Emery v. United States

• Decision Date: 08 June 1926
• Docket Number: No. 2988.,2988.
• Citation: 13 F.2d 658
• Court: U.S. District Court — District of Connecticut
• Parties: EMERY v. UNITED STATES.

13 F.2d 658 (1926)

EMERY v. UNITED STATES.

No. 2988.

District Court, D. Connecticut.

June 8, 1926.

Cummings & Lockwood and William A. Kelly, all of Stamford, Conn., for plaintiff.

John Buckley, U. S. Atty., and George H. Cohen, Asst. U. S. Atty., both of Hartford, Conn.

THOMAS, District Judge.

This case was submitted on an agreed statement of facts, together with certain exhibits, consisting of a file certified by the Comptroller General of the United States. The agreed statement of facts shows that the plaintiff, a citizen of the United States and a resident of Connecticut, on an order of the Department of Commerce dated April 21, 1925, delivered to the Bureau of Standards, Department of Commerce, one 100,000-pound tension machine at a price of $5,000, which was found to comply with the order. A voucher for $5,000 payable to the order of plaintiff was approved and referred to the General Accounting office for audit and settlement. The General Accounting office withheld the sum of $969.64, which has not been paid, and it is to recover this amount that the present action is brought. As against this claim, the government has filed a set-off of the same amount which arose out of a transaction which commenced in 1918. It does not dispute the fact that the plaintiff earned the full amount of $5,000 under the transaction of 1924.

It is well settled that, where a contractor is a creditor under one contract, the government may set off, without separate action, the amount owing to it by that contractor under another contract. Taggart's Case (1881) 17 Ct. Cl. 322; Barry v. U. S. (1913) 229 U. S. 47, 53, 33 S. Ct. 681, 57 L. Ed. 1060. It is also established that parties receiving moneys illegally paid by a public officer are liable ex æquo et bono to refund them, and it is for the court to determine whether the payments were illegal, and the decisions of executive officers are not binding on the court. Wisconsin Central Railroad Co. v. U. S., 164 U. S. 190, 212, 17 S. Ct. 45, 41 L. Ed. 399; U. S. v. Burchard, 125 U. S. 176, 8 S. Ct. 832, 31 L. Ed. 662; U. S. v. Stahl, 151 U. S. 366, 14 S. Ct. 347, 38 L. Ed. 194; Duval v. U. S., 25 Ct. Cl. 46; U. S. v. Sutton Chemical Co. (C. C. A.) 11 F.(2d) 24.

In the Wisconsin Central Railroad Case, supra, which involved the question of the amount to be paid a contractor for carrying the mails on page 205 (17 S. Ct. 49) Mr. Chief Justice Fuller said:

"The Postmaster General, in directing payment of compensation for mail transportation, under the statutes providing the rate and basis thereof, does not act judicially, and whatever the conclusiveness of executive acts, so far as executive departments are concerned, as a rule of administration, it has long been settled that the action of executive officers in matters of account and payment cannot be regarded as a conclusive determination, when brought in question in a court of justice. Harmon v. United States C. C. 43 F. 560, by Mr. Justice Gray; Id., 147 U. S. 268 13 S. Ct. 327, 37 L. Ed. 164; Hunter v. United States, 5 Pet. 173 8 L. Ed. 86; United States v. Jones, 8 Pet. 387 8 L. Ed. 983; United States v. Bank of Metropolis, 15 Pet. 377 10 L. Ed. 774."

Therefore the question here is whether the payment of $959.64 under the transaction of 1918-1919 was an illegal payment. If so, the plaintiff's claim must be denied.

By contract dated December 12, 1918, signed by the plaintiff and by Charles Conard, Captain Pay Corps U. S. N. and Supply Officer of the United States Navy Yard at Washington, acting for the government, the plaintiff agreed to manufacture and deliver to the United States a 4-inch 50-caliber experimental gun. Article 1 of the contract provides:

"1. That he, the said party of the first part, will furnish and deliver, at his own risk and expense, at such place as stated below * * * the following articles, and at the price set opposite each item, respectively:

"For the Bureau of Ordnance, Navy Department. Washn., D. C., Rec. 405 Ord. (Bu.) Item 1. For necessary labor, material, and expenses covering the manufacture of a 4-inch 50-caliber experimental gun by the hydraulic pressure process invented by Mr. A. H. Emery. All expenditures to be made under the direction and subject to the approval of the Chief of the Bureau of Ordnance, Navy Department. Total cost not to exceed $5,000.00.

"Note. — Contractor to furnish necessary auxiliary material and work thereon, at his ordinary rate of charges, including necessary personal expenses, connected therewith."

Article 7 of the contract provided:

"That upon the presentation of the customary bills, and the proper evidence of the delivery, inspection, and acceptance of the said article, articles, or services, and within ten days after such evidence shall have been filed in the office of the Supply Officer, Navy Yard, Washington, D. C., there shall be paid to the said party of the first part, or to his order, by the Supply Officer at Washington, D. C., the sum not to exceed five thousand dollars, for all the articles delivered or services performed under this contract: Provided, however, that no payments shall be made until all the articles or services shall have been delivered or performed and accepted, except at the option of the party of the second part."

It appears that the plaintiff received the following payments on account of said contract price: February 7, 1919, $1,837.16; April 8, 1919, $2,919.91; May 14, 1919, $1,212.57 — a total of $5,969.64. The claim of the government is that the payment of $969.64 above the limit set by the contract of December 12, 1918, is illegal.

Prior to the date of the last payment, by letter dated April 7, 1919, from the Bureau of Ordnance, Navy Department, at Washington, to the Bureau of Supplies and Accounts, it was requested that an additional allowance of $969.64 be made the plaintiff. Further correspondence passed between the two departments, and on May 5, 1919, the following letter was written from the Bureau of Supplies and Accounts to the Supply Officer of the Navy Yard at Washington:

"1. In view of the information furnished by Ordnance in the second indorsement, the Supply Officer is authorized to increase the estimated cost of the above mentioned requisition and contract based thereon to $5,969.64 to cover labor and material in excess of that estimated in the beginning of the experimental work and found necessary for the completion of the gun.

"2. Due to the experimental nature of the construction of this new type of gun, the original estimate of labor and material could not be accurately estimated, and it was accordingly anticipated that additional expenses might be necessary.

"3. It will be noted that the contract provides that all expenditures are under the direction and subject to the approval of the Chief of the Bureau of Ordnance.

"W. N. Hughes "By Direction of the Paymaster General."

On May 8, 1919, the following was written by the United States Navy Supply Officer to the plaintiff:

"United States Navy Yard, Washington, D. C.

"No. K21-581. "Supply Department "8 May, 1919.

"A. H. Emery, Glenbrook, Conn. — Dear Sir: Your contract No. 581 dated 12 December, 1918, is hereby amended to provide for an increase in the total cost to the amount of $5,969.64. This increase is due to the fact that labor and material in excess of that estimated in the beginning of the experimental work was found necessary for the completion of the gun, and that the Chief of the Bureau of Ordnance, Navy Department, directed the incurring of the additional expense for the benefit of and to the interest of the government.

"Respectfully "Signed Chas. Conrad, Captain "Pay Corps, U. S. N., Supply Officer."

It will be noted that this letter bears the signature of the officer who signed the original contract in behalf of the government.

Respecting this letter, it is the contention of the government that it purports to be merely an amendment to the contract, and is invalid by reason of the provision of section 3744 of the Revised Statutes (Comp. St. § 6895), which section, so far as is here pertinent, provides:

"It shall be the duty of the Secretary of War, of the Secretary of the Navy, and of the Secretary of the Interior, to cause and require every contract made by them severally on behalf of the government, or by their officers under them appointed to make such contracts, to be reduced to writing, and signed by the contracting parties with their names at the end thereof. * * *"

It is true that, on an executory contract required to be in writing by section 3744, and which does not comply with its requirements, no recovery may be had against the government for its failure to perform. Johnston v. U. S., 41 Ct. Cl. 76; Clark v. U. S., 95 U. S. 539, 24 L. Ed. 518; South Boston Iron Co. v. U. S., 18 Ct. Cl. 165, affirmed 118 U. S. 37, 6 S. Ct. 928, 30 L. Ed. 69. Where, however, services are rendered or material furnished under an oral contract, and the services or articles are accepted by the government and inure to the benefit of the government, recovery may...