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recent passage of the 'Act for the support of the Army,' the appropriation made by the act of Congress approved March 3, 1905, providing for the manufacturing, repairing, procuring, and issuing arms at the national armories, is also applicable. 3. Attention is invited to article 2 of the proposed contract, which states that the parties of the first part shall be paid royalties for all arms and clips manufactured after December 22, 1904. This date is that on which the agreement was made between myself and the attorney for Messrs. Von Lengerke & Detmold, providing for the payment of a license fee of $200,000, to be paid under the terms and conditions stated in the contract inclosed with my letter of February 17, 1905, and on which your decision of February 28 was based. It is thought that as the inclosed form of contract provides substantially for making the same payment, the date of December 22 may be considered as the date of the agreement on which the inclosed form of contract is based, but the terms and conditions of making this payment, as provided for in the within contract, were arrived at between myself and the attorney for Messrs. Von Lengerke & Detmold on March 16 instant. In case an oral agreement between myself and the attorney for Messrs. Von Lengerke & Detmold is an agreement within the meaning of that word, as found on page 5 of your decision of February 28, these dates are accordingly given, with the request that it be stated in your decision from which the royalties shall be computed.
4. As stated in my letter of February 17, Messrs. Von Lengerke & Detmold will be required to furnish a bond in the sum of $50,000 to carry out the stipulations contained in article 4 of the inclosed form of contract.
5. A decision is requested as to whether or not this Department can enter into a contract of the inclosed form."
In paragraph 3 of this communication the Chief of Ordnance invites attention to article 2 of the proposed contract, which provides for the payment of royalties for all arms and clips manufactured after December 22, 1904, and says:
"This date is that on which the agreement was made between myself and the attorney for Messrs. Von Lengerke & Detmold providing for the payment of a license fee of $200,000 to be paid under the terms and conditions stated in the contract inclosed with my letter of February 17, 1905, and on which your decision of February 28 was based.
It is understood by this statement that on December 22, 1904, a verbal agreement was entered into between the Chief of Ordnance, in behalf of the United States, and the attorney of the owners of the letters patent specified in the proposed
contract transmitted by you, by which it was agreed to pay said owners a license fee of $200,000 for the right thereafter to manufacture and use arms containing improved devices for which said letters patent were granted. It is also understood that the United States has since that date manufactured and used arms containing said improved devices. It is further stated by the Chief of Ordnance, in substance, that on March 16, 1905, another verbal agreement was entered into by the same parties which modified the terms of payment of the license fee of $200,000, and that the terms of the latter agreement are incorporated in the proposed contract.
These verbal agreements, not having been "reduced to writing and signed by the contracting parties with their names at the end thereof," as required by section 3744 of the Revised Statutes, are void. But while these specific contracts can not be enforced, the fact that they are void does not necessarily preclude a liability upon an implied contract for the reasonable value of the use of the improved devices. In ordinary cases under similar circumstances such a contract would be implied. (Clark v. United States, 95 U. S., 539.) But in a case involving a tort no contract would be implied. If the arms had been manufactured and used by the United States without the consent of the owners of the patents and without the expectation by them of compensation therefor, a contract would not be implied. Such manufacture and use would be an infringement, which is in the nature of a tort, for which suit against the United States is not authorized. (Schillinger v. United States, 155 U. S., 163; Russell v. United States, 182 U. S., 535.)
But where the Government uses patented improvements with the consent of the owner and with the expectation of reasonable compensation for their use, a contract for such compensation will arise. (United States v. Palmer, 128 U. S.. 269; United States v. Berdan Fire-Arms Co., 156 U. S., 567.)
Therefore, in the present case, if an agreement was made on December 22, 1904, to pay the owners of the patents $200,000 for the right, by the United States, to manufacture and use arms containing improvements for which the letters patent were granted, such agreement, although void, is evidence of the consent of the owners to such manufacture and use, and also of a mutual understanding that the owners were to be
compensated therefor, and I think a contract for compensation based on a quantum meruit must be implied from these facts.
I am also of opinion that the subsequent modification of the terms of payment, if not detrimental to the interests of the Government, may be applied to arms manufactured prior to the time it was made, and that, if the compensation specified is a reasonable compensation for the manufacture and use by the United States of arms containing the patented improvements, both for the period which has expired and for the period subsequent to the date when the proposed contract shall be entered into, you are authorized to enter into a contract containing the provisions specified.
PENSION MONEY RECEIVED BY INMATES OF THE GOVERNMENT HOSPITAL FOR THE INSANE.
Pension money received by an inmate of the Government Hospital for the Insane and paid to the Superintendent of the hospital under the provisions of the act of February 20, 1905, can not be applied to the support of the pensioner in said hospital for time prior to the passage of said act.
Moneys deposited in the Treasury by the Superintendent of the Government Hospital for the Insane, as agent for inmates of the institution, are not moneys paid an officer of the hospital within the meaning of the act of February 20, 1905, and are not available for use by said hospital.
(Assistant Comptroller Mitchell to the Secretary of the Interior, April 6, 1905.)
I have received your letter of the 22d ultimo, as follows:
"By the act of Congress approved February 20, 1905, entitled 'An act relating to the payment and disposition of pension money due to inmates of the Government Hospital for the Insane' (copy herewith transmitted), it is provided, among other things, that during the time any pensioner shall be an inmate of the Government Hospital for the Insane all money due or becoming due on his or her pension shall be paid by the pension agent to the superintendent of the hospital, upon a certificate by such superintendent that the pensioner is an inmate of the hospital and is living; and such pension money shall be by said superintendent disbursed and used under regulations to be prescribed by the Secretary of the Interior for the benefit of the pensioner, etc.
"With a view to carrying into effect the provisions of the tatute, tentative regulations are now under consideration, as copy of which is herewith inclosed. These regulations are necessarily incomplete, by reason of the fact that in the construction of the act two questions have suggested themselves which must be determined before the Department can act finally in the matter:
"First. As to whether the final sentence in this act, which in terms is as follows-this provision shall also be applicable to all unexpended pension money heretofore paid to the offcers of said hospital on account of pensioners who were, but are not now, inmates thereof,' makes the unclaimed balance standing to the account of the superintendent of the hospital, as agent, available for the general purposes of the hospital until expended. At the present time there are on deposit in the Treasury moneys aggregating approximately $50,000, which have been paid into the Treasury by the superintendent of the hospital, as agent, as moneys belonging to patients, a portion of which was doubtless pension money, and the balance was received by the inmates from other sources. No portion of such pension money so covered into the Treasury was ever paid to the superintendent officially, and there is now no means of determining from the records of the Government Hospital for the Insane how much of this fund was pension money and how much was from other sources, as the various persons to whom this money belonged have either died or left the hospital, and their whereabouts is unascertainable. It is presumed that it was the intention of Congress, under this paragraph above recited, to make these moneys on deposit in the Treasury available for uses of the institution as a permanent indefinite appropriation to be available until used; but in view of the facts stated there is some doubt as to the matter.
Second. Whether arrears of pension paid to the superintendent may be charged for the board and maintenance of the pensioner to cover a period prior to the passage of the act of February 20, 1905. A case in point may serve as an illustration of what is meant, to wit: George W. Bastin, certificate No. 1043401, late of Company K, Third United States Infantry, was first admitted to the Government Hospital for the Insane September 22, 1888, discharged June 30, 1893, and readmitted September 1, 1903. An allowance on account of a new disability in this case is now in process of settlement. The first payment will amount to nearly $2,000, the date of the commencement of pension being October 19, 1888. Under the act of February 20, supra, is the superintendent authorized to use any part of the arrears of pension to pay the pensioner's board and maintenance for the period, or any part thereof, from his admission into the hospital, September 22, 1888, to
his discharge, June 30, 1903, and since his readmission, September 1, 1903?
"In cases in which pensioners are receiving $72 per month, or more than sufficient to pay the current expenses of the hospital for board and maintenance, aggregating $20 per month, can any part of the current pension money be used to reimburse the hospital for board and maintenance of the patient, covering any period prior to the date of the passage of the act of February 20, 1905?
"Upon the points above indicated, I have the honor to request that you will favor me with an expression of your views, in order that proper regulations governing the disposition of moneys contemplated in the act of February 20, 1905, may be promulgated at the earliest practicable date."
The act of February 20, 1905 (Public-No. 85), provides:
"That the proviso in the act approved August seventh, eighteen hundred and eighty-two, appearing on page three hundred and thirty of the Twenty-second Statutes at Large, and relating to pensions of inmates of the Government Hospital for the Insane, is hereby stricken out and the following inserted:
"Provided, That in addition to the persons now entitled to admission to said hospital, any inmate of the National Home for Disabled Volunteer Soldiers who is now or may hereafter become insane shall, upon an order of the president of the Board of Managers of the said National Home, be admitted to said hospital and treated therein. During the time that any pensioner shall be an inmate of the Government Hospital for the Insane all money due or becoming due upon his or her pension shall be paid by the pension agent to the superintendent of the hospital, upon a certificate by such superintendent that the pensioner is an inmate of the hospital and is living, and such pension money shall be by said superintendent disbursed and used, under regulations to be prescribed by the Secretary of the Interior, for the benefit of the pensioner, and, in the case of a male pensioner, his wife, minor children, and dependent parents, or if a female pensioner, her minor children, if any, in the order named, and to pay his or her board and maintenance in the hospital; the remainder of such pension money, if any, to be placed to the credit of the pensioner and to be paid to the pensioner or the guardian of the pensioner in the event of his or her discharge from the hospital; or, in the event of the death of said pensioner while an inmate of said hospital, shall, if a female pensioner, be paid to her minor children, and in the case of a male pensioner be paid to his wife, if living; if no wife survives him, then to his minor children; and in case there is no wife nor minor children, then the said unexpended balance to his or her credit
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