United States v. Piatt and Salisbury
157 U.S. 113 (1895)

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U.S. Supreme Court

United States v. Piatt and Salisbury, 157 U.S. 113 (1895)

United States v. Piatt and Salisbury

No. 166

Submitted January 23, 1895

Decided March 4, 1895

157 U.S. 113

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES

FOR THE NORTHERN DISTRICT OF CALIFORNIA

Syllabus

In March, 1878, P. contracted to carry the mails three times a week for four years on route 36,107, commencing July 1, 1878, and entered on the performance of his contract. On the 5th day of the following December, in consequence of false and fraudulent sworn statements made by him concerning the number of horses and men that would be required to expedite the service by reducing the time, a large additional compensation was allowed him by the Postmaster General for that purpose. On the 13th of the same December he sublet his contract to S. with the consent of the Department, and the service was from that time performed by S. Further increased allowances, based on like fraudulent statements by P. were made in January and July, 1879, and assented to by P. and S. The amount so fraudulently received during the term of service was $99,556.20. The government sued P. and S. to recover back that sum. In the first count, the above facts were set forth and it was alleged that the false statements were designed to mislead and did mislead the Post Office Department. A second count was for money had and received. A third count set forth the same facts and averred that the money had been paid in mistake of fact, and had been received contrary to the provisions of Rev.Stat. § 3961. No process was served upon P., and he did not appear.

S. appeared and demurred, and the demurrer was sustained. Each was cited in the writ of error, and service acknowledged by the attorney for both. Held:

(1) That the statements regarding the "horses and men" required for the expedited service came within the statement as to "stock and carriers" required therefor, as provided in Rev.Stat. § 3961.

(2) That P. and S. were bound by these statements and were estopped from asserting that it was not intended thereby to bring the contract within the statute.

(3) That the demurrer admitted the fact that the increase had been allowed on the basis of the false representation.

(4) That the court below erred in sustaining the demurrer to the third count.

(5) That the defendants having each participated in the transaction, were properly sued jointly.

(6) That the demurrer should have been overruled.

The case is stated in the opinion.

Page 157 U. S. 114

MR. JUSTICE HARLAN, after stating the facts in the foregoing language, delivered the opinion of the Court.

This action was instituted by the United States to recover from the defendants in error certain moneys claimed to have been paid to then for services in carrying the mail in excess of the amount to which they were legally entitled.

The first count alleges in substance that on March 15, 1878, the defendant Piatt contracted in writing with the United States, through the Postmaster General, to carry the mail three times a week for four years, from July 1, 1878, for a consideration of $16,500 per annum, on the route then known as No. 36, 107, between Bozeman, Montana, by way of Shields River, Crow Agency, Stillwater, Head of Navigation, Pompey's Pillar, Fort Peace, and Big Horn City, to Tongue River and back. By power of attorney dated August 15, 1878, Piatt authorized the defendant Salisbury to collect from the Auditor of the Treasury for the Post Office Department all pay to become due for carrying the mails upon that route, and subsequently, on December 13, 1878, with the permission of the Post Office Department, he sublet his contract to Salisbury. Piatt entered upon and continued the performance of this service from July 1, 1878, until December 13, 1878, from which date the service was performed by Salisbury.

For the purpose of expediting the service, the Post Office Department, by order dated December 5, 1878, on agreement with Piatt, shortened the schedule of departures and arrivals on the above route after December 16, 1878, by reducing the time from 132 hours to 72 hours in summer, and 96 hours in winter, allowing therefor additional compensation of $16,500 per annum, in supposed accordance with the provisions of § 3961 of the Revised Statutes of the United States. A

Page 157 U. S. 115

similar order was made January 17, 1879, allowing an additional annual sum of $3,542.92 from January 25, 1879, for an increased distance on the route of 35 miles, such allowance being computed pro rata upon the basis of the compensation previously allowed. A further order, dated July 15, 1879, increased the service to seven trips a week from August 1, 1879, for which the additional sum of $48,723.89 per annum was allowed upon the same basis of compensation. Both Piatt and Salisbury consented to the conditions of these orders.

Piatt procured the issuing of the above orders amending the original contract. They were issued solely upon the basis of certain representations made in his sworn statement dated August 16, 1878, to the effect that to carry the mail upon said route three times a week, on a schedule of 132 hours, required 26 men and 90 horses, while the proposed expedited schedule of 72 hours in summer and 96 hours in winter would require 48 men and 200 horses. This statement was wholly false and fraudulent, in that it alleged an increase of 22 men and 110 horses necessary to perform the expedited schedule, whereas to fact neither Piatt nor Salisbury ever required or used in performing the mail service, three times a week or seven times a week, more than 34 men and 100 horses, being 14 men and 100 horses less than Piatt alleged in his sworn statement were necessary for performing said expedited service three times a week. By means of such fraudulent representations by Piatt, and by means of false vouchers presented to the Post Office Department, Piatt and Salisbury received from the plaintiff a larger sum of money then they were lawfully entitled to receive. The sum so received by them during the period of their service by means of such false statements and fraudulent vouchers was $261,016.50, being $99,556.20 in excess of the amount that could, after certain reductions and remissions, be lawfully paid to them. The false statements above referred to were designed to mislead, and did mislead, the Post Office Department of the United States, and the defendants were entitled to receive from the United States for such service the sum of $148,438.23 and no more.

Payment of such excess having been demanded and refused,

Page 157 U. S. 116

judgment was asked against the defendants for $99,556.20, with interest from August 21, 1882, and costs of suit.

The second count is the common law count for money had and received

The third count sets forth the same facts as are embodied in the first count, and alleges that plaintiff's officers were induced to pay the $99,556.20 in mistake of fact, and that that sum was received by defendants contrary to section 3961 of the Revised Statutes of the United States.

The payments referred to are set out in full in an exhibit showing the amounts defendants were lawfully entitled to receive on the basis of the actual increase of stock and carriers consequent upon the reduction in running time, as before mentioned.

Piatt was not served with process, nor did he appear or plead. Service of process was had upon Salisbury, who appeared and demurred both generally and specially to the complaint.

The court below sustained the demurrer and dismissed the complaint as to both defendants. Each defendant is cited in the writ of error upon which this action is before us, and service acknowledged by the attorney of both.

The plaintiff in error has assigned the following errors: (1) that the circuit court erred in sustaining Salisbury's demurrer to the complaint; (2) that judgment was wrongly given in favor of both defendants, Piatt not having appeared or pleaded.

By section 3961 of the Revised Statutes of the United States, it is provided that

"no extra allowance shall be made for any increase of expedition in carrying the mail unless thereby the employment of additional stock and carriers is made necessary, and in such case the additional compensation shall bear no greater proportion to the additional stock and carriers necessarily employed than the compensation in the original contract bears to the stock and carriers necessarily employed in its execution."

It is contended that as the statement of the contractor in every case merely stated the number of men and horses required to perform the service on the contract time, and also

Page 157 U. S. 117

how many men and horses, in his opinion, it would require to perform the service on the proposed expedited schedule, and as it merely alleged that the subcontractor or person who performed the service did not use the men and horses stated to be necessary, the complaint is insufficient to maintain this action, for the reason that section 3961 of the Revised Statutes, under which the action is brought, provides nothing as to men and horses, but does provide that the allowance for expedition shall be based upon the additional stock and carriers made necessary by the expedited schedule; and, it is said,

"there is not a word in the complaint that charges that the defendants did not employ additional stock and carriers on the expedited schedule in exact proportion to the expedition allowance."

It is also said that the words "stock and carriers' in section 3961 are not synonymous with the words "men and horses;" that the word "stock" does not mean simply livestock, nor does the word "carriers' mean either horses or men, but rather includes all the equipment of the route, whether horses, wagons, harness, stage stations, fuel, food, stables, in fact everything needed to carry on the service, such being the popular sense in which these words are used.

There is nothing of substance in these contentions. Whatever may be comprehended by the term "stock and carriers

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