Case Name: Henry L. Norris, survivor, &c., v. The United States
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1878-12
Citations: 14 Ct. Cl. 354
Docket Number: 
Parties: Henry L. Norris, survivor, &c., v. The United States.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 14
Pages: 354–367

Head Matter:
Henry L. Norris, survivor, &c., v. The United States.
On the Proofs.
The claimants agree to'pnild railroad engines for the^overnment to the exclusion of all other contraéis with private customers. The government agrees to indemnify the claimants from all losses in consequence. As each engine is delivered the claimants present a hill for items of loss on that engine “ due to us as part of the indemnity promised.” The total of these hills is $114,949.87. After ail are presented, the government allows them $125,497.26, upon their assurance that this “ will finally close our account.” They subsequently sue for losses on certain engines which were to have been delivered to third parlies.
Where contractors x>resent hills for specified items of losses against which the defendants have indemnified them, designating the items as “part of the indemnity promised to us,”’and the defendants pay to them a materially larger sum upon their assurance that this payment “ will finally close our account,” the payment and acceptance constitute an accord and satisfaction of all losses existing and prospective for which the defendants could he held liable under their contract of indemnity.
The Reporters’ statement of the case:
The following are the facts as found by the court:
■ I. On the 29th of October, 1863, the claimant, Henry L. Norris, and one Richard Norris were copartners, under the firm of Richard Norris & Son, engaged in the building of locomotive engines at Philadelphia, in Pennsylvania, and had anextensive establishment equipped for that purpose. The saicUpartnership continued from that time through and during all the transactions hereinafter referred to. The said Eichard Norris died on the 8th of June, 1874, and the claimant, Henry L. Norris,-is the sole surviving partner of the said firm.
II. On the said 29th day of October, the said firm contracted in writing with the Pennsylvania Eailroad Company to deliver to it twenty locomotive engines, ten of which were to be passenger engines, at $14,500 each and the United States tax, and ten of which were to be freight engines at $15,000 each and the United States tax; the deliveries to commence with the month of March, 1884, four locomotives and tenders each successive month, ending July, 1864.
III. In the spring of 1864, when the deliveries should have commenced under the said contract, the price of labor and materials had become variable and fluctuating, and it became evident that there would be a great loss to the said Arm in complying with their said contract. A military necessity then existed for the procurement by the War Department of a large number of locomotive engines for use upon the military railroads in Tennessee. As early as the 11th of January, 1864, some negotiations were had with the said firm by the general manager of railroads in the Department of the Cumberland, and on the 24th of February they wrote to the Secretary of War:
“ We beg to inform you that we have now well under way ten locomotives, ordered for Penn. E. E. Co., which cannot be altered. Ten more, not yet much done to them, material all on hand. Ten more for the Illinois Cent. E. E. Co., material partly on hand. If the requirements of the government be such as to make it important for early delivery, if you will cause us to be released from the contracts for ten of the engines for Pehn. E. E. Co., and eight for the Illinois Oent..E. E. Co., we can commence delivery of four or five locomotives per month in May next. At all events, government work shall have precedence over all other work, if you will save us harmless.”
The following reply was made to this communication:
“ WAR DEPARTMENT,
“ Washington City, March 8th, 1864.
“ Sirs : Your communication of the 24th ultimo, relating to the supply of locomotives for U. S. military r’r’ds has been received. In reply, I am instructed by the Secretary of War to inform you that Col. McCallum is the manager of the railroads in tlie Department of tbe Obio and tbe Military Division of tbe Mississippi: tbat bis orders for locomotives will be regarded as tbe orders of tbis department, and tbat you will be indemnified for any damages that may result from taking locomotives ordered for other railroad companies. A copy of tbe authority vested in-Colonel McCallum by the President is transmitted ■herewith inclosed.
“ Very respectfully, your ob’t s’v’t,
(S’g’d) “ED. M. CANBY,
“Brig. Gen’l, A. A. G.
“ Messrs. Richabd Nobbis & Son,
“Philadelphia?
McCallum received full power to contract with builders in Philadelphia and elsewhere for engines, and on tbe 16th March, 1864, he contracted with said Richard Norris & Son for the construction and delivery of eighteen locomotives, to meet in part the said military necessity. The said contract is set forth in the following correspondence, and no other or different contract was ever made between the said firm and the defendants:
“ Oeeice ob Dibectob and G-enl. Manages
“ Militaby Railroads United States,
“New Torlc, March 16, 1864.
“Richabd Nobbis & Son, Philadelphia:
“ Gentlemen : In pursuance of the authority in me vested, I do hereby direct you to construct, at the earliest practical moment, eighteen (Í8) locomotives, of five (5) feet gauge, for the use of the United States Government, to the exclusion of all other interests or contracts whatever, it being understood that you will be indemnified for any damage resulting from a compliance with this order.
“Very respectfully, your ob’t serv’t,
“D. C. M’CALLUM,
“Gol. a/nd, Director and, Gen’l Manager M. B. B. Ú.
“ Mabch 16, 1864.
“Col. D. 0. McCallum:,
“Gol. and Director and Gen. Manager
“Mil. B. Bds., U. 8.:
“ Deab Sib : We will, with much pleasure, conform to your order of this date, and will take thirteen of the locomotives now under way for Pennsylvania Railroad Company; the same to be made to a gauge of five feet, with four 54 driving wheels and copper flues; two pumps on .each engine; tenders on eight wheels; all complete, for the sum of eighteen thousand two hundred and thirty-one dollars; each machine complete; cash on delivery of each on cars at our works for transportation.
“We will also, in due course, construct five more of same description, and at same price and terms, in all eighteen complete locomotives and tenders, suited to a gauge of five feet. The whole number of eighteen to have precedence of all other work whatsoever,' and to be finished with all possible dispatch. A No. 5 injector, with adjustable nozzle, to be put on the left side of each locomotive.
“ Yery respectfully,
“EICHAED NOEEIS & SON.
“Accepted.
“D, 0. McCALLUM,
“Gol. Director and Gen. Mam. M. B. B. Ú. 8.”
IY. In fulfilling their said contract' with the defendants, thirteen of the engines so contracted for were altered from engines already under construction for the Pennsylvania Eail-road Company, and the remaining five were constructed from materials collected and prepared for engines that had been previously contracted for. Had the said firm been allowed to proceed with the work on the engines tor the Pennsylvania Company, they would have been able to deliver all the engines required by their said contract with said company within the time stipulated for in the contract, namely, before August 1, 1864. They did in fact deliver only seven engines to said company prior to August 1, and the remaining thirteen after August 1. The deliveries to the defendants and to the said company under the respective contracts were on the following dates:
Y. The defendants paid to the said firm in full for each and every engine so delivered the sum of $L8,777.93, amounting in the aggregate to $338,002.74.
Yl. On delivering each engine to the defendants, the said firm rendered to them a bill with the following heading: “The United States Dr. to Eichard Norris & Son.” Each bill was dated about the day of the delivery of the locomotive or locomo- lives to wbicb it related. Tke first, second, third, and fourth purported to be—
“For increase of cost inmaterial and labor on the locomotive-engine and tender No. [-], seized by Col. McOallum, by order of the Secretary of W ar, March 16,1864, say from October 23,1863, the date of the contract with Penn’a B. It. Co., to [the date of the dill rendered].”
The remainder purported to be—
“ For increase in cost of labor & material used in the construction of the locomotive & tender No. [-], seized by Col. McOallum, by order of the Hon. the Secretary of War, March 16th, 1864, for the use of the military service of the United States, estimated at prices existing October 23,1863, date of contract, to [the date of the MU rendered].”
Each of these bills contained the following items, but the amounts carried against each item varied with the fluctuations in the value of labor and materials. On a few of the bills there were other items of trifling amounts:
Advance in wrought iron, boiler-plates, rivets, &c_$-
“ “ cast “ . .
“ . “ copper, tin, lead, spelter, &c. .
“ “ tires. .
u a workmen’s wages.. .
Additions directed by Mr. Leach, M. M.:
No. 5 injector, with attachments. .
Alterations in cab. .
Brass-work on cylinders, steam-chests, boiler, &c. - — —
% U. S. excise tax
Terms, cash.
Immediately following the said items there was on the first and second of said bills a statement that the above sum (setting forth the aggregate of the items) was due the said firm as indemnity promised them by the Secretary of War in his letter to them, the locomotive being one of eighteen seized by Colonel McOallum for account of the United States; and on each of the remainder of the bills a like statement, except that the aggregate in the bill was said to be due as a part of such indemnity.
VII. The defendants declined to pay any of the said bills for indemnity until all the engines should be delivered. They had similar contracts with other manufacturers of locomotives on wliick like questions arose or would arise, and it was finally decided by the defendants that $25,750 would be a just sum. to pay for each engine in full for all charges for manufacture and indemnity. The aggregate which the said firm would receive under this decision was $463,500.
On the 8th of April, 1865, the said Bichard Norris & Son received the sum of $104,581.05, which was paid to them by the defendants as indemnity on fifteen locomotives. The defendants disputing the said claim to indemnity on the remaining three locomotives furnished by them, they, on the 8th of June, 1865, addressed the following letter to General McCallum:
“Bicdard Norris & Son, Locomotive Works,
“ Philadelphia, June 8, 1865.
-“Brig. Gen’l D. O. McCallum,
“Mil. JDir. & Gen’l Manager' U. S. Mil. RVd, Washington:
“Dear Sir: Eeceiving no answer to our several letters for final adjustment of our account, we are constrained again to address you. You are doubtless aware that the parties who had the auditing of our account made a very great error. We were allowed on only 15 engines, when we actually furnished you 18, making' still due us $20,916.21 to place us on the same footing all others were, w’hich you will agree we are entitled to.
“ Will you oblige us to have this sum remitted to us, which will finally close our account'? We refer you to our letters July 5,1864, and your reply to same of July 15, as also to your telegram to the Sec. of War, March 12,1864. We lost heavily by the restriction on us, which prevented our realizing as the products of our shops, and have made less than any other builders under the circumstances. We think this back claim should be paú!, and hope you will order it paid.
“Oblige us with a reply to this and inform us what will be done.
“We aré, very respectfully, '
' “NICH’D NOEEIS & SON.”
After some negotiations, the said claim for indemnity for the three engines was also allowed, and the bill therefor was paid on the 30th December, 1865, and the payment receipted for as follows:
The United States to RicWd Morris c6 Son, Dr. .
1865. — For increase in cost of labor and material used in constructing three locomotive engines for the U. S., and delivered between June 1st and October 1st, 1864, at $6,972.07 each. $20, 916 21
“ I certify that tbe above bill is correct and just; that Bich-ard Norris & Son furnished to tbe United States eighteen (18) engines, and that by a mistake in the settlement they were only-paid tbe increase cost at tbe above rate on fifteen; that tbe engines have all been received and accounted for by Capt. H. L. Bobinson, A. Q. M., and that tbe sum charged is tbe amount allowed by tbe Quartermaster-General on the settlement for tbe fifteen paid for.
“D. C. M’OALLUM,
uBt. Brig. Qen’l, Dir. & Gen’l Manager Mil. B. Bds., U. 8.”
“Beceived, at Washington, D. C., tbe 30th of December, 1865, of H. L. Bobinson, assistant quartermaster, United States Army, tbe sum of twenty thousand nine .hundred and sixteen dollars and twenty-one cents, in full of tbe above account. (Duplicate.)
“BICHABD NOBBIS & SON.
(Indorsed:) No. 82. Abstract B. Dec. Qr., 1865. Bichard Norris & Son. Dollars, 20,916^,. Paid Dec. 30, 1865.
“ Tbe explanation of Gen. M’Oallum is satisfactory, and tbe voucher, if paid, will be admitted at tbe Treasury.
“J. M. BBODHEAD,
“ Convp’r.
u2d COMP’r Oee., Deo. 26,1865.”
Yin. The sums thus paid by tbe defendants, and received by tbe said Bichard Norris & Son, were:
As the agreed price of tbe engines and of sundry extras ordered by tbe defendants after tbe contract . $338,002 74
As indemnity claimed by tbe said firm in tbe several bills rendered by them as set forth in Finding YI.. 125,497 26
Total... 463,500 00
Tbe aggregate amount of tbe indemnity demanded by tbe claimants in tbe several bills set forth in Finding YI was $114,949.87; and tbe amount allowed and paid to them by tbe defendants was $10,547.39 in excess of tbe amount so demanded by them.
IX. After receiving this payment, namely, on tbe 22d Jan- nary, 1866, tbe said Richard Norris & Son addressed the following letter to the Secretary of War:
“Richard Norris & SON, Loooiiotite Works,
“Philadelphia, Jan’y 22d, 1866.
“ Hon’ble E. M. StawtoN,
“Secretary of War, Washington:
“Dear Sir: When Col. D. E. M’Oallum, general manager H. S. mil. railways, under your order, as per your letter to us March 8, 1864, made a requisition on us March 12, 1864, for eighteen locomotives then under construction for several companies, we did not hesitate a single moment to obey that requisition cheerfully, viewing the requirements of the gov’t at that time paramount to all other considerations. Nevertheless, to avoid complications thereafter, we asked to be relieved from existing contracts to the extent of the requisition, which Col. McOallum, by telegram to you of March 12, 1864, suggested should be done by a general order by you to that effect. Such not being given, we concluded, rather than embarass the operations of the gov’t, simply to discharge our duties to the best of our abilities, and rely on the promise made in your letters to us of March 8,1864, one of which says, ‘ Col. McOallum’s orders for locomotives will be regarded as the orders of this department, and that you will be indemnified for any damage that may result from taking locomotives ordered for other railroad companies.’ The other says, ‘You will deliver to his order such engines as he may direct, whether building under orders for other parties or otherwise, the government being accountable for the same.’ Here were the fullest assurances of indemnity to us, which we did not hesitate to accept, but deemed it but an act of justice to ask the Penn’a Rl. R. Co. to release us from our contract, which the president, Mr. Thomson, refused to do. After fulfilling the requisition of Col. McOallum, we delivered in good faith to the Penn’a Rl. Rd. Co. the whole number (20) of locomotives contracted for, say 10 at $14,500 each and gov’t tax, and 10 at $15,000 each and gov’t tax, and asked them to increase the price of each sum $5,000 each, which would have about half covered the loss to us, and which they refused to do, informing us our claim for damages must be on the gov’t, and to whom we must look.
“The prices of locomotives ranged from $20 to $30,000 from April, 1864, to Nov., 1864, and to April, 1865, $30,000 & $35,000 could have been obtained. Col. McCallum settled with us for the locomotives he took, building for Penn’a R. Rd. Co., at $25,000 & gov’t tax, or $25,750 each, but we are not indemnified as yet for the loss we sustained by delivering of 18 locomotives to Penn’a Rl. Rd. Co., on which we received an average of $14,750 each & 3 % gov’t tax and the actual value of same in the market on such delivery. By fair dealing, we think the gov’t owe us $10,260 & 3 % tax on. 18 locomotives, anti we very respectfully ask if our claim is not a just one, under the circumstances ?
“ Submitting this to your consideration, we ask, with great resjiect, your examination of the same, & remain, sir, with great respect,
“Yery truly, yours,
“NICH’D NORRIS & SON.”
It does not appear that the claim contained in this letter was set up by said firm, or came to the knowledge of the defendants’ agents prior to the date of said letter, viz, January 22, 1866. The defendants refused to recognize it as a valid claim, and no part of it has been paid.
X. The postponement in the delivery of engines to the Pennsylvania Company, set forth in Finding IY, was occasioned by said manufacture of engines for the defendants. In consequence thereof the said firm was obliged to fulfill their contract with the company at times when, by reason of the increased rise in the cost of labor and materials, the cost of fulfilling it was increased. Had they delivered the engines to the company at the times called for bj their contract with it, they would have suffered a loss of $227,252. By reason of said postponement, their loss in fulfilling said contract was increased $15,412, so as to amount in the aggregate to $242,664.
Mr. John D. McPherson for the claimant.
Mr. P. J. Lippitt (with whom was the Assistant Attorney-General) for the defendants
The contract of indemnity was entire; and the payments under it having been made and accepted in full satisfaction of it, the present claim is barred. (Baircl v. United States, 6 Otto, 430.)

Opinion:
Davis, J.,
delivered the opinion of the court:
The record in this case was somewhat voluminous, and the case has been twice tried on the merits. At the present trial the discussion was able and thorough on both sides, and the court is now warranted in the conviction that the facts as found reach all the points in issue and present the law in a way to do justice between the parties.
In October, 1863, Richard Norris & Son. contracted with the Pennsylvania Railroad Company to deliever to them four locomotives in the following March, four in April, four in May, four in June, and four in July; in all, twenty engines.
A military necessity for locomotives for the Department of the Cumberland arose in the winter and spring of 1863-'64. In February, 1864, Norris & Sou, in response to some previous applications, wrote to the Secretary of War that ¿they would begin delivering four or five locomotives a month in May, if the government would secure a release from their contract with the Pennsylvania Company and from another contract with another railroad company; and in any event that they would give the government precedence in the manufacture of engines over all other work if it would save them harmless.
The government elected the latter proposal, and on the 16th of March, by its duly-authorized agent, agreed with them for the construction of eighteen locomotives at the earliest practicable moment, to the exclusion of all other contracts, to pay them for each locomotive as delivered $ 18,23L, and to indemnify them for any damage resulting from a compliance with the order.
Seven of the engines intended for the Pennsylvania Company were so far advanced that the material in them could not be used in filling the contract with the government. They were accordingly finished and delivered to that company within the contract time. The materials for the other thirteen engines intended for the company were used in constructing the engines for the government. After the expiration of the contract time for delivering the last thirteen engines to the company, Richard Norris & Son manufactured and delivered to it thirteen other engines, and the company received them as if manufactured aud delivered under the contract.
The eighteen engines for the government were manufactured as agreed and were paid for as agreed. The sum paid for each was slightly in excess of the $18,231 named in the contract-, in consequence of extra work ordered by the defendants after the-contract was made.
As each engine was delivered, the manufacturers presented with it a bill for the amount of the indemnity due by reason of the manufacture and the delivery of that particular engine. These bills varied slightly in language and necessarily varied in amounts ; but in principle they were substantially alike. It is sufficient to quote one of them in this connection:
The United States Dr. to Diehard Dorris & Son.
For increase of cost in materials and labor on the locomotive engine and tender No. 168 (1116), seized by Col. MeOallum, by order of the honorable the Secretary of War, March 16,1864, say from October 23, 1863, the date of contract with Penh a B. B. Co., May 19,1864, viz:
Advance in wrought iron used.$1,461 30
" cast iron. 793 15
u copper, tin, spelter, and lead. 454 70
tires. 210 00
" wages of workmen. 1,625 00
Additions added by Mr. Leach, M. M.:
One No. 5 injector and attachments. 165 00
Alterations in cab, &c. 43 50
Brass works on cylinders and boiler. 75 00
$4,827 65
3 per cent. U. S. excise tax. 144 82
$4,972 41
Terms cash.
The above sum, $4,972.41, is due to us as part of the indemnity promised by the honorable the Secretary of War, in his letter to us, on the above one locomotive and tender seized by Col. D. C. MeOallum for account of the United States.
The government refused to adjust the indemnity until all the engines should be delivered. Other manufacturers as well as Bichard Norris & Son were making locomotives for it, and it appears to have been thought desirable to have one rule for adjusting these items with all. So Bichard Norris & Son went on delivering their engines and taking their pay for the contract price and the extras and presenting their bills for the indemnities, until, on the delivery of the last engine, and on being paid for it and for the extras at the contract rate, they were claiming $114,949.87 as still due them by reason of the indemnity promised to them by the agents of the government.
The defendants then fixed the sum of $25,000 for each locomotive and the government tax of $750 thereon as a sum which would properly remunerate Bichard Norris & Son and the other manufacturers for the engines which they had delivered. The practical effect of tbis decision, would be, if carried into effect, to pay to Richard Norris & Sou $125,497.26 over and above the contract price for the engines and the extras instead of $114,949.87, as claimed by them.
The defendants paid to them $104,581.05, being the proportionate amount for fifteen engines, and withheld $20,916.21, the proportionate amount for the remaining three engines. Thereupon, on the 8th of June, 1865, Richard Norris & Son wrote to -General McOallum urging the payment of the remaining sum, and said, " Will you oblige us to have this sum remitted to us, which will finally close our account f We think this back claim should be paid, and hope you will order it paid." As a result of this application the claim was paid, and Norris & Son gave a receipt therefor in full.
This settlement was scarcely completed before Richard Norris & Son advanced a further demand to be remunerated for the losses to which they were subjected by reason of the improvident contract which they had made with the Pennsylvania Company. They had made a contract by which they were bound to lose about $10,000 an engine. They maintained that the government had agreed to guarantee them against the inevitable loss which their contract had brought upon them. They said, "The prices of locomotives ranged from $20,000 to $30,000 from April, 1864, to November, 1864," which was the period covered by the deliveries to the company and to the government. " Colonel McOallum settled with us for the locomotives he took, building for the Pennsylvania Railroad Company, at $25,000 and government tax, or $25,750 each, but we are not indemnified as yet. for the loss we sustained by delivering of eighteen locomotives to the Pennsylvania Company, on which we received an average of $14,750 each and 3 per cent, government tax, and the actual value of the same in market on delivery. By fair dealing we think the government owe us $10,250 and 3 per cent, tax on eighteen locomotives."
The government peremptorily refused to listen to such a claim, and thereupon this suit was brought; but the grounds of the claim were shifted when brought here, and the alleged losses were averred to have been caused by the rise in labor and materials used in eighteen locomotives to the extent of $180,000, after the locomotives could have been delivered to the company under their contract. At the trial the claim was confined to tbe supposed losses on the thirteen engines delivered after the 1st of August.
We have not considered whether the contract of indemnity is capable of either of the constructions thus put upon it. We regard it as clear beyond dispute that both parties concurred in a different construction, upon which they came to an agreement which was executed. On this agreement the defendants paid a large sum of money; and the claimants accepted the payment aud gave receipts in full, without intimating that they had further or other demands to prefer under the contract of indemnity. This was an accord aud satisfaction of a disputed claim which is a complete bar to a recovery in this action.
Should the claimant seek a review of our decision, he is entitled to a finding of the amount of the losses, if any, by reason of the postponement of the delivery of the thirteen engines to the Pennsylvania Company. As we have found that amount at a much smaller sum than the amount claimed by him, we think it proper to state the principle upon which the result is reached. '
Norris & Son made their March deliveries to the Pennsylvania Company in April; they were entitled on these to the advance between March and April. They made their April deliveries, one in May, one in June, one in July, and one in August. They were entitled on them to the respective advances between April and May, June, July, and August. They made their May deliveries, two in August and two in September; their June deliveries, one in September and three in October; aud their July deliveries, two in October and two in November. In each of these cases it must be determined by the same rule whether they suffered any injury, and, if so, to what extent.
The best evidence of the fluctuation in the value of the materials and labor which actually went into the engines manufactured in the shops of Norris & Son from February to December, 1864, must have been within the claimants' reach, but was not produced.
In lieu of it he offered, in the first place, evdence of the amount aud cost of .materials which were during that time from month to half-month aud from half-month to month put into a locomotive by another manufacturer in Philadelphia, and also evidence of the relative cost of the labor and of the material which ordinarily go into a locomotive. This evidence might have been open to tbe charge of being vague, if we had been able to consider it; but on examination it also proved to be entirely at variance with the bills of actual increased cost which had been rendered by Richard Norris & Son in their bills for indemnity presented as the locomotives were delivered, and we were forced to disregard it.
The claimant has also furnished us with evidence of the market value of locomotives manufactured by Richard Norris & Son (like those furnished the Pennsylvania Company) from month to month between February and November, 1864. This appears to furnish a reasonably correct basis by which to measure the fluctuations in cost and the increasing or decreasing losses of Richard Norris & Son in delivering the promised locomotives to the Pennsylvania Company. We therefore adopt this standard. Measured by it, it appears that the whole loss for which the government could be make liable on the claimant's own theory is $15,412; and it also appears that $10,547.39 of this amount has been already paid to the firm in the settlement which we have held to be final. The comparatively small amount of outstanding loss furnishes -additional reason for the conclusion that the parties intended to settle and did settle all their disputes in the final payment of December 30, 1865.
Judgment must therefore be entered that the claimant's petition be dismissed.