295 F. 415 | D. Or. | 1924
This is an action brought by the Astoria Marine Iron Works against the United States Shipping Board Emergency Fleet Corporation to recover approximately $188,000 for labor ’ and material alleged to have been furnished by the plaintiff in installing machinery and equipment in 20 ship hulls for the defendant under a contract dated March 25, 1918.
The defendant in its answer denies certain allegations of the complaint, and for a further and separate defense alleges: That it is a corporation organized under the laws of the District of Columbia, by
The plaintiff has demurred to and moved to strike out this defense, on the ground that it is immaterial and irrelevant, and constitutes no defense to the present action.
The legal status of the Emergency Fleet Corporation has been a frequent subject of judicial consideration, and it has been definitely determined by the highest court of the land that it is a private business corporation having a distinct entity, and is not entitled to the immunity of the sovereign, and may be sued as any other private corporation for its torts or on its contracts (U. S. v. Strang, 254 U. S. 491, 41 Sup. Ct. 165, 65 L. Ed. 368; Sloan Shipyard Cor. v. U. S. E. F. C., 258 U. S. 549, 42 Sup. Ct. 386, 66 L. Ed. 762), but so far as I am advised this is the first case in which the courts have been called upon to determine whether the Fleet Corporation is liable personally on contracts
The President was authorized to exercise the powers and authority thus vested in him and expend the money appropriated through such agent or agents as he should determine from time to time. By subsequent executive orders the President appointed the Emergency Fleet Corporation as his agent, and delegated to it all the powers and authority vested in him by the act referred to relating to the purchase, construction, or equipment of ships, contracts, or material for ships. It is alleged in the answer that the contract in suit was made by the defendant as such agent, and by virtue of the authority delegated to it by the President, and not in its own behalf.
If this is true, and it must be so assumed for present purposes, the defendant is not in my judgment liable personally on the contract so made, any more than the President would have been if he had made it himself. It is an established rule of law that, where a public officer or agent acts in the line of his duty and by legal authority, he is not responsible on any contract he makes in that capacity, and when his contract or engagement is concerned with a subject fairly within the scope of his authority, it shall be considered to have been made by him officially and in his public character, unless the contrary appears by satisfactory evidence of an absolute and unqualified engagement to be personally liable, although such contract may be under his hand and seal. Parks v. Ross, 11 How. 371, 13 L. Ed. 730; Hodgson v. Dexter, 1 Cranch, 362, 2 L. Ed. 130; Sheets v. Selden’s Lessee, 2 Wall. 187, 17 L. Ed. 822; Belknap v. Schild, 161 U. S. 17, 16 Sup. Ct. 443, 40 L. Ed. 599.
A copy of the contract between the plaintiff and defendant is appended to the answer, and there is nothing in it which manifests an intention on the part of the defendant to be personally liable for its performance. It begins by reciting that it was made between the party of the first part and the “United States Shipping Board Emergency Fleet Corporation, representing the United States of America
Great reliance is placed by plaintiff on the decisions in the Sloan Shipyards, supra, and kindred cases; but as I read the opinions in these cases the question here presented, although urged upon the attention of the court, was deemed not to be within the record, and is not decided. Two of the cases were appeals from judgments sustaining demurrers to the complaints and dismissing the actions, on the ground that the Fleet Corporation was a mere bureau or arm of the government and entitled to the immunity of the sovereign. The court ruled that it was a public business corporation, and liable to be sued for its torts or on its contracts the same as any other corporation, and therefore the complaints stated a cause of action; but the question of whether it is personally liable on contracts made by it as agent or representative of the President under the war powers conferred upon him was not decided.
It follows, therefore, that the motion and demurrer should be overruled ; and it is so ordered.