United States Skinner Eddy Corporation v. Carl 14 18, 1927

Citation72 L.Ed. 131,48 S.Ct. 12,275 U.S. 1
Decision Date10 October 1927
Docket NumberNo. 30,30
PartiesUNITED STATES ex rel. SKINNER & EDDY CORPORATION v. McCARL, Comptroller General. Argued April 14-18, 1927
CourtUnited States Supreme Court

Messrs. Louis Titus and J. Barrett Carter, both of Washington, D. C., for petitioner.

The Attorney General and Mr. Gardner P. Lloyd, of New York City, for respondent.

Mr. Justice BRANDEIS delivered the opinion of the Court.

This is a petition for a writ of mandamus, brought in the Supreme Court of the District of Columbia in October, 1924. The relator, Skinner & Eddy Corporation, seeks to compel the Comptroller General to pass upon its claims against the government. These arise under contracts made during the years 1917, 1918, and 1919 with the United States Shipping Board Emergency Fleet Corporation. Most of the contracts refer to the corporation as 'representing the United States.' The claims were presented to the Comptroller General for allowance, because Skinner & Eddy wished to be in a position to use them as a credit, if the United States should, as was threatened, sue on the contracts. It deemed this course necessary, because section 951 of the Revised Statutes (United States Code, tit. 28, § 774 (28 U. S. C. A. § 774; Comp. St. § 1588)) provides:

'In suits brought by the United States against individuals, no claim for a credit shall be admitted, upon trial, except such as appear to have been presented to the accounting officers of the treasury, for their examination, and to have been by them 'disallowed. * * *'

Compare United States v. Fisher Flouring Mills Co. (D. C.) 295 F. 691; Id. (C. C. A.) 17 F. (2d) 232.

The Comptroller General declines to consider the claims, asserting that he has neither the duty nor the power to do so, and that the duty of passing upon them rests with the Shipping Board.

In 1923, the Fleet Corporation assigned to the United States all of its assets, including accounts against divers persons for the payment of money. Thus the United States is the owner, either as principal or as assign of the Fleet Corporation, of all the claims against Skinner & Eddy. Two actions arising out of these contracts are now pending in the federal court for the Western District of Washington. One is a suit by Skinner & Eddy against the Fleet Corporation, begun in 1923 in a state court of Washington, and removed to the federal court. In that case, the defendant has moved to dismiss the suit on the ground that the claim sued on is one against the United States.1 The other action is a suit by the United States against Skinner & Eddy, commenced in the federal court since this petition for a writ of mandamus was filed.

The question whether the writ of mandamus should issue is presented by a demurrer to the plea and traverse which was interposed to the answer. The Supreme Court of the District sustained the demurrer and dismissed the petition without opinion. Its judgment was affirmed by the Court of Appeals of the District, 56 App. D. C. 52, 8 F.(2d) 1011. This court granted a writ of certiorari. 270 U. S. 636, 46 S. Ct. 205, 70 L. Ed. 773. The government insists that the petition was properly dismissed, because claims arising out of contracts with the Fleet Corporation are not within the jurisdiction of the Comptroller General, and that, even if they were, the relief was properly denied, because his refusal to consider the claims was a disallowance thereof within the meaning of section 951, and thereby the requirement of that section was satisfied. It is conceded that mandamus is an appropriate remedy. Compare Interstate Commerce Commission v. Humbolt S. S. Co., 224 U. S. 474, 32 S. Ct. 556, 56 L. Ed. 849.

The first contention involves a determination of the powers and duties of the Comptroller General and of the United States Shipping Board in respect to claims arising out of transactions of the Fleet Corporation. The powers and duties formerly 'imposed by law upon the Comptroller of the Treasury or the six Auditors of the Treasury Department' were transferred to the Comptroller General by Act of June 10, 1921, c. 18, title 3, §§ 301-304, 42 Stat. 30, 23, 34 (United States Code, tit. 31, § 44 (31 USCA §§ 41-44; Comp. St. §§ 400 4/5-400 4/5 b)). Section 305, amending section 236 of the Revised Statutes (31 USCA § 71 (Comp. St. § 368)), provides:

'All claims and demands whatever by the government of the United States or against it, and all accounts whatever in which the government of the United States is concerned, either as debtor or creditor, shall be settled and adjusted in the General Accounting Office.'2

The language of this grant, if standing alone, might possibly be broad enough to include authority to audit accounts and to pass upon claims arising out of contracts made by a government-owned corporation 'representing the United States.' But here it must be construed in the light of the statutes dealing specifically with the Shipping Board and the Fleet Corporation, of the latter's origin and character, and of the administrative practice prevailing with regard to it and other similar corporations.

The Fleet Corporation was organized on April 16, 1917-ten days after the United States declared war. All of its stock was subscribed and paid for by the Shipping Board on behalf of the United States. And all the stock has been held by it since. The company was formed by the Shipping Board, pursuant to the specific authority to form one or more corporations, which was conferred by the original Shipping Board Act. Act Sept. 7, 1916, c. 451, § 11, 39 Stat. 728, 731 (46 USCA § 810 (Comp. St. § 8146f)). Congress conferred this authority in contemplation of the possibility of war, and it required that any such corporation should be dissolved 'at the expiration of five years from the conclusion of the present European War.' The Fleet Corporation is thus an instrumentality of the government. See United States v. Walter, 263 U. S. 15, 18, 44 S. Ct. 10, 68 L. Ed. 137. But it was organized under the general laws of the District of Columbia, as a private corporation, with power to purchase, construct and operate merchant vessels. The act authorized the Board to sell, with the approval of the President, 'any or all of the stock of the United States in such corporation, but at no time shall it be a minority stockholder therein.' Section 11.

Being a private corporation, the Fleet Corporation may be sued in the state or federal courts like other private corporations; it does not enjoy the priority of the United States in bankruptcy proceedings (Sloan Shipyards Corporation v. United States Shipping Board Emergency Fleet Corporation, 258 U. S. 549, 42 S. Ct. 386, 66 L. Ed. 762), and its employees are not agents of the United States, subject to the provisions of section 41 of the Criminal Code, being 18 USCA § 93 (United States v. Strang, 254 U. S. 491, 41 S. Ct. 165, 65 L. Ed. 368). Compare 34 Op. Attys. Gen. 241.

Government-owned private corporations were employed by the United States as its instrumentalities in several other fields during the World War. The Food Administration Grain Corporation (later called the United States Grain Corporation) was organized under the laws of Delaware under Food Control Act Aug. 10, 1917, c. 53, § 19, 40 Stat. 276 (Comp. St. § 3115 1/8 n). See Act March 4, 1919, c. 125, 40 Stat. 1348, and Executive Orders of August 14, 1917, and March 4, 1919. The United States Spruce Corporation was organized by the Director of Air Craft Production under the laws of the District of Columbia, pursuant to Act July 9, 1918, c. 143, 40 Stat. 845, 888, 889 (Comp. St. §§ 3115 1/32 g-3115 1/32 k), for the purpose of aiding in the production of aircraft material. The United States Housing Corporation was organized under the laws of the District of Columbia by authority of the President, for the purpose of providing housing for war needs under Act June 4, 1918, c. 92, 40 Stat. 594, 595 (3115 5/6 g, 3115 5/6 gg, 3115 5/6 i). The War Finance Corporation was organized under Act April 5, 1918, c. 45, 40 Stat. 506 (15 USCA § 331 et seq. (Comp. St. §§ 3115 4/5 a-3115 4/5 qq)), to assist financially industries important to the successful prosecution of the War. For many years before the War, the government had employed the Panama Railroad Company as its instrumentality in connection with the Canal.3 And, since the War, the Inland Waterways Corporation has been organized by the Secretary of War to operate the government-owned inland waterways system pursuant to Act June 3, 1924, c. 243, 43 Stat. 360 (49 USCA §§ 151-156 (Comp. St. §§ 10071 1/2-10071 1/2 e)). The government likewise has established, and holds all the stock in, the Federal Intermediate Credit Banks, formed under Act March 4, 1923, c. 252, tit. 1, § 205, 42 Stat. 1454, 1457 (12 USCA § 1061), to bring about easier agricultural credits.4

At no time, during the War or since its close, have the financial transactions of the Fleet Corporation passed through the hands of the general accounting officers of the government or been passed upon, as accounts of the United States, either by the Comptroller of the Treasury or the Comptroller General. 5 The accounts of the Fleet Corporation, like those of each of the other corporations named, and like those of the Director General of Railroads during federal control,6 have been audited, and the control over their financial transactions has been exercised, in accordance with commercial practice, by the board or the officer charged with the responsibilities of administration.7 Indeed, an important, if not the chief, reason for employing these incorporated agencies was to enable them to employ commercial methods and to conduct their operations with a freedom supposed to be inconsistent with accountability to the treasury under its established procedure of audit and control over the financial transactions of the United States.8 It is true that a kind of audit of the Fleet Corporation's transactions was later made by the general...

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