U.S. Supreme Court
Kellogg v. United States, 74 U.S. 7 Wall. 361 361 (1868)
Kellogg v. United States
74 U.S. (7 Wall.) 361
An officer of the United States, under authority of Congress, made a contract with D. and S., by which they agreed to furnish bricks to the government. The contract contained a clause that D. and S. should not sublet or assign it. D. and S. having abandoned the contract, it was taken up, with the consent of the officer representing the government, by M. and A., the sureties of D. and S. to the government for its performance. M. and A. then entered into a contract with K., by which he undertook to perform the contract and to receive payment therefor from the United States at the contract price, and to pay over to M. and A. a certain percentage of the amount received, M. and A. constituting him, at the same time, their attorney to furnish the bricks and to receive payment. The government, desiring to abandon their enterprise, proposed to all parties respectively interested on account of their contract &c., that if they would cancel it, the United States would settle with them "on the principles of justice and equity" all damages &c., incurred by them. Held that K. was not a party to, nor interested in the contract.
By an act of March 3, 1853, Congress authorized the commencement of an aqueduct to supply Washington with water. Captain Meigs was appointed to superintend the work.
In January, 1854, Captain Meigs, on behalf of the United chanroblesvirtualawlibrary
States, entered into a contract with Degges & Smith, by which they agreed to furnish for the work a certain number of bricks, for which the United States agreed to pay at a specified rate per thousand. To secure performance, Degges & Smith gave bond, with Mechlin & Alexander as sureties.
The contract between Captain Meigs and Degges & Smith contained a provision that neither the contract, nor any part of it, should be "sublet or assigned."
In March, 1855, Congress having appropriated a certain sum for continuing the work, Captain Meigs gave notice to Degges & Smith, and also to their sureties, Mechlin & Alexander, that there would be required for the work of that season a portion of the bricks. To this notice Degges & Smith made no response, but abandoned their undertaking and failed to comply with their contract.
Degges & Smith having thus made default, Mechlin & Alexander, in order to save themselves from prosecution on their bond, entered into an arrangement with Captain Meigs by which they assumed the contract which had been made with Degges & Smith.
Mechlin & Alexander accordingly made preparations for the manufacture of the bricks necessary to fulfill their contract, but before completing their arrangements, they, in March, 1856, entered into a contract with one Kellogg by which he undertook to furnish all the bricks required and to receive payment therefor from the United States at the contract price and to pay over to Mechlin & Alexander 5 percent of the amount so received, and Mechlin & Alexander by deed constituted him their lawful attorney to furnish the bricks, and to receive payment therefor.
Kellogg continued to furnish bricks, as the agent of Mechlin & Alexander, during the summer of 1856, until what remained of the appropriations for the building of the aqueduct was exhausted, when he received notice from Captain Meigs not to make or deliver any more.
On the 3d of March, Congress passed a joint resolution, containing a proposition to "all parties respectively interested on account of their contract for manufacturing bricks for the chanroblesvirtualawlibrary
Washington aqueduct," that if they would cancel it, the United States would settle with them, "on the principles of justice and equity, all damages, losses, and liabilities incurred by said parties respectively on account of their contract."
After the passage of this resolution, Mechlin & Alexander and Kellogg also accepted the proposition and cancelled the contract.
Upon this, the Secretary of the Treasury proceeded to make the settlement contemplated by said joint resolution, and awarded to Mechlin & Alexander, as the only persons included in the provisions of the resolution, $29,534. Of the sum so awarded by the Secretary to Mechlin & Alexander, Kellogg, accepting it under protest, received $10,476, as the amount he was entitled to receive under his contract with Mechlin & Alexander.
Kellogg now filed his petition in the court below setting forth the facts above stated and insisting that the award of the said sum of money to Mechlin & Alexander, and the exclusion of him from the benefits of the resolution by the Secretary, was erroneous and contrary to the intent of the resolution, and that the Secretary should have awarded him, as the amount he was entitled to receive under the resolution as "a party interested in said contract," the sum of $62,692, to recover which sum and interest, amounting in all to $91,389, the suit was instituted.
To this petition the United States demurred, and the demurrer having been sustained by the Court of Claims and the petition dismissed, the case was now here on appeal.