United States v. New York & Porto Rico SS Co., 239 U.S. 88 (1915)
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Scribd Government DocsUnited States v. New York & Porto Rico SS Co., 239 U.S. 88 (1915)
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Scribd Government Docs239 U.S.
88
36 S.Ct. 41
60 L.Ed. 161
UNITED STATES OF AMERICA, Plff. in Err.,
v.
NEW YORK & PORTO RICO STEAMSHIP COMPANY.
No. 44.
Argued November 3, 1915.
Decided November 15, 1915.
Solicitor General Davis and Mr. Robert Szold for plaintiff in error.
Messrs. James H. Hayden, Norman B. Beecher, and Ray Rood Allen for
defendant in error.
[Argument of Counsel from page 89 intentionally omitted]
Mr. Justice Holmes delivered the opinion of the court:
This is a suit by the United States to recover the increased cost of transportation
for coal, above a price that the defendant had agreed to accept for the service;
the latter having notified the government that it would not furnish the steamers
agreed. There is no dispute as to the facts. On November 9, 1909, the plaintiff
requested in writing that the defendant make a tender for the transportation of
not less than 8,000 tons of coal from certain Atlantic ports at the option of the
plaintiff to Mare island or San Francisco, with stipulations as to time. On
November 13 the defendant submitted an offer which the plaintiff accepted by
telegraph on the same day. On November 15 the defendant wrote,
acknowledging the telegram, and saying that it could advise in due course what
steamers it would tender. There was further correspondence on the footing of a
mutual contract, but on December 14, the defendant's attorney wrote, stating
that it believed that a combination had been made with intent 'to cause it to
make default under its engagement to your Department or else to suffer heavy
loss,' and requesting the plaintiff to procure the transportation if it could be
done at reasonable cost, letting the writer know the terms of any contract before
it was closed. The plaintiff thereupon got the transportation elsewhere. The
declaration is in three counts; two upon the contract and a third for money paid
at the defendant's request. At the first trial the plaintiff had judgment. 197 Fed.
995. This judgment was reversed by the circuit court of appeals. 124 C. C. A.
325, 206 Fed. 443. At a second trial on this same record both parties moved
that a verdict be directed, and a verdict was directed for the defendant. The
judgment was affirmed by the circuit court of appeals. 126 C. C. A. 668, 209
Fed. 1007.
2
The only matter for our consideration is whether the court below was right in
ruling as matter of law that there was no binding contract, and therefore we
may lay on one side some details that were dwelt upon by the defendant, but
that do not affect this question. The ground of the defense is Rev. Stat. 3744,
Comp. Stat. 1913, 6895. By this section it is made the duty of the Secretaries
of War, the Navy, and the Interior to cause every contract made by their
authority on behalf of the government 'to be reduced to writing, and signed by
the contracting parties with their names at the end thereof;' all the copies and
papers in relation to the same to be attached together by a ribbon and seal, etc.
A formal proposal, varying, the defendant says, from that which was accepted
in the letters, was sent to the defendant, and received by it on December 11, but
never was signed, and the defendant contends that, however it might be
otherwise, the statute makes the informal agreement by correspondence void.
The statute does not address itself in terms to the effect of the form upon the
liability of the parties, like the statute of frauds. Whatever effect it has in that
way is not a matter of interpretation in a strict sense, but is implied. The extent
of the implication is to be gathered from the purpose of the section and such
other considerations as may give us light. The section originally was part of the
act of June 2, 1862, chap. 93, 12 Stat. at L. 411, Comp. Stat. 1913, 6895, and
its purpose is manifested by the scope of the act and its title. It is called 'An act
to Prevent and Punish Fraud on the Part of Officers Intrusted with Making of
Contracts for the Government,' and this was recognized as the purpose in Clark
v. United States, 95 U. S. 539, 24 L. ed. 518. In that case some of the justices
thought that the decision went too far in treating the section as a statute of
frauds even in favor of the United States; and while it is established that a
contract not complying with the statute cannot be enforced against the
government, it never has been decided that such a contract cannot be enforced
against the other party. The prevailing opinion cannot be taken to signify that
the informal contract is illegal, since it went on to permit a recovery upon a
quantum valebat when the undertaking had been performed by a claimant
against the United States. United States v. Andrews, 207 U. S. 229, 243, 52 L.
ed. 185, 191, 28 Sup. Ct. Rep. 100. Of course the statute does not mean that its
maker, the government, one of the ostensible parties, is guilty of unlawful
conduct, or that the other party is committing a wrong in making preliminary
arrangements, if later the Secretary of the Navy does not do what the act makes
it his duty to do.
4
There is no principle of mutuality applicable to a case like this, any more than
there necessarily is in a statute requiring a writing signed by the party sought to
be charged. The United States needs the protection of publicity, form,
regularity of returns and affidavit (Rev. Stat. 3709, 3718-3724, 3745-3747,
Comp. Stat. 1913, 6832, 6862, 6863, 6865, 6869, 6872-6874, 6897-6899) in
order to prevent possible frauds upon it by officers. A private person needs no
such protection against a written undertaking signed by himself. The duty is
imposed upon the officers of the government, not upon him. We see no reason
for extending the implication of the act beyond the evil that it seeks to prevent.
Even when a statute in so many words declares a transaction void for want of
certain forms, the party for whose protection the requirement is made often
may waive it, 'void' being held to mean only voidable at the party's choice.
Judgment reversed.
