The Commissioners of the District of Columbia have no power to
agree to a common law submission of a claim against the
District.
On July 30, 1879, a contract for resurfacing with asphaltum
certain streets in the City of Washington was awarded to
Page 171 U. S. 162
the Bailey-French Paving Company. The agreement was embodied in
a writing signed on the one part by Davis W. Bailey, as general
agent of the company just named, and on the other part signed and
sealed by the Commissioners of the District of Columbia. The price
specified for the work aggregated a little less than $41,000. On
February 12, 1880, when about three-fourths of the work to be done
under this contract had been completed, and about $36,000 earned
therefor, including $5,784.14 allowed for extra work, the
Commissioners notified Bailey that no more work could be performed
under the contract because of the fact that the appropriation made
by Congress for the work in question was exhausted. Subsequently,
on February 24, 1883, Davis W. Bailey, claiming that he was in fact
the Bailey-French Paving Company, instituted an action at law in
the Supreme Court of the District of Columbia against the District
of Columbia to recover $25,000 as damages averred to have been
sustained by the cessation of the work under the contract. The
District, on April 4, 1883, filed pleas claiming a set-off of
$1,312.30 for damages alleged to have been sustained by improper
performance of the work of resurfacing, averring the termination of
the contract by reason of the appropriation's having been exhausted
and alleging that the time within which the contractor had
stipulated to complete the work had expired long prior to the
cancellation of the contract. The plaintiff joined issue and filed
a replication on April 18, 1883.
On June 19, 1883, Bailey died. His widow was appointed
administratrix, and the action against the District was revived in
her name.
On September 16, 1891, the attorney for the claimant addressed a
letter on behalf of the administratrix to the Commissioners of the
District of Columbia calling attention to the pending case, stating
that "the grounds of said suit is for breach of contract," reciting
the facts as to the making of the contract and the mode by which it
was terminated, and claiming that, at the time of such
cancellation, Bailey had expended for machinery necessary to the
performance of the contract $10,180; that he had at the time stock
on hand,
Page 171 U. S. 163
$7,000; that the profit on the unexecuted balance of the work
would have been $8,000; that there was due under the contract for
an extra one-half inch of surfacing $5,000. These items were stated
in the letter to amount to $31,180, but only aggregate $30,180.
Without calling the attention of the Commissioners to the fact that
the item of $5,000 for an extra half-inch of resurfacing was not
asserted in the declaration in the pending suit, the attorney for
the administratrix proceeded to refer to the defenses interposed in
such suit on behalf of the District, and next stated the claim made
by the contractor in his replication that the delay in the work was
the fault of the District.The conclusion of the letter, omitting
references to immaterial matters, was as follows:
"Now, having stated the principal facts which bear upon this
case, that you may have sufficient knowledge to act in the
premises, I write to ask if you will appoint some good man as a
referee or arbitrator to whom this case may be referred, with power
to hear the evidence and make an award which shall be accepted,
whether for or against us, as a final settlement of this long and
much litigated case."
This communication was referred by the Commissioners to the
attorney for the District, who endorsed thereon under date of
October 17, 1891:
"This is a case which has been pending in the court for a long
time, and it ought to be disposed of. It if could be referred to
some first-class referee, who will give us a full hearing; it would
be a very good way of disposing of if, and I should favor such a
reference, as we can then attend to it at our convenience."
A memorandum was also sent by one of the Commissioners to the
assistant attorney for the District, which read as follows.
"Thomas: Think of some good names for a referee, and talk with
us about this case."
"October 27, 1891. J.W.D."
A memorandum in pencil, evidently having reference to the
foregoing, is as follows:
Page 171 U. S. 164
"Ans. Mr. Douglass. Comm'rs think this case should be settled in
court."
On October 28, 1891, Assistant Attorney Thomas sent the
following letter:
"To the Hon. Commissioners, etc., etc."
"Gentlemen: I return to you herewith a communication from W.
Preston Williamson, Esq., relative to the case of
Bailey v. The
District of Columbia, referred to me with the request that I
give you the name of some one who would make a good referee."
"I would suggest either Mr. A. B. Duvall or Mr. J. H. Lichliter,
both members of the bar, and well qualified to decide the issues in
that case."
"Very respectfully,"
"S. T. Thomas,
Asst. Atty. D.C."
The next document referring to the matter is the following:
"Office of the "
"Commissioners of the District of Columbia"
"Washington,
January 11, 1892."
"Ordered, that J. J. Johnson is hereby appointed referee in the
matter of the suit of
Bailey, Administratrix of Bailey,
Deceased v. District of Columbia."
"Official copy furnished Mr. J. J. Johnson."
"By order: W. Tindall,
Secretary"
Under this appointment, on February 17, 1892, the attorneys for
the respective parties appeared before Mr. Johnson. It was claimed
by witnesses for the plaintiff at the trial of the action
subsequently brought to enforce the finding of the referee that, at
the commencement of the hearing, the latter gentleman, as well as
the attorney for the administratrix, raised the question whether or
not, under the order of appointment, the decision of the referee
was to be final, and were assured by the attorney for the District
that the decision of Mr. Johnson was to be a final determination of
the case.
Page 171 U. S. 165
Such witnesses also testified that subsequently, when a question
arose with respect to permitting an amended declaration to be filed
setting up a claim for an extra half-inch of resurfacing, the
referee and attorneys discussed as to whether the decision of the
referee "was to wind up finally the whole matter," and an
affirmative conclusion was arrived at. No attempt, however, was
made to obtain from the Commissioners of the District any
modification or amplification of the writing of January 11,
1892.
The hearing before the referee was concluded on July 18, 1892,
when Mr. Johnson placed on the files of the Supreme Court of the
District of Columbia, in action numbered 21,279, his report as
referee. The report did not refer to the mode by which its author
had become referee. It was entitled in the cause, purported to
contain a synopsis of the pleadings, the plaintiff's claim, a
statement of the facts, and the findings of "J. J. Johnson,
Referee." The report concluded as follows:
"Upon the evidence and the law, I have allowed the plaintiff for
the unexecuted balance of 11,385 square yards, $4,440.15, being the
profit between the cost of resurfacing the streets at fifty cents
per square yard and eighty-nine cents, the price received, and for
the extra one-half inch I have allowed the plaintiff $6,079.05 at
the contract price, aggregating the sum of $10,519.20. I do,
therefore, find that there is due to the plaintiff from the
defendant the sum of $10,519.20, besides costs."
The referee also fixed his fee at $550, which was paid by the
administratrix.
On September 23, 1892, exceptions were filed on behalf of the
District to this report. Upon the exceptions, the attorney for the
plaintiff made the following endorsement: "I consent that these
exceptions be filed
nunc pro tunc." On March 10, 1893, a
motion for judgment was filed on behalf of the plaintiff.
Without action's being had on the exceptions and motions
referred to, the administratrix of Bailey, on August 8, 1893,
instituted an action at law, numbered 34,564, in the Supreme
Page 171 U. S. 166
Court of the District of Columbia, seeking to recover from the
District the sum of $10,519.20, basing the right to such recovery
upon the claim that the finding of Mr. Johnson was in fact a final
decision and award. In the affidavit filed with the declaration, as
authorized by the rules of practice of the court, what purports to
be a copy of the resolution appointing Mr. Johnson referee is set
out, but the words "of the suit" are omitted from before the words
"of Bailey, administratrix." On September 2, 1893, pleas were filed
on behalf of the District denying that it had agreed to submit the
matters of difference referred to in the declaration to the award
and arbitrament of Johnson, and averring that Johnson had not made
an award concerning the same. The various steps in the original
action (No. 24,279) were stated, and it was alleged that motions to
set aside said award and for judgment were still pending. It was
also averred that the alleged award was not under seal, and was
never delivered to the defendant; that the defendant never
undertook and promised in the manner and form as alleged, and that
the District was not indebted as alleged. The plaintiff joined
issue. On October 8, 1895, on motion of the plaintiff, the two
causes were consolidated. While the motion to consolidate was
opposed by the District, no exception was taken to the entry of the
order of consolidation.
The consolidated action came on for trial January 13, 1896. At
the trial, W. Preston Williamson, a witness for the plaintiff,
testified that he had sent to the Commissioners the communication
of September 16, 1891. Under objection and exception, he was
permitted to testify to conversations had separately with two of
the Commissioners, which tended to show that in the event of the
appointment of an arbitrator or referee, it was the intention of
the Commissioners to submit to the individual selected as referee
or arbitrator the final determination of the entire controversy
referred to in Williamson's letter. Also, under objection and
exception, the witness testified that after the order appointing
Mr. Johnson referee was made by the Commissioners, he and the
attorney for the District, in the presence of the referee,
discussed the scope of
Page 171 U. S. 167
the submission, and agreed that the decision of the referee was
intended by the parties to the controversy to be a final
disposition of the whole matter. The endorsements on the letter of
Mr. Williamson, the letter of the assistant attorney of the
District, and other memoranda heretofore set out were put in
evidence on behalf of the plaintiff. Mr. Hazleton, a former
attorney for the District, also testified for the plaintiff, in
substance, under objection and exception, that it was the intention
of the Commissioners, as he knew from oral statements made to him
by two of the Commissioners, that the appointment of a referee
would be for the purpose of ending the whole controversy, and that
nothing occurred between the time of the appointment of the referee
and the making of the report to change that understanding. He also
testified as to the filing of the amended declaration before the
referee, setting up the claim for an extra half-inch of
resurfacing, which was not embraced in the pending suit at the time
the referee or arbitrator was appointed.
J. J. Johnson also testified on behalf of the plaintiff, under
objection and exception, as to the understanding had with him at
the hearing before him as referee, by the counsel for the
respective parties, regarding the finality of any decision made by
him, and as to the filing of the amended declaration for the extra
half-inch of resurfacing. He testified that he filed the report
made by him in court of his own motion, and averred that certain
written matter filed with his report was not a part of the report,
and that it did not contain all the evidence, though it contained
all the oral testimony given before him.
The report was next put in evidence, objections being first
separately interposed to its introduction on the grounds (1) that
the papers and evidence attached thereto should also be put in
evidence, and (2) that the referee was without authority to make an
award. To the overruling of each objection the defendant duly
excepted.
John W. Douglass, one of the Commissioners for the District in
office at the time of the appointment of the referee, testified on
behalf of the plaintiff that the intention of the
Page 171 U. S. 168
Commissioners was to make the reference final. The evidence for
the plaintiff was closed with the testimony of the plaintiff, who
stated, in effect, that the letter of September 16, 1891, had been
sent to the Commissioners with her approval, and that nothing had
been paid her on account of the award. For the defendant, John W.
Ross, who was a Commissioner at the time of the appointment of Mr.
Johnson, testified that he was an attorney at law, knew the
difference between an arbitration and order of reference for a
report, and that his understanding when the appointment of Mr.
Johnson as referee was made was that the appointment was not of an
arbitrator, but was simply one of reference. He further testified
"there was no record of the appointment of the referee, except the
one in evidence, unless the pencil memorandum may be taken as a
record." The witness denied that he made statements attributed to
him by the witnesses for the plaintiff, to the effect that it was
the intention of the Commissioners that the decision of Mr. Johnson
should be final.
After Mr. Ross had concluded his testimony, the record and
proceedings in action No. 24,279 were introduced in evidence on
behalf of the defendant. On the settlement of the bill of
exceptions, a dispute arose as to whether the papers attached to
the report of the referee had been put in evidence by the offer
made, but it is unnecessary to notice the action taken by the trial
court with respect to that controversy.
In rebuttal, Mr. Williamson reiterated statements as to alleged
declarations of Mr. Ross regarding the finality of the decision of
the referee. On cross-examination, he said:
"That he wrote the letter of September 16, 1891 at his office,
912 F Street; that he did not know why the District filed
exceptions, as it was understood that the report was to be final;
that witness filed the motion to confirm the award because he
thought it the best thing -- the only thing -- that could then be
done, and that he thought it would be simply a matter of form, and
he would have confirmation at once of the award, and that the money
would be paid, but the District, instead of doing that, violated
its agreement; that witness
Page 171 U. S. 169
did not remember ever consenting to the filing of exceptions to
the award. Now that counsel shows him the paper which is the
exception to the award, witness remembers that he signed the paper
consenting that the exceptions should be filed
nunc pro
tunc. Mr. Richardson came to him, and asked him if he would
make any special objection to the exceptions' being filed; that
they ought to be filed, so that the District might make their
objections, and for that purpose he did it, and did not consent to
it because he thought it was not final; that there was not a copy
of the award served by him on the Commissioners; that Mr. Johnson
was their arbitrator, and it was not for witness to serve them with
a copy."
The evidence was then closed. The trial judge granted a request
of the defendant that the jury be instructed to render a verdict
for the defendant in the first action, and an exception was duly
noted on behalf of the administratrix. The trial judge also granted
a request of counsel for the plaintiff, in substance that the jury
be instructed to find for the plaintiff if they found from the
evidence that the Commissioners accepted the proposition contained
in Mr. Williamson's letter; that, in pursuance of such acceptance,
the Commissioners made the order of January 11, 1892, and that the
hearing before Mr. Johnson was proceeded with under such
appointment, and the declaration amended at the hearing by consent
of counsel. An exception was taken to the granting of this
instruction.
The following requests for instructions were then asked on
behalf of the defendant, which, being overruled, separate
exceptions were noted:
"2. The jury are instructed, on the whole evidence in cause No.
34,564, they are to render a verdict for the defendant."
"3. The jury are instructed that the Commissioners of the
District of Columbia were without authority to agree to submit the
matters in controversy in the case of
Bailey, Adm'r v. The
District of Columbia at law, No. 24,279, to the final award of
an arbitrator, but that said Commissioners had authority to agree
to refer the case for the award and report of a referee, subject to
the approval of the court."
"5. The jury are instructed that the plaintiff, as
administratrix
Page 171 U. S. 170
of the estate of her deceased husband, was without authority to
agree to refer the claim of the estate to arbitration without the
previous direction of the Supreme Court of the District of
Columbia, holding a special term for orphans' court business."
The bill of exceptions also states that exceptions were taken on
behalf of the District to portions of the general charge of the
court contained in brackets, but no portion of the charge, as
contained in the printed record, is so marked.
A verdict was returned finding in favor of the defendant in
action No. 24,279, and in favor of the plaintiff for $10,519.20 and
interest in action No. 24,564. Judgment was subsequently entered
upon the verdict, and both parties prosecuted error. The Court of
Appeals of the District having affirmed the judgment, 9 App.D.C.
360, each party obtained the allowance of a writ of error from the
court, and the consolidated cause is now here for review.
MR. JUSTICE WHITE, after stating the facts in the foregoing
language, delivered the opinion of the Court.
The decision of this controversy involves two propositions: did
the Commissioners of the District of Columbia have the power to
agree to submit the claim in issue to the award of an arbitrator?
And, if they did have the power, did they lawfully exercise it? To
answer either of these questions, it becomes essential to ascertain
whether an agreement to submit to arbitration involves the power to
contract. Both of the matters above stated depend upon this last
inquiry, because both the claim that the District of Columbia did
not in valid form exercise the power to submit to arbitration, and
the assertion that, if they so did, they were not authorized to
that end, rest on the claim that the submission was not made in
Page 171 U. S. 171
the form required by law to constitute a contract, and even if
the alleged award was in legal form, nevertheless the District
Commissioners were without power to contract for that purpose.
In determining whether an agreement to arbitrate involves the
power to contract, we eliminate at once from consideration consents
to arbitrate made under a rule of court, by consent, in a pending
suit, and shall consider only whether an agreement to arbitrate not
under rule of court or within the terms of a statute enacted for
such purpose is or is not a contract. We do this because there is
no pretense in the case at bar that the submission to arbitration
was under a rule of court or equivalent thereto. Indeed, the courts
below held that the submission of the claim in question to
arbitration was a purely common law one, and not made under a
statute or rule of court; and, in consequence of these views, the
courts held it to be their duty to make the award executory by
rendering a judgment thereon, on the assumption that the parties,
having agreed to a common law submission, were bound by reason
thereof to abide by the award of the arbitrator.
The general rule is
"that everyone who is capable of making a disposition of his
property, or a release of his right, may make a submission to an
award; but no one can who is either under a natural or civil
incapacity of contracting."
Kyd, p. 35; Russell on Arbitrators, p. 14. And Morse, in the
opening paragraph of his treatise on Arbitration and Award (p. 3),
says: "A submission is a contract." And again at p. 50:
"The submission is the agreement of the parties to refer. It is
therefore a contract, and will in general be governed by the law
concerning contracts."
In
Whitcher v. Whitcher, 49 N.H. 175, the Supreme Court
of New Hampshire said (p. 180):
"A submission is a contract between two or more parties, whereby
they agree to refer the subject in dispute to others and to be
bound by their award, and the submission itself implies an
agreement to abide the result, even if no such agreement were
expressed."
It was because a submission to arbitration had the force of a
contract that at common law a submission by a corporation aggregate
was required to be
Page 171 U. S. 172
the act of the corporate body, Russell on Arbitrators, fifth
edition, p. 20, which act was of necessity required to be evidenced
in a particular manner.
It is true that an executor at common law, had the power to
submit to an award. But this power arose by reason of the full
dominion which the law gave the executor or administrator over the
assets, and the full discretion which it vested in him for the
settlement and liquidation of all claims due to and from the
estate.
Wheatley v. Martin, 6 Leigh 62;
Wamsley v.
Wamsley, 26 W.Va. 46;
Wood v. Tunnicliff, 74 N.Y. 38.
While, however, the agreement of the executor to a common law
submission was binding upon him, such a consent on his part did not
protect him from being called to an account by the beneficiaries of
the estate, if the submission proved not to be to their advantage,
because the submission was the voluntary act of the executor, and
was not the equivalent of a judicial finding. 3 Williams on
Executors, p. 326, and authorities cited. So also the power of a
municipal corporation to arbitrate ariss from its authority to
liquidate and settle claims, and the rule on this subject is thus
stated by Dillon (Mun. Corp., 4th ed. sec. 478):
"As a general proposition, municipal corporations have, unless
specially restricted, the same powers to liquidate claims and
indebtedness that natural persons have, and from that source
proceeds power to adjust all disputed claims, and, when the amount
is ascertained, to pay the same as other indebtedness. It would
seem to follow therefrom that a municipal corporation, unless
disabled by positive law, could submit to arbitration all unsettled
claims with the same liability to perform the award as would rest
upon a natural person, provided, of course, that such power be
exercised by ordinance or resolution of the corporate
authorities."
In the early case of
Brady v. Brooklyn, 1 Barb. 584,
589, the power of a municipal corporation to submit to arbitration
was ascribed to the capacity to contract, with a liability to pay,
and it was held that corporations have all the powers of ordinary
parties as respects their contracts, except when they are
restricted expressly or by necessary implication. In the
Page 171 U. S. 173
case of minor public officials or corporations, such as
selectmen and school districts, the power to arbitrate has been
clearly rested upon the existence of the right to adjust and settle
claims of the particular character which had been submitted to
arbitration.
Dix v. Dummerston, 19 Vt. 262;
Walnut v.
Rankin, 70 Ia. 65. Indeed, the proposition that an independent
agreement to submit to an award must depend for its validity upon
the existence of the right to contract is so elementary that
further citation of authority to support it is unnecessary.
Examining, then, the questions we have stated in their inverse
order, we proceed to inquire whether the Commissioners of the
District of Columbia had the power to enter into a contract of the
nature of that under consideration. The solution of this inquiry
requires a brief examination of the statutes, from which alone the
powers of the Commissioners of the District are derived.
By chapter 337 of the Act of June 20, 1874, "An act for the
government of the District of Columbia, and other purposes," 18
Stat. 116, the Commission provided for in section 2 was vested with
the power and authority the then governor or board of public works
of the District, except as thereinafter limited, and it was
provided that
"said Commission, in the exercise of such power or authority,
shall make no contract, nor incur any obligation other than such
contracts and obligations as may be necessary to the faithful
administration of the valid laws enacted for the government of said
District, to the execution of existing legal obligations and
contracts, and to the protection or preservation of improvements
existing, or commenced and not completed at the time of the passage
of this act."
By the Act of June 11, 1878, c. 180, "An act providing a
permanent form of government for the District of Columbia," the
District and the property and persons therein were made subject to
the provisions of the act, "and also to any existing laws
applicable thereto not hereby repealed or inconsistent with the
provisions of this act." The Commissioners provided for in the act
were, by section 3, vested with
Page 171 U. S. 174
all the powers, rights, duties, and privileges lawfully
exercised by, and all property, estate, and effects vested in, the
Commissioners appointed under the provisions of the Act of June 20,
1874, and were given power, subject to the limitations and
provisions contained in the act, to apply the taxes or other
revenues of the District to the payment of the current expenses
thereof, to the support of the public schools, the fire department,
and the police. It was expressly enacted, however, in the same
section that the Commissioners, in the exercise of the duties,
powers, and authority vested in them,
"shall make no contract nor incur any obligation other than such
contracts and obligations as are hereinafter provided for and shall
be approved by Congress."
In the same section, it was further provided that the
Commissioners should annually submit to the Secretary of the
Treasury, for his examination and approval and transmission by him
to Congress, a statement
"showing in detail the work proposed to be undertaken by the
Commissioners during the fiscal year next ensuing, and the
estimated cost thereof; also the cost of constructing, repairing,
and maintaining all bridges authorized by law across the Potomac
River within the District of Columbia, and also all other streams
in said District; the cost of maintaining all public institutions
of charity, reformatories, and prisons belonging or controlled
wholly or in part by the District of Columbia, and which are now by
law supported wholly or in part by the United States or District of
Columbia, and also the expenses of the Washington Aqueduct and its
appurtenances, and also an itemized statement and estimate of the
amount necessary to defray the expenses of the government of the
District of Columbia for the next fiscal year."
Of the estimates as finally approved by Congress, the act
provided that fifty percent should be appropriated for by Congress,
and the remaining fifty percent assessed upon the taxable property
and privileges in the District other than the property of the
United States and of the District of Columbia. In the fifth section
of the act, provision was made for the letting by contract, after
due advertisement, of all work of repair on streets, etc., where
the cost would exceed one thousand dollars,
Page 171 U. S. 175
and it was also in said section stipulated that
"all contracts for the construction, improvement, alteration or
repairs of the streets, avenues, highways, alleys, gutters, sewers
and all work of like nature shall be made and entered into only by
and with the official unanimous consent of the Commissioners of the
District, and all contracts shall be copied in a book kept for that
purpose and be signed by the said Commissioners, and no contract
involving an expenditure of more than one hundred dollars shall be
valid until recorded and signed as aforesaid."
By section 37 of chapter 62 of the Act of February 21, 1871, c.
62, 16 Stat. 427, it was provided as follows:
"All contracts made by the said board of public works shall be
in writing, and shall be signed by the parties making the same, and
a copy thereof shall be filed in the office of the secretary of the
District, and said board of public works shall have no power to
make contracts to bind said District to the payment of any sums of
money except in pursuance of appropriations made by law, and not
until such appropriations shall have been made."
This section is deemed to be applicable to the present
Commissioners. Comp.Stat.Dis.Col. secs. 30 and 31, pp. 201-202. So
also, by section 15 of the act of 1871, 16 Stat. 423, it was
provided that the legislative assembly should not
"authorize the payment of any claim, or part thereof, hereafter
created against the District under any contract or agreement made,
without express authority of law, and all such unauthorized
agreements or contracts shall be null and void."
Section 13 of the joint resolution of June 1, 1878, embodies the
second section of the joint resolution approved March 14, 1876, 19
Stat. 211-212, which made it a misdemeanor for any officer or
person to increase or aid or abet in increasing the total
indebtedness of the District.
Under the statutes of 1874 and 1878 above referred to, it has
been held that the District of Columbia still continued to be a
municipal corporation, and that it was subject to the operation of
a statute of limitations,
Metropolitan Railroad Co. v. District
of Columbia, 132 U. S. 1, and was
also liable
Page 171 U. S. 176
for damages caused by a neglect to repair the streets within the
District.
District of Columbia v. Woodbury, 136 U.
S. 450. But the mere fact that the District is a
municipal corporation is not decisive of the question whether or
not the Commissioners of the District had power to make a contract
to submit to an award, for, as we have seen, it is not the mere
existence of municipal corporate being from which the power to make
a submission to arbitration is deduced, but that the municipal
corporation by which such an agreement is entered into has power to
contract, to settle, and adjust debts; in other words, all the
general attributes which normally attach to and result from
municipal corporate existence. Recurring to the statutes relating
to the Commissioners of the District of Columbia, it is clear from
their face that these officers are without general power to
contract debts, or to adjust and pay the same; that, on the
contrary, the statutes expressly deprive them of such power, and
limit the scope of their authority to the mere execution of
contracts previously sanctioned by Congress, or which they are
authorized to make by express statutory authority. The necessary
operation of these provisions of the statutes is to cause the
District Commissioners to be merely administrative officers, with
ministerial powers only. The sum of the municipal powers of the
District of Columbia are neither vested in nor exercised by the
District Commissioners. They are, on the contrary, vested in the
Congress of the United States, acting
pro hac vice as the
legislative body of the District, and the Commissioners of the
District discharge the functions of administrative officials.
There is no authority for holding that a mere administrative
officer of a municipal corporation, simply because of the absence
of a statutory inhibition, has the power, without the consent of
the corporation speaking through its municipal legislative body, to
bind the corporation by a common law submission. And, this being
true, with how much less reason can it be contended that the
administrative officers of the District have such power without the
consent of Congress, when the acts defining the powers of the
Commissioners, by clear and necessary implication, contain an
express prohibition to the contrary?
Page 171 U. S. 177
Nor is it in reason sound to say that, because the District
Commissioners have the power to sue and be sued, they have
therefore the authority to enter into a contract to submit a claim
preferred against the District to arbitration, and thus to oust the
courts of jurisdiction, when no authority is conferred upon the
Commissioners to contract to pay a claim of the character embraced
in the arbitration, and no appropriation had been made by Congress
for the payment of any such claim. It cannot be said that, because
Congress had appropriated for the improvement of streets, and
therefore authorized a contract for such improvement to the extent
of the appropriation, it had also authorized and appropriated for a
claim in damages asserted to have arisen from the fact that work
had been stopped because the appropriation made by Congress had
been exhausted. The appropriation of money to improve streets was
in no sense the appropriation of money to pay a claim for
unliquidated damages arising, not for work and labor performed and
materials furnished, but from the refusal to permit the performance
of work and labor and the furnishing of materials.
Aside from the prohibition imposed on the Commissioners of the
District by the acts of Congress against entering into contracts
for the payment of money for any claim not specifically
appropriated for, and agreement to submit the claim in question to
the arbitrament of a single individual was, if valid, a contract
binding the District to pay any sum of money which the arbitrator
might award. It cannot be doubted that, if the District
Commissioners themselves had seen fit to pass a resolution reciting
that the appropriation by Congress for the improvement of the
streets had been exhausted, and that a given sum of money was set
aside to pay a claim for damages preferred against the District for
having contracted when there was no appropriation, such action
would have been, under the statutes,
ultra vires. But, if
the express action of the Commissioners to this end would have been
void, how can it be contended that, by indirection -- that is, by
entering into an agreement to submit to an award -- the
Commissioners had the power to delegate to a third person an
authority which
Page 171 U. S. 178
they themselves did not possess? While the fundamental want of
power in the District Commissioners to agree to a common law
submission is decisive, there is another view which is equally so.
By the express terms of the statute, the Commissioners are
forbidden to enter into any contract binding the District for the
payment of any sum of money in excess of one hundred dollars unless
the same is reduced to writing and is recorded in a book to be kept
for that purpose and signed by all the Commissioners, the statute
declaring in express terms that no contract shall be valid unless
recorded as aforesaid. This mandatory provision of the statute
clearly makes the form in which a contract is embodied of the
essence of the contract. In other words, by virtue of the
restrictions and inhibitions of the statute, a contract calling for
an expenditure in excess of one hundred dollars cannot take effect
unless made in the form stated. The form therefore becomes a matter
of fundamental right, and illustrates the application of the maxim,
forma dat esse rei. That the mere statement of the
appointment of a referee on the minutes without the signature of
any of the Commissioners did not comply with the requirements
referred to, is too clear for discussion. The attempt to give
effect to such entry as a contract without regard to the
requirements of the law illustrates the wisdom of the statute, and
the evil of disregarding it, for on the trial, two of the three
Commissioners testified, one on behalf of the plaintiff and the
other on behalf of the defendant, and swore to directly opposite
views as to whether or not there had been a common law submission
by the Commissioners.
We have considered what has been referred to by counsel as the
order of the Commissioners, according to its terms, which embraced
only the matters contained in the action then pending, and have not
regarded the parol evidence which sought to vary and contradict the
writing by establishing that it was intended thereby to embrace a
claim which had not been asserted in the action. The views we have
advanced being decisive against the legality of the alleged award,
it follows that the judgment in favor of the administratrix based
thereon must be reversed. As, however, the consolidation of
Page 171 U. S. 179
the action upon the award with the original action for damages
for breach of the contract for the resurfacing, and the trial of
such consolidated cause, proceeded upon the hypothesis that a valid
agreement to arbitrate had been entered into, the ends of justice
will be subserved by also reversing the judgment in favor of the
District entered in the original action. It is therefore ordered
that the judgments be
Reversed, and the cases remanded with directions to dismiss
the action No. 34,564, founded upon the alleged award, and to grant
a new trial in action No. 24,279.
