brought an action against the United States to recover the land, the Indiana Supreme Court held that the conveyance from the bank to the trustees was prohibited by an act of Congress and was therefore void. Upon appeal to the Supreme Court of the United States, the decision was reversed and remanded for a new trial.]

Mr. Justice Curtis delivered the opinion of the Court.

*

The question, therefore, which arises upon this writ of error is, whether the Supreme Court of Indiana rightly construed the Act of Congress, which is in these words: "That no land shall be purchased on account of the United States, except under a law authorizing such purchase."

The deed in question conveyed the land to Badollett and others, in trust, to sell so much thereof as might be necessary to raise sufficient money to pay a debt due from the bank to the United States. It is clear this was not in any sense a purchase of land on account of the United States. In the land itself, the United States acquired by the deed no interest. They were not even clothed with an equitable right to acquire such an interest through the aid of a court of equity; for their title was not to the whole proceeds of the lands, whatever they might be, but only to so much of them as might be necessary to pay the debt of the bank. To this extent both the creditor and the debtor had the right to insist on a sale, and whatever residue of land should remain, was by force of the deed, operating by means of a shifting, or secondary use, to go to the bank upon payment in full of the debt due to the United States.

It is clear, therefore, that these trustees, and not the United States, took the land under this deed, and that the latter acquited no interest in the land as such. *** If it were necessary, therefore, we should hold that the Act of Congress was not applicable to this conveyance, because by it no title to land was purchased on account of the United States.

But we do not think it necessary to rest the decision of the case exclusively on this ground; for in our judgment the Act of Congress does not prohibit the acquisition by the United States of the legal title to land, without express legislative authority, when it is taken by way of security for a debt. It is the duty of the Secretary of the Treasury to superintend the collection of the revenue, and of the Comptroller of the Treasury to provide for the regular and punctual payment of all moneys which may be collected, and to direct prosecutions for all debts which may be due to the United States. 1 Stat. at Large, 65, 66. To deny to them the power to take security for a debt on account of the United States, according to the usual methods provided by law for that end, would deprive the government of a

means of obtaining payment, often useful, and sometimes indispensably necessary. That such power exists as an incident to the general right of sovereignty, and may be exercised by the proper department if not prohibited by legislation, we consider settled by the cases of Dugan's Ex'rs v. United States, 3 Wheat. 172; United States v. Tingey, 5 Pet. 117; United States v. Bradley, 10 Pet. 343; United States v. Linn, 15 Pet. 290.

These cases decide that the United States, being a body politic, as an incident to their general right of sovereignty, have a capacity to enter into contracts and take bonds, by way of security, in cases within the sphere of their constitutional powers, and appropriate to the just exercise of those powers, through the instrumentality of the proper department, when not prohibited by law, although not required to do so by any legislative act; and we think this same power extends to and includes taking security upon property for a debt already due. The assumption that Congress intended by the Act in question to prohibit the just exercise, is wholly inadmissible. * * *

*

NOTES

1. The positive aspect of the Tingey decision has been consistently followed where the bonds of United States officers are involved. See Jessup v. United States, 106 U.S. 147 (1882); United States v. Hodson, 77 U.S. (10 Wall.) 395 (1870); United States v. Linn, 40 U.S. (15 Pet.) 290 (1841); United States v. Bradley, 35 U.S. (10 Pet.) 34 (1836). The bond, however, must be voluntary. Constable v. National Steamship Co., 154 U.S. 51 (1894).

2. In United States v. Maurice, 26 Fed. Cas. 1211, 1217 (C.C.D. Va. 1823), a decision validating a bond covering the duties of an agent of the United States who had been improperly appointed to office, Circuit Justice Marshall discussed the power of the United States to contract.

"Without entering on the inquiry respecting the limits which may circumscribe the capacity of the United States to contract, I venture to say that it is co-extensive with the duties and powers of government. Every contract which subserves to the performance of a duty, may be rightfully made. The constitution, which has vested the whole legislative powers of the Union in congress, has declared that the president "shall take care that the laws be faithfully executed." The manner in which a law shall be executed does not always form a part of it; a power, not limited or regulated by the words of the acts, has been given by the legislature to the executive, to construct fortifications; and large sums of money have been appropriated to the object. It is not and cannot be denied, that these laws might have been carried into execution by means of contract; yet, there is no act of congress, expressly authorizing the executive to make any contract in the case. It is useless, and would be tedious, to multiply examples, but many might be given to illustrate the truth of the proposition. It follows, as a necessary consequence, that the duty, and of course the right, to make contracts may flow from an act of congress, which does not in terms prescribe this duty; the proposition then is true, that there is a power to contract in every case where it is necessary to the execution of a public duty.” 3. In United States v. Bradley, 35 U.S. (10 Pet.) 34, 359 (1836), the Tingcy decision was described as laying down a “general principle only, without . . .

...

attempting to enumerate the limitations and exceptions, which may arise from the distribution of powers in our government, and from the operation of other provisions in our constitution and laws."

UNITED STATES v. SALON

182 F.2d 110 (7th Cir. 1950)

FINNEGAN, Circuit Judge.

This is an appeal from a judgment for plaintiff, entered in the District Court on complaint, answer and stipulation of facts; it was submitted to this court on briefs without oral argument.

The Government filed its complaint to recover for services rendered under the terms of a written contract with the defendant, who was a motor carrier engaged in the trucking business, in Chicago, Illinois. On May 23, 1945, while the country was at war, the President of the United States issued Executive Order No. 9554 authorizing and directing the Director of the Office of Defense Transportation to take possession and assume control of such plants, facilities or transportation systems owned or operated by motor carriers in or about the City of Chicago which were then interrupted, or about to be interrupted, in their operation by labor disturbances.

Among other provisions of said Executive Order are the following: "The Director of the Office of Defense Transportation is authorized and directed, through or with the aid of any public officers, Federal agencies, or other government instrumentalities that he may designate, *** to operate or to arrange for the operation of the said plants, facilities, and transportation systems in such a manner as he may deem necessary for the successful prosecution of the war; and do anything that he may deem necessary to carry out the provisions and purposes of this order."

Pursuant to said Executive Order the Director of the Office of Defense Transportation, on May 23, 1945, issued a notice and order taking possession and control of the transportation systems of motor carriers subject to the Executive Order, and appointing Ellis T. Longenecker Federal Manager of such systems. **

When the Federal Manager took possession and control of defendant's transportation system, he found the drivers and dockmen on strike.

On July 2, 1945, the appellant-defendant entered into a written contract with the plaintiff, The United States, whereby the carrier agreed to pay the Government for services rendered by drivers and dockmen furnished by the Government for use in the operation of the defendant's transportation system. The contract provided for the manner of determining the payment for such services, as well as the time and place for making such payments.

At the defendant carrier's request, the Government furnished 18 men who worked for a total of 230 hours in serving the carrier as drivers and dockmen. Computed on the basis of the contract, the services thus rendered amounted to $208.94, of which sum the carrier paid the Government $11.13, leaving a balance of $197.81.

Defendant stipulates that he signed the contract, and, that, at his request, services were rendered as claimed in the complaint, but contends that the contract is ultra vires on the part of the Government; that the employees furnished were soldiers who were performing military service on behalf of the Government in rendering assistance in the operation of defendant's transportation system, and that the Government has no right to make a profit for such services.

The record discloses that the drivers and dockmen furnished to the defendant by the Government, were in fact soldiers on active duty in the Army of the United States who were paid their statutory wages by the Department of War.

Appellant raises no question as to the power in the President to issue Executive Order No. 9554 to take possession and control of his system under the existing conditions in furtherance of the war effort. He makes no issue of the legality of using soldiers in executing said order. He does not complain that soldiers drove his trucks while his civilian drivers were on strike. In fact, he admits everything the Government charges, but seeks to have the contract he entered into declared unenforceable. He questions the power of the Government to enter into the contract we have before us.

[1] The United States Government has a capacity to contract which is co-extensive with its duties and powers. ***United States v. Tingey, 5 Pet. 115, 30 U.S. 115 ***.

It seems to us that the sole issue is whether the Government after rendering services to a private citizen in the operation of his business, and at his request, is precluded from enforcing a contract providing for payment of such services by the fact that they were rendered by soldiers in time of war. It should be noted that the Government does not seek recovery for services rendered in protecting defendant's property or in furnishing convoy escort to his vehicles.

Under the circumstances in this case, the Government was faced with a public duty and had the right to enter into a contract to carry out that duty. In United States v. Maurice, 1823, Fed. Cas. No. 15,747, Circuit Justice Marshall, in speaking of the power of the Government to contract, said: "that there is a power to contract in every case where it is necessary to the execution of a public duty."

The President had the power to issue Executive Order No. 9554, and had the power to delegate his authority, and did delegate that authority to the Director of Defense Transportation, who named a Federal Manager. The strike in the appellant's transportation system

interfered with its operation and with the war effort. Civilian drivers and dockmen were on strike, therefore soldiers of the Army served as such under voluntary written agreement made with the appellantdefendant. The latter agreed to pay for such services. The Government had fulfilled its part of the contract in the execution of its duty and in furtherance of the war effort.

The judgment of the District Court is therefore affirmed.

NOTES

1. In United States v. Speed, 75 U.S. (8 Wall.) 77 (1868), the Court held that the United States had breached a contract to furnish live hogs and cooperage to private persons for slaughtering and packing. In response to the Government's contention that pork-packing and curing bacon was not a business within the scope of the powers of the Secretary of War, the Court concluded: "If by this is meant that the War Department has no authority to enter into the business of converting hogs into pork, lard and bacon, for purposes of profit of sale as individuals do, the proposition may be conceded. But, if it is intended to deny to the department this mode of procuring supplies when it may be the only sufficient source of supply for the army, the proposition is not sound. The Commissary Department is in the habit, and always has been, of buying beef cattle and having them slaughtered and delivered to the forces. Is there no power to pay the butchers who kill for their services? That is just what the claimants contracted to do with the hogs which the government had purchased of other parties, and it is for this butchering and curing the meat that the government agreed to pay. The proposition places a construction altogether too narrow on the powers confided to the War Department in procuring subsistence, which in time of war, as this was, must lead to great embarrassment in the movement and support of troops in the field."

2. In United States v. Russell, 80 U.S. (13 Wall.) 623 (1871), the Court acknowledged that the emergency of war and the doctrine of "military necessity" justified the requisitioning by the military of private property. The Government, however, was required to make full compensation to the owner.

DUGAN v. UNITED STATES

16 U.S. (3 Wheat.) 172 (1818)

ERROR to the circuit court for the district of Maryland.

By the special verdict in this cause, it appeared, that on the 22d of December, 1801, Aquila Brown at Baltimore, drew a bill of exchange on Messrs. Van Staphorst & Co. at Amsterdam, for 60,000 guilders, payable at 60 days sight, to the order of James Clarke, the defendants' testator. James Clarke endorsed the bill to Messrs. Brown & Hackman, who afterwards endorsed it to Beale Owings, who endorsed the same to Thomas T. Tucker, Esq. treasurer of the United States, or order, and delivered it to him as treasurer as aforesaid, who received it in that capacity, and on account of the United States. It further