The Court of Claims is without jurisdiction of a claim based on
an obligation of the United States growing directly out of the
treaty with Spain ceding the Philippine Islands or on one imposed
by principles of international law as a consequence of the cession.
Pp. 251 U. S. 357
251 U. S. 362
Eastern Extension Tel. Co. v. United States, 231 U.
; Jud.Code, § 153.
To create an express or, (in a strict sense) an implied contract
binding the United States, some officer with express or implied
power to commit the government must have intended that result. P.
251 U. S.
A cable company holding Spanish concessions in the Philippines
obliging it to transmit government messages, in part free and in
part at reduced rates, and to pay certain taxes, and entitling it
to a subsidy, claimed the subsidy from the United States upon the
ground that the government, by accepting the benefits, had assumed
the burdens of the concessions. Held
that no such contract
could be derived from the facts as found. Id.
Such a contract could not be implied from the use of the cable
service in transmitting government messages when the government
Page 251 U. S. 356
the rates, in part reduced but all as fixed and charged by the
company, and, through the Secretary of War, expressly declined free
service. P. 251 U. S.
Nor did any liability of the United States arise from
expenditures made by the company in voluntarily extending its lines
with approval of the government given without prejudice to the
government's rights. P. 251 U. S.
The acceptance by subordinate executive officials of the Insular
government of payments tendered by the cable company in connection
with statements of account assuming a recognition of its
concessions and right to subsidy held
no basis for
implying an obligation of the United States to pay the subsidy.
54 Ct.Clms. 108 affirmed.
The case is stated in the opinion.
MR. JUSTICE CLARKE delivered the opinion of the Court.
The appellant, claimant, is the grantee from the government of
Spain of three concessions to lay down and operate submarine
cables. The first one, in 1879, was for the exclusive privilege,
for forty years, of constructing and operating a cable between the
Island of Luzon and Hong Kong. It was landed at Bolinao on the
northerly coast of Luzon, and dispatches were transmitted to Manila
and other places by government owned land lines, which were subject
to interruption. This concession required that official messages be
transmitted free and be given precedence. In 1898, a second
concession, supplemental to the first, empowered the claimant to
extend its cable to Manila, and the term of the prior exclusive
grant was extended twenty years, with the same priority for
official dispatches, but with the provision that they were to
Page 251 U. S. 357
transmitted free only for the first ten years from the date of
this second grant.
In 1897, a third concession, the one with which this case is
chiefly concerned, authorized the claimant to lay down and operate
three submarine cables connecting the Island of Luzon with three
Visayas Islands -- Panay, Negros, and Cebu. This grant required the
claimant to operate the cables for twenty years, to give precedence
to official dispatches and to charge for them at one-half the rates
charged for private messages, to pay a tax of ten percent on
receipts in excess of expenses not to exceed �6,000 per annum, an
additional tax of "fifty centimes of a franc" per word on telegrams
transmitted, and a surtax of "five centimes of a franc" per word on
telegrams between the four islands named in the grant and others of
The government of Spain, on its part, agreed to pay the claimant
in equal monthly installments, an annual subsidy of �4,500 during
the term of the grant.
All of the cables were promptly laid down and put in use, and
those of the third grant are designated in the record as the
"Visayas cables" and the grant as the "Visayas concession." This
suit is to recover the amount of the subsidy provided for in the
third concession, which had accrued when the petition was
The United States denied all liability, and the judgment of the
Court of Claims dismissing the petition is before us for
The case was here before on appeal, and this Court held (
231 U. S. 231
326) that the case as then stated in the petition was not within
the jurisdiction of the court of Claims, whether viewed as
asserting an obligation growing directly out of the treaty with
Spain or one imposed by principles of international law upon the
United States as a consequence of the cession of the Islands by the
treaty. The court, however, referring to certain general and
Page 251 U. S. 358
allegations in the petition, suggested that the implication
might be drawn from them that there may have been action on the
part of officials of the government of the United States since it
had assumed sovereignty over the Islands which, if properly pleaded
and proved, would give rise to an implied contract with the
claimant outside the treaty, which would be within jurisdiction of
the Court of Claims, and, to the end that the right to have such a
claim adjudicated might be saved, if it really existed, the case
was remanded for further proceedings in conformity with the
Doubtless inspired by the suggestion from the court, an amended
petition was filed in which claimant alleged with much detail that
the government of the United States had used the cables extensively
for official messages, which had been given precedence and had been
transmitted, as required by the terms of the two concessions, over
the Hong Kong cable free until 1908, and thereafter at one-fourth
of the regular rate, and over the Visayas cables at one-half the
rate charged for private dispatches; that the claimant had paid and
the government accepted the ten percent tax on receipts from
messages, computed as required by the third concession; that, since
the American occupation, the service over the Visayas cables had
been extended and improved at large expense by arrangement with
duly authorized officers of the government, and that, in August,
1905, the claimant had paid and the government had accepted a
balance due on an account stated in a form indicating an adoption
of the terms of the concessions. By this course of conduct, it was
averred, the United States "assumed and adopted" all of the
obligations imposed on the government of Spain by the concessions,
and agreed with the claimant to discharge and perform all of them
and especially agreed to pay the annual subsidy of �4,500, as
required by Art. 10 of the third concession.
Page 251 U. S. 359
Trial by the Court of Claims resulted in findings of fact, as
follows: that the concessions were made to claimant as alleged and
that all of the cables were completed and in use when the Treaty
with Spain was signed, December 10, 1898; that the government used
the cables extensively for official dispatches, which were given
priority in transmission, but that this was in accordance with the
International Telegraph Convention, as well as in compliance with
the terms of the concessions; that the claimant charged the
government for messages over the Visayas cables at one-half the
rate charged for private dispatches, which is the rate prescribed
by the third concession, but that it "has paid the full rates
charged by the claimant for messages over any of the lines," and
claimant had authority to make its own rates, and that it is not
true that the claimant transmitted messages over the Hong Kong
cable free of charge. "The United States government has paid full
established rates on the Hong Kong-Manila cable."
It is further found that, since December, 1901, the claimant has
made claim to the subsidy in annual statements to the authorities
of the Philippine government, in which the terms of the concession
granting it were referred to and in which the United States was
charged with the amount of it then accrued. With respect to these,
except as hereinafter noted, the court finds that whether any reply
was made to them "does not appear from the record."
Much significance is attached by the claimant to the statement
presented on June 11, 1905. The finding with respect to this is
that, on that date, the claimant's representative forwarded to "the
Secretary of Finance and Justice," an officer of the Philippine
government at Manila, a communication, with an attached statement
purporting to show the amount
"due to the United States government in the Philippines on
account of the transmission
Page 251 U. S. 360
of all United States government traffic over the Manila-Hong
Kong cable, as per the concession granted to us for laying the
same, up to and including December 31, 1904."
In this statement, the government is credited (as if the amount
had nor been paid) with what it had paid for service over the Hong
Kong-Manila cable, laid under the first and second concessions,
from August 21, 1898, to December 31, 1904, and it is charged with
"Visayas subsidy," under the third concession, �4,500 per annum to
December, 1904. Thus, a balance was arrived at of �4,712.10.6 in
favor of the United States, "as to the disposal of which I shall be
glad to receive your instructions," wrote the representative of the
In reply to this, the auditor of the government of the
Philippine Islands, to whom it had been referred, wrote to
claimant's representative at Manila, acknowledging receipt of his
letter in which it was stated, "There is due the insular government
under your concession the sum of �4,712.10.6," and the auditor
added, "It is respectfully requested that said amount be deposited
with the Insular Treasurer as miscellaneous revenue." Payment was
made and receipt given by the treasurer of the government of the
Philippine Islands for the amount as "due government as per
statement of account rendered by Eastern Extension, etc., Tel. Co.
to Sec. Finance and Justice June 5, 1911."
Each year after 1905, the claimant sent a statement to the
"Secretary of Finance and Justice" at Manila in the form
"The United States government at Manila in Account with the
Eastern Extension Australasia & China Tel. Co., Limited. . . .
Free Transmission of American government Telegrams over Hong
Then follow credits for messages passing over the Hong
Kong-Manila cable, as if they had not been paid for, and a debit of
Page 251 U. S. 361
subsidy" accrued to the date of the statement. To these no reply
appears to have been made.
It is expressly found that:
"Except the payment above referred to in 1905, the claimant has
never paid anything into the Treasury of the Philippine government.
It does not appear that any part of said sum was paid into the
Treasury of the United States. Nor has the claimant paid any sum to
the United States government."
The only payment of the ten percent tax under the third
concession was that made in 1905, �184.17.2, and the statement
showing this balance in favor of the United States concluded:
"I therefore have the honor to request that the necessary
permission be given to the Treasurer to receive these amounts, now
standing to the credit of the United States government in the
Of its own motion, the claimant, in 1899, made extensions of the
Visayas cables at a considerable expense. But the finding with
respect to this is:
"These extensions were carried out with the approval of the
military authorities in control of the Philippines at the time, and
by the sanction of the United States government, but without
prejudice to, and with the reservation of, all rights of the
government of the United States."
The following is from the court's finding of fact No. IX:
"Between the 10th day of December, 1898, and March, 1899,
considerable correspondence was exchanged between the government of
the United States and the claimant regarding the transmission of
official telegrams over the Hong Kong-Manila cable at reduced
"On the 1st of March, 1899, the Secretary of War transmitted to
the chairman of the claimant company a telegram stating that the
"accepts the courteous offer of your company to transmit
Page 251 U. S. 362
free between Hong Kong and Manila, providing that this
acceptance leaves in abeyance Spanish concession which is now under
"On the following day, claimant's reply was transmitted to the
War Department, stating that the foregoing telegram had been
received and the reservation therein noted, and that 'the company
have pleasure in affording all possible facilities to the United
States government in connection with the transmission of their
telegrams.' On the 28th of March, 1899, a written communication was
transmitted by the War Department to the duly authorized
representative of the claimant company to the effect that,"
"upon careful reconsideration of the subject, it is deemed
inadvisable for the department to avail itself of your company's
offer. I beg to state therefore that the department will pay the
established rates on official cable messages, and all accounts of
this character presented to the United States will be paid."
"This communication concluded with a renewal of thanks 'for the
voluntary reduction in rates which your company has so courteously
tendered.' The United States government has paid full established
rates on Hong Kong-Manila cable, and has paid the established rates
on the Visayas cables on its messages."
Upon these findings of fact and upon principles and analogies
derived from the law of private contract, the Court must proceed to
judgment. For it was determined by this Court on the former appeal
that any right in the defendant derived directly from the Treaty
with Spain, or any obligation imposed upon the United States by
principles of international law as a consequence of the cession of
the Islands, would not be within the jurisdiction of the Court of
Claims, and counsel for claimant, expressly disclaiming the
assertion of any right under the Treaty of Paris, urge that the
case be treated exactly as it would be if it arose between two
Page 251 U. S. 363
So regarding the case, it is obvious that no express contract by
the United States to adopt and be bound by the third or any of the
concessions can be made out from the findings of fact, and it is
equally clear that such an implied contract, using the words in any
strict sense, cannot be derived from the findings, for it is plain
that there is nothing in them tending to show that any official
with power, express or implied, to commit that government to such a
contract ever intended to so commit it.
The contention of the claimant must be sustained, if at all, as
-contract, as an obligation imposed by law
independent of intention on the part of any officials to bind the
government, one which, in equity and good conscience, the
government should discharge because of the conduct of its
representatives in dealing with the subject matter.
It is argued that the United States should be held to have
assumed the burden of the concession because it derived benefits
and advantages from the use of the cables.
These cables were in operation when the United States government
assumed jurisdiction over the Islands. It extended a much more
efficient governmental protection over the lines than they had
before, but left the claimant in full ownership and control over
them with the power to determine rates for service. The government,
to be sure, availed itself of the advantages of communication which
the cables afforded, but for such service it paid the rates which
the claimant demanded and which it must be assumed were adequate.
From such circumstances as these, very clearly the law will not
raise an obligation on the part of the government to assume the
burden of the subsidy on the principle of undue enrichment or of
advantage obtained. It used the cables as other customers used
them, and from such a use, paid
Page 251 U. S. 364
for at the full rate demanded, no obligation can be derived by
It is further contended that the terms and conditions of the
concession should be imposed on the government because the
officials of the Philippine government accepted taxes computed as
provided for by the third grant.
The finding of the Court of Claims is not that the Philippine
government demanded or exacted the small amount of taxes that was
paid, but that the claimant itself computed the amount in the
manner which it thought was provided for in the concession, and
tendered payment, which, after repeated urging, was accepted by
local officers of the Philippine government so subordinate in
character that it is impossible to consider them as empowered to
commit the government of the United States to the large
responsibilities now claimed to spring from their conduct.
The finding with respect to extension of the cables in 1899
excludes all suggestion of the assumption of any liability by the
United States on account of the expenditure involved.
The form of the statement of account of December 31, 1904,
showing a balance favorable to the United States, which was paid to
and accepted by the Treasurer of the Philippine government and from
which so much is claimed, is not impressive as creating the
Here again, the claimant, without suggestion of demand from the
government of the United States or even from the Philippine
government, prepared a statement, and, in order to give it the form
of an account, was obliged to treat as unpaid charges for tolls
over the Hong Kong-Manila cable all of which had been paid by the
United States government and accepted by the claimant.
A separate government, sustained by its own revenues, has been
maintained for the Philippine Islands ever since they were ceded to
the United States. At first military,
Page 251 U. S. 365
it became a civil government in 1902, organized as provided for
by an act of Congress (32 Stat. p. 691, c. 1369), with a Governor
General and executive, legislative, and judicial departments all
subject to the supervision of the Secretary of War of the United
It is surprising that the claimant, when it desired to have
these important concessions, with their large obligations, adopted
by the government of the United States, did not make application
for that purpose directly to that government or to its Secretary of
War, or at least to the Governor General or legislative department
of the Philippine government, instead of relying for its adoption
by implication, as it has done, chiefly upon the form in which the
accounts were presented to the Secretary of Finance and Justice of
the Philippine government.
The action of a department head of the Philippine government
(inconsistent with the position taken by the Secretary of War in
1899 with respect to the subject matter) in accepting a voluntary
payment of $23,000 cannot be made the sufficient basis for implying
an obligation on the part of the government of the United States to
pay a bonus of a total aggregate of almost $440,000.
If doubt could be entertained as to the correctness of this
conclusion, it would be disposed of by the fact that, when the
claimant, in March, 1899, tendered to the Secretary of War, so far
as appears the only official of the United States with large powers
who considered the subject, the privilege of free transmission of
messages over its Hong Kong-Manila cable, as was provided for in
the first concession, the offer was politely but firmly declined
with the statement that "the Department will pay the established
rates on official cable messages. and all accounts of this
character presented to the United States will be paid" -- a promise
which the findings show that he and his successors in office have
In the jurisdiction given to the Court of Claims, Congress
Page 251 U. S. 366
has consented that contracts, express or implied, may be
judicially enforced against the government of the United States.
But such a liability can be created only by some officer of the
government lawfully invested with power to make such contracts or
to perform acts from which they may be lawfully implied.
Langford v. United States, 101 U.
, 101 U. S. 345
United States v. Buffalo, Pitts Co., 234 U.
; Tempel v. United States, 248 U.
; Ball Engineering Co. v. J. G. White,
250 U. S.
The foregoing discussion makes it palpably plain that no
contract, express or implied, to pay the disputed subsidy was made
by any officer of the United States, and the judgment of the Court
of Claims is therefore