United States v. Justice, 81 U.S. 535 (1871)

U.S. Supreme Court

United States v. Justice, 81 U.S. 14 Wall. 535 535 (1871) United States v. Justice

81 U.S. (14 Wall.) 535

APPEAL FROM THE

COURT OF CLAIMS

Syllabus

Where a contractor with the United States and the United States disagree as to what is justly due to the contractor and the question is referred to a commission constituted by proper authority to audit such claims as that of the contractor's, and the commission finds a certain sum as justly due, and the contractor receives that sum, he cannot sustain a claim in the Court of Claims for a further sum, even though he have given no receipt in full.

On the 12th of August, 1861, Philip S. Justice, by a letter to Lieutenant Treadwell, first lieutenant of ordnance, proposed to supply the Ordnance Department with 4,000 rifled

Page 81 U. S. 536

muskets, "similar in style and finish to the sample deposited" with the said lieutenant, at $20 each.

On the next day, Lieutenant Treadwell, enclosing Justice's proposition, wrote to General Ripley, then chief of ordnance, at Washington, as follows:

"I enclose a proposition from Mr. Justice to furnish rifle muskets, caliber .69. I have examined a sample of the musket, and it is a good serviceable arm, .69 caliber, clasp bayonet, long-range sight, original percussion barrel, and well finished."

On August 16, 1861, General Ripley replied to Lieutenant Treadwell, saying:

"You are authorized to accept Mr. Justice's proposition."

And on August 17, 1861, Lieutenant Treadwell wrote to Justice as follows:

"I am authorized by the Ordnance Department to accept your proposal of August 12, to furnish for the United States 4,000 rifled muskets, caliber 69/100 of an inch, equal in all respects to the sample deposited with me, at $20."

In execution of the contract, Justice delivered from time to time, 2,174 rifled muskets, all of which were inspected by subordinate officers appointed by Lieutenant Treadwell and received under his official certificate that they had been duly inspected and approved. "These arms" thus furnished "were not," as the Court of Claims found,

"in all respects, similar to the sample arm, but on an average not inferior to it, which was far from being a standard or first-class arm of the United States. It was not equal to the Springfield rifle. And the Justice arms were far from being a first-class arm."

Before the 19th of March, 1862, all the muskets, with the exception of 472, had been received and approved, and had also been paid for by the United States at the contract price of $20 each. These 472 were delivered on the said 19th of March, on which day Lieutenant Treadwell acknowledged their receipt and issued to Justice a final voucher showing that there was due to him for these and some other arms, the sum of $19,171.25.

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The muskets thus furnished by Justice were given to three regiments of Pennsylvania volunteers in the field, who were accordingly armed with them. Sometime afterwards, the Ordnance Department receiving serious complaints from these regiments alleging that the arms were unserviceable, ordered reinspections of the arms in the hands of these troops, as well as of those remaining yet in store. The reinspections of the arms in the hands of each of these regiments was made by Lieutenant Harris, of the Ordnance, Colonel Doubleday, of the Artillery, and Assistant Inspector General Buford. It showed that many of the guns were made up of parts of condemned muskets; that the stocks were of soft, unseasoned wood, and were defective in construction; that most of the barrels abounded in flaws; that many locks were defective, that the sights had been merely soldered on, and came off with the gentlest handling; that the bayonets bent "like lead" and came off, and that so many of the guns burst that the men were afraid to use them, and that, as a whole, the arms in the hands of the troops were "a worthless lot of arms, unfit for service and dangerous to those who used them."

Of the arms yet in store, the inspection was made by Lieutenant Treadwell in person. He reported to General Ripley, March 28, 1862, certifying to the ability and integrity of the armorers who had conducted the original inspection and saying:

"My instructions to them were to inspect the arms and reject all that in their opinion were not good and serviceable and in all respects fit for use in the field. I think that these instructions were complied with. The arms were offered to me at a time when the demand for arms was most imperative, and it was deemed desirable to accept them to meet in part the pressing demand. Comparing the arms with those of our own manufacture, none would pass inspection, and it was not supposed that they should be subjected to any such standard, but that all that were passed on inspection would prove good and serviceable was believed. Examining two boxes of these arms in store, I do not find them to have the radical defects complained

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of, nor can I account for the very different report of their inspection at camp, and that made to me by my inspectors. I find the sights are soldered on, but on tapping twenty of them with a hammer sufficiently hard to dent them, none were found to come off, or even started."

On the 20th of March, 1862, the Chief of Ordnance informed the Secretary of War that he deemed it his duty to withhold payment of the above voucher for $19,171.25, given by Lieutenant Treadwell to Justice, until the matter could be investigated. He submitted to the Secretary all the papers on the subject, and suggested that the matter be referred to the two gentlemen (Messrs. Joseph Holt and Robert Dale Owen) who had been authorized by the Secretary to audit and adjust all claims and contracts in respect to ordnance, arms, and ammunition. This recommendation was approved by the Secretary of War, who referred the voucher of March 19, together with all the papers and reports received from the Ordnance Office, to this committee, who were then sitting in Washington. The committee proceeded to investigate the character and quality of the arms. Justice was in Washington during its session, appeared before it, and was persistent and energetic in presenting his claim. He offered no evidence, but presented several written arguments.

The first report of the committee, who declared that they "considered it proved that Mr. Justice had not fulfilled his obligation to furnish a serviceable arm to the government," was condemnatory of all the guns, as "not suitable in workmanship or material for the public service." Fourteen days after it was made, Justice succeeded in convincing the commissioners that in thus condemning all the guns, they had fallen incontestably into error. He also protested that as his arms were accepted after inspection by government authority, the government could not rightfully decline to pay for all so accepted. A second report corrected the error which Justice had pointed out and found that the "complaints of inferiority" related chiefly to 2,174 rifled muskets. Accordingly the committee decided in their second report

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that the payments theretofore made to Justice be considered as "on account," and that $15 per gun only be allowed for the 2174 rifled muskets, instead of $20, the contract price.

[In their first report, they had decided that $15 was an ample equivalent for all the arms.]

The Second Auditor was now instructed by the Chief of Ordnance to settle Justice's account on the voucher of March 19 for $19,171.25, on "the basis of this decision," and he accordingly stated an account between Justice and the United States in which he charged the contractor as with an overpayment of $5 each for all the rifled muskets already paid for at the contract price of $20, and deducted $5 from the contract price of each of the muskets embraced in the voucher of March 19. As the whole number of these arms was, as has been seen, 2,174, the amount deducted from the face of that voucher was thus $10,870, leaving on the face of the account $8,301.25 as the balance due.

On the 8th of December, 1862, Justice received from the Treasurer of the United States certificates of indebtedness amounting to $6,000, and a Treasury draft for $2,301.25, amounting in all to $8,301.25; the receipt of which he acknowledged in a letter to the Treasurer of the United States, thus:

"SIR: Have received your letter of draft, together with the following certificates of indebtedness, payable to blank, viz.:"

No. 36,332 to No. '337, i.e., 6 of $1,000 . . $6,000.00

Draft for balance remitted. . . . . . . . . . . 2,301.25

---------

Amounting to. . . . . . . . . . . . . . . . $8,301.25

"Issued on war warrant No. 3405 for that amount in favor of Philip S. Justice."

"Scale No. 12,051."

"Yours &c.,"

"P. S. JUSTICE"

"F. E. SPINNER"

"Treasurer of the United States."

No other receipt was ever given by Justice for the amount or any portion of the amount of the above voucher of March 19. The amount thus received left a balance of that

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voucher amounting to $10,870 unpaid; and to recover this balance, Justice, on the 16th of October, 1867 (nearly five years, it will be seen, after receiving it), brought suit in the Court of Claims.

The Court of Claims found for the claimant the $10,870 claimed, and the United States appealed.

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MR. JUSTICE DAVIS delivered the opinion of the Court.

It is impossible to escape the conclusion, after reading the evidence which the Court of Claims incorporates with its finding of facts in this case, that the arms obtained by the government from Justice were unserviceable and even unsafe for the troops to handle, whether they were equal to the sample arm furnished by him or not. It is true they had been accepted by Lieutenant Treadwell, with whom the contract of purchase was made, after inspection by subordinates appointed by him, but when difficulty arose in relation to them, he said, in justification of his conduct and to show his interpretation of the contract, that he had instructed these inspecting officers to reject all the arms that in their opinion were not good and in all respects fit for use in the field. That the duty with which these officers

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was, to say the least, negligently performed is evident from the result of the subsequent inspection which was ordered. This inspection was in response to serious complaints from three regiments of Pennsylvania volunteers which had been armed with the muskets in controversy. The arms of each regiment were inspected by a separate commissioned officer of experience, and all united in condemning them as worthless and, indeed, dangerous to those using them.

In this state of case, the Chief of the Ordnance Bureau informed the Secretary of War that he deemed it his duty to withhold payment of one of the vouchers given for these arms until the matter could be further investigated, and recommended reference of the entire subject to the commission then sitting in Washington, which had been constituted by the proper authority "to audit and adjust all contracts, orders, and claims on the War Department in respect to ordnance, arms, and ammunition." In accordance with this recommendation, the case was referred to this commission, which, after full investigation and a patient hearing given to Justice, reported that he had not fulfilled his obligation to furnish "a serviceable arm" to the government, and fixed a basis on which the account should be settled. This basis of settlement was adopted, and in accordance with it the Secretary of the Treasury, on the 8th of December, 1862, pursuant to a requisition of the War Department, drew his warrant on the Treasurer of the United States in favor of Justice for the amount found due by the accounting officers, which was transmitted to him, and receipt of it acknowledged by letter. After waiting until the five years' limitation to actions of this kind had nearly expired, he brings this suit to recover the balance of the claim, according to the original contract price, and the question is can he maintain it?

In the nature of things, during such a war as we have just passed through, contracts would in many instances by the made by some of the numerous subordinates entrusted with that duty in disregard of the rights of the government, or if properly made, would be so unfaithfully executed that the

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public service would suffer unless their further execution were arrested. Although every just government is desirous of making full compensation to its creditors in all cases of fair dealing, it cannot afford to recognize this rule where an imposition has been practiced upon it. Of necessity, it acts through agents, and cannot therefore assure its own protection as natural persons in dealing with each other. What, then, was the proper course for the government to pursue in relation to these disputed claims? To pay them, in the existing condition of the country, would set a bad example and lead to the most ruinous consequences, and to withhold payment altogether until Congress or the Court of Claims should act would be, in case the claim should prove to be meritorious, a hardship. Common fairness required that some mode should be adopted for the speedy adjustment of these differences between the creditor and the government, and what better mode for the accomplishment of this object than the appointment of a commission of intelligent and disinterested persons to hear the respective parties and to settle the allowance to be made? We know by the history of the times that several commissions for this purpose were appointed during the war, and the record discloses the fact that when this controversy arose, these was one sitting in this city, constituted by the Secretary of War under the authority of the President, to audit and adjust claims of like character. It is fair to presume, in the absence of anything in the record to the contrary, that the creation of this commission was a necessity produced by the number and magnitude of the claims presented to the Ordnance Bureau which the head of it deemed unjust, and was, therefore, unwilling to pay. This commission, like all others with similar authority, possessed no judicial power, nor did it attempt to exercise any. It would not compel a claimant to appear before it and submit to its action, nor would its decision, in case there were no adversary party, have any conclusive effect. If, on the contrary, the party whose claim was disputed went before it, participated in its proceedings, and took the sum found to be due him without protest, he cannot

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afterwards be heard to say that he did not accept this in full satisfaction of his demand. This voluntary submission and reception of the money is an acceptance on the part of the claimant of the mode tendered him by the government for the settlement of his disputed claim, and precludes him from any further litigation.

It is always in the power of parties to compromise their differences. One way of doing this is by arbitrators, mutually chosen, but from such submission neither party is at liberty to withdraw after the award is made. The condition of the government creditor is better than this, for if dissatisfied with the allowance made him by the commission, he can refuse to receive it, or can accompany his receipt of it, if he chooses to take it, with a proper protest. This protest is necessary to inform the government that the compromise is rejected and that this rejection leaves the claimant free to litigate the matter in dispute before the Court of Claims. If with this knowledge and under these circumstances the money is paid, there can be no just cause of complaint on either side, and the status of the parties is not affected by anything which transpired before the commission.

These views dispose of this case. If it be conceded that the guns obtained from Justice were equal to the sample furnished, still it is manifest they were not a serviceable arm, and were besides unsafe, and that the government withheld the payment of the voucher because the contract, in the opinion of the Ordnance Bureau, was unfaithfully executed. The contract, with the accompanying papers, were referred to the ordnance commission. Justice appeared before it to contest the position of the government, and, although he offered no evidence, argued his case in writing. And as if to leave no doubt of his intention to abide the result, he succeeded, two weeks after the commission had reported on the matter to the Chief of Ordnance, in getting an error against him corrected. And when this was done and the account stated in conformity with this correction, he receives the amount allowed him without an intimation of dissatisfaction. It is difficult to suppose that at this time

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he had any other purpose than to acquiesce in the decision which was made. If his purpose were different, why the long delay in instituting suit? It is hard to believe that the course subsequently taken was not the result of an afterthought.

The recent cases in this Court of the United States v. Adams and the United States v. Child are like this in principle, although they contain some elements not applicable here.

Judgment reversed and the cause remanded to the Court of Claims with instructions to dismiss the petition.