the District of Columbia.
The second clause of the organic law of the board touching this matter is that declaring that the board " shall hare no power to malee contracts to hind said District to the payment of any sums of money, except in pursuance of appropriations made hy law." There is no question here as to whether the words are directory or mandatory. They are a plain prohibition, an absolute interdict. To sustain the claimant's demand, in the face of them, is impossible, even on the supposition that the president had power to contract by word of mouth for the board, unless-it appear that an appropriation had previously been made by law, authorizing the particular contract he might attempt so to make. Of course, there is no pretense that any appropriation was ever made, by any law, for paying contractors' losses on forced sales of auditor's certificates of the board, under the circumstances of this case or under any other.
And so, in every view, as well on general legal principles as under statute law, the present demand is singularly destitute of any valid claim to judicial recognition.
The claimant's petition is dismissed.
Nott, J., was not present at the trial of this case,-and took no part in its decision.