Opinion of the Court.

We think the court erred in the above charge, and the judgment must, therefore, be

Reversed, and the cause remanded with instructions to grant a new trial.

MR. JUSTICE HARLAN dissented.

DISTRICT OF COLUMBIA v. JOHNSON.

DISTRICT OF COLUMBIA v. SHECKELS.

APPEALS FROM THE COURT OF CLAIMS.

Nos. 617, 618. Submitted January 4, 1897. - Decided February 15, 1897.

The act of February 13, 1895, c. 87, 28 Stat. 664, providing that in the adjudication of the claims against the District of Columbia therein referred to, the Court of Claims should allow the rates established and paid by the board of public works, simply conferred a gratuity upon the persons covered by its provisions, which became "due and payable" only from the time when the act which gave it was passed.

The claim of the District of Columbia to offset against any recovery here, the amount of the interest from June 1, 1874, on its counterclaim found due in its favor against the claimants, cannot be admitted.

THE case is stated in the opinion.

Mr. Assistant Attorney General Dodge and Mr. Special Assistant Attorney Howard for appellants.

Mr. J. J. Johnson for Johnson, appellee.

Mr. W. L. Cole for Sheckels, appellee.

MR. JUSTICE PECKHAM delivered the opinion of the court.

These are appeals from the Court of Claims which gave judgments in favor of the appellees in actions commenced by them in December, 1880, pursuant to the provisions of the act

Opinion of the Court.

of June 16, 1880, c. 243, 21 Stat. 284, entitled "An act to provide for the settlement of all outstanding claims against the District of Columbia, and conferring jurisdiction on the Court of Claims to hear the same, and for other purposes." 31 C. Cl. 395.

The actions relate to work done under various contracts with the authorities of the District of Columbia between 1871 and 1876. These contracts were a few among a very large number of others, entered into with the authorities of the District of Columbia by many different persons, and relating to improvements then in contemplation and partly in course of completion in the city of Washington. Those in question here were originally made with one Peter McNamara, in or about the year 1872, for work in the nature of grading, sewering and filling various streets in that city. The contracts. were in writing and stated the specific prices which were agreed upon for the various items of work to be performed under the contract.

At the time when these contracts were entered into, an act of Congress, approved February 21, 1871, c. 62, 16 Stat. 419, forbade the municipal authorities to contract except in writing, and forbade the allowance of extra compensation for work done under a written contract. Notwithstanding this legislative prohibition the board of public works then existing, without authority and in plain violation of the terms of the act, raised the prices agreed to be paid under the contracts with McNamara to what are called "board rates" (that is, rates allowed by the board of public works), the effect of which was to enormously increase the cost of the work done under them. In this way the work upon the improvements went on until in 1874, when Congress, by an act approved June 20, of that year, c. 337, 18 Stat. 116, abolished the District government and substituted another in its stead. The sixth section. of the act constituted the First and Second Comptrollers of the Treasury of the United States a board of audit for the settlement of all unfunded or floating debts of the District of Columbia and of the board of public works as specified in such section, and the section further provided that the board of

Opinion of the Court.

audit should issue to each claimant a certificate signed by the board and countersigned by the comptroller of the District, stating the amount found to be due to each and on what

account.

The seventh section of the act provided that the sinking fund commissioners of the District should cause bonds of the District of Columbia to be prepared, bearing date August 1, 1874, and payable 50 years thereafter, with interest at the rate of 31% per cent per annum, payable semi-annually, which bonds the sinking fund commissioners were authorized to exchange at par for like sums for any class of indebtedness named in the preceding sixth section, including certificates of the auditing board provided in the act. The section contained the following statement: "And the faith of the United States is hereby pledged that the United States will by proper proportional appropriations, as contemplated in this act, and by causing to be levied upon the property within said District such taxes as will do so, provide the revenues necessary to pay the interest on said bonds as the same may become due and payable, and create a sinking fund for the payment of the principal thereof at maturity."

By general resolution, approved March 14, 1876, 19 Stat. 211, Congress abolished the board of audit, and forbade the further issue of bonds.

By another act, approved June 11, 1878, c. 180, 20 Stat. 102, 104, 105, a permanent government was established for the District of Columbia, and in it the commissioners were required to annually make assessments for all expenses of the District, which, upon being submitted to the Secretary of the Treasury and approved by him, were to be laid before Congress; and it was then provided that "to the extent to which Congress shall approve of said assessments, Congress shall appropriate the amount of 50 per centum thereof, and the remaining 50 per centum of such approved assessments shall be levied and assessed upon the taxable property and privileges in said District other than the property of the United States and of the District of Columbia." In this manner Congress assumed the payment of a portion of the bonds and expenses of the District.

Opinion of the Court.

65

Under the authority of these statutes, the bonds of the District of Columbia, carrying interest at the rate of 35 per cent were issued and used to a certain extent in the payment of the indebtedness of the District incurred as above mentioned. In 1880 there still remained outstanding many certificates which had been delivered by the board of audit under the sixth section of the act of 1874, and many accounts against the District were also outstanding and unprovided for.

On the 16th of June, 1880, Congress passed "An act to provide for the settlement of all outstanding claims against the District of Columbia, and conferring jurisdiction on the Court of Claims to hear the same, and for other purposes." c. 243, 21 Stat. 284. That act conferred jurisdiction on the Court of Claims in regard to all such claims against the District of Columbia as then existed, arising out of contracts made by the late board of public works and extensions thereof, and to other claims mentioned in the section; and the act conferred upon the court the same power and provided that it should proceed in the same manner and should be governed by the same rules in respect to the mode of hearing, determination and adjudication of claims as in those against the United States.

The second section provided that the claims should be prosecuted by the contractor, his personal representative or his assignee, in the same manner and subject to the same rules, so far as applicable, as claims against the United States are prosecuted therein. Judgments were to be entered, and for the payment thereof the sixth section provided as follows:

"The Secretary of the Treasury is hereby authorized to demand of the sinking fund commissioner of the District of Columbia so many of the three sixty-five bonds authorized by act of Congress approved June twentieth, eighteen hundred and seventy-four, and acts amendatory thereof, as may be necessary for the payment of the judgments; and said sinking. fund commissioner is hereby directed to issue and deliver to the Secretary of the Treasury the amount of three sixty-five bonds required to satisfy the judgments; which bonds shall be received by said claimant at par in payment of such judgments, and shall bear date August first, eighteen hundred and seventy

Opinion of the Court.

four, and mature at the same time as other bonds of this issue: Provided, That before the delivery of such bonds as are issued in payment of judgments rendered as aforesaid on the claims aforesaid the coupons shall be detached therefrom from the date of said bonds to the day upon which such claims were due and payable; and the gross amount of such bonds heretofore and hereafter issued shall not exceed in the aggregate fifteen millions of dollars: Provided, The bonds issued by authority of this act shall be of no more binding force as to their payment on the Government of the United States than the three sixty-five bonds issued under authority of the act of June twentieth, eighteen hundred and seventy-four."

The mode of payment thus provided for was changed subsequently by a provision in the act approved March 3, 1881, c. 134, 21 Stat. 458, 466, as follows:

"The Treasurer of the United States, as ex officio sinking fund commissioner, is hereby authorized, whenever in his opinion it will be more advantageous for the District of Columbia to do so, to sell the bonds authorized to be issued under the provisions of the sixth section of the act of the Congress of the United States, entitled 'An act to provide for the settlement of all outstanding claims against the District of Columbia, and conferring jurisdiction on the Court of Claims to hear the same, and for other purposes,' approved June sixteenth, eighteen hundred and eighty, for the satisfaction of the judgments which may be rendered by said Court of Claims under the provisions of said act, and pay the said judgments from the proceeds of said sales, instead of delivering to said judg ment claimants the said bonds as provided for in said act."

A large number of actions were brought against the District. under these statutes, and among them the two actions in question. They were brought by the executrix of McNamara and by the assignee of a portion of his claim against the District for the purpose of recovering payment of the balance alleged. to be due under the various contracts which McNamara had secured from the municipal authorities. They were consolidated into one action on motion of the Attorney General, and proceeded to trial before a referee. The referee found upon