A voluntary transfer of a claim against the United States by way
of mortgage, completed and made absolute by judicial sale, is
within the provision in Rev.Stat. § 3477, that assignments of
claims against the United States shall be void,
"unless they are freely made and executed, in the presence of at
least two attesting witnesses, after the allowance of such a claim,
the ascertainment of the amount due, and the issuing of a warrant
for the payment thereof."
A transfer of a contract with the United States by way of
mortgage, completed and made absolute by judicial sale, is within
the prohibition of Rev.Stat. 3737 that
"no contract or order, or any interest therein, shall be
transferred by the party to whom such contract or order is given to
any other
Page 112 U. S. 734
party, and any such transfer shall cause the annulment of the
contract or order transferred, so far as the United States are
concerned."
The rulings of the court in
Chicago & Northwestern
Railway Co. v. United States, 104 U.
S. 680, and
Chicago, Milwaukee & St. Paul
Railway Co. v. United States, 104 U.
S. 687, maintained.
This case came up on appeal from the Court of Claims.
The facts which make the case are stated in the opinion of the
Court.
MR. JUSTICE MATTHEWS delivered the opinion of the Court.
On the 8th day of October, 1875, the Lake Superior and
Mississippi Railroad Company entered into a contract in writing
with the United States, acting by the Postmaster General, for
carrying the mails between St. Paul and Duluth for an agreed
compensation of $13,859.97 per annum.
On the 20th day of October, 1876, the Postmaster General gave
notice to the company of a reduction in its compensation at the
rate of $2,772 per annum, in accordance with the Post Office
Appropriation Act of July 12, 1876, and on the 28th day of August,
1878, a further decrease was notified by the department under the
Post Office Appropriation Act of June 30, 1878, amounting to
$498.96 per annum.
The total reduction amounted to $12,141.36, of which $3,686.76
was made prior to June 12, 1877, and $8,454.60 after that date. The
service rendered during the first period was by the contractor, the
Lake Superior and Mississippi Railroad Company, during the latter
period, by the appellant, the St. Paul and Duluth Railroad Company,
claiming to be the successor to all rights of the former under the
contract.
Its title thereto arises under a judicial sale by virtue of a
decree of the Circuit Court of the United States for the District
of Minnesota, foreclosing a mortgage given by the Lake Superior and
Mississippi Railroad Company to trustees to secure its bonds, dated
January 1, 1869.
Page 112 U. S. 735
This mortgage professes to convey the lands of the mortgagor, to
which it was or might be entitled under grants from the United
States and the State of Minnesota, and its railroad constructed or
to be constructed, right of way, and all tracks, bridges, viaducts,
culverts, fences, depots, stationhouses, and other similar houses,
superstructures, erections, and fixtures held or to be acquired for
the use of the railway or in connection therewith, or the business
thereof; also all locomotives, tenders, cars, rolling stock, or
equipment, and all machinery, tools, implements, etc., and also all
franchises connected with or relating to said railway and said line
of telegraph, and all corporate franchises of any nature, including
the franchise to be a corporation, and all endowments, income, and
advantages, etc., to the above-mentioned lands, railroad, or
property belonging or appertaining, and the income, rents, issues,
and profits thereof.
The decree for sale directs the sale of the mortgaged premises,
and a sale thereof was confirmed by the court and a conveyance made
to the appellant, a corporation organized by the purchasers for
that purpose, under the laws of Minnesota, on June 27, 1878.
In respect to the claim of the appellant for so much of the
reduction made by the post office department as relates to the
service performed prior to the sale by the Lake Superior and
Mississippi Railroad Company, it would be governed by the decision
of this Court in the cases of
Chicago & Northwestern
Railway Co. v. United States, 104 U.
S. 680, and
Chicago, Milwaukee & St. Paul
Railway Co. v. United States, 104 U.
S. 687, if the corporation with whom the contract was
made were the claimant, but we do not find in the mortgage, or
decree for sale, any terms of description, as to the property and
interests conveyed, sufficient to pass the interest therein of the
original company to the purchasers at the sale.
The same remark applies to the contract itself. The appellant,
by virtue of the sale of the railroad and property rights
mortgaged, did not become assignee of the contract between the
United States and the Lake Superior and Mississippi Railroad
Company, and can claim nothing as such in this suit.
Page 112 U. S. 736
There are no words of description in the mortgage which include
it. The fact that service was performed in carrying the mail,
subsequent to the sale, by the appellant, does not commit the
government to a recognition of the contract as if made with it. No
such recognition is found as a fact by the Court of Claims, and it
is apparent from the facts found that the Post Office Department
treated the service performed by the appellant as subject to
regulation according to the terms of the Act of June 17, 1878,
which justified the reduction complained of.
If it were otherwise, however, the appellant's case must still
fail.
That part of its claim for services rendered prior to the sale
by the Lake Superior and Mississippi River Railroad Company falls
within the prohibition of Rev.Stat. § 3477, which provides that
"All transfers and assignments made of any claim upon the United
States, or any part or share thereof or interest therein, whether
absolute or conditional and whatever may be the consideration
therefor, and all powers of attorney, orders, or other authorities
for receiving payment of any such claim, or any part of share
thereof, shall be absolutely null and void unless they are freely
made and executed in the presence of at least two attesting
witnesses after the allowance of such a claim, the ascertainment of
the amount due, and the issuing of a warrant for the payment
thereof."
In
Erwin v. United States, 97 U. S.
392, it was held that an assignment by operation of law
to an assignee in bankruptcy was not within the prohibition of the
statute, and in
Goodman v. Niblack, 102 U.
S. 556, a voluntary assignment by an insolvent debtor
for the benefit of creditors was held valid to pass the title to a
claim against the United States. But in our opinion the present
case is not within the principle of these exceptions, but falls
within the purview of the prohibition. It is a voluntary transfer,
by way of mortgage, for the security of a debt, and finally
completed and made absolute by a judicial sale.
If the statute does not apply to such cases, it would be
difficult to draw a line of exclusion which leaves any place for
the operation of the prohibition.
Page 112 U. S. 737
So the transfer by the same proceeding of the contract itself so
as to entitle the assignee to perform the service and claim the
compensation stipulated for is forbidden by Rev.Stat. § 3737. That
section is as follows:
"SEC. 3737. No contract or order, or any interest therein, shall
be transferred by the party to whom such contract or order is given
to any other party, and any such transfer shall cause the annulment
of the contract or order transferred, so far as the United States
are concerned."
The explicit provisions of this statute do not require any
comment. No explanation could make it plainer.
The judgment of the Court of Claims is accordingly
affirmed.