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where government as distinct from its functionaries may operate undisturbed by the demands of litigants. A sense of justice has brought a progressive relaxation by legislative enactments of the rigor of the immunity rule. As representative governments attempt to ameliorate inequalities as necessities will permit, prerogatives of the government yield to the needs of the citizen. By the act of 3 March 1797, and its successor legislation, as interpreted by this Court, cross-claims are allowed to the amount of the government's claim, where the government voluntarily sues. Specially designated claims against the United States may be sued upon in tħe Court of Claims or the district courts under the Tucker Act. Special government activities, set apart as corporations or individual agencies, have been made suable freely. When authority is given, it is liberally construed, Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381; Federal Housing Administration v. Burr, supra. As to these matters no controversy exists.
Respondent contends this immunity extends, however, only to original suits; that when a sovereign voluntarily seeks the aid of the courts for collection of its indebtedness it takes the form of a private suitor and thereby subjects itself to the full jurisdiction of the court. The complete examination into the cross-claim, despite attendant dislocation of government business by the appearance of important officers at distant points and the production of documents as evidence, to justify the allowance of an offset to the government's claim. It is pointed out that surprise is not involved as no cross-claim may be proven until after submission to and refusal by the government accounting officers. Respondent further insists that his position is supported by The Thekla, 266 U.S. 328, and subsequent decisions quoting its language. Emphasis is placed upon the fact that these probate proceedings are in rem or quasi in rem as were the libels in admiralty in the Thekla.
The Thekla turns upon a relationship characteristic of claims for collision in admiralty but entirely absent in claims and cross-claims in settlement of estates. The subject matter of a suit for damages in collision is not the vessel libelled but the collision. Libels and crosslibels for collision are one litigation and give rise to one liability. In equal fault, the entire damage is divided. As a consequence when the United States libels the vessel of another for collision damages and a cross-libel is filed, it is necessary to determine the cross-libel as well as the original libel to reach a conclusion as to liability for the collision. That conclusion must be stated in terms of responsibility for damages. * * *There is little indication in the facts or language of The Thekla to indicate an intention to permit generally unlimited crossclaims. Quotations from The Thekla in later opinions of this Court are used to illustrate problems entirely apart from the one under consideration here.
The suggestion that the order of the probate court is in reality not a judgment but only a "judicial ascertainment" of credits does not affect our conclusion. No judgment against the United States is more than that. But such an entry, if within the competence of the court passing the order, would be res judicata of the issue of indebtedness, Williams v. United States, 289 U.S. 553, 564. The suggestion springs from the opinion in United States v. Eckford, 6 Wall. 484, 491.
* * *
In the Eckford case this Court was dealing with the litigation at a more advanced stage than the present litigation has reached. The United States has sued Eckford's executors on his bond in the District Court for the Southern District of New York. They pleaded a set-off, a balance was found in their favor and a judgment entered that the executors were entitled to be paid the amount found. Suit in the Court of Claims was instituted by the executors, the record was proven, over objection, and judgment entered accordingly. Consequently a reversal of the Court of Claims was the only step necessary.
This Court did not deal with the New York judgment.
We have considered respondent's further argument that sovereign immunity was waived when the United States took possession of the assets of its agent the Fleet Corporation prior to the institution of this action, and later, but prior to the entry of the probate judgment appealed from, assumed the Corporation's obligations by the act of 29 June 1936. We see nothing in these transactions which indicates an intention to waive the immunity of the United States in the state courts.
MR. JUSTICE SANFORD delivered the opinion of the Court.
This action was brought by Horowitz, under the Tucker Act (Act of 3 March 1887, 24 Stat. 505, c. 359; Jud. Code, ş 145), to recover damages for the alleged breach of a contract relating to the purchase of silk from the Ordnance Department. The petition was dismissed, on demurrer, for failure to state a cause of action. 58 Ct. Cls. 189.
The petition alleges, in substance, these facts: On 20 December 1919, the claimant, a resident of New York, submitted a bid for certain Habutai silk offered for sale by the New York Ordnance Salvage Board. At the time the "Chief of the Textile Division of New York City," agreed, "on behalf of such Board," that the claimant would be given an opportunity to re-sell the silk before completing the payment of the purchase price, and that the "departments of the Government having jurisdiction in matters of this kind" would ship the silk--which was then in Washington--within a day or two after shipping instructions were given. On 22 December he was notified by the Board that the sale of the silk to him had been "approved"'; and he thereupon paid part of the purchase price. On 30 January 1920, he sold the silk to a silk company in New York. On 16 February he paid the balance of the purchase price, and wrote the Board to ship the silk at once, by freight, to the silk company. Two days later he was notified by the Board that it had received the shipping instructions and had ordered the silk to be shipped. Thereafter the price of silk declined greatly in the New York market, until 4 March. On that date the "claimant learned.
that the silk was still in Washington, and had not been shipped because the Government through one of its agencies, the U.S. Railroad Adminis. tration, had prior to 1 March 1920, place, an embargo on shipments of silk by freight, and the shipment of Habutai silk for claimant had been held up." Afterwards the Government shipped the silk to the consignee, by express. It arrived in New York "on or about 12 March." The consignee then refused to accept delivery on account of the fall in prices. And "by reason of the Government's breach of the contract and agreement in placing an embargo, and failing to ship the silk either by express or freight prior to 4 March 1920, the price of silk having declined, the claimant was forced to sell the said silk for $10,811.84 less than the price the consignee had agreed to pay for same had it been delivered in time."
The petition alleges that the claimant is entitled to recover from the United States the said sum of $10,811.84, "for and on account of the violation of the said agreement"'; and prays judgment therefor.
without determining, that the petition shows a valid contract with the Salvage Board for the sale of the silk and its prompt shipment after the receipt of shipping instructions. The sole breach of this contract which is alleged is the failure to ship the silk prior to 4 March 1920. This, according to the averment of the petition, was caused by an embargo, placed by the Railroad Administration on shipments of silk by freight. Neither the validity of this embargo nor its effect in delaying the shipment is challenged by the petition.
It has long been held by the Court of Claims that the United States when sued as a contractor cannot be held liable for an obstruction to the performance of the particular contract resulting from its public and general acts as a sovereign. Deming v. United States, 1 Ct. Cis. 190, 191; Jones v. United States, 1 Ct. Cls. 383, 384; Wilson v. United States, 11 Ct. Cls. 513, 520. In the Jones Case, supra, the court said:
"The two characters which the government possesses as a contractor and as a sovereign cannot be thus fused; nor can the United States while sued in the one character be made liable in damages for their acts done in the other. Whatever acts the government may do,
be they legislative or executive, so long as they be public and general, cannot be deemed specially to alter, modify, obstruct or violate the particular contracts into which it enters with private persons. . .In this court the United States appear simply as contractors; and they are to be held liable only within the same limits that any other defendant would be in any other court, Though their sovereign acts performed for the general good may work injury to some private contractors, such parties gain nothing by having the United States as their defendants.
It was upon this ground that the demurrer in the present case was sustained by the Court of Claims. We think this was correct, and the judgment is Affirmed.
D. Authority of the Contracting Officer
THE FLOYD ACCEPTANCES
74 U.S. (7 Wall.) 666 (1868)
APPEALS from the Court of Claims,
The facts as found by that court, were thus:
Russell, Majors & Waddell had contracts for supplies and transportation, to be furnished to the Army in Utah. By these contracts, they were to be paid either by the quartermaster at St. Louis, or by his drafts on the assistant treasurer of the United States in New York. In all the contracts, except one, these payments were to be made on the final delivery of the supplies in Utah; but in one contract there was an agreement that partial payments should be made when the trains were started. In all cases, such payments were to be made upon certificates of the proper quartermaster.
The performance of these contracts required a very large outlay of money, and Russell & Co., finding it difficult to advance this and wait for its return until they were entitled to receive payment under their contracts, made an arrangement with the Secretary of War, under which they should draw time-drafts on him, payable to their own order, at the Bank of the Republic in New York, which should be accepted by the secretary. On these drafts they were then to raise the money necessary to enable them to perform their contracts, and as the money for the transportation and supplies became due, they were to receive it, and take up the acceptances of the Secretary before or at maturity. Under this arrangement the Secretary accepted drafts to the amount of $5,000,000 most of which were taken up by Russell, Majors & Waddell, as agreed; but over a million of dollars in amount remain unpaid.
The drafts passed into the hands of different holders; among them T. W. Pierce, the Dover Five Cent Saving Bank, E. D. Morgan, and the Boatmen's Saving Institution; and Mr. Floyd having retired from the War Department, and the department refusing to pay the acceptances, Pierce, by his separate bill, and the other parties in a proceeding treated by the Court of Claims as one in substance, brought suit in the court. The petition of Pierce averred:
"That the said Floyd, as Secretary of War, and in behalf of the
* * * dismissed all the cases, holding, in the Secretary had no power to bind the United States by - acceptances were to be regarded as within the act s an attempt to avoid it, and were, therefore, void; upreme Court authorized such acceptances; that the ish any usage, in the different departments, by -r was authorized to accept, in behalf of the United , and that if such usage or practice were established, aimant, because forbidden by law.
how that anything remained due to the contractors,
matured; no evidence on the state of the accounts e. en as settled, that when the United States becomes
commercial paper--by which is meant that class of le by indorsement or delivery, and between private hands of innocent holders from inquiry into the it was put in circulation--they are bound in any ion they submit, by the same principles that govern tions to such paper.
the sake of argument, that the instruments under 1, bills of that character, and that the signature that he was at the time Secretary of War, there to be considered essential to plaintiffs' right to : the authority of the Secretary to accept the bills at.
aper, issued by an individual when we make ourre, we are sure that he is bound, because the right
to all men. But the Government is an abstract to write or mouth to speak, and has no signature s in the case of an individual. It speaks and or more properly, officers. These are many, and owers confided to them.
able paper is found in the market purporting to st necessarily be by the signature of an officer
purchaser of such paper, whether the first holder eril, see that the officer had authority to bind
where are we to look for the authority of the