Sutton v. United States

256 U.S. 575, 41 S. Ct. 563, 65 L. Ed. 1099, 1921 U.S. LEXIS 1590, 19 A.L.R. 403, 56 Ct. Cl. 477
Supreme Court of the United States·Decided June 1, 1921·No. 307·Published·Cited by 143 cases

Opinion

*577 Mr. Justice Brandéis

delivered, the opinion of the court.

The River and Harbor Act of July 25, 1912, c. 253, 37 Stat. 201, 209, made this appropriation: “Improving channel from Clearwater Harbor through Boca Ceiga Bay to Tampa Bay, Florida: Completing improvement and for maintenance, twenty thousand dollars.” Sealed proposals were solicited, and on January 21, 1913, a contract was made by the War Department with the Hillsboro Dredging Company to do work at unit rates for dredging soft'material and for excavating rock. The appropriation was ample to defray the cost at these rates, assuming that the quantities of material to be removed did not greatly exceed the estimates presented by the specifications. It was provided by the contract that United States “inspectors will keep a record of the work done” and also that, “within the limits of available funds the United States reserves the right to require the removal of such yardage as will complete the work ... be it more or less than the quantity above estimated. . . .”

Work was begun under the contract in June, 1913, and payments were made monthly on estimates of the government inspector. Upon these estimates both the Government and the contractor relied. About May 15, 1914, it was discovered that through a mistake of the inspector so much work had already been done th^t, if paid for at the unit rates, it would call for an amount far in excess of the appropriation available. The government engineer in charge ordered operations discontinued immediately; and- this contractor had no further connection with the work. The work already done amounted at the unit price to $25,032.31. The aggregate appropriation available for the improvement — including an additional $3,000 made by Act of March 4,1913, c. 144, 37 Stat. 801, 809 — was $23,000. Against this appropriation the Gov *578 ernment charged $1,732.90 for superintendence and office expenses. The balance — $21,267.10—it paid to the contractor, leaving unsatisfied a claim, at the unit rates, of $3,042.74, for material dredged or excavated, and a further claim of $1,551 for the cost of blasting rock which was not removed because of the order to cease work. To recover these sums the assignee in bankruptcy of the Hillsboro Company brought this suit in the Court of Claims. That court entered judgment for the Government, 55 Ct. Clms. 193; and the case is here on appeal.

First. It is urged that the Secretary of War was authorized by Congress to make, and that he did make, a contract with the Hillsboro Company not only to proceed with the work, but for its completion; and that the United States is, therefore, liable, even though the appropriation proved to be insufficient. Two appropriations had been made for . this project before the Act of 1912 above referred to; one by Act of June 25, 1910, c. 382, 36 Stat. 630, 644, of $29,500, for “improving channel from Clear-water Harbor”; the other by Act of February 27, 1911, c. 166, 36 Stat. 933, 941, of a like amount for “completing improvement.” -The Act of 1912 provided by § 8 (37 • Stat. 233) that “whenever the appropriations made, or authorized to be made, for the completion of any river and harbor work shall prove insufficient therefor, the Secretary of War may, in his discretion, on the recommendation of the Chief of Engineers, apply the funds so appropriated or authorized to the prosecution of such work.” But by none of these acts was any authority conferred upon the Secretary of War to'complete the improvement or to contract to expend more than the amount then appropriated. On the other hand, § 3733 of the Revised Statutes provides that no contract “for any public improvement . . .. shall bind the Government to pay a larger sum of money , than the amount in the Treasury appropriated for the specific purpose.” See *579 also §§ 3732 and 5503. And the Act of June 30, 1906, c. 3914, provides by § 9 (34 Stat. 697, 764) that “No Act of Congress hereafter passed shall be construed . . . to authorize the execution of a contract involving the payment of money in éxcess of appropriations made by law, unless such Act shall in specific terms declare an appropriation t.o be made or that a contract may be executed.” The Secretary of War was, therefore, without power to make a contract binding the Government to pay more than the amount appropriated. See Bradley v. United States, 98 U. S. 104, 113, 114. Those dealing with him must be held to have had notice of the limitations upon his authority. But there is nothing in the contract indicating a purpose to bind the Government for any amount in excess of the appropriation. On the contrary, it limits to the amount of the appropriation the work which may be done.

By Act of October 2,1914, c. 313, 38 Stat. 725, Confess appropriated the sum of $20,000,000 “to be expended under the direction of the Secretary of War and the supervision of the Chief of Engineers, for the preservation and maintenancé of existing river and harbor works, and for the prosecution of such projects heretofore authorized as may be most desirable in the interests of commerce and navigation, and most economical and advantageous in the execution of the work.” Out of the sum so appropriated $12,000 was allotted by the Secretary for completing the Clearwater Harbor Improvement; and out of this sum there was paid to the contractor in November, 1914, $3,046.44, being the unpaid balance at unit prices for the material removed prior to'May 15, 1914. This payment was later disallowed by the auditor for the War Department and the Comptroller of the Treasury and was deducted from payments made to the contractor under a wholly different contract for work in North and South Carolina. . It is clear that the Act of 1914 did not *580 authorize the application of any part of the appropriation to work theretofore done. The payment therefrom having been unauthorized, did not bind the Government; and if it was entitled to recover the money, the method pursued in doing so was proper. Wisconsin Central R. R. Co. v. United States, 164 U. S. 190; Grand Trunk Western Ry. Co. v. United States, 252 U. S. 112.

Second. It is contended that since the contract pro-. vided that the government “inspectors will keep a record of the work done,” since their estimates were relied upon by the contractor, and since, by reason of the inspector’s mistake the contractor was led to do work in excess of the appropriation, the United States is liable as upon an implied contract for the fair value of the work performed. But the short answer to this contention is that since no official of the Government could have rendered it liable for this work by an express contract, none can by his acts or omissions create a valid contract implied in fact. The . limitation upon the authority to impose contract obligations upon the United States is as applicable to Contracts by implication as it is to those expressly made. Nor did the subsequent use of the excavation by the Government imply a promise to pay for it if at any time thereafter Congress should appropriate money to be applied in completing the improvement.

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Sutton v. United States, 256 U.S. 575, 41 S. Ct. 563, 65 L. Ed. 1099, 1921 U.S. LEXIS 1590, 19 A.L.R. 403, 56 Ct. Cl. 477 (1921).

256 U.S. 575 (Sutton v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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