United States v. McCoy

This suit was commenced by the government to recover an amount alleged to be due on a bond to secure the performance of a contract to carry mail. The defendants were McCoy, the contractor and principal in the bond, and his sureties. The cause was put at issue by a general denial, and was tried in November, 1899. The government prosecuted error from a judgment of nonsuit which was entered against it. The circuit court of appeals for the ninth circuit decided that the trial court was 'right in holding that the documents offered in evidence by the plaintiff were legally insufficient to make out a prima facie case for damages on account of the alleged entire failure of McCoy to perform the service provided in his contract.' It was, however, held that a prima facie right to recover the amount of a fine of $5 had been established. The judgment was, therefore, reversed and the case remanded for a new trial. 44 C. C. A. 125, 104 Fed. 669. A second trial took place in May, 1901. At that trial the case made by the government was as follows: McCoy, being the lowest bidder, was awarded a contract for carrying the mails from July 1, 1890, to June 30, 1894, between the postoffice at San Francisco and certain railroad stations and steamboat landings, and executed the bond which was sued on. On May 3, 1893, the postmaster at San Francisco telegraphed the Postoffice Department that, under a judgment rendered against McCoy, the sheriff had seized the wagons used by him in executing his contract, and would sell them on May the 5th; that the probable result of this sale would be to render it impossible for McCoy to continue to perform his contract, and that some temporary arrangement would be necessary, and asking instructions in the premises. Three days later, on May the 8th, the postmaster telegraphed the Department that the service had been absolutely abandoned by McCoy, and that a temporary arrangement had been made, to last until the Department could act. On the day after the receipt of this telegram (May 9) the Postoffice Department addressed a letter to McCoy, care of Zevely and Finley, Washington, D. C., giving the substance of the two telegrams above referred to, and asking if McCoy intended to carry out his contract. On May 17 the Department telegraphed the sureties on McCoy's bond, informing them that McCoy had failed to perform his contract, and inquiring if they would assume the service. On the same day the Department by telegram informed the postmaster at San Francisco that his action in providing a temporary arrangement for the performance of the service was approved. On May 18 a telegram was received by the Department from one of the sureties of McCoy, saying that he, the surety, was unable to perform the contract, and requesting to be relieved from all future liability on the bond, because his signature thereto had been 'improperly obtained.' On the same day (May 18) a finding was made by the Postmaster General that McCoy was a failing contractor, this finding being evidenced by the following certificate:

State of California. No. 76,475.

Regulation wagon service, San Francisco, San Francisco     county. Contractor, C. C. McCoy. Pay, $7,700.00.

Whereas C. C. McCoy, contractor on this route under the     advertisement of September 16, 1889, has failed to perform      the service, he is hereby declared a failing contractor.

W. S. Bissell,

Postmaster General.

Date, May 18, 1893.

The Department subsequently advertised for proposals for the remaining period of McCoy's term, and the same was let to one Popper, and a contract entered into with him on the subject. Thereupon the auditor of the Postoffice Department stated the account of McCoy as a failing contractor. That account charged on the debit side the sum paid for temporary service from May 5 to August 13, 1893, the date when the new contract was awarded, and also the difference between the amount stipulated to be paid in the McCoy contract and that which the government had contracted to pay Popper, the new contractor, from August 14, 1893, to June 30, 1894, when the McCoy contract would have terminated. The account, moreover, stated a charge against McCoy of $5, the amount of a fine which had been imposed on him by the Department during the third quarter of 1893. McCoy was credited with the whole sum which he would have earned had he performed his obligations, the balance to the debit being the amount sued for, $5,772.99. After the government had shown the facts above stated, it rested its case, and the defendant offered no evidence whatever.

The government then requested an instruction in its favor on the ground that a prima facie case of liability had been proven. Exception was taken to the refusal of the court to give this instruction.

The court charged the jury as follows:

'It will not be necessary for you to retire to consider this case. You can render a verdict from your seats. This is an action in which the government sued to recover damages for breach of a mail contractor's bond-breach of the contract. The action is against the contractor and the sureties upon his bond. The government claims damages for the total abandonment of the contract without having performed it, and as to that claim all the evidence that has been offered on the part of the government is insufficient to prove that there was an abandonment, there being no testimony of any witness having knowledge of the fact that the contractor did fail. The evidence includes the statement of account made up by the auditing department of the government, in which there appears to have been a fine of $5 imposed upon the contractor for a particular failure, and in accordance with the decision of the circuit court of appeals for this circuit that evidence is sufficient prima facie to entitle the government to recover the $5, and the defendants here in open court have admitted liability for that $5. Therefore your verdict will be in favor of the government for the sum of $5. I have prepared a verdict which you will select one of your number to sign as foreman, and that will be your verdict in the case.'

To this instruction the government saved an exception. From a judgment in favor of the defendant for all but $5 of the amount claimed, the government prosecuted error. The circuit court of appeals affirmed the judgment upon the authority of the ruling made by it when the case was previously before it. This writ of error was thereupon prosecuted.

Assistant Attorney General Purdy for plaintiff in error.

Mr. E. C. Hughes for defendants in error.

Statement by Mr. Justice White:  Mr. Justice White, after making the foregoing statement, delivered the opinion of the court: