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.
