The Act of February 13, 1896, c. 87, 28 Stat. 664, providing
that in the adjudication of the claims against the District of
Columbia therein referred to, the Court of Claims should allow the
rates established and paid by the Board of Public Works, simply
conferred a gratuity upon the persons covered by its provisions,
which became "due and payable" only from the time when the act
which gave it was passed.
The claim of the District of Columbia to offset against any
recovery here the amount of the interest from June 1, 1874, on its
counterclaim found due in its favor against the claimants cannot be
admitted.
The case is stated in the opinion.
MR. JUSTICE PECKHAM delivered the opinion of the Court.
These are appeals from the Court of Claims which gave judgments
in favor of the appellees in actions commenced by them in December,
1880, pursuant to the provisions of the Act
Page 165 U. S. 331
of June 16, 1880, c. 243, 21 Stat. 284, entitled
"An act to provide for the settlement of all outstanding claims
against the District of Columbia and conferring jurisdiction on the
Court of Claims to hear the same, and for other purposes."
31 Ct.Cl. 472.
The actions relate to work done under various contracts with the
authorities of the District of Columbia between 1871 and 1876.
These contracts were a few among a very large number of others,
entered into with the authorities of the District of Columbia by
many different persons and relating to improvements then in
contemplation, and partly in course of completion, in the City of
Washington. Those in question here were originally made with one
Peter McNamara, in or about the year 1872, for work in the nature
of grading, sewering, and filling various streets in that city. The
contracts were in writing, and stated the specific prices which
were agreed upon for the various items of work to be performed
under the contract.
At the time when these contracts were entered into, an Act of
Congress approved February 21, 1871, 16 Stat. 419, c. 62, forbade
the municipal authorities to contract except in writing, and
forbade the allowance of extra compensation for work done under a
written contract. Notwithstanding this legislative prohibition, the
Board of Public Works then existing, without authority, and in
plain violation of the terms of the act, raised the prices agreed
to be paid under the contracts with McNamara to what are called
"board rates" (that is, rates allowed by the Board of Public
Works), the effect of which was to enormously increase the cost of
the work done under them. In this way, the work upon the
improvements went on until in 1874, when Congress, by an Act
approved June 20th of that year, 18 Stat. 116, abolished the
District government and substituted another in its stead. The sixth
section of the act constituted the first and second Comptrollers of
the Treasury of the United States a board of audit for the
settlement of all unfunded or floating debts of the District of
Columbia, and of the Board of Public Works, as specified in such
section, and the section further provided that the board of
Page 165 U. S. 332
audit should issue to each claimant a certificate signed by the
board and countersigned by the Comptroller of the District, stating
the amount found to be due to each and on what account.
The seventh section of the act provided that the sinking fund
commissioners of the District should cause bonds of the District of
Columbia to be prepared, bearing date August 1, 1874, and payable
50 years thereafter, with interest at the rate of 3.65 percent per
annum, payable semiannually, which bonds the sinking fund
commissioners were authorized to exchange at par for like sums for
any class of indebtedness named in the preceding sixth section,
including certificates of the auditing board provided in the act.
The section contained the following statement:
"And the faith of the United States is hereby pledged that the
United States will, by proper proportional appropriations, as
contemplated in this act, and by causing to be levied upon the
property within said District such taxes as will do so, provide the
revenues necessary to pay the interest on said bonds as the same
may become due and payable, and create a sinking fund for the
payment of the principal thereof at maturity."
By general resolution approved March 14, 1876, 19 Stat. 211,
Congress abolished the board of audit and forbade the further issue
of bonds.
By another Act, approved June 11, 1878, 20 Stat. 102, 104-105, a
permanent government was established for the District of Columbia,
and in it the commissioners were required to annually make
assessments for all expenses of the District, which, upon being
submitted to the Secretary of the Treasury and approved by him,
were to be laid before Congress, and it was then provided that,
"to the extent to which Congress shall approve of said
assessments, Congress shall appropriate the amount of 50 percentum
thereof, and the remaining 50 percentum of such approved
assessments shall be levied and assessed upon the taxable property
and privileges in said District other than the property of the
United States and of the District of Columbia."
In this manner, Congress assumed the payment of a portion of the
bonds and expenses of the District.
Page 165 U. S. 333
Under the authority of these statutes, the bonds of the District
of Columbia, carrying interest at the rate of 3.65 percent, were
issued and used to a certain extent in the payment of the
indebtedness of the District incurred as above mentioned. In 1880,
there still remained outstanding many certificates which had been
delivered by the board of audit under the sixth section of the act
of 1874, and many accounts against the District were also
outstanding and unprovided for.
On the 16th of June, 1880, Congress passed
"An act to provide for the settlement of all outstanding claims
against the District of Columbia, and conferring jurisdiction on
the Court of Claims to hear the same, and for other purposes."
That act conferred jurisdiction on the Court of Claims in regard
to all such claims against the District of Columbia as then
existed, arising out of contracts made by the late Board of Public
Works and extensions thereof, and to other claims mentioned in the
section, and the act conferred upon the court the same power, and
provided that it should proceed in the same manner, and should be
governed by the same rules, in respect to the mode of hearing,
determination, and adjudication of claims as in those against the
United States.
The second section provided that the claims should be prosecuted
by the contractor, his personal representative, or his assignee in
the same manner and subject to the same rules, so far as
applicable, as claims against the United States are prosecuted
therein. Judgments were to be entered, and for the payment thereof
the sixth section provided as follows:
"The Secretary of the Treasury is hereby authorized to demand of
the sinking fund commissioner of the District of Columbia so many
of the three sixty-five bonds authorized by Act of Congress
approved June twentieth, eighteen hundred and seventy-four, and
acts amendatory thereof, as may be necessary for the payment of the
judgments, and said sinking fund commissioner is hereby directed to
issue and deliver to the Secretary of the Treasury the amount of
three sixty-five bonds required to satisfy the judgments; which
bonds shall be received by said claimants at par in payment of such
judgments, and shall bear date August first, eighteen hundred and
seventy-four,
Page 165 U. S. 334
and mature at the same time as other bonds of this issue,
provided that before the delivery of such bonds as are
issued in payment of judgments rendered as aforesaid on the claims
aforesaid, the coupons shall be detached therefrom from the date of
said bonds to the day upon which such claims were due and payable,
and the gross amount of such bonds heretofore and hereafter issued
shall not exceed in the aggregate fifteen millions of dollars,
provided the bonds issued by authority of this act shall
be of no more binding force as to their payment on the government
of the United States than the three sixty-five bonds issued under
authority of the Act of June twentieth, eighteen hundred and
seventy-four."
The mode of payment thus provided for was changed subsequently
by a provision in the Act approved March 3, 1881, 21 Stat. 458,
466, as follows:
"The Treasurer of the United States, as
ex officio
sinking fund commissioner, is hereby authorized, whenever in his
opinion it will be more advantageous for the District of Columbia
to do so, to sell the bonds authorized to be issued under the
provisions of the sixth section of the act of the Congress of the
United States, entitled"
"An act to provide for the settlement of all outstanding claims
against the District of Columbia, and conferring jurisdiction on
the Court of Claims to hear the same, and for other purposes,"
"approved June sixteenth, eighteen hundred and eighty, for the
satisfaction of the judgments which may be rendered by said Court
of Claims under the provisions of said act, and pay the said
judgments from the proceeds of said sales, instead of delivering to
said judgment claimants the said bonds as provided for in said
act."
A large number of actions were brought against the District
under these statutes, and among them the two actions in question.
They were brought by the executrix of McNamara and by the assignee
of a portion of his claim against the District for the purpose of
recovering payment of the balance alleged to be due under the
various contracts which McNamara had secured from the municipal
authorities. They were consolidated into one action on motion of
the Attorney General, and proceeded to trial before a referee. The
referee found upon
Page 165 U. S. 335
the trial a certain amount due the claimants by reason of the
work done under the contracts mentioned in the actions. He also
found that there was due from the McNamara estate to the defendant,
the District of Columbia, over and above the sum due from the
District of Columbia to such estate, the amount of $6,694.41, being
the excess which had been paid to McNamara at "board rates" for
work done under his contracts, and which sum was over and above the
amount which was due him at the rates provided for in his
contracts, and the referee further found that such amount was due
to the defendant as a counterclaim June 1, 1874, with interest from
that date. The report of the referee, having been filed, was
excepted to by claimants, but the defendant took no exception to
the report, and there the matter rested until after the passage of
the Act of February 13, 1895, 28 Stat. 664, c. 87.
Prior to the passage of that act, many of those contractors in
whose favor "board rates" had been allowed instead of the prices
which were contained in the contracts executed by them had brought
suits against the District of Columbia of a nature similar to the
two suits now here, and had based their claims as to the balance
due them with reference to the board rates allowed for work under
the contracts, instead of the prices named in such contracts. These
claims had been held to be illegal, and the District of Columbia
had successfully defended the actions, and had succeeded in
obtaining judgments allowing counterclaims in its favor for the
difference between the prices as named in the contracts and those
which had been paid by the board. The Court of Claims had decided
many cases to that effect, among which are those of
Roche v.
District of Columbia, 18 Ct.Cl. 217;
Barnard v. District
of Columbia, 20 Ct.Cl. 257;
Barnes v. District of
Columbia, 22 Ct.Cl. 366, and
Eslin v. District of
Columbia, 21 Ct.Cl. 359, and 29 Ct.Cl. 370. This Court had
held the same proposition in
Barnard v. District of
Columbia, 127 U. S. 409. The
ground upon which the recovery on the counterclaim had been allowed
was the illegality of altering the prices named in the contracts,
and of paying any greater sums for the work contracted to be done
than was provided for in the written contracts, and payments beyond
those sums were held to have been illegal.
Page 165 U. S. 336
Prior to the passage of the act of 1895, therefore, it is
undisputed there was no claim, legal or equitable, which the
parties could successfully maintain against the District of
Columbia for the recovery at board rates for work done under
written contracts with the municipal authorities, but such work
could only be legally paid for at the prices named in the various
contracts for such work.
Under the statute of 1880, it had been customary for the Court
of Claims, in deciding questions arising in this class of cases, to
state the day upon which the claims awarded by it had become due
and payable, so that, under the sixth section of the act of 1880,
if payment were to be made in the 3 65/100 bonds, the coupons
thereon might be detached from the date of the bonds to the date
upon which the claims were by the judgment of the court found to
have been due and payable. If, instead of paying judgments by the
delivery of the bonds, as provided for in the act of 1880, the
Treasurer of the United States proceeded under the Act of March 3,
1881, to sell the bonds, he might do so, and with the proceeds pay
the judgments rendered by the Court of Claims.
Matters were in this condition when the Act of February 13,
1895, was passed, which provided as follows, 28 Stat. 664:
"That in the adjudication of claims brought under the provisions
of the act entitled"
"An act to provide for the settlement of all outstanding claims
against the District of Columbia, and conferring jurisdiction on
the Court of Claims to hear the same, and for other purposes,"
"approved the sixteenth of June, eighteen hundred and eighty
(Twenty-First Statutes at Large, page two hundred and eighty-four),
the Court of Claims shall allow the rates established and paid by
the Board of Public Works, and whenever said rates have not been
allowed, the claimant or his personal representative shall be
entitled, on motion made within sixty days after the passage of
this act, to a new trial of such cause."
Under this act, these claimants again presented their cases to
the Court of Claims (no judgment having been entered upon the
previous finding of the referee that the estate was indebted to the
District), and thereupon the court granted
Page 165 U. S. 337
judgment to the administrator of McNamara and to the executrix
of his assignee, respectively, by allowing the claimants
compensation for work done under the contracts at the rates
established and paid by the Board of Public Works (instead of the
contract prices), and the court held as a conclusion of law that
those sums which were thus allowed by virtue of the act of 1895
were, according to its true intent and meaning, due and payable,
one portion to the administrator of McNamara, February 1, 1872, and
another portion February 1, 1876, and still another portion to the
executrices of Theodore Sheckels, assignee, April 1, 1878. The
effect of the finding is to allow interest on these sums secured
under the provisions of the act of 1895 for about twenty years.
The claim of the appellant is that the amount allowed by the
Court of Claims did not, as a matter of law, become due or payable
until after the passage of the Act of February 13, 1895, and the
granting of a judgment by virtue of that act. The appellant further
insists that although the effect of the act was to extinguish its
counterclaim so far as the principal sum was concerned, yet, as the
referee found that principal sum was due the defendant, with
interest from June 1, 1874, the claim for interest itself was not
so extinguished, and that such interest should have been allowed as
a counterclaim against the claim made by the estate of the
contractor against the appellant.
In the opinion of the Court of Claims delivered in these cases,
it is conceded, and, indeed, there is no dispute in regard to it,
that the finding of the referee was correct at the time he made it,
as to the amount of the counterclaim legally existing in favor of
the defendant and against the claimants, and the only ground upon
which that finding can be attacked is based upon the Act of
February 13, 1895. The question, therefore, is as to the effect of
that act. Did this enactment so far change existing facts and law
as not only to permit a recovery of the board rates, instead of the
contract rates, but did it also make that sum "due and payable"
twenty years before its passage? Under the holdings of the Court of
Claims and of this Court, it is perfectly apparent that the result
of the passage of the act
Page 165 U. S. 338
of 1895 was simply to bestow a pure gratuity to the amount of
the difference between the contract price and the board rates upon
those persons included within its provisions. There is no element
of a legal or an equitable claim within the proper meaning and
signification of those words on the part of any of those who will
profit by the act of 1895 against the municipal authorities of the
District. That act bestowed a pure and simple gift.
Those who are to profit by it are those who had entered into a
fair and legal written contract with the District authorities to do
certain work at prices named in the contract, and at a time when a
law of Congress prohibited the granting of any extra compensation
for contract work, and when it provided that all contracts should
be in writing, signed by the parties making the same, and a copy
thereof filed in the office of the Secretary of the District.
Viewed in the light of a gratuity, a gift wholly without
consideration, the statute itself must receive a strict
construction; not such a construction as will prevent the fair
meaning thereof from taking effect, but such as shall not be
enlarged by inferences or implications not plainly to be drawn from
the language of the act.
The United States has pledged its faith for the payment of
claims arising out of these transactions, when properly proved.
Unless, therefore, the claim for interest against the government is
clear and beyond question, it must be denied. Interest is not to be
collected from the government in the absence of language specially
providing for its payment.
United States v. Sherman,
98 U. S. 565;
United States v. Verdier, 164 U.
S. 213. We are unable to see how it can be correctly
stated that the claims in question became "due and payable" at the
time of the completion of the work under these contracts more than
twenty years ago when it is conceded that, but for the passage of
the act of 1895, there was no legal or valid claim whatever, and
that the right to any recovery depends upon the language used in
that act. The statute of 1895 simply, as we have said, conferred a
gratuity upon the persons covered by its provisions, and the
reasonable construction of such an act is to say that the gratuity
thus given becomes "due and payable" only
Page 165 U. S. 339
from the time when the act which gave it was passed. To make the
amount of the gratuity thus given "due and payable" twenty years
before the passage of the act giving it, so as thereby to allow
interest from that time upon the amount of such gratuity, requires
the clearest and most certain expression of legislative will to
that effect. We do not find any such expression in the act here
under consideration. Although it permits the Court of Claims to
allow the rates used and paid by the Board of Public Works, yet, as
that allowance is a mere gift, the further burden of twenty years'
interest on it should not be added to the gift without the use of
the very plainest language.
For these reasons, we think the Court of Claims erred in holding
that any portion of the moneys which might be due the claimants,
and which arose by virtue of the act of 1895, became due and
payable at any time before the passage of that act.
The claim of the appellant to offset against any recovery here
the amount of the interest from June 1, 1874, on its counterclaim
found due in its favor against the claimants in the report of the
referee, we think cannot be admitted. The effect of the passage of
the act of 1895 is, in substance, the same as if the counterclaim,
which is the principal sum, had been paid, and when that is the
case the interest becomes thereby extinguished.
Pacific
Railroad v. United States, 158 U. S. 118.
These views lead us to the conclusion that the judgments of the
Court of Claims must be
Reversed, and the cases remanded to that court for further
proceedings not inconsistent with this opinion.