71 Ct. Cl. 218 | Ct. Cl. | 1930
delivered the opinion:
The defendant at the outset contends that this court has no jurisdiction to determine the issues of this case for the reason that plaintiff has failed to meet the requirements of section 180 of the Judicial Code, 36 Stat. 1141, under which one of its claims is made; that in bringing this suit in its own behalf, the plaintiff must allege and admit that it is or has been indebted to the United States as an officer or agent thereof or by virtue of a contract therewith, failing in which
There is no merit in this contention of the defendant. In the first place, the plaintiff has alleged and proved all the jurisdictional requirements of section 180 of the Judicial Code. That section provides as follows:
“ Whenever any person shall present his petition to the Court of Claims alleging that he is or has been indebted to the United States as an officer or agent thereof, or by virtue of any contract therewith, or that he is the guarantor, or surety, or personal representative of any officer or agent or contractor so indebted, or that he or the person for whom he is such surety, guarantor, or personal representative has held any office or agency under the United States, or entered into any contract therewith, under which it may be or has been claimed that an indebtedness to the United States had arisen and exists, and that he or the person he represents has applied to the proper department of the Government requesting that the account of such office, agency, or indebtedness may be adjusted and settled, and that three years have elapsed from the date of such application, and said account still remains unsettled and unadjusted, and that no suit upon the same has been brought by the United States, said court shall, due notice first being given to the head of said department and to the Attorney General of the United States, proceed to hear the parties and to ascertain the amount, if any, due the United States on said account. The Attorney General shall represent the United States at the hearing of said cause. The court may postpone the same from time to time whenever justice shall require. The judgment of said court or of the Supreme Court of the United States, to which an ■appeal shall lie, as in other cases, as to the amount due, shall be binding and conclusive upon the parties. The payment of such amount so found due by the court shall discharge .such obligation. An action shall accrue to the United States .against such principal, or surety, or representative to recover the amount so found due, which may be brought at any time within three years after the final judgment of said court; and unless suit shall be brought within said time, such claim and the claim on the original indebtedness shall be forever barred. The provisions of section one hundred and sixty-six shall apply to cases under this section.”
'So far as this case is concerned, the section requires that the plaintiff “ present his petition to the Court of Claims alleging that he * * * has entered into any contract
The plain language of the section grants to an officer, agent, or a contractor, or the guarantor, surety, or personal representative of such officer, agent, or contractor the right to come into this court and have the claim of the United States that he is indebted to. it determined; first, in a case where such person may admit an indebtedness which has not been settled or adjusted for any reason; secondly, in a case where such person may admit in part or deny in part an indebtedness claimed by the United States against him which has not been settled, adjusted, or suit brought by the United States; and, thirdly, in a case where such person denies entirely an indebtedness claimed by the United States against him which has not been adjusted and settled and no suit brought by the Government. The provision that if such person “ has held any office or agency under the United States, or entered into any contract therewith, under which it may be or has been claimed that an indebtedness to the United States had arisen and exists ” clearly has reference to an indebtedness claimed by the United States and not by the person bringing the suit, although, as pointed out above, in order to have the matter finally determined, the plaintiff may admit all or a portion of such claimed indebtedness. The rights granted by this section and the jurisdiction conferred thereby are in addition to the rights given and the jurisdiction conferred by section 145 of the Judicial Code. The intention of the act was to provide for the speedy disposition of claims by the United States against its officers and agents, and against those having contracts with it, by giving to such persons the right to come into this court and compel the United States to answer and have its claim determined. Prior to 1887, when section 180 was enacted, such questions could only be settled and determined in the absence of a settlement by the parties in suit brought by the United States against such officer, agent, or contractor,
The defendant next contends that the claimed indebtedness, of the plaintiff to the United States was adjusted and settled within the meaning of section 180 when the Comptroller General of the United States applied amounts standing to the credit of the plaintiff on the books of the United-States against an amount believed by the Comptroller General to be the amount of damages for which it was claimed'; the plaintiff was liable to the defendant. There is no merit in this contention. The action of the Comptroller General did not even constitute a prima facie case in favor of the-defendant, either on the questions of law or of fact. In any event, in this case, the plaintiff, as hereinafter set forth in more detail, has clearly overcome by competent proof any - claim by the defendant of the existence of any indebtedness by the plaintiff under the contract of June 26, 1916. We need not here decide the meaning of the words “ adjusted and settled ” used in section 180, for it is well settled that. disputed claims for damages for breach of contract can in. no sense be called an account, and are not committed by law to the control and decision of the accounting officers of the United States. The reason is plain. Such claims must be sustained by extraneous proof and often involve a broad; field of investigation requiring the determination of difficult:
The defendant further contends that this court may only determine the amount of indebtedness due the United States under the contract of June 26, 1916; that since plaintiff has.invoked the provision of section 180 of the Judicial Code this court is without jurisdiction or authority to consider another issue or to render judgment against the-United States on any affirmative claim made by the plaintiff in the same suit. In support of this contention defendant relies upon Victoria Gerding, Administratrix, v. United States, 26 C. Cls. 319 and 28 C. Cls. 531. Some of the-language in that opinion went beyond the necessities of the case, but it is unnecessary for us to discuss the facts in. that case since it appears from the opinions that “ the allegations of the petition do not, by express averment, allege an indebtedness to the claimant,” and it was only in argument that it was insisted that the defendant was indebted to the plaintiff. In the Gerding case the court did not fully discuss the provisions of section 180 and, for the reasons hereinafter set forth, we think there is no merit in this claim of the defendant. In our opinion it was never intended by-section 180 to take away from the plaintiff any of the rights, to sue the United States under other provisions of the law and there is nothing in the section which precludes the plaintiff from setting up, by appropriate allegations in a petition which invokes the provisions of section 180, a claim or claims against the United States for affirmative relief under-
The defendant admits that the amount of $50,116.18 is due the plaintiff. There can be no question under the facts about this.
On the question of interest this court has jurisdiction of a suit to recover interest on an unpaid balance of judgments against the United States, whether rendered by this or another court. United States v. O’Grady, 22 Wall. 641; Hobbs v. United States, 19 C. Cls. 220; Carroll v. United States, 31 C. Cls. 314; Bloodgood v. United States, 39 C. Cls. 69. See also United States v. La Grange Grocery Co., 31 Fed. (2d) 297; United States v. N. Y., C. & St. L. R. Co., 32 Fed. (2d) 887. This question will be further discussed following our decision on the question of the indebtedness claimed by the defendant against the plaintiff under the contract of June 26, 1916.
The nest question, and the one about which there is the most serious controversy, is whether there exists an indebtedness of the plaintiff to the United States under the contract of June 26, 1916, relating to certain dredging in Honolulu Harbor. The facts have been fully stated and we need not repeat them in detail here.
The defendant insists that the plaintiff breached the contract in failing to make satisfactory progress with the work; that the defendant had the right to relet the contract for the work and to annul the plaintiff’s contract, and to hold the plaintiff for the cost of doing the work in excess of that provided in the plaintiff’s contract of June 26,1916.
On the other hand, the plaintiff contends, first, that it did not breach or abandon its contract but that the defendant breached the contract and excluded plaintiff from the work; that nothing is due the defendant under the contract of June 26, 1916; that under plaintiff’s other claims judgment should be rendered in its favor for the amount of $50,176.78, with interest under the act of March 3, 1875; secondly, that
We are of opinion that the defendant breached the contract of June 26, 1916, with plaintiff and that there is nothing due the United States because of the payment by it to another dredging company under the two contracts of October 29, 1917, and October 1, 1919, of an amount in excess of the price at which the plaintiff had contracted to do the dredging specified in its contract. Article 3 of the contract provided that the contractor should commence the work within sixty days after approval of the contract by the Chief of Engineers and should prosecute the work at a rate sufficient in the opinion of the contracting officer to secure completion within the contract time; and that if the contractor
The local district engineer at Honolulu, who was the contracting officer, was on the ground and entirely familiar with all the facts and circumstances concerning the operations under the contract of June 26, 1916. The plaintiff was actually engaged upon the work under its contract and although it did not, up until the work was relet on October 29,1917, have a dredge on the work it had certain dredging equipment necessary to the drilling and blasting required in the area to be dredged. The contract of October 29, 1917, was made solely by direction of the Chief of Engineers. The contracting officer exercised no judgment whatever but merely executed the decision of his superior as his position compelled him to do. The contracting officer never decided that it was necessary to take any action in order to put the work in a proper state of advancement or to insure completion of the contract within the period specified. On the contrary, he did not at any time deem such action necessary and the contract was let by direction of the Chief of Engineers solely for the purpose of enabling construction of the quarantine wharf. It is worthy of note that the defendant did not call as a witness any one of the contracting officers on whom article 8 of the contract imposed the duty of deciding whether the contractor was making such progress as would insure completion of the work within the contract time, and who, under article 4 of the contract, was required to decide in the first instance whether the contractor was diligently and faithfully prosecuting the work and to secure the sanction of the Chief of Engineers before the contract could be annulled. The plaintiff has affirmatively established, however, that the contracting officer took none of the steps and made none of the decisions required of him under articles 8 and 4 of the contract, and that he never decided that the plaintiff was not
The defendant attempts to justify the action taken on the ground that the contracting officer did act in the matter, and it is immaterial that he acted solely under instructions from the Chief of Engineers of the War Department, at Washington, D. C. This was not enough. The contract was annulled by the Chief of Engineers. In King v. United States, 37 C. Cls. 428, 436, the contract had been annulled by the Chief of Engineers, the court said:
“ The contract called for "the judgment of the engineer in charge,’ and gave him alone ‘ power, with the sanction of the Chief of Engineers, to annul the contract by giving notice in writing to the party of the second part.’ The Chief of Engineers and the Secretary of War, and the assistant who signed the notice, were not the persons named in the contract. The contractor was entitled to the judgment of the engineer in charge, with the sanction of the Chief of Engineers, and was entitled to ‘notice in writing to that effect from the engineer in charge.’ ”
In Williams Engineering & Contracting Co. v. United States, 55 C. Cls. 349, the court held that where a contract provides that the Chief of the Bureau of Yards and Docks may, upon the report of the engineer in charge that the work can not be completed within the contract time, annul the same, the Secretary of the Navy, during the temporary absence of the Chief of the Bureau of Yards and Docks,
With respect to the right of the plaintiff to recover interest on the several amounts withheld by the defendant and finally applied by the Comptroller General of the United States as a credit against the alleged indebtedness of the plaintiff, the defendant contends, with respect to the two items of $10,000 each and the item of $4.35, that it has not been shown that these items were ever allowed by legal authority as required by the act of March 3, 1875, and that there is no proof that the items upon which interest is claimed were ever presented to the Secretary of the Treasury. The facts and decided cases disposed of these questions contrary to the contentions of the defendant. See section 305 amending section 236 of the Revised Statutes and section 307 of the Budget and Accounting Act of 1921, 42 Stat. 20, 24, 25; United States v. La Grange Grocery Co., 31 Fed. (2d) 297; United States v. New York, C. & St. L. R. Co., 32 Fed. (2d) 887; James Stewart & Co., Inc., v. United States, No. H-340, decided by this court November 3, 1930. [Ante, p. 126.] In United States v. La Grange Grocery Go. supra, the court said:
_ “ When the act of 1875, now section 227, was passed, section 71 appeared in the Revised Statutes of 1873 as section 236, except that the adjustment and settlement was to be done in the Treasury Department. The machinery of settlement then consisted of a Comptroller of the Treasury, with his assistant and six auditors. * * * In 'order that interest should follow an improper offset, it was unnecessary to present the demand for payment to the Secretary of the Treasury in person, as it was unnecessary that he, in person, should make the offset. The Comptroller and the Auditor made the offsets, and a presentation in the Treasury Department for adjustment and payment was all that was meant by the words: 1 When :i: * * any claim * * * shall be presented to the Secretary of*250 the Treasury for payment.’ The purpose of the act was not to involve the Secretary personally, but to raise a duty in his department to offset counterclaims, and to fix the fair consequences in the matter of interest.”
Section 305 of the budget act of 1921, 42 Stat. 24, 25, amending section 236 of the Revised Statutes, provides that “All claims and demands whatever by the Government of the United States or against it, and all accounts whatever in which the Government of the United States is concerned, either as debtor or creditor, shall be settled and adjusted in the General Accounting Office,” and section 307 of said budget act of 1921 provides that “ The Comptroller General may provide for the payment of accounts or claims adjusted and settled in the General Accounting Office, through disbursing officers of the several departments and establishments, instead of by warrant.” Under existing law, therefore, the Comptroller General, and not the Secretary of the Treasury, is the directing agency as to when and by whom any claims against the United States shall be paid. His act in withholding payment was equivalent to such action by the Secretary of the Treasury. A claim presented to the Comptroller General, upon allowance by him, became a valid claim presented to the Secretary of the Treasury within the meaning of the act of March 3, 1875, providing for the payment of interest. This point was fully discussed and we think correctly decided by the court in United States v. La Grange Grocery Co. supra. Plaintiff is, therefore, entitled to recover $50,176.78 with interest.
On the question of claimed indebtedness of plaintiff to the United States under the contract of June 26, 1916, the court determines that nothing is due the United States in respect thereto and, further, it is the judgment of the court that plaintiff is entitled to recover from the defendant $50,176.78 with interest on $27,151.71 from October 5, 1918; on $10,000 from September 27, 1920; on $10,000 from February 13, 1923; on $3,020.72 from February 26, 1923.; and on $435 from August 21, 1920. It is so ordered.
