United States v. Mescalero Apache Tribe

The proceeds of all pasturage and sales of timber, coal, or other product of any Indian reservation, except those of the five civilized tribes, and not the result of the labor of any member of such tribe, shall be covered into the Treasury for the benefit of such tribe under such regulations as the Secretary of the Interior shall prescribe; and the Secretary shall report his action in detail to Congress at its next session.

That the Secretary of the Interior is hereby authorized to use the money which has been or may hereafter be covered into the Treasury under the provisions of the act approved March third, eighteen hundred and eighty-three, and which is carried on the books of that Department under the caption of "Indian moneys, proceeds of labor," for the benefit of the several tribes on whose account said money was covered in, in such way and for such purposes as in his discretion he may think best, and shall make annually a detailed report thereof to Congress.

* * * That hereafter all miscellaneous revenues derived from Indian reservations, agencies, and schools, which are not required by existing law to be otherwise disposed of, shall be covered into the Treasury of the United States under the caption "Indian moneys, proceeds of labor," and are hereby made available for expenditure, in the discretion of the Secretary of the Interior, for the benefit of the Indian tribes, agencies, and schools on whose behalf they are collected, subject, however, to the limitations as to tribal funds, imposed by section 27 of the Act of May 18, 1916 (Thirty-ninth Statutes at Large, page 159).

It is conceded that there is no legal obligation to pay interest on these funds * * *.

* * * That all money in excess of $500 held by the United States in a trust fund account, and carried on thePage 1314books of the Treasury Department to the credit of an Indian tribe, if the payment of interest thereon is not otherwise authorized by law, shall bear simple interest at the rate of 4 per centum per annum from the date of the passage of this Act. * * *

Sec. 2. All tribal funds arising under the Act of March 3, 1883 (22 Stat. 590), as amended by the Act of May 17, 1926 (44 Stat. 560), now included in the fund `Indian Money, Proceeds of Labor,' shall, on and after July 1, 1930, be carried on the books of the Treasury Department in separate accounts for the respective tribes, and all such funds with account balances exceeding $500 shall bear simple interest at the rate of 4 per centum per annum from July 1, 1930.

[24] § 2516. Interest on claims and judgments.

(a) Interest on a claim against the United States shall be allowed in a judgment of the Court of Claimsonlyunder a contract or Act of CongressPage 1315expressly providing for payment thereof.[Emphasis supplied.]

* * * The objection to a suit against the United States is fundamental, whether it be in the form of an original action, or a set-off, or a counterclaim. Jurisdiction in either case does not exist, unless there isspecific congressional authorityfor it. * * * [Id.at 106,45 S.Ct. at 25] [Emphasis supplied.]

The United States, as sovereign, is immune from suit save as it consents to be sued,United Statesv. Thompson,98 U.S. 486,25 L.Ed. 194;UnitedStates v. Lee,106 U.S. 196,1 S.Ct. 240,27 L.Ed. 171;Kansas v. United States,204 U.S. 331,27 S.Ct. 388,51 L.Ed. 510;Minnesota v. UnitedStates,305 U.S. 382,387,59 S.Ct. 292,294,83 L.Ed. 235;Keifer Keifer v. Reconstruction FinanceCorp.,306 U.S. 381,388,59 S.Ct. 516,517,83 L.Ed. 784;United States v. Shaw,309 U.S. 495,60 S.Ct. 659,84 L.Ed. 888. See cases cited inThePesaro,D.C.N.Y., 277 F. 473, 474,et seq.,and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit.Minnesota v. United States, supra,305 U.S. 388,59 S.Ct. 292,83 L.Ed. 235and cases cited; cf.Stanley v. Schwalby,162 U.S. 255,270,16 S.Ct. 754,760,40 L.Ed. 960. * * * [Id.at 586-87,61 S.Ct. at 770.]

It is beyond argument that the United States may be sued only where its immunity has been specifically waived by statute, and thatsuch waiver may not beimplied in the construction of an ambiguous statute.[Emphasis supplied.] [Id.at 354.]

The government does not consent to be sued byimplication,and consent to be sued should not be extended beyond the plain terms of the authorizing statute.Price v. United States and Osage Indians,174 U.S. 373,19 S.Ct. 765,43 L.Ed. 1011;EasternTransportation Co. v. United States,272 U.S. 675,47 S.Ct. 289,71 L.Ed. 472; * *. [Emphasis supplied.] [Id.at 84.]

It is fundamental that the United States cannot be sued without its permission, and that permission must be specifically granted by Congress.It will not beimplied.It is a deep-rooted principle in the fabric of all English speaking countries that a sovereign is immune from suits in its own courts. InNassauSmelting Refining Works, Ltd. v. United States,266 U.S. 101,106,45 S.Ct. 25,69 L.Ed. 190, the court said: "The objection to a suit against the United States is fundamental, whether it be in the form of an original action, or a setoff, or a counterclaim. Jurisdiction in either case does not exist, unless there is specific congressional authority for it. * * *" [Emphasis supplied.] [Id.at 577.]

* * * [J]urisdiction to grant relief depends wholly upon the extent to which the United States has waived its sovereign immunity to suit and thatsuch awaiver cannot be implied but must be unequivocallyexpressed. United States v. Sherwood,312 U.S. 584,61 S.Ct. 767,85 L.Ed. 1058[Emphasis supplied.] [Id.at 4,89 S.Ct. at 1503.]

The case, therefore, falls within the well-settled principle, that the United States are not liable to pay interest on claims against them, in the absence of express statutory provision to that effect. It has been established, as a general rule, in the practice of the government, that interest is not allowed on claims against it, whether such claims originate in contract or in tort, and whether they arise in the ordinary business of administration or under private acts of relief, passed by congress on special application. The only recognized exceptions are where the government stipulates to pay interest and where interest is given expressly by an act of congress, either by the name of interest or by that of damages.

This appears from a succession of the opinions of the attorney general of the United States, given by Attorneys General Wirt, Crittenden, Legare Nelson, Johnson, Cushing, and Black, and appearing in the following volumes and pages of those opinions, as published: 1, 268; 1, 550; 1, 554; 3, 635; 4, 14; 4, 136; 4, 286; 5, 105; 7, 523; 9, 57; and 9, 449.

Not only is this the general principle and settled rule of the executive department of the government, but it has been the rule of the legislative department, because congress, though well knowing the rule observed at the treasury, and frequently invited to change it, has refused to pass any general law for the allowance and payment of interest on claims against the government. Such statutes for the payment of interest as have been passed, apply to specific cases enumerated in the several statutes, and do not cover the present case.

The principle above stated is recognized by this court. InTillson v. United States,100 U.S. 43,47,25 L.Ed. 543, this court, speaking of the rule that interest is recoverable between citizens if a payment of money is unreasonably delayed, says that with the government the rule is different, and that the practice has long prevailed in the departments of not allowing interest on claims presented, except it is in some way specially provided for. See alsoGordon v. United States,7 Wall. 188,19 L.Ed. 35, andHarvey v. United States,113 U.S. 243,248,249,5 S.Ct. 465,28 L.Ed. 987. [Id.127 U.S. at 260,8 S.Ct. at 1161.]

The pertinent part of § 177(a) of the Judicial Code provides that "No interest shall be allowed on any claim up to the time of the rendition of judgment by the Court of Claims, unless upon a contract expressly stipulating for the payment of interest, * * *" Section 177(a) thus embodies the traditional rule that interest cannot be recovered against the United States upon unpaid accounts or claims in the absence of an express provision to the contrary in a relevant statute or contract.Tillson v. United States,100 U.S. 43,47,25 L.Ed. 543;United States v. NorthAmerican Co.,253 U.S. 330,336,40 S.Ct. 518,521,64 L.Ed. 935;United States v. Goltra,312 U.S. 203,207,61 S.Ct. 487,490,85 L.Ed. 776. * * *

* * * The sole issue thus becomes whether there is any express provision in the Act or in the lease permitting the recovery of interest under the circumstances. Only if there is such a provision can respondent avoid the traditional rule set forth in § 177(a).

But in order to override the historical rule codified in § 177(a), something more is necessary than an equivocal use of the term "just compensation." It is not enough that the term might be construed to include the payment of interest. As § 177(a) itself indicates, there must be a provision in the contract "expressly stipulating for the payment of interest." That provision must be affirmative, clear-cut, unambiguous; and an unexpressed intention by the parties that the term "just compensation" be construed to include interest is insufficient.Likewise, where a statute is relied upon to overcomethe force of § 177(a), the intention of Congress topermit the recovery of interest must be expressly andspecifically set forth in the statute. Tillson v.United States, supra,100 U.S. at page 46,25 L.Ed. 543;United States ex rel. Angarica v. Bayard,127 U.S. 251,260,8 S.Ct. 1156,1160,32 L.Ed. 159. Mere use of the term "just compensation," without more, is no substitute for an express provision for interest.

Here neither the Act of March 30, 1920, nor the lease under which respondent operated contains an express provision for the payment of interest, either in addition to or as a part of the "just compensation" to be paid to respondent. If the United States had desired to provide by statute or to contract in the lease for the payment of interest, it would have been easy to have said so in express terms. Because it did not say so, we are led irresistibly to the conclusion that it did not intend to negative the effect of § 177(a) in this instance.Tillsonv. United States, supra.[Footnote omitted.] [Emphasis supplied.] [Id.at 588-590,67 S.Ct. at 401.]

In our opinion, § 177(a) of the Judicial Code prohibits the award of any interest under the circumstances ofPage 1318this case. Section 177(a) provides that "No interest shall be allowed on any claim up to the time of the rendition of judgment by the Court of Claims, unless upon a contract expressly stipulating for the payment of interest, * * *" As we recently pointed out inUnited States v. Thayer-West Point Hotel Co.,329 U.S. 585,67 S.Ct. 398[91 L.Ed. 521], this provision codifies the traditional rule regarding the immunity of the United States from liability for interest on unpaid accounts or claims. In other words, in the absence of constitutional requirements, interest can be recovered against the United States only if express consent to such a recovery has been given by Congress. And Congress has indicated in § 177(a) that its consent can take only two forms: (1)a specific provision for the payment of interest ina statute; (2) an express stipulation for the payment of interest in a contract duly entered into by agents of the United States. Thus,there can beno consent by implication or by use of ambiguouslanguage.Nor can an intent on the part of the framers of a statute or contract to permit the recovery of interest suffice where the intent is not translated into affirmative statutory or contractual terms.The consent necessary to waive thetraditional immunity must be express, and it must bestrictly construed. Tillson v. United States,100 U.S. 43,25 L.Ed. 543;United States v.Thayer-West Point Hotel Co., supra.

Tested by those standards, the award of interest in this case cannot be sustained. There is obviously no contractual stipulation involved. And the appropriation statutes which cover the refunds here in issue contain no provision whatever for the recovery of interest. Act of May 14, 1937,50 Stat. 137, 142; Act of June 25, 1938,52 Stat. 1114, 1149. The traditional immunity of the United States, as codified in § 177(a), accordingly applies.

The Court of Claims, without making a reference to § 177(a), sought to justify its award of interest on what it thought "would be right or just." * * *

But assuming that the equities of the situation all favor the owners of the refund claims, the Court of Claims did not thereby acquire power to carve out an implied exception to the plain words of § 177(a). Had Congress desired to permit the recovery of interest in situations where the Court of Claims felt it just or equitable, it could have so provided. The absence of such a provision is conclusive evidence that the court lacks any power of that nature. Indeed, any other conclusion would permit the Court of Claims to supply the consent which only Congress can give to the imposition of interest against the United States.

* * * Only Congress can take the necessary steps to waive the immunity of the United States from liability for interest on unpaid claims. Cf.Smythv. United States,302 U.S. 329,353,58 S.Ct. 248,252,82 L.Ed. 294, 114 A.L.R. 807.

* * * It is enough to note that the traditional rule embodied in § 177(a) is a complete one covering all types of claims, including those arising out of pre-existing judgments. As we have seen, any exception to that rule must be grounded uponanexpress provision in a statute or contract.It follows that any exception relating to pre-existing judgments must be traced tospecific language in acontract or some other statute.Section 177(a) by itself warrants no such exception. * * *

* * * Courts lack the power to award interest against the United States on the basis of what they think is or is not sound policy. We reiterate thatonlyexpress language in a statute or contract can justifythe imposition of such interest.Such language is absent in this instance.

We accordingly reverse the judgment of the Court of Claims in No. 94Page 1319to the extent that it includes an award of interest. * * * [Emphasis supplied.] [Id.bridging pages 658-63, 67 S.Ct. at page 603.]

Turning now to the right to interest under the contracts, and apart from the contention regarding the Fifth Amendment, we find that the contracts have no provision for payment of interest. No statute authorizes the payment of interest in cases like this.In the absence of specific contract orstatutory provisions no interest runs against theGovernmenteven though the Government's payment for the contract purchases be delayed. SeeSmyth v.United States,302 U.S. 329,353,58 S.Ct. 248,252,82 L.Ed. 294, 114 A.L.R. 807;United States v.Thayer-West Point Hotel Co.,329 U.S. 585,588,67 S.Ct. 398,399[91 L.Ed. 521];United States v.N.Y. Rayon Importing Co.,329 U.S. 654,659-660,67 S.Ct. 601,604[91 L.Ed. 577]. [Emphasis supplied.] [Id.at 605,67 S.Ct. at 609.]

* * * We granted certiorari limited to the question presented by the award of interest.340 U.S. 873,71 S.Ct. 121[95 L.Ed. 635] (1950).

It is the "traditional rule" thatintereston claims against the United Statescannot be recoveredin the absence of an express provision to thecontrary in the relevant statute or contract.28 U.S.C. (Supp. III) § 2516(a).United States v.Thayer-West Point Hotel Co.,329 U.S. 585,588,67 S.Ct. 398,399,91 L.Ed. 521(1947), and cases cited therein. * * [Emphasis supplied.] [Id.at 49,71 S.Ct. at 552.]

However, the common law rule that delay or default in payment of money gives rise to a right to recover interest has been held not to be applicable to the sovereign government on grounds of public convenience, unless the sovereign's consent to pay interest has been exhibited by an act of the Congress, or by a lawful contract of its executive officers.United States v. North AmericanTransportation Trading Co.,253 U.S. 330,40 S.Ct. 518,64 L.Ed. 935;United States v. North Carolina,136 U.S. 211,216,10 S.Ct. 920,34 L.Ed. 336;United States ex rel. Angarica v. Bayard,127 U.S. 251,8 S.Ct. 1156,32 L.Ed. 159;Richmond,Fredericksburg Potomac Railroad Co. v. UnitedStates,95 Ct.Cl. 244;Hinds v. United States,41 F.2d 892, 70 Ct.Cl. 288, 293. Congress has specifically provided by an Act of June 25, 1948, ch. 646, sec. 1,62 Stat. 978, U.S.C. Title 28 (Supp. IV), § 2516(a), that:

Interest on a claim against the United States shall be allowed in a judgment of the Court of Claims only under a contract or Act of Congress expressly providing for payment thereof.

A provision in a Government contract for the payment of interest must be affirmative, clear-cut, and unambiguous.United States v. Thayer-West PointHotel Co.,329 U.S. 585,67 S.Ct. 398,91 L.Ed. 521. The Supreme Court has held that although an award of interest on a claim against the United States would be just or equitable, this fact alone does not empower the Court of Claims to make such an award on the basis of what they think is a sound policy. The immunity of the United States from liability for interest on unpaid claims is not to be waived by such policy arguments.United States v. New York RayonImporting Co.,329 U.S. 654,67 S.Ct. 601,91 L.Ed. 577. * * * [Id.at 356, 121 Ct.Cl. at 431-32.]

For many decadesCongress has forbidden intereston a plaintiff's claim in this courtunless acontract or a statute has "expressly" provided forinterest.28 U.S.C. § 2516(a).This rule has wonstrict adherence in many kinds of cases, includingIndian claims. Tillson v. United States,100 U.S. 43[25 L.Ed. 543] (1879);United States v. NorthAmerican Transp. Co.,253 U.S. 330,336[40 S.Ct. 518,64 L.Ed. 935], (1920);United States v.Thayer-West Point Hotel Co.,329 U.S. 585[67 S.Ct. 398,91 L.Ed. 521] (1947);United States v. N. Y.Rayon Importing Co.,329 U.S. 654[67 S.Ct. 601,91 L.Ed. 577] (1947);United States v. Alcea Band ofTillamooks,341 U.S. 48[71 S.Ct. 552,95 L.Ed. 738] (1951);Loyal Band of Creek Indians v. UnitedStates,118 Ct.Cl. 373, 382-83,97 F. Supp. 426,431(1951),cert. denied,342 U.S. 813[72 S.Ct. 27,96 L.Ed. 615]. * * * [Emphasis supplied.] [Id.at 454.]

* * * Calling interest "damages" or loss does not deprive it of being interest, and the statute forbids the allowance of interest. It is frequently the case that interest, where not stipulated for, is allowed by the courts as damages for the detention of money or as compensation to which a plaintiff is entitled, but this rule is not applicable to the sovereign, "and, as has been settled on grounds of public convenience, it is not to be awarded against a sovereign government, unless its consent to pay interest has been manifested by an act of its legislature or by a lawful contract of its executive officers."United States v. North Carolina,136 U.S. 211,216[10 S.Ct. 920,34 L.Ed. 336]. See alsoSherman case [United States v. Sherman],98 U.S. 565[25 L.Ed. 235];Angarica v. Bayard,127 U.S. 251,260[8 S.Ct. 1156,32 L.Ed. 159]. [Id.at 106.]

* * * The payment of interest as such was neither expressly provided for by the corporation's contract with the War Department, nor by any Act of Congress. Plaintiffs attempt to avoid the effect of thisbydesignating their claim as one for damages,consisting of interest on amounts paid out by the corporation to third persons. But, as this court pointed out inMoran Brothers Co. v. United States,61 Ct.Cl. 73, 106,"Calling interest `damages' orloss does not deprive it of being interest, and thestatute forbids the allowance of interest."[Emphasis supplied.] [Id.101 F. Supp. at 356, 121 Ct.Cl. at 432.]

* * * The additional interest now claimed is sought reallyas damagesfor the delay of Congress in appropriating the sum due in 1895 as the United States promised in the 1891 agreement.Page 1321But the rule as to interest against the UnitedStates does not allow us to adjudge interest asdamages at all.Congress must expressly provide for it or the contract must so provide. * * * [Emphasis supplied.] [Id.at 490,46 S.Ct. at 433.]

Judgment is entered for the plaintiffs in the sum of $350,000, with interest at six percent per annum, not as interest but as a part of just compensation, * * *. [Id.at 75.]

Both statute and contract expressly provide for the payment of "just compensation." * * * [Id.at 569, 106 Ct.Cl. at 81.]

But in order to override the historical rule [no interest against the United States] * * * something more is necessary than an equivocal use of the term "just compensation." It is not enough that the term might be construed to include the payment of interest. * * * [T]here must be a provision in the contract "expressly stipulating for the payment of interest." That provision must be affirmative, clear-cut, unambiguous; * * *. [Id.at 590,67 S.Ct. at 400.]

* * * We conclude that even if it could be said that the $72,600.37 was not interest per se or interest in the strict sense of the word, the act of the Commission in denying this amount as offsets solely by reason of its five percentPage 1322rule had the effect of granting interest on the award. We do not believe the Commission can do indirectly what it is prohibited from doing directly. [Id.1223, 192 Ct.Cl. at 394.]

* * * We are not here awardingintereston a judgment forsimple interest,but including an additional factor in our judgment to make up for the income which should have been, but was not, earned on reinvestedinterest.

The only practical way we can think of to assessdamagesfor failure to comply with the law requiring investment and reinvestment of the incomeis by awarding compound interest.[Emphasis supplied.] [31 Ind.Cl. Comm. 427, 529.]

Equity and good conscience, dominant principles in these accounting cases, as well as the plain language of the 1841 act,compel us to award compoundinterest.[Emphasis supplied.] [31 Ind.Cl.Comm. 427, 550.]

In awardingdamagesequal to compound interest * * * for the period between 1883 * * * and ending June 30, 1930, * * *.

* * * [W]e have the authority, and duty, to awarddamagesfor breach of the 1841 act,which damagesare measured by interest.* * * [Emphasis supplied.]

The 1841 act does not authorize us to awardinterest against the Government.* * * [Emphasis supplied.]

The Court of Claims, * * * sought to justify its award of interest on what it thought"would be rightor just."* * *

But assuming that theequitiesof the situation all favor the owners of the refund claims, the Court of Claims did not thereby acquire power to carve out an implied exception to the plain words of § 177(a). Had Congress desired to permit the recovery of interest in situations where the Court of Claims felt itjust or equitable,it could have so provided. The absence of such a provision is conclusive evidence that the court lacks any power of that nature. Indeed,any other conclusion would permitthe Court of Claims to supply the consent which onlyCongress can give to the imposition of interestagainst the United States.[Emphasis supplied.] [Id.at 659-60,67 S.Ct. at 604.]

Chap. XXV. —An Act to repeal a part of the sixthsection of the act, entitled "An act to provide forthe support of the Military Academy of the UnitedStates for the year eighteen hundred andthirty-eight, and for other purposes," passed Julyseventh, eighteen hundred and thirty-eight.

Be it enacted by the Senate and House ofRepresentatives of the United States of America inCongress assembled,That so much of the sixth section of an act entitled, "An act to provide for the support of the Military Academy of the United States for the year eighteen hundred and thirty-eight, and for other purposes," as requires the Secretary of the Treasury to invest the annual interest accruing on the investment of the money arisingPage 1324from the bequest of the late James Smithson, of London, in the stocks of States, be, and the same is hereby, repealed. And the Secretary of the Treasury shall, until Congress shall appropriate said accruing interest to the purposes prescribed by the testator for the increase and diffusion of knowledge among men, invest said accruing interest in any stock of the United States bearing a rate of interest not less than five per centum per annum.

Sec. 2.And be it further enacted,That all other funds held in trust by the United States, and the annual interest accruing thereon, when not otherwise required by treaty, shall in like manner be invested in stocks of the United States, bearing a like rate of interest.

Sec. 3.And be it further enacted,That the three clerks, authorized by the act of June twenty-third, eighteen hundred and thirty-six, "to regulate the deposits of the public money," be, and hereby are, directed to be retained and employed in the Treasury Department, as provided in said act, until the state of the public business becomes such that their services can conveniently be dispensed with.

That the further investment of any public funds of the United States in stocks of the several states ought forthwith to be prohibited by law.²

It is a familiar rule of statutory construction that great weight is properly to be given to the construction consistently given to a statute by the Executive Department charged with its administration.United States v. Cerecedo Hermanos y Compania,209 U.S. 337,28 S.Ct. 532,52 L.Ed. 821;Robertson v.Downing,127 U.S. 607,8 S.Ct. 1328,32 L.Ed. 269;United States v. Healey,160 U.S. 136,16 S.Ct. 247,40 L.Ed. 369, and such construction is not to be overturned unless clearly wrong, or unless a different construction is plainly required. * * [Id.at 193,50 S.Ct. at 146.]

I join in the court's opinion on the first claim, but dissent from the disposition of thedemand forintereston the $172,762.04 awarded by the Indian Claims Commission.

The sole ground for this claim is Article 7 of the 1854 Treaty,10 Stat. 1084, which provided:

And as the amount of the annual receipts from the sales of their lands, cannot now be ascertained, it is agreed that the President may, from time to time, and upon consultation with said Indians, determine how much of the net proceeds of said sales shall be paid them, and how much shall be invested in safe and profitable stocks, the interest toPage 1326be annually paid to them, or expended for their benefit and improvement.

It is agreed that if this is read as containing anexpress provision for interest appellants canrecover, otherwise not. See United States v. AlceaBand of Tillamooks,341 U.S. 48,49,71 S.Ct. 552,95 L.Ed. 738(1951);Confederated Salish andKootenai Tribes v. United States,175 Ct.Cl. [451, 454] (1966),cert. denied,Oct. 24, 1966,385 U.S. 921,87 S.Ct. 228[17 L.Ed.2d 145]. * * * [Emphasis supplied.] [Id.at 1006, 177 Ct.Cl. at 770-71.]

* * * At the time of the enactment of 1841 there existed certain treaties with the Indians, containing stipulations for the payment to them, annually, of interest upon the proceeds of lands ceded by them; and it had already been provided by the act of January 9, 1837 (5 Stat., 135), which is now embodied in the Revised Statutes as section 2096, that these funds should be invested in securities at not less than five percent interest.It was clearly fortrusts of this definite character, established as wehave said, by law, that the act of 1841 proposed toestablish a general system.This is especially indicated by the exception in that act of cases regulated by treaty. The reference is to these Indian treaty funds.We think, then, that the statute didnot apply to the transaction in question,and it is evident that the executive did not propose to conform to its requirements. [Emphasis supplied.] [Id.at 324.]

* * * It has been established, as a general rule, in the practice of the government, that interest is not allowed on claims against it, whether * * * they arise in the ordinary business of administration or under private acts of relief, * * *. [Id.at 260,8 S.Ct. at 1161.]

Not only is this the general principle and settled rule of the executive department of the government, but it has been the rule of the legislative department, because congress though well knowing the rule observed at the treasury, and frequently invited to change it, has refused to pass any general law for the allowance and payment of interest on claims against the government. * * * [Id.at 260,8 S.Ct. at 1161.]

When we consider the rule requiring an express provision of contract or statute to justify the imposition of interest in adjudicating any claim against the United States, we can find nothing in the circumstances of this case to increase the interest as adjudged. * * * The only contractual obligation here is for simple five percent. interest until payment.

And by § 3659 of the Revised Statutes, re-enacting § 2 of the Act of Congress of September 11, 1841,5 Stat. 465, which provides:

"All funds held in trust by the United States, and the annual interest accruing thereon, when not otherwise required by treaty, shall be invested in stocks of the United States, bearing a rate of interest not less than five per centum per annum."

It is urged that the largest item, of $1,111,284.70, was taken out of a $5,000,000 trust fund held by the United States for the benefit of the Cherokees, and therefore that it should be treated as if it were always in the Treasury of the United States, held in trust for the Indians, and as if the United States had collected the interest thereon out of the invested stocks,Page 1328and had refused to pay it over as annuities to the Indians.This claim proves too much. It wouldrequire compound interest brought about by annual orsemi-annual rests for near a century, an amount thatthe Solicitor General suggests would be equal to thenational debt.The argument is shown to be wholly without support in the circumstance that the Cherokees and the United States by the resolution of the Senate in 1850, agreed upon the interest for such debts as that of 5 percent. until paid. * * * [Emphasis supplied.] [Id.at 490, 492,46 S.Ct. at 434.]

Plaintiffs' final argument for interest requires us to consider the 1962 amendment to § 9(a) of the Act which directs that the proceeds of sale "shall be heldin trustby the Secretary of the Treasury", * * * [Emphasis by Judge Durfee] 50 U.S.C. App. § 9(a) (1964), in conjunction with 31 U.S.C. § 547(a) (1964), which provides:

All funds held in trustby the United States, and the annual interest accruing thereon, when not otherwisePage 1329required by treaty,shall be investedin stocks of the United States, bearing a rate of interest not less than 5 per centum per annum. [Emphasis by Judge Durfee.]

From these statutes and some familiar principles of trust law regarding the obligation of a trustee to invest trust funds (see Restatement, 2d, Trusts § 181), plaintiffs' counsel conclude that the Government has been under a duty to invest the sales proceeds in question, and that, if the Government has not done so, then it has been enjoying "the economic benefits of an interest-free loan."To thisargument, we have two responses. First, § 9(a) of theAct could have specifically referred to 31 U.S.C. § 547(a),or required the Treasurer to invest theproceeds of any sale or liquidation. However, thatsection makes no such reference, and we regard thisas a strong indication that Congress intended tolimit recovery to the allocated sales proceeds.[Emphasis supplied.] Second, and most importantly, this question was carefully considered inGmo,Niehaus Co. v. United States,373 F.2d 944, 179 Ct.Cl. 232 (1967), which was decided after the Act was amended in 1962, and it was answered adversely to plaintiffs' contentions.Niehausinvolved the recovery of damages by plaintiffs on a claim for the value of money or property unlawfully appropriated by vesting under the Trading With the Enemy Act. Particularly pertinent is the court's discussion of defendant's liability for any post-sale increment. In that regard, the court stated:

In this connection, it should be noted that Section 7(c) of the Trading With the Enemy Act, as amended (50 U.S.C. App. § 7(c) (1964)), provides that in a case involving the unlawful vesting and the subsequent sale by the Alien Property Custodian of the property of a person who was not an enemy national, any recovery by the owner of the property "shall be limited to and enforced against the net proceeds received therefrom and held by the Alien Property Custodian or by the Treasurer of the United States." * * * Although this limitation of the Trading With the Enemy Act may not be strictly applicable in terms to plaintiffs' case, we should be governed byits indication of the Congressionalpolicy as to maximum recovery. Neither thepost-sale increment in value nor interest isrecoverable under Section 7(c), and neither shouldbe recoverable here.[Emphasis by Judge Durfee.]Cf. Sac Fox Tribe of Indians of Oklahoma v.United States[383 F.2d 991, 179 Ct.Cl. 8, 24], decided this day, Part VI of that opinion.

* * *In non-eminent domain cases, the normal ruleis that interest is not recoverable unlessauthorized by statute or contract,28 U.S.C. § 2516(a).In this instance there is neitherstatutory nor contractual authorization.[Emphasis supplied.]On the contrary, Section 7(c) of theTrading With the Enemy Act looks the other way.[Emphasis by Judge Durfee.] [373 F.2d 961-962, 179 Ct.Cl. at 262-273.]

Plaintiffs allude to certain factual differences betweenNiehausand the instant case, but none dilute the full force and effect of the court's general interpretation of § 7(c) of the Act.

In the absence of compelling evidence to the contrary, we must always be guided by the Congressional intent which, in this instance, is clearly thatthe Government must specificallyconsent to be liable for interest in express terms,rather than by implication,except in the most extreme cases, such asHenkels[Henkels v.Sutherland,271 U.S. 298,46 S.Ct. 524,70 L.Ed. 953(1926)], in which an alternate approach is desirable and necessary to avoid a serious inequity,i. e.,unjust enrichment. Thereforeplaintiffs are notentitledPage 1330to interest on the allocated sales proceeds of theirshares of GDC stock.[Emphasis supplied.] [438 F.2d at 572-73, 194 Ct.Cl. at 163-64.]

The 1883 Act could have specifically referred to the 1841 Act, or required the Treasurer to invest the I.M.P.L. Funds. However, the 1883 Act makes no such reference, and we regard this as a strong indication that Congress intended that the Indians would receive only the amount of the I.M.P.L. Funds deposited in the Treasury.

* * * Moneys arising from the sources stated [IMPL funds] clearly could not be credited to the interest-bearing "Creek general fund." * * There being no treaty or statutory obligation on the part of the United States to pay interest on Creek tribal funds, [including IMPL funds] other than those belonging to the "Creek general fund", interest can be allowed only on such of the unauthorized disbursements as were made from that fund. [Id.at 505.]

It is well settled that the United States cannot be charged with interest except where liability therefor is clearly imposed by the statute or assumed by contract.United States v. North Carolina,136 U.S. 211[10 S.Ct. 920,34 L.Ed. 336];Cherokee Nation v.United States,270 U.S. 476[46 S.Ct. 428,70 L.Ed. 694];United States v. Worley, Administratrix, etal.,281 U.S. 339[50 S.Ct. 291,74 L.Ed. 887];TheUte Indians v. United States,45 Ct.Cl. 440, 470. InCherokee Nation v. United States, supra,the court said [270 U.S.] at pp. 490, 491 [46 S.Ct. 428]:

In view of the care with which Congress and this Court in interpretation of the legislative will, have limited the collection of simple interest against the Government,a fortiorimust compound interest be denied to appellant unless provision therefor is made in the contract of 1891, or in the statute of 1919 authorizing this suit, and it is to be found in neither.

The cases cited make it clear that a statute consenting to payment of interest refers to simple interest only, andany obligation to pay compoundinterest cannot be implied from general words, butmust be based upon clear and unequivocal languageleaving no doubt as to the intention of Congress todepart from the general rule so announced as to theright to charge and collect interest from theGovernment.The Act of February 12, 1929,expresslyprovided for only "simple interest"upon money held in trust fund accounts, andthis language may not beinterpreted as intending to obligate the UnitedStates to pay interest upon interestpreviously credited upon other interest-bearing funds or accounts. The term "simple interest" has a well-established meaning. [Emphasis supplied.]

We are of opinion that plaintiff is not entitled under the provisions of the Act of February 12, 1929, to recover interest on interest. * * * [Id.at 161.]

No interest, either simple or compound, can be collected from a sovereign except by its consent. (United States v. North Carolina,136 U.S. 211[10 S.Ct. 920,34 L.Ed. 336].) In the case at bar the sovereign has agreed to pay interest, and that means simple interest only. But the plaintiffs seek to charge the defendants with compound interest in this case on the ground that the money so received constituted a trust fund, and that in such cases where the fund has been improperly withheld, the trustee is penalized with compound interest. It is elementary as a general proposition, in the absence of a contract to that effect, that interest upon interest is not recoverable for the detention of money, and that is a general rule either at law or equity. (Perley on Law of Interest,159, 160;Inre Ward's estate,73 Mich., 220,228[41 N.W. 431].) It is only where a trustee, guardian, or executor has acted in bad faith, in abuse of his trust or has been guilty of such gross negligence as to be evidence of a corrupt intention, that compound interest will be charged against himPage 1332(Barney v. Saunders,16 How., 535 [14 L.Ed. 1047];Perrin v. Leper [Lepper],72 Mich., 446[454, 40 N.W. 859];Vaughan v. Bibb,46 Ala., 153;Smith v. Kennard,38 Ala., 695).

The Governmentonly acts through its officers and agents and thus in law can never be guilty of fraud, bad faith, or negligence;hence it can never bepenalized by being charged compound interest.[Emphasis supplied.]

Because the United States is not liable for interest on judgments in the absence of an express consent thereto, it cannot be liable for interest on the annual income payments not made. Therefore, if an interest rate measure is adopted by the Commission, it must be simple and not compound interest. [Id.at 473 n. 6,88 S.Ct. at 1140.]

* * * The only contractual obligation here is for simple five per cent. interest until payment.

What the appellant here seeks is compound interest, that is interest on interest from 1895 until now. The general rule even as between private persons is that in the absence of a contract therefor or some statute, compound interest is not allowed to be computed upon a debt.Whitcomb v. Harris,90 Me. 206,38 A. 138;Bradley v. Merrill,91 Me. 340, 40A 132;Ellis v. Sullivan,241 Mass. 60,64,134 N.E. 695;Tisbury v. Vineyard Haven Water Company,193 Mass. 196,79 N.E. 256;Lewin v. Folsom,171 Mass. 188,192,50 N.E. 523;Wallace v. Glaser,82 Mich. 190,46 N.W. 227, 21 Am. St.Rep. 556;Blanchard v.Dominion National Bank,130 Va. 633,637,108 S.E. 649, 27 A.L.R. 78;Finger v. McCaughey,114 Cal. 64,66,45 P. 1004;Cullen v. Whitham,33 Wn. 366,368,74 P. 581. In view of the care with which Congress, and this court in interpretation of the legislative will, have limited the collection of simple interest against the Government,a fortiorimust compound interest be denied to appellant unless provision therefor is made in the contract of 1891, or in the statute of 1919 authorizing this suit, and it is to be found in neither. [Id.at 490-91,46 S.Ct. at 433.]

* * * The taking away ofcontractual rights,via a rupture of the contract, is of course not equivalent to a taking ofpropertyunder the Fifth Amendment. It is commonplace for the defendant to be held in this court for having gone back on a promise and thus denied a plaintiff his rights.Interest is not paidon an award of that kind for a breach of contract.Choctaw Nation v. United States,91 Ct.Cl. 320, 402-03 (1940),cert. denied,312 U.S. 695[61 S.Ct. 730,85 L.Ed. 1130] (1941). * * * [Footnote omitted.] [Emphasis supplied.] [Id.at 455.]

Admittedly no interest is allowable for the breach of an obligation to pay over money to the Indians.Confederated Salish and Kootenai Tribes v. UnitedStates,175 Ct.Cl. [451] (1966),cert. denied,385 U.S. 921,87 S.Ct. 228,17 L.Ed.2d 145andRamsey v.United States,101 F. Supp. 353, 121 Ct.Cl. 426, 431-32 (1951),cert. denied,343 U.S. 977,72 S.Ct. 1072,96 L.Ed. 1369(1952). * * * [Id. at 1006,177 Ct.Cl. at 770 n. 9.]