Where, in a contract with the Secretary of War for supplying the
troops of the United States with provisions, specific prices are
stipulated for rations issued at certain places mentioned in the
contract, and it is further provided that "should any rations be
required at any places not specified in this contract, the price of
the same shall be hereafter agreed on betwixt the public and the
contractor;" if the parties cannot agree upon the price for the
rations thus required, a reasonable compensation is to be allowed,
and is to be proved by competent evidence and settled by a jury,
and the contractor, upon the trial, is at liberty to show that the
sum allowed by the Secretary of War is not a reasonable
compensation.
Under the third and fourth sections of the Act of 3 March, 1797,
ch. 74, the defendant is entitled at the trial to the full benefit
of any credit in his favor, whether arising out of the particular
transaction for which he was sued or out of distinct and
independent transactions, which would constitute a legal or
equitable setoff, in whole or in part, of the debt sued for by the
United States.
This was an action of debt brought in the District Court of
Kentucky against the defendant, a former contractor for supplying
the troops of the United
Page 19 U. S. 136
States with provisions. The defendant pleaded
nil
debet. The attorney of the United States, to support the issue
on the part of the United States, produced a certain account marked
A. The counsel for the defendant, to support the issue on his part,
produced the contract marked B.; also a paper marked C. and an
account for contingent claims, marked D. By the contract entered
into between the defendant and the Secretary of War on 3 July,
1801, it was among other things agreed that the contractor should
receive
"for every complete ration issued at the Chickasaw Bluffs at
Nashville, at Bear Creek, on the Tennessee, or at any other place
on the road between Nashville and Bear Creek, fourteen cents,"
and
"for every complete ration issued at any place in the Chickasaw
or Chocktaw country on the road between Bear Creek and Natchez,
eighteen cents and one-half cent,"
and that
"should any rations be required at any places or within any
other districts not specified in this contract, the price of the
same shall be hereafter agreed on betwixt the public and the
contractor."
It appeared from the evidence that at the time the contract was
entered into, the road from Nashville to Natchez crossed the
Tennessee River at the mouth of Bear Creek, which empties into the
Tennessee River on the southwest side. That after the date of the
contract, a new road from Nashville to Natchez, passing through the
Chickasaw and Chocktaw country, was cut out by the United States
troops which crossed the Tennessee River about twelve or fourteen
miles above the mouth of Bear Creek, and
Page 19 U. S. 137
about ten miles further from Nashville. That during the
continuance of the contract, a cantonment was established on the
southwest side of the Tennessee River at the crossing point of the
new road and in the Chickasaw country. That the rations on which
the two first deductions were made in the paper marked C. were
issued at this cantonment, and on the new road as far as Bear
Creek. That supplying rations at the cantonment and on the road as
aforesaid, was more expensive to the contractor than it would have
been at the mouth of Bear Creek. That Fort Deposit is situated on
the road from Natchez to Nashville on the northeast side of the
Bayou Piere, about half a mile above the Grindstone Ford. That when
the contract was entered into, the Bayou Piere was considered the
Chocktaw boundary, but at the treaty afterwards held at Fort Adams
it was discovered that an old boundary line existed between the
Chocktaw Indians and the French twenty miles in advance from the
Grindstone Ford, and this line was adopted in the treaty. That at
this post the rations were deposited, on which the third deduction
was made in the paper, marked C.
On the trial of this cause, the following questions
occurred:
1. Whether, under the contract marked B., the defendant was
entitled to the sums, or either of them, disallowed in the papers
C. and D., which had been presented to the proper officers and by
them disallowed.
2. If the defendant be not entitled to the amount
Page 19 U. S. 138
claimed in the first, second, and third items or either of them
in the paper marked C., on the ground that the place at which the
rations were delivered is not specially provided for in the
contract, has he a right to show that the sum allowed by the
Secretary of War for those rations is not a reasonable
compensation?
3. Upon such proof, is the defendant entitled to a reasonable
compensation for those rations to be ascertained by the jury?
4. If the defendant be entitled to any of the above sums, can he
be permitted to claim a credit for them in this suit?
The opinions of the judges of the circuit court being opposed
upon these questions, they were ordered to be certified to this
Court according to the act of Congress.
MR. JUSTICE STORY delivered the opinion of the
Page 19 U. S. 139
Court.
This case comes up from the Circuit Court of Kentucky upon a
division of opinion of the judges upon certain questions stated in
the record.
It appears from the record that the defendant, on 3 July, 1801,
entered into certain articles of agreement with the Secretary of
War for supplying the troops of the United States with provisions
at certain places enumerated in the contract. Among other things,
the articles provide that the contractor should receive "for every
complete ration issued at the Chickasaw Bluffs, at Nashville, at
Bear Creek, on the Tennessee, or at any place on the road between
Nashville and Bear Creek, fourteen cents," and
"for every complete ration issued at any place in the Chickasaw
or Chocktaw country on the road between Bear Creek and Natchez,
eighteen cents and one-half cent,"
and that
"Should any rations be required at any places or within any
other districts not specified in this contract, the price of the
same shall be hereafter agreed on betwixt the public and the
contractor."
At the time the contract was entered into, the road from
Nashville to Natchez crossed the Tennessee River at the mouth of
Bear Creek, which empties into Tennessee River on the southwest
side. After the date of the contract, a new road from Nashville to
Natchez, passing through the Chickasaw and Chocktaw country, was
cut by the United States troops, which crossed the Tennessee River
about twelve or fourteen miles above the mouth of Bear Creek and
about ten miles further from Nashville. During the continuance of
the contract, a
Page 19 U. S. 140
cantonment was established on the southwest side of the River
Tennessee at the crossing point of the new road, and in the
Chickasaw County. At this cantonment certain rations were issued by
the defendant for which he claimed the contract price of eighteen
and a half cents a ration as rations issued in the Chickasaw
country. This claim was disallowed by the Treasury Department, and
constitutes the first and second items of an account presented to
the Treasury and referred to in the first question as the paper
marked C. The remaining item of the same account, which was
disallowed by the Treasury, was for certain rations deposited at
Fort Deposit, for which the defendant claimed also the contract
price of eighteen and a half cents a ration, as rations issued in
the Chocktaw country. At the time the contract was made, Fort
Deposit was considered within the Chocktaw boundary, but at the
treaty afterwards held at Fort Adams it was discovered that an old
boundary line existed between the French and the Chocktaws, which
was the line adopted by that treaty, and excluded Fort Deposit from
the Chocktaw country. There is another account annexed to the
record marked D., consisting of certain claims of the defendant
against the United States which were presented to and disallowed by
the Treasury Department. Upon these claims it is unnecessary to say
more than that this Court entirely concurs in the opinion of the
Treasury Department.
The first question, then, is whether the defendant is entitled
to any or all of the items disallowed by
Page 19 U. S. 141
the Treasury Department in the account C. It is contended on
behalf of the United States that the two first items for rations
issued and deposited at the cantonment on the new road on Bear
Creek were within that part of the contract providing for rations
issued "at any place on the road between Nashville and Bear Creek,"
for which the defendant was entitled to the contract price of
fourteen cents only, and that this sum had been allowed therefor at
the Treasury. On the other hand, the defendant's counsel pretends,
as has been already stated, that this cantonment was within the
Chickasaw country, and that the phrase "Bear Creek on the
Tennessee" in the contract means the mouth of Bear Creek on the
Tennessee, so that the defendant is entitled to the contract price
of eighteen and a half cents.
We are, however, of opinion on this point that the contract must
necessarily be presumed to refer to the actual state of things at
the time of its inception, inasmuch as there is nothing in it which
shows that the parties had in contemplation any prospective
changes. The phrase "Bear Creek on the Tennessee" seems to be an
unusual description of the junction a creek with a river, but in
its connection with the context, we are unable to give it any other
rational interpretation. And if this were even doubtful, we are of
opinion that the road between Nashville and Bear Creek, spoken of
in the contract, is the road then in existence and use between
those places, and cannot, in the absence of all evidence of
intention, be construed to mean a new road not then laid out or
made nor shown to be in
Page 19 U. S. 142
the contemplation of the parties. The rations then issued and
deposited at the cantonment on the new road were not provided for
in the contract at a specific price; not at the price of fourteen
cents, for they were not issued at any place on the old road
between Nashville and Bear Creek, described in the contract; and
not the price of eighteen and a half cents, for it was not
sufficient that the cantonment should be in the Chickasaw and
Chocktaw country, but it must also be on the road between Bear
Creek and Natchez existing at the time of the contract. The case,
then, falls precisely within that clause of the articles of
agreement that provides that the price of rations delivered at any
other places not specified shall be thereafter agreed on betwixt
the public and the contractor, and this is the construction
originally adopted by the government itself.
The same reasons which lead us to this conclusion constrain us
to adopt the construction that the parties, in their contract, in
referring to the Chickasaw and Chocktaw country, intended not a
disputed, imaginary, or rightful boundary afterwards to be settled,
but the actual reputed boundary of that country. If, then, Fort
Deposit was within the reputed boundary at the time of the
contract, the line as afterwards settled by the treaty at Fort
Adams, though the true line, has nothing to do with the case, and
the rations deposited at Fort Deposit are to be paid for at the
contract price of eighteen and a half cents a ration.
The second and third questions propounded by the circuit court
may be shortly answered. If
Page 19 U. S. 143
there be no specific price agreed upon in the contract for
rations issued at any place, the contract leaves the price to be
adjusted by the government and the contractor. It is to be the
joint act of both parties, and not the exclusive act of either. If
they cannot agree, then a reasonable compensation is to be allowed,
and that reasonable compensation is to be proved by competent
evidence and settled by a jury, as in common cases, and the
defendant upon such a trial is at liberty to show that the sum
allowed him by the Secretary of War is not a reasonable
compensation.
The fourth question is whether the defendant can be permitted to
claim a credit for the sums due him under the contract in this
suit. The answer may materially depend upon the true construction
of the Act of Congress of 3 March, 1797, c. 74, providing for the
more effectual settlement of accounts between the United States and
public receivers. The third section of that act provides that upon
suits instituted against any person indebted to the United States,
judgment shall be rendered at the return term unless the defendant
shall in open court make oath or affirmation that he is equitably
entitled to credits which had been previous to the commencement of
the suit submitted to the consideration of the accounting officers
of the Treasury and rejected, &c. The fourth section then
provides that in suits between the United States and individuals,
no claim for a credit shall be admitted upon trial but such as
shall appear to have been presented to the accounting officers of
the Treasury for their
Page 19 U. S. 144
examination and by them disallowed in whole or in part, unless
it shall be proved to the satisfaction of the court that the
defendant is at the time of the trial in possession of vouchers not
before in his power to procure, and that he was prevented from
exhibiting a claim for such credit at the Treasury by absence from
the United States or some unavoidable accident. The terms of these
sections are very broad and comprehensive. The third section
manifestly supposes that not merely legal but equitable credits
ought to be allowed to debtors of the United States by the proper
officers of the Treasury, and the fourth section prohibits no
claims for any credits which have been disallowed at the Treasury
from being given in evidence by the defendant at the trial. There
being no limitation as to the nature and origin of the claim for a
credit which may be set up in the suit, we think it a reasonable
construction of the act that it intended to allow the defendant the
full benefit at the trial of any credit, whether arising out of the
particular transaction for which he was sued or out of any distinct
and independent transaction which would constitute a legal or
equitable setoff, in whole or in part, of the debt sued for by the
United States. The object of the act seems to be to liquidate and
adjust all accounts between the parties and to require a judgment
for such sum only as the defendant in equity and justice should be
proved to owe to the United States. If this be the true
construction of the act, which we do not doubt, the defendant might
well claim a credit in this suit for the sums due him, even if they
had
Page 19 U. S. 145
grown out of distinct and independent transactions, for he is
legally, as well as equitably, entitled to them. But even if this
construction of the act were doubtful, upon the facts of this
particular case as far as we can gather them, we should have
probably come to the same result.
This suit seems to have been brought by the United States for
the money price of certain provisions received by the defendant
under the articles of agreement. The real object of the suit is
therefore to procure an account and settlement of that claim. It
forms an item in the general account between the parties, like
every other advance made by the government to the defendant, and,
independent of any statute provision, the defendant would have a
right to show that he had accounted for the value of such advance
by delivering the equivalent provisions for which it was originally
made. In this view also, the fourth question might be answered in
the affirmative.
The opinion of the Court will be certified accordingly to the
Circuit Court of Kentucky:
1. That under the contract marked B., the defendant is not
entitled to the sums disallowed in the paper D., nor to the sums
specifically charged in the first and second items of the paper C.
which were disallowed by the Treasury officers, but is entitled to
the sum charged in the third item of the paper C. which was
disallowed by the same officers if Fort Deposit was within the
reputed boundary of the Chocktaw country.
Page 19 U. S. 146
2. That the defendant is not entitled to the first and second
items in the paper C., on the ground that the place at which the
rations were delivered is not specially provided for in the
contract, but that he has a right to show that the sum allowed by
the Secretary of War for those rations is not a reasonable
compensation.
3. That upon such proof, the defendant is entitled to a
reasonable compensation for those rations, to be ascertained by the
jury.
4. That the defendant ought to be permitted to claim a credit
for the above sums due him in this suit.
Certificate accordingly.
