MONROE SALISBURY v. THE UNITED STATES.
[No. 15719.
Decided May 22, 1893.]
On the Proofs.
This is the same case decided on demurrer, ante, p. 52. The facts found do not essentially differ from those alleged.
I.Where an agreement between a mail contractor and his sub-contractor provides that the former shall pay to the latter “ the full amount of mail pay that shall, from time to time, Secóme due to him,” and the sub-contractor assumes all the obligations of the contract, the one month’s extra pay for discontinuing the service, provided by the original contract, belongs to the sub-contractor.
II.A claim for mail transportation pay does not accrue when the service is rendered, but when payments are to be made, viz: One month after the current quarter, and a claim for the one month’s extra pay allowed in post-office contracts for a discontinued service comes under the same provision.
III.Where the Postmaster-General increases expedition and requires additional service by one order at the same time, and the contractor performs accordingly he is entitled to compensation for both.
The Reporters’ statement of tbe case:
Tbe following are tbe facts of tbis case as found by tbe court:
I. March 15, 1878, O. J. Salisbury entered into a written contract for carrying tbe mails on route No. 36128, of which, so far as it bears upon tbis case, tbe following is a copy:
“This article of contract, made tbe 15th day of March, eighteen hundred and seventy-eight, between the United States of America (acting in this behalf by the Postmaster-General) and O. J. Salisbury, contractor, and H. Wadsworth, of San Francisco, Cal., and Wm. K. Sloan, of Hilliard, Wyo., as his sureties.
“Witnesseth, That whereas O. J. Salisbury, has been accepted, according to law, as contractor for transporting the mail on route No. 36128, from Silver Bow, Mont., by Cable City, Phillipsburgh, and Emmittsburgh, to New Chicago and back, three times a week, by schedule satisfactory to the De-*405partmerb, at two thousand and five hundred dollars per year, for and during the term beginning July first, eighteen hundred and seventy-eight, and ending June thirtieth, eighteen hundred aud eighty-two; now, therefore, the said contractor and his sureties do, jointly and severally, undertake, covenant, and agree with the United States of America, and do bind themselves—
“1st. To carry said mail with certainty, celerity, and security, using therefor such means as may be necessary to transport the whole of said mail, whatever may'be its size, weight, or increase, during the term of this contract, and within the time fixed in the annexed schedule of departure and arrivals; and so to carry until said schedule is altered by the authority of the Postmaster-General of the United States, as hereinafter provided, and then to carry according to such altered schedule; and in all cases to carry said mail in preference to passengers and freight, and to their entire exclusion if its weight, bulk, or safety shall so require. And that they will carry the mail, upon demand, by any conveyance which said contractor regularly runs, or is concerned in running, on the route, beyond the number of trips above specified, in the same manner and subject to the same regulations as are herein provided touching regular trips.
“2d. To carry the mail in a-safe and secure manner, free from wet or other injury, under a sufficient oil-cloth or bearskin if carried on a horse, and in a boot under the driver’s seat if carried in a coach or other vehicle.
“3d. To take the mail and every part thereof from, and deliver it and every part thereof at, each post-office on the route, or that may hereafter be established on the route (or on any route that may hereafter be established and to which this contract may be extended as hereinafter provided), and into tjie post-office at each end of the route, and into the post-office, if one is there kept, at the place at which the carrier stops for the night, and if no post-office is there kept, to lock it up in some secure place, at the risk of the contractor.
“They also undertake, covenant, and agree with the United States of America, and do bind themselves, jointly and severally, as aforesaid, to be accountable and answerable in damages for the person to whom the said contractor shall commit the care and transportation of the mail, and his careful and faithful performance of the obligations assumed herein and those imposed by law, not to commit the care or transportation of the mail to any per,son under 16 years of age; to discharge any carrier of said mail whenever required so to do by the Postmaster-General; not to transmit, by themselves, or either of them, or either of their agents, or be concerned in transmitting commercial intelligence more rapidly than by mail; not to carry, otherwise than in the mail, letters, packets, *406or newspapers which, should go by mail, or convey or transport any person engaged in carrying letters, packets, or newspapers which should go by mail; to carry post-office blanks, mail locks and bags, and other postal supplies, and also the . special agents of the Department, on the exhibition of their •credentials, if a coach or other suitable conveyance is used, without additional charge.
“To collect quarterly, if required by the Postmaster-General, of postmasters on the route, the balances due from them to the United States on their quarterly returns, and faithfully to render an account thereof to the Postmaster-General in the settlement of the quarterly accounts of said contractor, and to pay over to the Auditor of the Treasury for the Post-Office Department, on the order of the Postmaster-General, all balances remaining in his hands.
“ For which services, when performed, the said O. J. Salisbury, contractor, is to be paid by the United States the sum of $2,500 a year, to wit: Quarterly, in the months of November, February, May, and August, through the postmasters on the route, or otherwise, at the option of the Postmaster-General; said pay to be subject, however, to be reduced or discontinued by the Postmaster-General as hereinafter stipulated; or to be suspended in case of delinquency.
“ It is hereby stipulated and agreed by the said contractor and his sureties that the Postmaster-General may discontinue or extend this contract,, change the schedule and termini of the route, and alter, increase, decrease, or extend the service, in accordance with law, he allowing a pro rata increase of compensation for any additional service thereby required, or for increased speed, if the employment of additional stock or carriers is rendered necessary; and in case of decrease, curtailment, or discontinuance of service, as a full indemnity to said contractor, one month’s extra pay on the amount of service dispensed with, and a pro rata compensation for the service retained: Provided, however, That in case of increased expedition, the contractor may, upon timely notice, relinquish the contract.
“ It is hereby also stipulated and agreed by the said contractor and his sureties as aforesaid that they shall forfeit— * * *
. “And this contract shall, in all its parts, be subject to the terms and requirements of the act of Congress approved April 21,1808, entitled “An act concerning public contracts,” and of the act of Congress approved June 8, 1872, entitled “An act to revise, consolidate, and amend the statutes relating to the Post-Office Department.”
“ In witness whereof the said Postmaster-General has caused the seal of the Post-Office Department to be hereto affixed, and has attested the same by his signature, and the said con*407tractor and Ms sureties have hereunto set tbeir hands and seals the day and year set opposite their names, respectively.
“Signed, sealed, and delivered by the Postmaster-General, * * *”
March 13,1879, the claimant became a subcontractor by the following written agreement, which was filed in the office of the Second Assistant Postmaster-General, who notified the Auditor of the Treasury Department of the fact, according to law:
“This article of contract, made this 13th day of March, A. D. 1879, between O. J. Salisbury, contractor with the U. S. Post-Office Department for transporting the mails on route No. 36128, from Silver Bow to New Chicago, Montana Territory, of the one part, and Monroe Salisbury of the other part—
“ Witnesseth, That whereas the said Monroe Salisbury has been accepted by the said O. J. Salisbury as subcontractor for transporting the U. S. mails on said route No. 36128 from the first day of January, A. D. 1879, to the thirtieth day of June, A. D. 1882: now, therefore, the said Monroe Salisbury doth agree, and by these presents hath agreed, to transport the U. S. mails on the above-numbered route and for the period above mentioned, according to the terms of his, the said O. J. Salisbury’s contract with the P. O. Department, holding himself, the said Monroe Salisbury, responsible in damages to the said O. J. Salisbury for any fines, penalties, or losses that may result from any violation of the terms of his, the said O. J. Salisbury’s, contract with the P. O. Department.
“In consideration of the above agreement of the said Monroe Salisbury, and to enable him, the said Monroe Salisbury, to execute the same, the said O. J. Salisbury doth hereby give, assign, and set over to the said Monroe Salisbury the entire amount of pay that may become due him, the said O. J. Salisbury, as contractor on said route No. 36128 for the period commencing on the first day of January, A. D. 1879, and terminating June thirtieth, A. D. 1882. This contract to bind the heirs and legal representatives of the parties hereto.
“Witness our hands and seals this 1st day of Mch., A. D. 1879.”
The service required was increased, by additions and expedition, upon orders of the Postmaster-General, arid was performed by the claimant, who received all the payments made. Subsequently the increased service was reduced, and one month’s extra pay on the amount of service dispensed with was $526.16, which has not been paid
II. July 31,1878, William W. Giddings entered into a written contract for carrying the mails on route No. 39116 of similar form and tenor as that set out in finding I.
*408December 20, 1878, tbe claimant became subcontractor by tbe following written agreement which was filed in tbe office of tbe Second Assistant Postmaster-General, who notified tbe Auditor of tbe Treasury Department of tbe fact, according to law :
“This article of contract, made and entered into by and between W. W. Giddings, contractor for carrying tbe United States mails on route No. 39116, between Fort Bascom, New Mexico, and Trinidad, Colorado, and also contractor on route No. 39114, between Fort Stanton, New Mexico, andFortDavis, Texas, of tbe one part, and Monroe Salisbury of tbe other x>art, witnesseth: That whereas tbe said Monroe Salisbury has been accepted by tbe said W. W. Giddings as subcontractor for carrying tbe United States mails on routes No. 39116 and No. 39114, for the period commencing on tbe first day of October, A. D. 3878, and terminating on tbe thirtieth of June, A. D. 1882; now, therefore, and in consideration of tbe acceptance of the said Monroe Salisbury as subcontractor, be, tbe said Monroe Salisbury, doth undertake, covenant, and agree, and by these presents hath undertaken, covenanted, and agreed with, the said "W. W. Giddings to transport tbe United States mails on the above numbered and named routes, and for tbe period above mentioned, in strict accordance with his, tbe saidW. W. Giddings, contracts with the Post-Office Department and in conformity with tbe postal laws of tbe United States, tbe rules and regulations of tbe Post-Office Department, and the orders of the Postmaster-General, and that be will bold himself, the said Monroe Salisbury, responsible in damages to tbe said W. W. Giddings for any and all losses, fines, and penalties that may ensue from any violation of tbe terms of Ms, tbe said W. W. Giddings, contracts with the Post-Office Department, or from any violation of said laws, rules, regulations, and orders.
“In consideration of the above undertakings, covenants, and agreements of the said Monroe Salisbury tbe said W. W. Gid-dings herewith agrees to pay, and by these presents bath agreed to pay, to the said Monroe Salisbury tbe full amount of mail pay that shall from time to time become due to him, the said W. W. Giddings, up to tbe thirtieth day of June, A. D. 1882. This contract to bind tbe heirs and legal representatives of tbe parties thereto.
“In witness whereof we have herewith set our bands and seals this 20th day of December, A. D. 1878.”
Tbe service required was increased, by addition and expedition, upon order of tbe Postmaster-General, and was performed by tbe claimant, who received all the payments made. Subsequently tbe increased service was reduced, and one month’s *409extra pay on tbe amount of tbe service dispensed with was $799.61, wbicb bas not been paid.
III. April 8,1878, John M. Dorsey entered into a written contract for carrying tbe mails on route No. 40104, of similar form and tenor as that set out in finding i. In 1880 tbe claimant became subcontractor by a written agreement, wbicb was filed in tbe office of tbe Second Assistant Postmaster-General, who notified tbe Auditor of tbe Treasury Department of tbe fact, according to law. This contract of subletting bas been lost, but its receipt was acknowledged by tbe Postmaster-General August 23, 1880, and all future dealings were with tbe claimant. Tbe service required was increased, by addition and expedition, upon order of tbe Postmaster-General, and was performed by tbe claimant, who received all payments -made. Subsequently tbe increased service was reduced, and one month’s extra pay on tbe amount of service dispensed with was $1,112.84, wbicb'has not been paid.
IY. March 15,1878, Hugh White entered into a written contract for carrying tbe mails on route No. 45124 of similar form and tenor as that set out in finding i. October 29,1878, tbe claimant became subcontractor by tbe following agreement, wbicb was filed in tbe office of tbe Second Postmaster-General, who notified tbe Auditor of tbe Treasury Department of tbe fact, according to law:
“This article of contract, made this 29th day of October, A. D. 1878, between Hugh White, contractor, with tbe United States Post-Office Department for transporting tbe United States mails on route 45124, from Eureka to Piocbe, State of Nevada, and Monroe Salisbury, subcontractor, witnessetb:
“That whereas tbe said Monroe Salisbury bas been accepted as subcontractor for transporting tbe United States mails on route No. 45124, from tbe 29th day of October, A. D. 1878, to tbe 30th day of June, A. D. 1882:
“Now, therefore, the said Monroe Salisbury does covenant and agree with tbe said Hugh White, and by these presents bas covenanted and agreed, to transport tbe United States mails on tbe above-named route No. 45124, and for tbe period above mentioned; that tbe said Monroe Salisbury will perform said service in strict accordance with- tbe postal laws of tbe United States, the regulations of tbe Post-Office Department, and tbe orders of tbe Postmaster-General, and that be will bold himself, tbe said Monroe Salisbury, responsible in damages to tbe said Hugh White for any and all fines and penalties that may ensue from any violation of said laws, regulations, and orders.
*410“It is also covenanted and agreed by the said Hugh White, in consideration of the above undertaking of said Monroe Salisbury to transport the United States mails on said route No. 45124, and for the further consideration of $100 (the payment of which is hereby acknowledged), that he, the' said Monroe Salisbury, shall be entitled to and receive the entire pay that is or may become due to him, the said Hugh White, contractor on said-route No. 45124.
“This agreement to bind the heirs and legal representatives -of the parties hereto.
“Witness our hands and seals this 29th day of October, A. D. 1878.”
The service required was increased by additions and expedition upon orders of the Postmaster-General, and was performed by the claimant, who received all payments made. Subsequently the increased service was reduced by order of the Postmaster-General April 13, 1881, to take effect May 1, 1881, and one month’s extra pay on the amount of service dispensed with was $2,637.15, which has not been paid.
Y. Said expedited and additional service was required under each of said contracts by the same orders of the Postmaster-General. They were performed in each case by the claimant.
Mr. A. J. Willard for the claimant.
Mr. Henry M. Foote (with whom was Mr. Assistant Attorney-General Cotton) for the defendants.
When the court considered this case upon demurrer its decision overruling it was to the effect that the subcontracts contained a provision to pay the entire compensation provided for in the original contract to the subcontractor, and that the approval of the subcontracts containing these provisions by the Postmaster-General created a privity of contract between the subcontractor and the United States which authorized him to recover not only pay for service performed but also the indemnity for discontinuance of service provided for in the original contract.
We are not inclined to say that the court was not right in this decision upon the allegations contained in claimant’s petition that the subcontracts provided for the payment of the entire compensation stipulated to be paid in the original contracts; but it is thought that there is a distinction tobe made between a stipulation of this character and those actually made which *411only refer to tbe entire pay to become due under tbe original contracts. It does not follow that these provisions necessarily include tbe entire compensation therein provided for, and it would not be an unreasonable construction of these terms to say that tbe words entire pay only comprehend compensation for a service performed. Such is tbe ordinarily accepted meaning of such terms when applied to transactions between individuals.
If A should enter into a contract with B to erect a building for a stipulated sum and tbe contract provided for tbe payment of a specified amount in damages to A in case B annulled tbe contract, and A should subsequently employ 0 with tbe consent of B to perform tbe work and agree to pay him tbe entire pay due under bis contract with B, and B assumed to pay 0, upon tbe annulment of tbe contract could C recover anything in excess of money actually earned? We think not, and that B would have a perfect defense to an action brought by 0 to recover damages for tbe annulment.
It is very clear under tbe decision of tbe court that defendant’s liability in this case is measured by tbe extent of tbe contractor’s liability to tbe subcontractor. Tbe authority of tbe defendant to discontinue this service grows out of tbe original contracts, and unless it is clear that it agreed to paythe subcontractor damages there can be no recovery, and. we contend that no such liability exists.
But whatever view tbe court may take of these suggestions as applied to tbe two subcontracts in question, it is very clear that our contention will apply to tbe subcontract in route No. 39116. There tbe agreement is to pay tbe full amount of mail pay that shall from time to time become due tbe contractor. Nothing is said about tbe entire pay, which we have insisted does not include tbe payment of an indemnity. But tbe mail pay earned from time to time is only spoken of, and this plainly comprehends nothing more than compensation for services, and can not by any possible pretext or misconstruction of its terms be held to include damages. Mail pay, if it. meáns anything, means pay for carrying tbe mails. This, and this only, was agreed to be paid tbe subcontractor. This obligation has been discharged, and now we-insist that no privity of contract exists to pay him damages which can only be recovered by tbe contractor himself.
*412The other objection which is'urged aginst this claim goes to' the foundation of the matter, and is the denial of a liability pay the sum claimed to anyone.
By reference to section 3961, Revised Statutes, it will be noticed that it provides that two facts shall exist before compensation’can be allowed for expedition.
One is, that the number of men and animals shall have been adjusted to a particular schedule.
The other is, that service shall have been performed for a stated compensation on said schedule, in order to establish the basis for extra compensation.
The statute upon this subject is imperative and does not authorize* expedition of service in any other way, and it would therefore follow that any departure from this statutory requirement whereby extra compensation is allowed is illegal and void, not having been made in accordance with the law, (.Moffat v. The United States, 112 TJ. S. R., 24,- Gibbons v. The United States, 8 Wall., 269 ; Whiteside v. The United States, 93 TJ. S. R., 247; Mart v. The United States, 95 TJ. S. R., 316; Mlor v. The United States, 9 Wall., 45.)
This being the law, it is insisted “ that there can be no legal remedy for that which is itself illegal ” (Bank of United States v. Owens, 2d Pet., 527).
Was this order of the Postmaster-General of July 11, 1879, illegal ? It will be noticed that the order provides for two things, increased service and expedition of service. The former is authorized under section 3960 and the latter under section 3961, which has been considered.
It will, therefore, be seen that when the service was expedited there did not exist the conditions which are contemplated in the latter section. There had not been a service performed on a three-trip-per-week schedule of one hundred and twenty hours, and therefore the allowance for expedition could not have been made upon any known and definite basis.
There is another phase of this subject which the court will consider, and it is this: The act of May 17, 1878, which provides for the approval of subcontracts, seems to deal with each contract separately.
“The subcontractor shall file in the office of the Second Assistant Postmaster-General a copy of his contract, and thereupon, etc.”
*413By reference to section 626, Postal Laws and Regulations, 1879 (p. 147), it is provided:
“ That a subcontract must not embrace more than one route and tliat application to sublet must be made separately for each route.”
Tbe court will notice in tbe subcontract under consideration that two distinct routes are embraced in it, and tbe objection urged is that it does not comply with tbe object of tbe statute or tbe requirements of tbe regulation.
Richardson, Cb. J.,
delivered tbe opinion of tbe court:
Tbe court bas drawn tbe findings concisely, to present all tbe facts upon wbicb questions of law arise, none of wbicb are 'controverted, omitting a great mass of details wbicb bave been examined and wbicb, if fully set out, would only obscure tbe real issues.
Tliere were four mail contracts originally made with as many different contractors, under all of wbicb tbe claimant became a subcontractor for tbe whole service. Each contract provided, in accordance with tbe statute, that “in case of decrease, curtailment, or discontinuance of service” there should be paid, “as a full indemnity to said contractor, one month’s extra pay on tbe amount of service dispensed with.”
Tbe service undertaken by tbe claimant was decreased, 'and be sued for one month’s extra pay.
Three points of law are involved, and they bave been thoroughly and ably argued on both sides.
Tbe first question is substantially tbe same as that decided on demurrer (ante p. 52), differing only as to one of tbe four contracts; tbe defendants contending that there is no privity of contract between tbe defendants and tbe subcontractor. Tbe petition demurred to alleged that by tbe terms of each of tbe agreements of subletting tbe claimant was to receive tbe “entire compensation stipulated tobe paid on said contract between tbe United States” and tbe original contractor. Tbe defendants accepted tbe subcontractor and always thereafter made payments to him. This established contract relations between tbe claimant and tbe defendants.
It was urged that tbe privity of contract extended only to tbe amounts due for services actually performed, and not to *414tbe one month’s extra pay on account of service dispensed with and not performed, on tbe ground, as claimed, that tbe month’s extra pay was in tbe nature of liquidated damages for breach of contract on tbe part of tbe defendants. We held that tbe one month’s extra pay for services dispensed with was not a penalty for breach of contract, but was as much a part of tbe original agreement of payment as was that for services actually performed, and we overruled tbe demurrer.
Tbe learned attorney for tbg defendants, no longer contending against tbe ruling of the court on tbe demurrer, now urges that it does not apply to the facts appearing in relation to tbe Giddings contract as set out in finding n.
Tbe agreement of sublettiug, after providing that tbe claimant should perform aE tbe service required by tbe contract, concludes as foEows:
“In consideration of tbe above undertakings, covenants, and agreements of tbe said Monroe Salisbury, tbe said W. W. Gid-dings herewith agrees to pay, and by these presents bath agreed to pay, to tbe said Monroe Salisbury tbe full amount of mail pay that shall from time to time become due to him tbe said W. W. Giddings, up to tbe thirtieth day of June, A. D. 1882. This contract to bind tbe heirs and legal representatives of tbe parties thereto.”
Tbe contention on tbe part of tbe defendants is that this subcontract does not provide for payment to tbe claimant of tbe “ entire compensation stipulated to be paid in said contract,” but only tbe “ full amount of mail pay that shall from time to time become due him,. tbe said W. W. Giddings,” and that “mail pay” moans pay for actual service performed. This, we think, is too narrow a view to be taken of tbe contract of subletting. Tbe intention of tbe parties, as gathered from an instrument and attendant circumstances, must govern its interpretation.
Tbe subcontractor assumed all tbe obligations of tbe contract, was put to all tbe expense of providing horses and carriages, and it would be unreasonable to bold tbe intention of tbe parties to have been that be should not receive tbe one month’s extra, pay for deprivation of tbe earnings which be would have bad for tbe use of so much of bis plant as be would have employed in performing tbe reduced service, and that aE such extra pay should go to tbe original contractor, who owned none *415of tbe plant for tbe loss of use of which.the extra amount was agreed to be paid. We can not interpret tbe contract in that way, but bold that tbe claimant is entitled to recover tbe entire compensation.
Tbe second point arises upon tbe facts found as to tbe White contract, set out in finding rv. Tbe order of tbe Postmaster-General for decreased service was made April 13,1881, to take effect on tbe first day. of May following. Tbe defendants set up tbe statute of limitation, and tbe question is wben tbe cause of action accrued.
On tbe part of tbe defendants tbe contention is that it accrued on tbe date of tbe order, April 13,1881, or wben tbe reduction began, May 1, 1881; in either case more than six years before tbe claimant’s petition was filed.
In our opinion it did not accrue until tbe time came for payment of any balance found due upon a settlement' of tbe claimant’s account under tbe contract for tbe quarter in which tbe decreased service took effect.
Tbe Auditor is required by law to close tbe accounts of tbe Post-Office Department quarterly (It. S., § 277, third par.). Tbe quarters end with March, June, September, and December. Tbe regulations provide that payment shall be made in February, May, August, and November, and mail contracts contain tbe same provision. This gives tbe Department one month in which to ascertain and determine from tbe report of postmasters on tbe route during tbe whole quarter tbe amount of penalties and forfeitures to be deducted for delinquencies, neglect, or malpractice (B. S., § 3962). Wben accounts are thus stated, or might be stated, by tbe Auditor, then, and not till then, do causes of action accrue to recover any balances found due or claimed. Under this contract tbe decreased service belonged to tbe quarter ending June 30,1881, and tbe balance of account for tbat quarter became payable in August, 1881, which was within six years of tbe time of filing tbe petition.
We can not bold tbat tbe claimant could have maintained an action for allowance on account of decreased service any earlier than be could have maintained one for tbe same service actually performed. They both belong to tbe same quarter.
Tbe third objection raised by defendants is tbat tbe Postmaster-General was not authorized by statute to increase ex*416pedition at tbe same time he required additional service; and this objection applies to all the contracts alike.
This is the provision on the subject in the Revised Statutes:
“Sec. 3961.-No extra allowance shall be made for any increase of expedition in carrying the mail unless thereby the employment of additional stock and carriers is made necessary, and in such case the additional compensation shall bear no greater proportion to the additional stock and carriers necessarily employéd than the compensation in the original contract bears to the stock and carriers necessarily employed in its execution.”
It is not necessary to determine whether or not the Postmaster-General exceeded his authority. The claimant performed the services according to contract and is entitled to pay therein agreed upon, even if the Postmaster-General erred in his construction of the statute. He is not in such case to be held responsible for a mistake in the construction of a doubtful provision of law made .by the Postmaster-General in the administration of the duties of his office.
On the whole case the claimant is entitled to recover—
Under tlie Salisbury contract..... $526.15
Under tlie Griddings contract.... 799. 61
Under tlie Dorsey contract.. 1,112.84
Under the White contract... 2,637.15
In all. 5,075.75
Judgment will be entered for the latter sum.