Parsons v. District of Columbia

Mr. Justice Van Orsdel

delivered the opinion of the Court:

It is clear that this is not a contract of the District, executed on its behalf by the commissioners acting under general authority vested in them for that purpose. In the act of Congress of June 11, 1878 [20 Stat. at L. 106, chap. 180, § 5], creating a permanent form of government for the District of Columbia, the commissioners are limited in their power to make contracts on behalf of the District as follows: “All contracts for the construction, improvement, alteration, or repairs of the streets, avenues, highways, alleys, gutters, sewers,, and all work of like nature, shall be made and entered into only by and with the official unanimous consent of the commissioners of the District; and all contracts shall be copied in a book kept for that purpose, and be signed by the said commissioners; and no contract involving an expenditure of more than $100 shall be valid until recorded and signed as aforesaid.”

Construing this authority, the court in District of Columbia v. Bailey, 171 U. S. 161, 176, 43 L. ed. 118, 125, 18 Sup. Ct. Rep. 868, said: “Recurring to the statutes relating to the commissioners of the District of Columbia, it is clear from their face that these officers are without general power to contract debts, or to adjust and pay the same; that, on the contrary, the statutes expressly deprive them of such power, and limit the scope of their authority to the mere execution of contracts previously sanctioned by Congress, or which they are authorized to make by express statutory authority. The necessary operation of these provisions of the statutes is to cause the District commissioners to be merely administrative officers, with ministerial powers only. * * * By the express terms of the statute the commissioners are forbidden to enter into any contract binding the District for the payment of any sum of money in excess of $100, unless the same is reduced to writing, and is recorded in a book to be kept for that purpose, and signed by all the commissioners, the statute declaring, in express terms, that no contract shall be valid unless recorded as aforesaid. This mandatory provision of the statute clearly makes the form in which a contract is embodied of the essence of the contract. In other words, by virtue of the restrictions and inhibitions of the statufe, a contract calling for an expenditure in excess of $100 cannot take effect unless made in the form stated. The form, therefore, becomes a matter of fundamental right, and illustrates the application of the maxim Forma dat esse rei."

It is therefore insisted by counsel for the District that, if the commissioners attempted to bind the District to a contract beyond the limitations of the statute, or in any other manner than as therein provided, such action would be void. This would undoubtedly be true, were it not that they were acting under express authority of Congress. It is well settled that a municipal corporation possesses only those powers, first, “granted in express words; second, those necessarily or fairly implied in or incident to the powers expressly granted; third, those essential to the declared' objects and purposes of the corporation, — not simply convenient, but indispensable.” United States ex rel. Daly v. Macfarland, 28 App. D. C. 552. This is a clear expression of the inherent power of the municipality to act through its officers. But counsel overlook the fact that Congress, having general plenary power to legislate for the District, may by special act create an agency to contract for the municipality in a particular matter, and bind it to a fulfilment of that contract. The limitations placed upon the commissioners, and the necessity of recording contracts made in the exercise of their general powers, would not attach to such a contract. We think that is just where this case turns. A special agency was created by Congress to enter into a' contract for the erection of the building in question. The contract was made either on behalf of the United States or the District of Columbia. Congress had full power to create the agency for either purpose, and we must look to the terms of the acts to ascertain for whom the commission was in fact acting.

It will be found by reference to the acts of Congress construed together, — and they must be so considered, — that before the contract in question was made, the title to the property had passed to the District; and it is specifically stated that the building shall be “for the accommodation of the municipal and other offices of the District of Columbia.” It also appears from the allegations of the petition, which are admitted by the demurrer, that the contract was made upon the theory and understanding that the building was being erected for the District. We think from the language of the statutes there is no escape from this conclusion. This case is not analogous to that of the government acquiring title to land in a State, and jurisdiction over the same by cession from the State, for the purpose of erecting thereon a building to be used exclusively for governmental purposes. Here Congress acts as a legislature for the District of Columbia. It provides by statute for public improvements within the District, and not only regulates their use, but the manner in which the expense shall be paid. In this instance, the act provided for the payment in the usual manner in which District obligations are paid, — one half by the government and one half out of the revenues of the District. This provision as to payment is in accordance with the law under which the revenues of the District are acquired and disbursed in conducting its affairs.

While, therefore, we think there is no escape from the conclusion that this building was constructed for the District, and that the municipal commission in making the contract in question acted on behalf of the District, we are confronted with the more serious proposition of the extent of the power of the commission to obligate the District. It is clear that the commissioners of the District of Columbia, acting in conjunction with the Secretary of the Treasury, were not exercising the general powers conferred upon them as commissioners to contract on behalf of the District. It is insisted that, inasmuch as this contract involved the expenditure of more than $100, and was not recorded in a book kept for that purpose, in which such contracts are reqiiired by law to be recorded, the action is not binding upon the District. As we have suggested, the commissioners were here acting as special agents appointed by Congress, in conjunction with the Secretary of the Treasury, to make this contract. Congress could have named any other agency, whose action would have had the same force and effect as that of the municipal commission. The action of either, so long as it proceeded within the strict letter of the acts of Congress delegating the authority and directing the action to be taken, would be legal and binding upon the District of Columbia. But it also follows that the power of this agency is limited and defined by the strict terms of the acts conferring it. The duty imposed upon the District commissioners was not a part of their general official duties, but an extra-official,, superadded duty imposed upon them for the purpose of contracting for the erection of this building, and no other.

In. McGraw v. District of Columbia, 3 App. D. C. 405, 25 L.R.A. 691, the court, considering the liability of the District for damages caused by the erection of a swimming pool by the commissioners of the District, under a special act of Congress,, said: “It may well be doubted whether the act of Congress that, has been cited in this case was intended to impose any duty upon the District of Columbia, such as is sought to be enforced in the present suit. The act is permissive in its character, and not mandatory. It is not mandatory, either upon the Secretary of War, to permit the use of the public grounds for the purpose in question, or upon the commissioners of the District, of Columbia, to carry the purpose into effect. And even if it, should be assumed that there was a duty imposed by it, from which a liability might accrue, it’- is not at all clear that the District of Columbia is chargeable with that duty, which was laid by express terms, not on the District as a municipality, but upon the commissioners of the District as a superadded obligation.” But in that case, as in a number of others cited by counsel for the District, the improvement was constructed by the. commissioners,, by permission of Congress, on land belonging to the United States. On this point we think these cases turn, and are distinguishable from the case at bar. The mere fact of a special agency being created to make the contract, and of Congress directing that supervision of the work should be by an officer appointed by the President, does not affect the question of liability. These are only details of administration over which Congress has full control. The building was still being erected for the District of Columbia. The same power that created the office of commissioner and placed upon its incumbents certain limited administrative functions, can enlarge those powers in a particular case, and direct their action on bqhalf of the District, either as commissioners, or as individuals, in connection with others, constituting a special commission. While, as suggested, this commission is strictly limited in its action to those powers clearly conferred by the acts of Congress, yet the Acts must be given a liberal construction, in order to effect the evident intent of Congress.

It is insisted that the municipal commission was limited to malting a single contract, because, by the terms of the act. of Congress, it was only authorized to contract for the erection of this building. The word “contract,” as there used in the singular, relates to the power conferred upon the commission, and not to the number of instruments it might be necessary to execute in order to accomplish the end authorized. We think the commission was authorized to make one or more contracts as it deemed advisable, so long as, through the various contracts made, the purpose of the acts — the erection of the building within the amount appropriated for that purpose — was accomplished.

This brings us to the crucial question in this case. The powers of the commission being limited to contracting for the erection of this building for a certain fixed amount of money, could it, either by additional contract, or by a provision in a contract, indirectly obligate the District to pay a greater sum than that appropriated for the purpose ? It is contended that this would be the practical effect were we to hold that the District is liable in this action. We do not so regard it.

The absurdity of this contention becomes apparent when it is remembered that every contract of importance entered into by the commissioners on behalf of the District of Columbia is for the expenditure of a specific appropriation, the full amount of which is usually embraced in the original contract or contracts. Followed, therefore, to its final analysis, the position of counsel would lead to a' declaration that in no instance, except where a portion of the fund specifically appropriated remained available, would the District be liable for damages for the breach of a contract. The claim here is not based upon a contract in excess of the amount appropriated, but is in the nature of damages for a breach of the contract by one of the contracting parties. The provision in appellant’s contract requiring the District, through this commission, to deliver the stone Within a specified time, was a reasonable and proper one. If the commission was dependent upon another contractor to furnish the stone, good administration would have called for a bond indemnifying the District against loss. If such precaution was not taken, the loss becomes one which municipalities, as well as the government itself, are sometimes called upon to suffer through the delinquencies of its officers and agents. In the absence of such precaution, however, the District is not estopped from recovering from the stone contractor, should it 'be held, liable in the present suit. It is well settled that, when a municipal corporation has been held liable for damages resulting from the negligence or breach of a third party, it has a remedy over against such party, unless the corporation has concurred in the wrong. Chicago v. Robbins, 2 Black, 418, 17 L. ed. 298. In the case at bar the party contracting to furnish the stone, through whose apparent delay the alleged damage has been sustained, might have been notified to appear and defend in the present suit. Such notice, however, is not necessary to create a liability, and, if he has knowledge of the pendency of the present action, he will be concluded by a judgment recovered against the District, resulting from his negligence and delay in furnishing the stone according to the terms of his contract, unless, as we have suggested, his action was concurred in by the District, or he was not in fact obligated in such manner as to render him liable.

There was nothing sacred about the particular fund appropriated to erect this building. It came into the District treasury as do other revenues. It was used as revenue is generally used, for the purposes for which it was so raised. If there has been a default on the part of the District, it will have to be made up out of its treasury, which derives its resources from the same source as that from which this particular fund came.

We are of opinion that the so-called municipal commission contracted for work to bo done for the District of Columbiá, and, if any breach occurred in the contract by which the appellant was damaged, a cause of action exists. The judgment is reversed, with costs, and the cause remanded, with instructions to proceed in accordance with this opinion. Reversed.