decided: December 2, 1912.
APPEAL FROM THE COURT OF CLAIMS.
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MR. JUSTICE PITNEY, after stating the case as above, delivered the opinion of the court.
The appellant, by his amended petition, asked for a recovery against the Government in the sum of twenty
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million dollars and interest, as the purchase price upon an alleged assignment and transfer in the year 1893 of certain inventions pertaining to pneumatic transportation for which letters patent had been theretofore issued to him as mentioned in the findings. His first insistence was and is that these inventions and patents had been purchased by the Postmaster-General under an express agreement to pay him the sum mentioned as consideration. In the alternative he insisted and now insists that at least the Government, with his consent, entered into the use and enjoyment of his devices and letters patent in the year 1893, and has ever since then used and enjoyed them, and ought to pay him their fair value, which he places at twenty million dollars. The facts from which the alleged contract of purchase (express or implied) is sought to be deduced are set forth in the findings of fact above referred to. These findings are criticised by the appellant on the ground that they constitute a mere recital of the evidence, instead of an ascertainment of the ultimate facts. This criticism, under the circumstances of the present case, is captious. The court has set forth the documents upon which alone must rest appellant's contention of an express contract, if that contention have any substantial basis; and has likewise set forth the history of the transactions from which, if at all, an agreement must be implied, if there was no express contract. At the same time the court has expressly found that "The evidence does not establish to the satisfaction of the court that plaintiff's letters patent were conveyed or delivered to the Postmaster-General;" and has made a similar negative finding respecting the appellant's claim to be the first inventor of the devices for pneumatic transportation used, operated and conducted for the transportation of mail matter by persons contracting with the United States or by the agents of the United States; and a similar negative finding respecting his claim that his letters patent "covered the
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same devices actually put into practical operation and used by the corporation which under an act of Congress contracted with the Postmaster-General for transmitting mail matter through pneumatic conveyors."
A fundamental obstacle stands in the way of appellant's claim, whether it be rested upon an express or an implied purchase of pneumatic devices or of patented inventions relating thereto. We refer to the lack of power on the part of the Postmaster-General to contract in behalf of the Government of the United States for such a purchase. Sec. 6 of the post-office appropriation act of July 13, 1892 (27 Stat. 145, c. 165), provided merely -- "that the Postmaster-General is hereby authorized and directed to examine into the subject of a more rapid dispatch of mail matter between large cities, and post-office stations and transportation terminals located in large cities, by means of pneumatic tubes or other systems, and make report upon the expense, cost and advantages of said systems when applied to the mail service of the United States, and the sum of ten thousand dollars is hereby appropriated therefor."
Manifestly the appropriation was intended for the purpose of investigation and report, and did not extend to authorizing such a purchase as that which the appellant alleges.
Of this limitation upon the authority of the Postmaster-General the appellant had plain notice at the inception of his dealings with that official. Not only did the advertisement of July 26, 1892, begin by referring to the above-recited clause of the appropriation act, but it contained, near its close, this express declaration: "The Postmaster-General has no authority in law to contract for the expenditure of money for the use of or purchase of any such invention, nor is there any existing appropriation out of which the cost of the same could be paid."
Appellant insists that under other acts of Congress the
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Postmaster-General had authority to purchase the inventions and devices in question. Reference is made to § 3965, Rev. Stat., enacting that "The Postmaster-General shall provide for carrying the mail on all post-roads established by law, as often as he, having due regard to productiveness and other circumstances, may think proper." This is one of the sections that prescribe the general duties of the Postmaster-General, and cannot be fairly treated as authority for making the alleged contract of purchase. Successive appropriation acts are referred to. Act of June 9, 1896 (29 Stat. 313, 315, c. 386), authorizing the Postmaster-General, in his discretion, to use not exceeding $35,000 in the transportation of mail by pneumatic tube or other similar devices, contains no authorization of purchase. Act of March 3, 1897 (29 Stat. 644, 646, c. 385), authorizes the use of not exceeding $150,000 in the transportation of mail by pneumatic tube or other similar devices, "by purchase or otherwise." But this was enacted more than four years after the last transactions (so far as the record shows) between the appellant and the Postmaster-General, out of which it could possibly be claimed that any contract, express or implied, had arisen. For like reasons, subsequent statutes that are referred to (Act of June 13, 1898, 30 Stat. 440, 442, c. 446; Act of March 1, 1899, 30 Stat. 959, 963, c. 327; Act of June 2, 1900, 31 Stat. 252, 258, c. 613; Act of July 1, 1898, 30 Stat. 597, 615, c. 546; Act of March 3, 1899, 30 Stat. 1074, 1092, c. 424) must be rejected. They indicate that pneumatic tube service was in operation in Philadelphia, New York City, Brooklyn, Boston, and perhaps elsewhere; but they have no reference to any transactions between the Postmaster-General and the appellant.
But if the obstacle arising out of the actual and avowed want of authority on the part of the Postmaster-General could be overcome, the appellant's case is still fatally
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weak upon the question whether any contract was in fact made, either expressly or by implication from the conduct of the parties.
The contention that there was an express contract rests upon the fact that the Postmaster-General retained the appellant's proposal without in terms rejecting it. The argument is untenable for several reasons, some of which may be stated.
First, it ignores the fact that the proposal was submitted in response to an advertisement which plainly stated that the proposals were desired for the purpose of investigation and estimate merely, and that the Postmaster-General had no authority to contract for the expenditure of money for the use or purchase of any such invention.
Secondly, it treats the appellant's proposal as an assignment in presenti of his inventions and patents to the United States, and nothing else. It was not, either in form or substance, an assignment, but (so far as it had reference to a sale), merely purported to state the terms upon which Beach proposed and offered to sell, and manifestly contemplated that something should be done on each side before the inventions should in fact become the property of the United States. It is significant that one of the terms of the proposal was: "This proposal is made upon condition and the same shall not be binding upon the undersigned unless the United States shall by the Postmaster-General accept said propositions, or one of said propositions, and shall notify me, the undersigned, of said acceptance on or before the first day of August, A.D. 1893."
Thirdly, the proposal was not a mere offer to sell the inventions and patents. It contained four several propositions, acceptance of either one of which involved rejection of the remaining three; that is to say, Beach offered (a) to invest in the United States all of his rights under
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the patents in all States and Territories excepting Maine, New Hampshire, Connecticut, Rhode Island, Michigan, and the District of Columbia, in consideration of $800,000 per annum, this offer being without limit as to the use to which the patented devices should be put; (b) to assign and transfer to the United States all rights in the patents in all the States and Territories saving those just mentioned for twenty million dollars, (this of course contemplated an absolute sale); (c) to invest in the United States all his rights under the two patents ("the said pneumatic devices or conveyors to be used solely and only for the purpose of collecting and transmitting the United States mails, and for no other purpose") in the entire United States excepting the States already mentioned and the District of Columbia, in consideration of an annual payment of $354,580.20, and (d) to "license or lease to the United States for mail purposes only" the right to construct and operate his pneumatic conveyors anywhere in the United States, excepting the States already mentioned and the District of Columbia, "upon reasonable and equitable terms, and for a reasonable consideration to be paid to me . . . the amount thereof to be agreed upon by the United States and the undersigned, James W. Beach, (either by mutual agreement or by arbitration), . . . said consideration to be based upon the mileage of the pneumatic tubes to be used, or upon a small percentage of the total (present) annual cost of the transportation of the United States mails within said United States." It is evident that a retention of the proposal without dissent could not be deemed an acceptance of proposition (b) any more than of (a), or of (c), or of (d); and so the act of retention (if there were no obstacle arising out of the want of authority on the part of the Postmaster-General) cannot be treated as an acceptance of either one of the four several propositions.
For these and other reasons, the Court of Claims was
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clearly right in holding that the evidence did not establish that the letters patent were conveyed or delivered to the Postmaster-General.
The theory of implied contract is likewise untenable. In the first place, the want of statutory authority on the part of the Postmaster-General to represent the Government in making an express contract is equally fatal to the theory of an implied contract. For it is fundamental that he who is without authority to bind his principal by an express contract cannot be held to have done so by implication.
Another and sufficient answer is that the appellant has failed to show any use by the Postmaster-General or his successors of the patented inventions or devices of the appellant, or to show that the contractors or agents of the Government have made any use of them. His case here fails because he does not show that the inventions or devices used are those covered by his patents.
Therefore the Court of Claims correctly held that the appellant had not made out a case of contract.
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