United States v. Adams - 74 U.S. 463 (1868)
U.S. Supreme Court
United States v. Adams, 74 U.S. 7 Wall. 463 463 (1868)
United States v. Adams
74 U.S. (7 Wall.) 463
1. It is the duty of the Secretary of War, as head of the War Department, to see that contracts which belong to his office are properly and faithfully executed, whether he have made the contracts himself or have conferred authority on others to make them; and if he becomes satisfied that contracts which he has made himself are being fraudulently executed, or that those made by others were made in disregard of the rights of the government, or with the intent to defraud it, or are being unfaithfully executed, it is his duty to interpose, arrest the execution, and adopt effectual measures to protect the government against the dishonesty of subordinates.
2. If there exist well grounded suspicions, or facts unexplained, tending strongly to the conclusion that contracts have been entered into and debts incurred within a particular military district in disregard of the rights of the government, the Secretary has a right and is bound to issue an order to suspend the payment of all claims against it.
3. In such a case (especially where the military district in which the contracts were made and are to be carried into execution is one distant from Washington, where Congress and the Court of Claims sit, and a resort to these tribunals would occasion delay and expense), the appointment of a board of commissioners, to meet at once at the place where all the transactions out of which the claims and demands of which payment is now suspended originated -- the appointment being for the simple purpose of affording to such claimants as might desire a tribunal to speedily
hear and decide upon their claims, without the delay and expense of resorting to those which the law had recognized or provided, and so to relieve them from the hardship resulting from the suspension of the payment, as far as was in the power of the Secretary -- is a fit measure to be taken by the Secretary.
4. If the claimant voluntarily come before a board thus appointed, and present his claim, and the board investigate it, and Congress afterwards enacting that all claims allowed by such board shall be deemed to be due and payable, and be paid upon presentation of a voucher with the commissioners' certificate thereon -- the petitioner do present his voucher and receive payment of the sum so allowed by the board, the cannot afterwards recover in the Court of Claims a balance which would remain on an assumption of the validity of his original contract.
5. These principles applied to contracts made in 1861 by General McKinstry, Quartermaster in the Western Military Division, under General Fremont, commanding, for mortar boats and tug boats, to be used by the army on the Western rivers during the late civil war.
The suit was founded on the petition of Adams, claiming a balance against the government on contracts with General Fremont, commanding the Western Military District, for the construction of a certain number of mortar boats and steam tug boats, to be used on the Western rivers in the late civil war. The contracts were alleged to have been made on or about the 24th of August, 1861, for the mortarboats, at a cost of $8,250 each; and on or about the 10th of September following, for the steam tug boats, at the cost of $2500 each. The petitioner was also to build cabins and pilot houses, and construct steering apparatus, and windlasses on the steam tugs, for which he was to receive the sum of $1,800 in addition for each boat.
After these boats were constructed they were received into the service of the government by the orders of the Secretary of War. This was in the latter part of November, 1861. Previous to this, on the 14th of October, of that year, General Fremont was superseded in his command. And, in consequence of representations of frauds and irregularities committed by General McKinstry, the chief quartermaster of the army of this military district, who had charge of making contracts for supplies and materials necessary for equipping the troops for the expedition
contemplated, and who made the contracts, among many others, in question, the Secretary of War, by order of the President, suspended payments upon all contracts within the department until an investigation could be had into the charges thus made.
General McKinstry was afterwards dishonorably dismissed the service for frauds found to have been committed against the government while serving as chief quartermaster of this army. And, after his suspension, on the 25th of October, 1861, the Secretary, by a like order, appointed a board of commissioners
"to examine and report, to the Secretary of War, upon all unsettled claims against the military department of the West, that had originated prior to the 14th of October, 1861, the day General Fremont had been superseded."
This board, composed of three gentlemen of the highest intelligence and character (Messrs. David Davis, Joseph Holt, and Hugh Campbell), met, without delay, at the City of St. Louis, the headquarters of the military department in which the irregularities and frauds in its administration, as charged, had been committed, and entered upon their duties; first giving notice to all persons holding claims against the government to present them for examination, with such proofs and explanations as the claimant might think proper to exhibit. Under this notice, the petitioner, on the 10th of December, 1861, presented his claims, which were as follows:
The United States to Theodore Adams, Dr.
For building 38 mortar boats for the United States, as
per order of Major General Fremont, herewith
attached, August 24, 1861 . . . . . . . . . . . . . . . $313,500.00
Deduct this amount, paid by Major McKinstry on the
__ day of _______ . . . . . . . . . . . . . . $75,000
Deduct this amount, paid by Major A. Allen
quartermaster, 7th to 12th November. . . . . . 55,000
Total to be deducted . . . . . . . . . . . . . . . 130,000.00
Balance due. . . . . . . . . . . . . . . . . . . . . . . $183,500.00
On this account the commissioners allowed the
petitioner . . . . . . . . . . . . . . . . . . . . . . $ 75,959.24
For building 4 hulls for tug boats for the United States,
as per contract herewith, dated September 10, 1861,
by Major McKinstry, quartermaster, at $2.500 each. . . $ 10,000.00
For building 4 hulls for tug boats for the United States,
as per contract herewith, by Major McKinstry,
quartermaster, dated September 21, 1861, at $2,500
each . . . . . . . . . . . . . . . . . . . . . . . . . 10,000.00
For building 8 cabins for tug boats for the United
states, as per contract herewith, dated September
20, 1861, by Major McKinstry, quartermaster, for
$1,800 each. . . . . . . . . . . . . . . . . . . . . . 14,400.00
Deduct amount already paid . . . . . . . . . . . . . . . 9,000.00
Balance. . . . . . . . . . . . . . . . . . . . . . . . . $ 25,400.00
On this account the commissioners, deducting
therefrom $5,204 from the charge for tug boats,
allowed the petitioner . . . . . . . . . . . . . . . . $ 20,196.00
For these several sums, $75,959.24 and $20,196.00, this board gave vouchers to the claimant as due from the government on these contracts, and received from him a receipt in full of all demands, which he signed under protest. When the papers were exchanged does not appear, but not long afterwards, on the 11th of March, 1862, Congress passed the following joint resolution:
"That all sums allowed to be due from the United States to individuals, companies, or corporations, by the commission heretofore appointed by the Secretary of War (for the investigation of military claims against the Department of the West) composed of David Davis, Joseph Holt, and Hugh Campbell, now sitting at St. Louis, Missouri, shall be deemed to be due and payable, and shall be paid by the disbursing officer, either at St. Louis or Washington, in each case upon the presentation of the voucher, with the commissioners' certificate thereon, in any form plainly indicating the allowance of the claim, and to what amount. This resolution shall apply only to claims and contracts for service, labor, or materials, and for subsistence, clothing,
transportation, arms, supplies, and the purchase, hire, and construction of vessels."
Under this resolution, the claimant and petitioner below presented his vouchers and received payment of the several sums allowed by the board.
The present suit, as has already been said, was brought by him against the government to recover the balance of the contract price of the mortar and steam tug boats, with their fixtures, over and above the amount allowed by the board, after an investigation into the merits and the payment of the same under this joint resolution.
The Court of Claims decided that he was entitled to recover that balance, and gave judgment for him against the United States for $112,748.76; finding, also, that the value of the mortar boats and tug boats was $274,408.80.