Manning v. Ellicott
9 App. D.C. 71
D.C.
1896
Check Treatment
Mr. Chief Justice Alvey

The sole question presented on this appeal is, whether the . agreement sued on, between the plaintiff and defendant, is such as is forbidden and rendered void, either by Section 3477 or by Section 3737, of the Revised Statutes of the United States. For if not, there can be no question of the right of the plaintiff to maintain an action thereon, unless the defendant can show a release or other matter of discharge.

The two sections of the Revised Statutes supposed to affect the validity of the agreement sued on, are as follows:

“ Sec. 3477. All transfers and assignments made of any claim upon the United States, or of any part or share thereof, or interest therein, whether absolute or conditional, and whatever may be the consideration therefor, and all powers *79of attorney, orders, or other authorities for receiving payment of any such claims, or of any part or share thereof, shall be absolutely null and void, unless they are freely made and executed in the presence of at least two attesting witnesses, after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof . . .”

“Sec. 3737. No contract or order, or any interest therein, shall be transferred by the party to whom' such contract or order is given to any other party, and any such transfer shall cause the annulment of the contract or order transferred, so far as the United States are concerned. All rights of action, however, for any breach of such contract by the contracting parties, are reserved to the United States.”

At the time of the making of the contract in question there was no claim whatever against the United States to be transferred or assigned; and therefore Section 3477 could not apply to a contract like the present. 'The agreement does not profess to transfer or assign any portion of an existing claim of the defendant against the United States. It simply contemplated an independent contract between the plaintiff and defendant, for doing a portion of the work that might be embraced in a contract that the defendant had proposed to make with the commission representing the Government. That a contractor for doing certain work for the Government may make subcontracts, in the execution of the work undertaken, is nowhere forbidden. Indeed, it is the every day practice, without question; and in large contracts, requiring division of labor, skill, and material, it is matter of necessity; and is always understood in letting out such contracts by the Government. Neither section of the Eevised Statutes referred to applies to such case. The Supreme Court, in the case of Hobbs v. McLean, 117 U. S. 567, 575, has clearly defined the character of the claims to which Section 3477 of the statute refers.

The claim, said the.court, “ is a right to demand money *80from the United States. Peck acquired no claim in any sense until after he had made and performed, wholly or in part, his contract with the United States. Section 3477, it is clear, only refers to claims against the United States which can be presented by the claimant to some department or officer of the United States for payment, or may be prosecuted in the Court of Claims. The section simply forbids the assignment of such claims before their allowance, the ascertainment of the amount due thereon, and the issuance of a warrant for their payment. When the contract of partnership was made Peck had no claim which he could present for payment, or on which he could have brought suit. He, therefore, had no claim, the assignment of which the statute forbids. It is so clear that the articles of partnership do not constitute such an assignment as is forbidden by the section under consideration, that it would be a waste of words further to discuss the point.” It is clear, therefore, that Section 3477 does not apply to the contract sued on in this action.

Nor does Section 3737 apply. The contract sued on does not require of the defendant the doing of anything forbidden by that section of the statute. There was no contract or order of the Government held by the defendant at the time that could have been transferred, and the agreement did not. require such transfer to be made. It contemplated a separate and subordinate contract as between the plaintiff and defendant, with a joinder of the plaintiff in the contract of the defendant with the Government as means of security to the plaintiff in respect to a part of the work to be done under a contract that might be awarded to the defendant. It was not a transfer of a contract within either the letter or meaning of the statute, such as would place the plaintiff in the position and relation to the Government of assignee claiming under the defendant. The Government would not be bound to recognize the plaintiff as a party to the contract with the defendant, nor as interested therein. If, however, *81the Government agents had thought proper to accept the plaintiff as a party to the contract, all objections would have been removed.

But, as said by the Supreme Court, in the case already referred to, if the contract sued on is fairly open to two constructions, the presumption is that it was made in subordination to and not in violation of Section 3737 ; and if it can be so construed consistently with the prohibition of the section, it should be so construed. For it is a well-settled rule of interpretation that where a contract is fairly open to two constructions, by one of which it would be lawful and the other unlawful, the former must be adopted. Hobbs v. McLean, supra.

It is argued, however, by the defendant, that, as the agreement provides that the plaintiff should be made a party direct to the contract with the commission, to the amount of the pedestal, as agreed upon by the plaintiff and defendant, and as such term in the agreement could not be enforced, therefore the entire contract must be treated as void. It may, certainly, be conceded that the commission, acting for the Government, could not be required to accept or recognize the plaintiff as a party to the contract with them for the erection of the pedestal. But it does not follow that the entire contract between the plaintiff and defendant must therefore be treated as void. This term in the contract is distinct and severable from the rest of the terms therein, and it was not inserted for the benefit of the defendant, but as security for the plaintiff; and it may well be rejected, and the other provisions of the agreement remain good and enforceable. It did not in any respect form the consideration upon which the defendant was induced to enter into the agreement with the plaintiff; and in such case as the present, where there is nothing malum in se, the term or stipulation not valid or enforceable, whether so by the common law or by statute, may be rejected, and all of the other parts *82of the agreement remain in full force and operation. United States v. Bradley, 10 Pet. 343, 360; Gelpcke v. City of Dubuque, 1 Wall. 221; Pickering v. Railroad Co., L. R. 3 C. P. 250.

It follows that the judgment appealed from must be reversed, and a new trial awarded.

Judgment reversed, and new trial awarded.