A private sale of old material arising from the breaking up of a
vessel of war, made by an officer of the Navy Department to a
contractor for repairs of a war vessel and machinery, is a
violation of the provisions of § 1541 Rev.Stat.
The allowance of the estimated value of such material in the
settlement of
Page 113 U. S. 129
such contractor's accounts is a violation of the provisions of §
3618 Rev.Stat.
A settlement of such accounts at the Navy Department and at the
Treasury, in which the contractor was debited with the material at
the estimated value, does not preclude the United States from
showing that the estimates were far below the real value, and from
recovering the difference between the amount allowed and the real
value.
Delay in enforcing a claim arising out of an illegal sale of
property of the United States at a value far below its real worth
cannot be set up as a bar to the recovery of its value.
This was an appeal from the Court of Claims.
See 19
Ct.Cl. 182. The facts are stated in the opinion of the Court.
MR. JUSTICE WOODS delivered the opinion of the Court.
The appellant was the claimant in the Court of Claims. He
brought his suit April 30, 1880, to recover from the United States
the sum of $3,400 for plumbing done by him on the United States
steamship
Quinnebaug under a contract made with I.
Hanscom, the Chief of the Bureau of Construction and Repair of the
Navy Department on behalf of the government in the year of 1875.
There was no dispute that there was due to him on his contract for
work done the sum sued for. The controversy arose on a plea of
cross-demand, filed by the United States, which alleged that the
officers of the government delivered to the appellant a large
amount of old material to be utilized and reworked by him for the
plumbing of the
Quinnebaug, that a
"small portion of the material thus delivered he reworked for
that purpose, but the greater portion thereof . . . he sold to
third parties, realizing therefrom the sum of $20,000."
The Court of Claims found that during the spring and summer of
the year 1875, there were delivered to the appellant by R. W.
Steele, who was a naval constructor in the United States Navy,
103,949 pounds of old material resulting from the
Page 113 U. S. 130
breaking up of certain monitors; that before such delivery,
there had been no survey or inspection of the old material, and
that of the amount so delivered, the appellant sold and disposed of
98,748 pounds, for which he received money and property to the
amount of $8,975.56, and the residue was lost in breaking up,
handling, and sorting. These findings fully established the
cross-demand of the government for $8,975.56. The court therefore
in adjusting the controversy, after charging the appellant with a
payment on his claim of $3,900 and another item for $300, about
neither of which there was any dispute, held him liable for the
amount so received by him for the old material, which was
sufficient to extinguish his claim and leave a balance of $3,575.56
due the United States. The court therefore rendered judgment
against him for that amount, and from that judgment the present
appeal is taken.
Upon the facts above stated, it is clear that the judgment of
the Court of Claims was right. But the appellant insists that the
other facts found by the court show that it was in error, and that
its judgment should have been for the appellant for the amount of
the claim for which his suit was brought. These facts were as
follows:
In the latter part of March or early in April, 1875, the
appellant had an interview in the City of Washington with Isaiah
Hanscom, Chief of the Bureau of Construction and Repair in the Navy
Department, at which the two came to some verbal understanding that
the appellant was to do the necessary plumbing on the United States
steamship
Quinnebaug, which was then on the ways in the
Philadelphia Navy Yard, and that Hanscom gave the appellant verbal
instructions to go on with the work. In the same interview, the
matter of using on the
Quinnebaug old material taken out
of other vessels was talked of, and Hanscom spoke of the material
as being worth $2,000, but it did not appear what material or what
quantity of material was referred to. Afterwards, on April 6, 1875,
the appellant wrote a letter to Hanscom in which he offered to
furnish all the material and labor necessary for the plumbing of
the Quinnebaug for $14,500, and take in whole or part payment any
brass or lead from old vessels that he could use for that
purpose.
Page 113 U. S. 131
On the receipt of this letter, Hanscom directed Edward Hartt,
who was a naval constructor on duty at the Philadelphia Navy Yard,
to draw up specifications for the plumbing to be done on the
Quinnebaug and to solicit proposals therefor. Proposals
were accordingly called for and received by the Bureau of
Construction and Repair, but the proposal contained in the
appellant's letter of April 6th was the lowest bid for the
work.
On April 15, 1875, Hanscom sent an order in writing to Naval
Constructor R. W. Steele to have all the old lead, brass, and
composition arising from the breaking up of the monitors, naming
them, weighed, boxed up, and sent to Philadelphia, and to report
the amount to the Bureau. The officer to whom the order was
addressed, interpreting it as authority from the Bureau to deliver
to the appellant the old material therein referred to, delivered it
to him, and the appellant received the 103,949 pounds of such
material heretofore mentioned as the property of the United States.
On July 9, 1875, Naval Constructor R. W. Steele wrote to Hanscom
that he had delivered the old material to the appellant, that it
was estimated to be worth $2,000, which sum would be deducted from
the first payment due him for his work. He added:
"I beg to say that it was impossible to arrive at a satisfactory
estimate of its value when appraised; there was much alloy and dirt
mixed with it, and the cost of transportation and labor in
separating and preparing it for use is not known, which makes it
necessary to correct the value after I obtain full information on
the subject, and before his contract is completed and
adjusted."
Naval Constructor Steele was led to put this estimate upon the
value of the old material by the statement made to him by Naval
Constructor Hartt, who was superintending the plumbing on the
Quinnebaug, that he supposed its value to be $2,000. But
it did not appear that Hartt had ever seen any of the 103,949
pounds of old material, but he assumed its value to be $2,000, and
so set it down in his account book in his office, and so charged it
against the appellant in the settlement of the account of the
latter.
On July 30, 1875, Hanscom, as Chief of the Bureau of
Construction and Repair, wrote to the appellant declining his
proposal to do the plumbing work on the
Quinnebaug for
$14,500,
Page 113 U. S. 132
and offered to pay him therefor the sum of $12,000, but with the
following stipulation:
"The old materials the government will furnish you to be
reworked, which have accumulated from the breaking up of the light
draft monitors [naming them], will go toward the materials used in
this work; the balance to be paid in two equal payments, in money,
on the certificate of the naval contractor superintending the work
that the work is satisfactorily completed, according to the
specifications which will be furnished."
The appellant accepted this proposition by letter dated August
2, 1875. There was no proof that he did any work on the
Quinnebaug until after this correspondence.
Upon these facts, the contention of the appellant is that the
court should have charged him with the value of the old material at
$2,000, and not at $8,975.56. This contention is based on the
ground that Naval Constructor R. W. Steele, in his letter to
Hanscom, dated July 9, 1875, estimated the old material, delivered
to the appellant, to be worth $2,000, and stated that this sum
would be deducted from his first payment, and that Naval
Constructor Hartt so charged it against him at that sum in the
settlement of appellant's account.
We think this an inadequate reason for allowing the appellant to
appropriate for $2,000 property of the United States, which it is
shown he disposed of for $8,975.56. There had been no inspection or
appraisement by any officer of the United States of the old
material delivered to the claimant, but merely a loose estimate of
its value by Naval Constructor Hartt, who had never seen it, and
there was no contract between the appellant and the United States
which bound the latter to deliver this old material at the estimate
put upon it by Hartt, or to deliver what was not used on the
Quinnebaug at all.
The contract between the parties was that made by the offer
contained in the letter of Hanscom to the appellant of July 30,
1875, and its acceptance by the appellant in his letter to Hanscom
dated August 2 following. These letters are set out in the
appellant's petition as expressing the contract which was the basis
of his cause of action. The previous verbal understanding referred
to in the findings of the Court of Claims was merged in it.
Page 113 U. S. 133
It is clear from the terms of the proposition made by Hanscom to
the appellant on July 30, 1875, and accepted by the latter on
August 2 that it was only such old material as could be reworked in
the plumbing of the
Quinnebaug that was to be transferred
to the appellant, and its value deducted from the contract price of
the work. There was no offer on the part of Hanscom to deliver to
the appellant old material which could not be used on the
Quinnebaug in payment of the stipulated price for his
work. Even if such had been the contract, it would have been
unauthorized, for § 1541 of the Revised Statutes provides that
"The Secretary of the Navy is authorized and directed to sell at
public sale such vessels and materials of the United States navy
as, in his judgment, cannot be advantageously used, repaired, or
fitted out, and he shall at the opening of each session of Congress
make a full report to Congress of all vessels and materials sold,
the parties buying the same, and the amount realized therefrom,
together with such other facts as may be necessary to a full
understanding of his acts."
§ 3618 provides that
"All proceeds of old material . . . shall be deposited and
covered into the Treasury as miscellaneous receipts on account of
proceeds of government property, and shall not be withdrawn or
applied except in consequence of a subsequent appropriation made by
law."
These sections confer upon the Secretary of the Navy the only
authority by which he can dispose of the materials of the United
States Navy. When, in the judgment of the Secretary, they can be
advantageously used, they must be used; when they cannot be so
used, they must be sold at public sale, and the proceeds covered
into the Treasury. No officer of the Navy Department had any
authority, therefore, to deliver to the appellant the materials of
the navy to be sold by him, and to allow him to put the proceeds
into his own pocket.
If we yield to the contention of the appellant, we should be
required to hold that an officer of the navy could, without
inspection or appraisement, trade off to a contractor in payment of
the money due him on his contract not only materials of every
description, but even the vessels of the United States when, in his
judgment, they could not be advantageously used,
Page 113 U. S. 134
repaired, or fitted out. It appears, therefore, that the
appellant was not entitled by the terms of the contract to the
material delivered to and sold by him, and if his contract had so
provided, it would have been without authority of the statute, and
therefore void.
The case of the appellant is not aided by the fact of the
delivery to him, before the written contract was made, of the old
material in question. The delivery was without any authority of the
Navy Department, and, to put it in the most favorable light for the
appellant, the delivery was made to him by mistake. But whether
with or without authority of the Department, if it was intended to
vest in the appellant any title to the material, it was without
authority of law, and cannot be set up as a ground of any right in
him.
The case therefore comes to this: the appellant claims to hold,
without accounting therefor, except at less than one-fourth its
value, the proceeds of old material belonging to the Navy of the
United States, which had been delivered to him without the sanction
of law, and to which he had no title, either by contract or
otherwise. The property was the property of the United States, and
the appellant must be held accountable for its full value.
The fact that the account of the appellant was settled by the
officers of the Navy Department by charging him with the value of
the old material at $2,000 is no bar to the recovery of its real
value by the government. The whole transaction was illegal, and
appellant is chargeable with knowledge of the fact. It was, in
effect, a private sale of the property of the United States without
survey, inspection, or appraisement at a grossly inadequate
price.
The fact that the account had been settled by the officers of
the Navy Department did not cure the unauthorized acts. Both the
disposition of the property and the settlement of the account were
without authority of law, and not binding on the government. Nor
can laches in not objecting to the settlement of the appellant's
account at an earlier time be imputed to the United States and set
up as a bar to the recovery of the value of the property unlawfully
appropriated. This is a case for the application
Page 113 U. S. 135
of the rule
nullum tempus occurrit regi.
Lindsey v.
Miller, 6 Pet. 666;
Gibson v.
Chouteau, 13 Wall. 92.
Judgment affirmed.