Piatt's Administrator v. United States
89 U.S. 496 (1874)

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U.S. Supreme Court

Piatt's Administrator v. United States, 89 U.S. 22 Wall. 496 496 (1874)

Piatt's Administrator v. United States

89 U.S. (22 Wall.) 496

APPEAL FROM THE COURT OF CLAIMS

Syllabus

Where a contractor has large claims on different accounts against the United States, and the United States have a counterclaim of fixed though of much less amount against him, and arrest him and put him in jail, and then by an act passed for his relief direct the accounting officers of the government to "settle" his accounts on just and equitable principles, giving all due weight and consideration to certain settlements and allowances already made, and to certain assurances and decisions of one of the executive departments which the party alleged to have been made to him,

"provided that the sum allowed under the said assurances shall not exceed the amount claimed by the united States and for which suits have

Page 89 U. S. 497

been commenced,"

a settlement by the accounting officers and a reception by the party of the amount fixed will not, in the absence of words to show that it is meant as a payment in full, prevent his recovering any further balance due, and which the proviso in italics prevented the accounting officers of the government from allowing. The case distinguished from United States v. Child, 12 Wall. 232, and United States v. Justice, 14 Wall. 535, and Mason v. United States, 17 Wall. 70.

J. H. Piatt, on the 26th of January, 1814 -- during our second war with Great Britain -- by a written contract with the then Secretary of War, General Armstrong, became a contractor of supplies for the Northwestern Army for one year, to begin on the 1st day of June, 1814, and end on the 31st day of May, 1815, at an average rate of twenty cents the ration; and as the usage then was to make advances in money to contractors, he retained in his hands, as an advance from the department, the balance of the commissariat fund, which at the close of his engagements amounted to $48,230.77.

On the 26th of January, 1814, when the contract was made, the government was in good credit and paying its debts in gold and silver. By the 1st of June following, when it was to take effect, the gold and silver were exhausted and the government had resorted to Treasury notes, which passed at a discount. In the month of August, 1814, the enemy captured Washington and burnt the capitol, an event which assisted to depress the business of the country. All the banks south and west of New York suspended specie payments. The currency soon became the irredeemable paper of state banks. Its value went down and the price of produce went up, till supplies could not be had for less than forty-five cents the ration.

By the 1st of January, 1815, after expending the balance of the commissariat fund and all other funds he had received, the United States owed him, for supplies already delivered, a large sum of money, and his drafts on the government lay under protest for the want of funds in the Treasury to pay them.

Page 89 U. S. 498

In this condition of things, and in an exigent moment, on the 26th of December, 1814 -- the army in the Northwest being about to make a move -- requisition was made on him for a large further supply of rations. He went, on the 1st of January, 1815, to Washington to lay matters before the War Department, and, as the Court of Claims found as facts of the case, at a personal interview there with him, notified to Mr. Monroe, then Secretary of War, that he would furnish no more rations under the contract. Secretary Monroe admitted to Piatt the inability of the government to comply with the terms of the contract on their part, both as to money already due and as to money which might become due for future supplies. But the military exigency then rendering it necessary that a large quantity of rations should be furnished immediately for the Northwestern Army, it was thereupon agreed by parol between Piatt and the Secretary, that if Piatt would furnish the rations which might be required, he should receive for them whatever price they should be reasonably worth at the time and place of delivery, and that the defendants, instead of paying as required by the terms of the original contract, should defer payment until such time or times as they should have the requisite funds.

Under the parol agreement, Piatt furnished

and delivered to the government 73,007,010 rations,

the reasonable value of which, at the times and

places at which they were furnished, was 45 cents

per ration, amounting in the aggregate to . . . . . . . $328,531.54

But, on the settlement of Piatt's account at

the close of the war, the officers of the Treasury,

having no knowledge or evidence of the parol agreement

under which the rations were furnished, allowed and

paid to him only the price designated in the original

written contract, amounting in the aggregate to. . . . . 148,791.87

-----------

And leaving due a balance of. . . . . . . . . . . . . $179,739.67

Page 89 U. S. 499

Piatt performed, as he alleged, other valuable

services for the government -- transportation &c., to

friendly Indians and to distressed refugees of

Michigan -- (confessedly outside of those contem-

plated by either the original or the parol

agreement), to the value of. . . . . . . . . . . . . . . $ 63,620.48

In September, 1819, an action was brought by the United States against him, and he was arrested on a capias ad respondendum for an alleged balance of $48,230.77, due from him as commissary of subsistence. He how brought his claim before Congress, but the Judiciary Committee of the Senate reported against it. However, while the suit was still pending, and he on bail, Congress (8th May, 1820) passed a private act for his relief, as follows:

"Be it enacted that the proper accounting officers of the Treasury Department be and they are hereby authorized and required to settle the accounts of J. H. Piatt, including his accounts for transportation, on just and equitable principles, giving all due weight and consideration to the settlements and allowances already made and to the assurances and decisions of the War Department:"

"Provided that the sum allowed under the said assurances shall not exceed the amount now claimed by the United States, and for which suits have been commenced against the said Piatt."

Under this act, the accounting officers of the Treasury settled the accounts of Piatt thus:

1st. They allowed him a credit of $63,620.48 for the transportation &c., furnished by him for the use of the Indians and refugees, not embraced within either of the agreements before described.

2d. They allowed him a credit upon a certain specified portion of the rations delivered upon the parol agreement, equal to the amount then claimed by the United States in the suit against him, to-wit, the sum of $48,230.77. The credit was thus ascertained: they first estimated the reasonable value of the specific portion of the rations thus

Page 89 U. S. 500

referred to; they then deducted therefrom the price per ration already paid to him; and from the balance thus ascertained, they made a further deduction sufficient to reduce the amount of the credit to the said sum of $48,230.77, as required by the proviso to the Act of Congress mentioned on the preceding page.

The allowance of the $48,230.77, which did not require the payment of money, was passed to his credit, and the action against him dismissed.

The $63,620.48 allowed for the transportation &c. to the Indians and refugees was not paid, there having been no appropriation applicable to that claim. His creditors became impatient and put him into prison, and he died in the prison bounds in the City of Washington on the 12th of February, 1822.

Congress subsequently (24th May, 1824) passed an act making an appropriation for this last-mentioned account, and there was paid under the act to the administrator of Piatt the sum of $63,620.48, the same being for the transportation &c., furnished to Indians and refugees, and not for army supplies.

But the balance of his original claim under

the parol contract for . . . . . . . . . . . $179,739.67

having been reduced by only. . . . . . . . . 48,230.77

-----------

his administrator now alleged that his

estate was entitled to . . . . . . . . . . . $131,508.90

and for this sum filed a petition -- the petition in the present case -- in the Court of Claims.

The petition set out with circumstance and color a case which in its essence was the same as above given, and after stating the interview with Mr. Monroe and that Mr. Monroe admitted that the right of the United States to enforce the original written contract had been forfeited by its failure to make payment according to its contract, and that Piatt had a right to refuse to furnish rations under the call made December 26th, 1814, alleged that Mr. Monroe had

"appealed to him as a patriot not to desert his country in that

Page 89 U. S. 501

day of its trial, assuring him that he should be fully indemnified, and should not be a loser."

The petition then alleged that on the faith of these assurances, he, Piatt, had gone on and furnished the subsequently required rations to the amount stated.

Though it did not seem to have been doubted that the rations actually cost the amount claimed, the officers of the Treasury, feeling themselves bound only by what appeared of record in the department, allowed in the settlement of the account for rations furnished after the 1st day of January, 1815, no more than the original contract price per ration. The petition then said:

"Under these circumstances, Piatt brought his claim before the Secretary of War, Mr. Crawford, who would have settled it on the principles for which the said Piatt then contended, and which your petitioner now claims to be legal and just, but that, by reason of what he considered countervailing evidence, he had doubts whether such assurances had ever been given. [Footnote 1]"

The Court of Claims, however, as already stated, found as a fact of the case that they had been given.

Being equally divided upon the right of the claimant to recover, the court could only give a judgment pro forma, and for the purposes of an appeal to the Supreme Court, decided accordingly as conclusions of law:

I. That the parol agreement entered into by Piatt and Mr. Monroe, then Secretary of War, after the forfeiture and abandonment of the original written contract, being a new contract upon a new consideration, was valid, and under such agreement, the government became indebted to Piatt for the reasonable value of the rations furnished under it and for the balance of $131,508.90.

II. But that this action was barred by the allowance made by the accounting officers of the Treasury under the private act of May 8, 1820, which must be construed to have been intended by Congress as a settlement of all claims against the defendants.

Page 89 U. S. 502

The petition was accordingly dismissed, and Piatt's administrator appealed, assigning this second conclusion of law for error.

MR. JUSTICE CLIFFORD delivered the opinion of the Court.

Attempt is made, chiefly on two grounds, to vindicate the conclusion of the Court of Claims, that the cause of action

Page 89 U. S. 506

is barred by the allowance reported by the accounting officers of the Treasury. The grounds are:

(1) That the auditor passed to the credit of the deceased claimant the amount claimed by the United States as due from him as commissary of subsistence, and that he, the claimant, accepted the settlement without protest.

(2) That Congress intended by the act directing the adjustment of his accounts that the settlement should be final and conclusive; that the act was in the nature of an offer for a disputed claim, and that the acceptance of the adjustment is a bar to the claim.

1. Verbal agreements between the parties to a written contract made before or at the time of the executions of the contract are, in general, inadmissible to vary its terms or to affect its construction, as all such agreements are considered as merged in the written contract. Both parties admit that proposition, nor is it denied by the defendants that oral agreements subsequently made, on a new and valuable consideration, before the breach of the contract may have the effect to enlarge the time of performance of the contract if it is not one within the statute of frauds, or that such an oral agreement may have the effect to vary any of the terms of the written contract or to waive or discharge it altogether.

Exceptions, it is everywhere admitted, exist to the rule that parol evidence is not admissible to contradict or vary the terms of a written instrument. Most of such exceptions are enumerated by Mr. Greenleaf, and in the course of that enumeration he says:

"Neither is the rule infringed by the admission of oral evidence to prove a new and distinct agreement upon a new consideration, whether it be as a substitute for the old or in addition to and beyond it; and if subsequent and involving the same subject matter, it is immaterial whether the new agreement be entirely oral or whether it refers to and partially or totally adopts the provisions of the written contract, provided the old agreement be rescinded and abandoned. [Footnote 2] "

Page 89 U. S. 507

Sufficient appears in the very nature of the new arrangement to show that the promise of the United States was made upon a good and valid consideration, as nothing is better settled than the rule that if there is a benefit to the defendant and a loss to the plaintiff consequent upon and directly resulting from the defendant's promise in behalf of the plaintiff, there is a sufficient consideration moving from the plaintiff to enable the latter to maintain an action upon the promise to recover compensation. [Footnote 3]

Other authorities state the rule much stronger, authorizing the conclusion that benefit to the party by whom the promise is made, or to a third person at his instance, or damage sustained at the instance of the party promising by the party in whose favor the promise is made is sufficient to constitute a good and valuable consideration for the support of an action of assumpsit. [Footnote 4]

Modern authorities supporting the proposition that parol evidence is admissible to prove such a new agreement under the circumstances disclosed in this case are very numerous and are quite sufficient to show that the proposition may be regarded as an established rule of decision. [Footnote 5]

Apply that rule to the case and it is quite clear that the whole amount claimed by the plaintiff was due to the deceased claimant at the time his accounts were adjusted by the accounting officers of the Treasury in addition to the amount claimed by the United States in setoff for balance due from him as commissary of subsistence. Well-founded doubt upon that subject cannot be entertained, as it satisfactorily appears that in order to reduce his claim to an amount not exceeding the claim of the United States, those

Page 89 U. S. 508

officers found it necessary to deduct from the aggregate estimate of the value of the rations furnished under the parol agreement, an amount exactly equal to the balance found due to the claimant by the subordinate court from whose judgment the appeal is prosecuted in this case.

Nothing was paid to the claimant under that private act except what was allowed to the claimant for services and expenses in furnishing transportation and rations for the use of Indians and indigent citizens. He was discharged from arrest and the balance due from him to the United States for the moneys in his hands as commissary of subsistence was also discharged, but nothing was paid to him for the large balance now found to be due by the court below. Argument to show that such a settlement is not a bar to the residue of the claim is unnecessary, as the proposition is utterly destitute of merit and repugnant to the plainest dictates both of law and justice.

2. Opposed to that is the suggestion in behalf of the United States that the Act of Congress was in the nature of an offer of compromise and that the acceptance of the adjustment is a bar to the claim.

Support to that proposition is attempted to be drawn from the decision of this Court in the case of Mason v. United States, [Footnote 6] but the Court here is very clearly of the opinion that the case cited affords no countenance whatever to any such conclusion. Muskets were wanted by the United States in that case, and it appears that the plaintiff in that controversy contracted to manufacture and deliver at a specified time large quantities of such arms at the price specified in the contract. Arms of the kind were delivered and paid for, and the plaintiff was notified by order of the Secretary of War that a larger quantity would be received. Preparations were accordingly made by the plaintiff to fill the second order, but the Secretary of War subsequently appointed a special commission to audit and adjust all such orders and claims. They reported that the contract should be confirmed

Page 89 U. S. 509

to a certain extent upon the condition that the contractor should, within fifteen days after notice of their decision, execute a bond with good and sufficient sureties for the performance of the modified contract, and the case shows that he executed the modified contract and gave the required bond. By that contract, he engaged to manufacture thirty thousand muskets, and the finding of the subordinate court showed that the contract was fulfilled by both parties.

What the Court decided in that case was that the claimant voluntarily accepted the modification of the contract as suggested by the commissioners, and that he executed the new contract in the place of the one superseded, which new contract he must have understood was intended to define the obligations of all concerned. Beyond all doubt, the new contract in that case was substituted for the old one, and the Court held that no party, after accepting such a compromise and executing such a discharge, could be justified in claiming damages for a breach of the prior contract which had been voluntarily modified and surrendered.

Other cases to the same effect have been decided by this Court. [Footnote 7] None of those cases, however, proceed upon the ground that such a commission possesses any judicial power to bind the parties by their decision or to give the decision any conclusive effect. Claimants in such cases may appear before the commission or not, as they choose, but the decision is, if they do appear and accept the terms awarded as a final settlement of the controversy, without protest, they must be understood as having precluded themselves from further claim and litigation.

Where a party accepts the amount awarded in such a case, it is just to conclude that he acquiesces in the decision of the tribunal by which a part of the claim is rejected as well as in the finding in his favor, but the accounting officers in this case were forbidden by law to allow the claimant anything beyond the amount in his hands as commissary of subsistence, and they obeyed the directions given in the act

Page 89 U. S. 510

of Congress. Manifestly the claimant had no opinion upon the subject, and in the opinion of the Court it would be an unreasonable construction of the Act of Congress to suppose that its framers intended that the claimant should relinquish the large balance found to be due him in consideration of his discharge from arrest and the discontinuance of the suit against him for the recovery of the amount due from him to the United States.

Certain cases from the state reports are referred to which it is supposed assert a different rule, but the Court here is of a different opinion. [Footnote 8]

Suffice it to say that in the case before the Court, no appropriation whatever was made in favor of the claimant. Where the claim is disputed and an appropriation is made in favor of the claimant for an amount less than the amount claimed, and the appropriation purports to be in full payment of the demand, the rule may be different, but it is sufficient to say in response to those authorities that nothing was appropriated in this case, and the accounting officers of the Treasury were forbidden to allow anything beyond what was involved in the pending suit against the claimant.

Judgment reversed and the cause remanded with instructions to render judgment in favor of the petitioner for $131,508.90, the amount found to be due him in the findings of the Court of Claims.

[Footnote 1]

See Reports of Senate Committee, April 5, 1820, Doc. 102, p. 5.

[Footnote 2]

1 Greenleaf on Evidence, 12th edition, § 303; 2 Taylor on Evidence, 6th edition, § 1044; Goss v. Nugent, 5 B. & A. 65; Nelson v. Boynton, 3 Metcalf 400; Leonard v. Vredenburgh, 8 Johnson 39; Marshall v. Lynn, 6 M. & W. 109; Stead v. Dawber, 10 A. & E. 57; Stowell v. Robinson, 3 Bingham's New Cases 927.

[Footnote 3]

1 Parsons on Contracts, 6th edition, 431.

[Footnote 4]

Violett v. Stettinius, 5 Cranch 150; Chitty on Contracts 28; Townsley v. Sumrall, 2 Pet. 182.

[Footnote 5]

Cummings v. Arnold, 3 Metcalf 489; Bank v. Woodward, 5 N.H. 99; Blood v. Goodrich, 9 Wendell 75; Lindley v. Lacey, 17 C.B.N.S. 584.

[Footnote 6]

84 U. S. 17 Wall. 70.

[Footnote 7]

United States v. Child, 12 Wall. 232; United States v. Justice, 14 Wall. 535.

[Footnote 8]

Sholes v. State, 2 Chandler 182; Baxter v. State, 9 Wis. 44; Calkins v. State, 13 id. 389.

MR. JUSTICE BRADLEY, with whom concurred JUSTICES SWAYNE, DAVIS, and HUNT, dissenting:

I dissent from the judgment of the Court in this case. In my view, the case was decided and settled more than fifty years ago. The claim cannot be established without opening that settlement and declaring that a valid contract was made which had been decided not to be a valid contract, but only a mere claim for some equitable allowance which was in fact made and accepted at that time.

Page 89 U. S. 511

Piatt, the original claimant, was an army contractor in the Northwest during the war of 1812. Becoming embarrassed by not receiving funds from the government and from the great rise in the prices of provisions, he threatened to throw up his contract, but the allegation is that at the request of Mr. Monroe, then Acting Secretary of War, and upon his assurances that he should not be the loser, he went on and furnished supplies to a large amount. For these supplies he claimed a large allowance beyond the amount stipulated in his contract. The petition, after alleging that the officers of the Treasury, feeling themselves bound only by what appeared of record in the department, allowed to Piatt, in the settlement of his account for rations furnished after the first day of January, 1815, no more than the original contract price per ration, states further that Piatt then brought his claim before the Secretary of War, Mr. Crawford, who would have settled it on the principles for which Piatt then contended, "but that, by reason of what the considered countervailing evidence, he had doubts whether such assurances had ever been given."

Thus it is seen that there were two sides to the question at that early day, when all the events were fresh and when Mr. Monroe was living at the seat of government and accessible at any moment.

In 1820, Piatt was arrested for $48,230.77, the balance found due to the government in his accounts, as ascertained by the settlement at the department. He then brought his claim before Congress, and the Judiciary Committee of the Senate reported adversely thereto. But on the 8th of May, an act was passed for his relief. *

Thereupon his accounts were restated under the provisions of the act and the officers of the department, after allowing him the sum of $63,620.48 for provisions furnished to friendly Indians and to distressed settlers of Michigan (which was entirely outside of his contract, and was afterwards paid in full), allowed him a credit on the footing of

Page 89 U. S. 512

the assurances of Mr. Monroe for $48,230.77, the full amount of the claim for which he had been arrested. He was thereupon discharged from custody on the 25th of July, 1820, and died in February, 1822. The present claim is prosecuted by his representatives.

Upon these facts it seems difficult to resist the conviction that in the contemplation of both parties (Piatt and the government), this case was then and there forever ended and determined. Between individuals it must necessarily have been so. Had such a disputed and doubtful claim been held by one man against another and left to arbitration, subject to the condition that no sum should be awarded beyond a certain amount, and had that amount been awarded and accepted, can there be a doubt that the award would have been binding and conclusive? I think not.

The present case is stronger. Congress proposed to allow Piatt a settlement of his claim by the Treasury Department, in which due weight and consideration should be given to the assurances in question, provided that the sum allowed under them should not exceed the amount claimed by the United States against him, and for which suit had been commenced. He accepted the law, had the benefit of the settlement, and was allowed under the assurances the amount named, which justly cancelled the debt for which he was sued and arrested by the government. Thereupon he was discharged. The declaration of Congress thus made binding by the acts of the party that nothing should be allowed against the government on that claim beyond a certain amount named, was equivalent to a solemn adjudication. It amounted to a declaration of the government that it would not suffer itself to be pursued or molested for a greater sum. Can it now be contended that the Act of 1855 constituting the Court of Claims, and allowing suits to be brought against the government on contracts made with it, has opened this adjudication -- that settlement and determination of the case? In my judgment, certainly not. The act constituting the Court of Claims was not intended to disturb past adjudications

Page 89 U. S. 513

and settlements, and to open afresh claims that had been disposed of. The Court of Claims had no right to go behind the final settlement and attempt to establish the original facts of the case. Its findings of fact in this respect were illegal and void. The government has never consented to be sued on this claim or on any claims similarly situated.

The conclusion of law to which the court came, I think, was correct, and the decree should be affirmed.

* See it set out supra, p. 89 U. S. 499 -- REP.

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