Ward v. United States
81 U.S. 28

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U.S. Supreme Court

Ward v. United States, 81 U.S. 14 Wall. 28 28 (1871)

Ward v. United States

81 U.S. (14 Wall.) 28

Syllabus

1. When a plaintiff presents as an important part of his case a written proposal, he is not at liberty to insist on a recovery on the ground of mere suspicion that there was a verbal proposal differing from the one in writing introduced by the plaintiff.

2. If there is no evidence at all of a different verbal proposal, it is the duty of the court to tell the jury there is none when requested.

Page 81 U. S. 29

3. It is error in the court in such case to charge the jury that they may find such a verbal proposition, when there is nothing but mere suspicion on which they can do so.

4. Where there is such a written proposal, it is the duty of the court, at the request of either party, to construe it, and in doing so the admitted facts concerning the relations of the parties to the transaction are to be considered.

This was an action of assumpsit brought by the United States against one Ward to recover the sum of $45,000 -- so much money had and received by the defendant to the use of the plaintiffs.

The whole of the testimony was embraced in a bill of exceptions.

The facts out of which the implied promise was supposed by the United States to arise were thus: in the years 1856 and 1857, the Detroit & Milwaukee Railway Company were building their road, and were in an embarrassed condition, in which it became important to them to obtain the delivery of their iron rails by giving rewarehousing bonds with surety. To obtain acceptable sureties, they offered to pay a large compensation for the use of the names of responsible persons, and in that way the defendant became surety on numerous bonds of the corporation, given to the plaintiffs at various times, amounting to over $90,000. This railway company, while these bonds were unpaid, was sold out, with all its property and franchises, and was purchased by a new organization under the laws of Michigan, which took the name of the Detroit & Milwaukee Railroad Company, and this latter company, in the process of transmutation, made or recognized a lien on the road and other property in favor of the United States for the whole or a part of the debt evidenced by these bonds, but denied any liability on the part of the corporation for those bonds, and it seemed probable that both the defendant and the agents of the United States were ignorant of the existence of this lien until after a compromise (hereafter to be mentioned) of the bonds. At this stage of the proceedings the defendant was the only solvent

Page 81 U. S. 30

surety, and he insisted that he was discharged by the dealing of the plaintiffs with his principals. In this state of things the bonds were placed in the hands of the District Attorney of the United States for suit.

All this appeared from a stipulation entered into between the parties to the suit, and "given in evidence on the trial by the counsel of the plaintiff to prove the issue on its part." The paper so given in evidence thus began:

"It is stipulated by counsel for the defendant that the following statements are facts, and that the same may be admitted in evidence upon the trial of this cause on the part of the plaintiffs."

Among these statements was this one:

"That in April, 1863, the board of directors of said railroad company was applied to by the defendant verbally to make a proposition of compromise of said bonds, which was put in writing by the president, on the 14th day of May, as follows:"

"DETROIT AND MILWAUKEE RAILROAD CO."

"DETROIT, May 14th, 1863"

"CAPTAIN E. B. WARD."

MY DEAR SIR: Referring to the conversation we have had on the subject of the duty bonds due the United States, I am authorized to say that if you can procure the settlement and cancelling of them for a sum not exceeding $80,000 currency, that sum to include your services and any claim you may have against the company on account of those bonds, this company is ready to pay, and will pay that sum; one-half on your making the arrangement with the government, and the other half within thirty days thereafter. This offer, however, not to be considered as waiving any defense the company has to said bonds and claims.

"Yours truly,"

"C. C. TROWBRIDGE, President"

"And that subsequently, in April, said board did verbally make the said defendant the said proposition."

The plaintiffs also introduced as a witness, Trowbridge (the party signing the proposition above set out), and he testified that though he had not heard the first conversation between the board and defendant, he afterwards heard of it from Mr. Brydges, managing director, or from Mr. Emmons, counsel for the company, and that after this and upon reducing

Page 81 U. S. 31

it to writing, in answer to the question of the defendant, as to what the board had decided as to his proposition, he repeated it orally to the defendant as he understood it, and as so stated, and as he understood it, it was fully expressed in the letter of May 14. Trowbridge had become president of the company during these transactions.

After his interview, above mentioned, with the directors of the company, Ward had a conference with the district attorney of the United States in which, while denying his liability, he offered to pay $35,000 in full for the delivery of the bonds on his own account, whether the company did or did not furnish the money, as he hoped they would, saying, "that the company was apt to be behind when money was to be paid out." This offer was afterwards accepted, and the $35,000 was paid and the bonds delivered to Ward.

It was conceded as part of the case that the agents of the United States had no knowledge of the offer of the company to pay the $80,000 when Ward made his proposition, nor until after the bonds were delivered and the $35,000 paid and accepted as a compromise; and further conceded that Ward received the $80,000, and had part of it, or all, in his hands when the compromise was finally accepted.

The district attorney of the United States becoming acquainted with what had passed between Ward and the company, and especially with the proposition about the $80,000, demanded the sum of $45,000 (the difference between this sum just named and the $35,000 paid), alleging that it had been paid to Ward for the purpose of being delivered to the government, on a compromise of their claim against him and the road. Ward, insisting that he was under no sort of obligation to pay any sum to the government, as the compromise had been fair, stated nevertheless that since making the compromise, he had learned of the making or recognition by the new company of the lien on the road and other property in favor of the United States for the debt evidenced by the bonds, and as that might have put the claim of the government on a better basis than it stood before, he was willing to pay over a check for $22,028. He did accordingly

Page 81 U. S. 32

pay it over to the government agent, but before it was presented at bank, stopped the payment of it. At the time when the check was given, Ward said that in giving it, he was doing better by the government than he was doing by himself; that the government were getting about 75 percent on their claim, while he was getting only some 55 percent on what he claimed.

It was upon this state of facts mainly that the United States asserted that the entire $80,000 was money had and received by Ward to their use, and sued for the $45,000 not paid over.

The defendant's counsel requested an instruction to the jury that there was no evidence from which they could infer any other contract between the defendant and the railroad company concerning this $80,000 than the one found in the written proposition. The learned judge refused, however, this request and charged the jury that there was evidence tending to show that the written proposition of May 14, 1863, did not fully evidence the terms made to the defendant by the railroad company in April, when he made the proposition of compromise to the district attorney, and added:

"I do not deem it necessary or expedient to say what the legal effect of that proposition is, as if in your opinion it is but a partial expression of the arrangement or is different from the oral arrangement of April, a construction would only tend to complicate your inquiries."

The jury were also told that it was for them to find what the arrangement or proposition was between the railroad company and the defendant in reference to a compromise of these bonds, and whether there was any other different proposition than that reduced to writing May 14, 1863, or whether that evidenced the precise terms of the arrangement between the company and defendant when the latter opened negotiations with the district attorney. They were told also that upon their finding in that respect would depend their verdict.

There were several other prayers for instruction asked by

Page 81 U. S. 33

the defendant's counsel and refused by the court, on which error was assigned, among them these:

"That the proposition of May 14 did not constitute the defendant the agent of the company to pay over to the plaintiff the sum of $80,000, or any given sum, but that under it he was at liberty to make any arrangement he saw fit with the plaintiffs for a settlement and cancellation of the bonds held by them."

"That if the jury find that said $80,000 was paid to the defendant by the railroad company under the said proposition, the plaintiffs are not entitled to recover any portion of the money thus paid to him, as in such case it was not paid to the defendant for the use of the plaintiffs, but to pay him in full for his own services and claims, and for procuring the settlement and cancelling of the bonds held by the plaintiffs, and for the delivery of the same to the railroad company."

"That even if the jury find that the defendant was guilty of either fraudulent disclosures or concealments in his negotiations with the plaintiff and thereby obtained the compromise in question, the plaintiff cannot recover in this action unless they find under the charge of the court that the whole $80,000 was specifically paid to the defendant to pay the plaintiff."

But the court refused to give any of these instructions. It charged also

"That the defendant Ward was in conscience and equity bound under the circumstances of the interview, when he offered $35,000 in the compromise to the attorney of the government to disclose whatever information he possessed, not accessible alike to both parties, which would materially affect or influence the decision of the government in coming to a conclusion upon the offer of $35,000, so that if he misrepresented or concealed any material fact which the government ought to have been informed of, and thereby obtained a surrender of the bonds for a less sum than would have been demanded had the government been fully advised, the government is not bound to abide by the settlement."

Verdict and judgment having been given for the United States for the $45,000 claimed, with interest, the defendant brought the case here.

Page 81 U. S. 37

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