Case: Henry E. McKee v. The United States
Abbreviation: McKee v. United States
Decision Date: 1876-12
Docket Number: 
Citation: 12 Ct. Cl. 504
Volume: 12
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: Henry E. McKee v. The United States.
Judges: Loring, J., agreed in all of the conclusions reached by the majority of the court.
Pages: 504–564

Head Matter:
McKEE’S CASE.
Henry E. McKee v. The United States.
On the Proofs.
A quartermaster advertises for 3,000 tons of hay, deliverable at Fori Gibson, the proposals to state at %ohat distance from the fort the hay will be cut, such military protection to be furnished “ as the necessities and interests of the service may admit.” The claimant’s bid to furnish the hay contains no stipulation as to the military protection. The formal contract binds the Government to furnish “sufficient guards and escorts to protect the contractor while engaged in the fulfillment of this contract.” A second contract in similar terms is made, without advertisement, on the 17th July, 1864, for more hay, deliverable from August 10 to September 2Ó. It is founded on an order of the- commanding officer directing the quartermaster to procure the hay “on the best terms you can,” “ should there not be time to advertise.” Sufficient guards are not furnished to protect the contractor. He is prevented from performing, and some of the hay is destroyed hy the public enemy. The accounting-officers of the Treasury allow him his losses and expenses per ton on that destroyed. He brings his action for profits. The defendants set up a counterclaim to recover hack the moneys paid on the accounting-officers’ award.
I. Where the advertisement and proposals refer only to such military protection “ as the necessities and interests of the sei'viae map admit,” the gratuitous insertion of a covenant in the formal contract binding the defendants to furnish “ sufficient guards and escorts to protect the contractor while engaged in the fulfillment of this contract” is void under the Advertisement Act 2d March, 1861, (12 Stat. L., 220, § 10.)
II. A covenant binding the Government to furnish “sufficient guards and escorts to proteetthe contractor while engagedin the fulfillment of this contract” is not an agreement to protect a citizen in his ordinary pursuits, but is of the nature of a contract of indemnity or insurance where the Government is interested in the fulfillment, and where there is a risk which one party or the other must assume. Such a covenant amid such circumstances is within a quartermaster’s discretion and valid.
III. A quartermaster’s contract made without advertisement was valid under the Act 4th July, 1864, (13 Stat. L., 394, § 4,) though the commanding officer did not in terms declare an emergency, nor in terms direct the quartermaster to procure the supplies “in the most expeditious manner without advertisement.”-
IV. A quartermaster’s contract made without ad vertisement for hay to be cut on the neighboring prairies was valid under the Act 4th July, 1864, (13 Stat. L., 394, § 4,) though it bore date on the 17th July, and the hay was not deliverable till from the 10th August to the 25th September. This might be “ the most expeditious manner” forthe “ immediate procurement” of those supplies amid the circumstances of the case.
V. Where the accounting-officers of the Treasury, in mistake of law, have certified a balance in favor of a party upon a contract or obligation which was invalid, and the party brings a suit founded upon the same contract, the defendants may set up as a counter-claim and recover back the money paid on the accounting-officers’ settlement, ex equo et tono.
The Reporters’ statement Of the'ease:
The following are the facts found by the court upon which the final argument in the case was heard :
I; In the year 1864, Brigadier-General John M. Thayer was in command of the District of the Frontier, Department of Arkansas, with headquarters at Fort Smith, and Greene Durbin, captain and assistant quartermaster, was chief quartermaster of said district; which district was in the Indian Territory, south of Kansas and west of Arkansas.
II. During the spring, summer, and fall of 1864, owing to the low stage of water in the Arkansas River, it was impracticable for General Thayer’s command to be supplied with grain, by way of that river, for the support of the animals; and the only other sources of supply of grain were Fort Scott and Fort Leavenworth, in Kansas. From those points to Fort Gibson was a long route, exceedingly difficult to protect and guard against raids from the rebel troops. Being thus cut off from any direct or safe communication with any base of supplies, said command was compelled to rely solely upon grass and hay for the support of the animals. Grass was very abundant in the Indian Territory during the year 1864, and hay could have been put up as late as the last of October. Owing to the condition of things thus stated, and as well to provide hay for present use as for the ensuing fall and winter for the posts in the command, the contracts annexed to the petition were entered into, as hereinafter set forth.
III. The said Durbin published in a newspaper.at Fort Smith, Arkansas; the following advertisement:
“ Geeice Chiee Quartermaster.,
“District oe the Frontier, Dep’t oe Ark.,
“JWort Smith, May 27, 1864.
“Sealed proposals will be received at this office until Monday, the 20th day of June, 1864, at 12 m., for furnishing 3,000 tons of hay, to be delivered at Fort Gibson, C. N. The bids will state at what date the delivery of the hay can commence, & no bid for the delivery of less than 200 tons will be received. The hay will be received by an agent of the undersigned, or by the post quartermaster at Fort Gibson, who may be serving there at that time, and upon the delivery & acceptance of each two hundred tons payment therefor will be made in such funds as the Government may provide for the purpose.
“Bonds, with approved security, in the amount of five hundred dollars, for the performance of contracts to deliver lots of 200 tons, & in the sum of two thousand dollars upon contracts for the delivery of lots of 1,000 tons, will be required; bonds for the performance of contracts for the delivery of other amounts than those above stated will be accordingly proportioned.
“The proposals must state within what time the hay will be delivered at the post, & at what distance from Fort Gibson each lot of hay will be cut.
“ Such military protection will be furnished as the necessities and interests of the service may admit.
“ Proposals will be made out in duplicate, with a copy of this advertisement attached, and endorsed ‘ Proposals for furnishing hay.’
“ The right is reserved to reject any & all bids, as the interests of the service may require.
“GREENE DURBIN,
“ Gapt. & A. Q. M., Oh’f Q’rm’r.’’
IY. The claimant made the following proposal under said advertisement:
“Fort Gibson, O. N., June 16,1864.
“Gapt. Greene Durbin,
“A. Q. M., Chief Q’rmaster:
“ Captain : I will deliver, as per terms of your advertisement annexed, three thousand (3,000) tons of hay at. the post of Fort Gibson, O. N., for thirty ($30) dollars per ton, or the same amount stacked within seven (7) miles of this post for twenty-two ($22) dollars per ton; or I will deliver any portion of the whole amount in the field or at the post, as may be desired, at the same prices. Delivering to commence by or before July 15,1864.
“ I offer as securities Perry Fuller & Edw. J. Brooks, both of Fort Smith, Arkansas.
“ H. E. MoKEE.
“I am prepared, on sufficient-notice, to furnish an additional quantity of hay at same prices, not to exceed in amount three thousand tons.
“H. E. MoKEE.”
Y. Thereafter the contract of June 20,1864, annexed to the petition as Exhibit A, was entered into between said McKee and said Durbin.
YI. On the 17th of July, 1864, the said Brigadier-General Thayer caused the following order to be addressed by his acting adjutant-general to said Durbin:
‘‘Headquarters District or the Frontier,
“ Fort Smith, Arle., July 17,186.4.
“The general commanding directs that you immediately take the necessary steps for the delivery of four thousand tons of hay at Cabin Creek, 40 miles from Fort Gibson, & at Hudson’s Crossing of the Neosho River, 70 miles from the fort; two thousand tons to be delivered at each of said points. Should there not be time to advertise & regularly let the contract, you will make the arrangements for the delivery of the hay on the best terms you can, but not to exceed the contract-rates for the delivery of hay at Fort Gibson, C. N., under the existing contract.
■ “Very respectfully, &c.,
(Signed) “T. J. ANDERSON,
“ Major <& A. A. Geni.
“ Capt. Greene Durbin,
“ Chief Quartermaster.”
VII. On the said 17th of July, 1864, the said Durbin addressed to the claimant the following letter:
' “Office Depot Quartermaster,
"JPort Smith, Arle., July 17, 1864.
“ Mr. Henry E. McKee,
“ Contractor, &c., M. Gibson, C. N.:
“ You will deliver at Fort Gibson, C. N., by the 10th of September, 1864, as per the last clause of par. I of the contract, entered into by and between you & myself, for supplying hay at Fort Gibson, O. N., on the 20th day of June, 1864, the additional amount of two thousand tons of good merchantable timothy or prairie hay. The hay will be inspected & accepted by the acting post-quartermaster at that post, or by my duly-authorized agent. Payment for the additional two thousand tons will be made as prescribed in paragraph I of said contract. You are also tendered the refusal of delivering & putting up at Cabin Creek, 40 miles from Fort Gibson, C. N., & Hudson’s Crossing of the Neosho River, 70 miles distant from the fort, at each of said points on the direct route of supplies from Fort Scott, Kansas, to Fort Gibson, four thousand tons of timothy or prairie hay, two thousand ton’s to be delivered at each point by the 25th of September, & the delivery to commence by the 10th of August, 1864. For each one thousand tons of hay delivered and accepted at said points you will be paid the sum of thirty dollars per ton, in such funds as the U. S. may furnish for that purpose.
“ You will inform me without any delay of your acceptance of this offer, and, if accepted, you will inclose to me a guarantee in duplicate, duly stamped, in the sum of six thousand dollars, and signed by good and sufficient sureties, for the faithful performance of your subsequent agreement. The guarantee will be in the enclosed form.
“ Respectfully, your obt. servt.,
“ GREENE DURBIN,
"Capt. & Asst. Q’rmlr, 77. 8. F.”
VIII. On the 23d of July, 1864, the claimant addressed and transmitted to said Durbin the following letter:
“Fort Gibson, Cherokee Nation,
“July 23rd, 1864.
“ Oapt. Greene Durbin,
"Asst. Quartermaster U. 8. Yols., Fort Smith, Arles.:
“ Sir : I have the honor to acknowledge the receipt of your communication of the 18th inst., ordering me to deliver two thousand tons of hay at the post, Fort Gibson, as provided in the contract of June 20,1864, and containing a proposition for the delivery of two thousand tons at Cabin Creek, and two thousand tons at Hudson’s Crossing of the Neosho River, on the route from Fort Scott, Kansas, to Fort Gibson, C. N., at thirty dollars per ton, and in reply I have to state that I wil’ accept your, proposition on condition that the necessary military protection be furnished at those points.
“I also enclose you bonds in duplicate for the fulfillment of same as requested.
“Very respectfully, your obt. servant,
“(Signed) “H. E. McKEE,
“Nay Contractor.”
IX. In pursuance of tlie correspondence set forth in the next preceding three findings, and without any advertisement inviting proposals for delivering hay at Cabin Creek and Hudson’s Crossing, the contract of the 18th of July, 1864, which is an nexed to the petition as Exhibit B, was entered into between said Durbin and the claimañt. •
X. During the months of July, August,- and September, 1864, the Indian brigade were all the troops of the United States that did permanent duty in the Indian Territory, and they were frequently inside fortifications. A great portion of the time other troops were temporarily on duty there. With the troops of his command General Thayer had to keep open a supply-route between Fort Smith and Fort Scott, a distance of about 250 miles. Upon this route lay Fort Gibson, Cabin Greek, and Hudson’s Grossing. Cabin Creek was 55 miles and Hudson’s Crossing 85 miles north of Fort Gibson, and the distance from Fort Gibson to Fort Scott was 165 miles.
XI. During those months, along the route between Fort Gibson and Fort Scott, active hostilities existed between the forces of the Government and those of the rebellion. Armed forces of the rebels were frequently along the road between those places, and in the vicinity of the hay-stations, with a view of capturing detached parties and attacking supply-trains, and large parties of them appeared frequently in the immediate neighborhood of Fort Gibson; and no working parties were allowed to go out from any of the posts within the district of the frontier without military protection. Because of this condition of things it was impracticable for General Thayer always to avoid delays in furnishing military protection to parties working under the claimant or under his subcontractors, in making hay under said contracts; but in every case guards and escorts were furnished by him as promptly as the necessities •and interests of the public service permitted. The following delays of that description took place: 1. At the commencement of the claimant’s work, under the contract of June 20, he was delayed about twenty days for want of military protection. 2. In consequence of the attack made, as hereinafter stated, on the 2d of September, 1864, upon the party of Subcontractor A. Cohen, working under that contract, said Cohen was compelled to suspend work for eight days. 3. One E. O. Amsden, a subcontractor under the claimant for putting up hay at Hudson’s Crossing, was two weeks delayed at Fort Gibson from setting out from thence to the crossing, waiting for an escort; and 4, one George W. Stotts, a subcontractor under the claimant for putting up' hay at Cabin Creek, was compelled to wait eight days at Fort Gibson for an escort and guard after he had made application therefor.
XIL The claimant and his subcontractors proceeded to cut and make hay for delivery under the said two contracts, and all the parties employed by the claimant or his subcontractors in that work were at all times provided with escorts and guards in as great strength as the necessities and interests of the public service permitted; but they were not sufficient to resist the attacks which were made upon them by rebel forces, as hereinafter set forth. If a force sufficient to resist those attacks had been provided, the claimant was prepared to furnish all the hay required to fill the said contract.
XIII. The 1,000 tons of hay which the contract of June 20 required to be delivered at the post of Fort Gibson were delivered there, and the contract-price of $30 per ton was paid therefor by the officers of the Quartermaster’s Department. Of the 2,000 tons which that contract required to be put up and delivered in stacks at or within the distance of seven miles from said post, the claimant delivered there in stacks, and was paid the contract-price of $22 per ton for 1,000 tons by the officers of the Quartermaster’s Department.
. XIY. Afterward the claimant presented to the Third Auditor of the Treasury a claim for compensation for hay which had been cut by him for delivery under the said contract of June 20, but not delivered, because destroyed by rebel troops on the 2d of September, 1861; and on the 28th of July, 1869, the Third Auditor recommended the payment of the items of the following account:
“ The United, States to Henry E. McKee, Ur.
Q. M. Dept.
“For compensation for hay destroyed by.rebel enemies, on 2d September, 1861, on the prairie within seven miles from Fort Gibson, O. N.; such hay having been cut by said McKee, for delivery to the United States, in pursuance of a contract made 20th June, 1861, between said McKee and Capt. Green
Durbin, assistant quartermaster, viz :
“100 tons, stacked, at $22 per ton..8,800 00
“200 “ in process of being stacked, at $19 per ton.:... 3,800 00”
The Second Comptroller of the Treasury concurred in the Third Auditor’s recommendation; and the said account (being settlement No. 1698) was thereupon paid to the claimant by the Secretary of the Treasury out of the appropriation for the Quartermaster’s Department.
XV. Of the whole quantity of 3,000 tons, deliverable under the contract of June 20, irrespective of the order given by said Durbin in the letter of July 17, set forth in finding VII, and of the 600 toils which were destroyed by the rebels as aforesaid, there remained 400 tons to be delivered: and the claimant was prevented from delivering the same, because, in consequence of the attacks of the rebels upon, and the capture by them of, other parties of hay-makers, twelve miles from Fort Gibson, the post commander at Fort Gibson ordered in to the post all the parties-en gaged in cutting and pu ttiug up hay to. fulfill that contract, and would not permit them to go to work again under that contract-
XVI. Under the contract of July 17, the claimant delivered at Cabin Creek 1,128 tons of hay, for which he was paid the contract-price of $30 per ton. On the 19th of September, 1864,. at Cabin Creek, an overpowering force of the rebels destroyed 115 tons, which had been cut there for delivery under the contract of July 17; after which no military protection was afforded by the authorities of the United States for parties to cut hay at or near Cabin Creek, and consequently no further work was done by the claimant toward delivering hay at Cabin Creek.
XVII. On the same 19th of September, a subcontractor under the claimant was engaged with a party of hay-makers in cutting hay at Hudson’s Crossing, for delivery under the contract of July 17, when information was received there of the attack at Cabin Creek; and Colonel Wheeler, of Thirteenth Kansas Infantry Volunteers, ordered the camp at Hudson’s Crossing to be abandoned, and the hay-makers and their guards to fall back on Fort Scott, which was done. At that time the party of the subcontractor had cut 70 tons of hay, which were abandoned when the camp was abandoned; and thereafter no military projection was afforded by the authorities of the United States for-parties to cut hay at Hudson’s Crossing, and no further work was done there under that contract.
XVIII. Afterward the claimant presented to the Third Auditor of the Treasury a claim for compensation for the 115 tons of hay destroyed by the rebel force at Cabin Creek, and for the 70 tons abandoned at Hudson’s Grossing; and the Third Auditor, in pursuance of the decision made by the Second Comptroller, recommended, on the 1st of April, 1870, the allowance and payment of the following account, as settlement No. 3614:
“ The United States to Henry H. McKee, Dr.
“In addition to an amount of $12,600.00 heretofore awarded him by settlement 1698, made 28th July, 1869, the further sum of..... 6,285 00
“This further sum being awarded him, in pursuance of the decision made 28th March, 1870, by the Second Comptroller, and upon consideration as follows:
“ 1st. On account of hay which had been cut by said McKee to fill a contract made by him 18th July, 1864, with Capt. Green Durbin, A. Q. M., and which was destroyed by rebel enemies at Cabin Creek (40 miles from Fort Gibson) on 19th Sept., 1864 —$3,450.00.
“2d. On account of hay which had been out by said McKee to fill the said contract, and which was necessarily abandoned and lost at Hudson’s Crossing of the Neosho River (70 miles from Fort Gibson) on the 19th of September, 1867 — $1,890.00.
“ 3d. On account of hire of teams used by the United States in said abandonment of the post at Hudson’s Crossing, $945.00.”
Thereupon, this account was paid to the claimant by the Secretary of the Treasury out of the appropriation for the Quartermaster’s Department.
XIX. The claimant furthermore presented to the said Third Auditor a claim for compensation for property destroyed by rebels at Cabin Creek, and near Fort Gibson, while being used by the claimant in preparing hay at those places, and the said Auditor, under the previous decisiou of the Second Comptroller, recommended, on the 24th of June, 1872, the payment of the following account: . ■
“ The United States to Henry K. McKee, Ur.
“In addition to the sums heretofore allowed by settlement 1698, of July, 1869, and settlement 3614, of April, 1870, and as compensation for property destroyed by rebels at Cabin Creek and near Fort G-ibson while being used by said McKee in preparing hay under his contract of 20th June, 1864, losses having been occasioned by reason of the failure of the United States to furnish sufficient guards, as stipulated in the contract, allowed on the papers filed in the claim herewith, and in accordance with the accompanying report thereon of the Third A uditor, (R. W. Clarke,) dated July 15th, 1869, and concurred in by the Second Comptroller, dated June 21st, 1872, amounting to sixteen thousand seven hundred & seventy-four dollars.... $16, 774 00”'
Thereupon, this account was paid to the claimant by the Secretary of the Treasury out of the appropriation for the Quartermaster’s Department.
XX. On the 26th of September, 1864, the said Durbin addressed the following letter to the claimant:
“Office Depot Quartermaster,
“Fort Smith, Ar7c., Sept. 26, 1864.
“Mr. Henry B. McKee,
“ Fort Gibson, G. N. ;
“Upon the advice of the general commanding, the putting up of hay at Cabin Creek and Hudson’s Crossing, Ind, Terrify, will be immediately stopped. I do not think the best interests of the Government will admit of running the risk of protecting forage at those points, as the garrisons are necessarily small.
“You will also immediately stop the further delivery of hay under the contract of the 20th of Juue, 1864, arranging for the putting up of 2,000 tons within a distance of 7 miles from Fort Gibson, as it is not deemed advisable to complete these contracts any further, except for the delivery of hay at the post of Fort Gibson.
“Respectfully, y’r ob’t se’v’t,
“ GREENE DURBIN,
“ Cap. & A. Q. MS
XXI. If the claimant had been enabled to cut and deliver, and had been paid for, all the hay called for by the contracts sued on, he would have realized a profit of six dollars per ton upon the 400 remaining to be delivered under the contract of June 20, and a profit of eleven dollars per ton on the 757 tons remaining to be delivered at Cabin Greek, and a like profit on the 1,930 tons remaining to be delivered at Hudson’s Crossing.
Additional findings allowed on the request of the defendants:
I. The claimant presented his claim to the Treasury Department for the contract-price of the four hundred tons mentioned in the XIYth finding.
II. For the two hundred tons mentioned in the XIYth finding, he claimed before the Treasury Department nineteen dollars a ton, being the contract-price, less the cost of stacking.
III. For the one hundred and fifteen tons mentioned in the XYIth finding, he claimed before the Treasury Department the contract-price.
IY. For the seventy tons mentioned in the XYIth finding, he claimed before the Treasury Department the contract-price, less the cost of stacking.
Y. These claims were for the value of the hay, as measured by the cost to himself; and he stated in an affidavit accompanying the same “ that the actual cost of putting up the hay was but little, if any, less than the contract-price, and in some cases was not covered by the contract-price; that from the time at which the estimatés were made and the contract let to the time at which the material and supplies were purchased gold had advanced from sixty to eig'hty per cent, premium; that the prices for labor, material, and supplies were regulated by this standard, and actually advanced more than fifty per cent, in the market during the time this work was being done, and your deponent was obliged to pay therefor upon that basis.”
YII. The hay thus claimed and paid for had not been delivered to, accepted, or measured by the officers of the United States, and was in the possession and control of the claimant at the time of its destruction.
YIII. At the time of the destruction of the six hundred 'tons mentioned in the XIYth finding, certain animals, machines, and stores belonging to the claimant, and used in the preparation of the hay, were captured and destroyed by the rebels. This property was valued at $1,100, and, upon the allowance of Third Auditor and Second Comptroller, claimant has been paid that sum for it.
IX. At the time of- the destruction of the one hundred and fifteen tons mentioned in the XYIth finding, George H. Stotts, a subcontractor under claimant, owned and used, in the preparation of said hay, certain wagons, mules, machines, hay-forks, and also owned certain flour, sugar, corn, &c., all of which was captured or destroyed by the rebels, McKee settled with Stotts for this property at a valuation of $15,674, and has been paid that sum for the same by the Treasury Department.
X. These two sums, $1,100 and $15,674, were allowed on the 21st June, 1872, and were payment for the property mentioned in claimant’s petition, filed in this court of December term, 1870, and valued therein at $1,099 and $15,674.
Mr. R. B. Warden and Mr. S. W. Johnston for the claimant:
On the facts as found by the court the case is within the decisions in Speed v. .United States, (8 Wall., 77;) Cobb, Christie & Go. v. United States; Thompson's Case, (9 O. Cls. R., 187;) and Tenney's Case, (10 id., 269.)
The contracts here relied on were not contrary to public policy, as argued on the other side. The policy relating to such contracts is essentially martial, and respects the maxim salus populi suprema lex. (Thompson's Case, 9 C. Cls. R., 187; Speed's Case, 7 O. Cls. R,. 95; Schooner Mannhaasset, 3 C. Cls. R., 76; Clyde's Case, 9 C. Cls. R., 184.)
We rely on Speed’s Case, and respectfully object to the proposed limitation of that leading case. We also rely on Tenney's Case, (10 C. Cls. R., 269.) So far from being contrary to public policy, apart from the provisions- of the statutes, the contracts here relied on were completely favored by the peculiar public policy occasioned by the civil war. We respectfully suggest that the court, sua sponte, may, on further consideration, see proper to amend the findings so as to find expressly that no responsible and capable person would have made contracts of the kind without an absolute guaranty of protection, such as was expressly stipulated for in the instances before the court. There is no controversy on that subject among the witnesses. They all show that the fact was as here suggested.
It is less fair than ingenious to put the case as though the claimant sought to hold the defendants responsible for the wrongful acts of the public enemy. We readily concede that the paramount consideration as to the performance by the Government of its part in the contracts with'the claimant was that of military propriety or necessity, bat subject to a duty to make good to tbe claimant all his damages, consequential to the action, dictated by such paramount considerations. No one denies that if the Government, because of such paramount considerations, takes the property of loyal citizens against their will, the public policy applying to such cases orders compensation. This, indeed, is, within certain limits, a statutory policy.
The Act March 3, 1849, supplemented by the Act March 3, 1863, effects this enactment:
“ Every person who sustains damage by the capture or destruction by an enemy, or by the abandonment or destruction by the order of the commanding general, the commanding officer, or quartermaster, of any horse, mule, ox, wagon, cart, sleigh, harness, steamboat or other vessel, railroad-engine or railroad-car, while such property is in the military service, either by impressment or contract; or who sustains damage by the death or abandonment and loss of any horse, mule, or ox, while in the service, in consequence of the failure on the part of the United States to furnish the same with sufficient forage, or whose horse, mule, ox, wagon, cart, boat, sleigh, harness, vessel, railroad-engine or railroad-car is lost or destroyed by unavoidable accident while such property is in the service, shall be allowed and paid the value thereof at the time when such property was taken into the service, except in cases where the rislc to which the property would be exposed toas agreed to be incurred by the owner.”
Like the words on which we have just laid a special emphasis,the proviso of the act referred to is remarkably significant as to the real public policy relating to contracts such as those on which the claimant here relies. The words of that proviso are:
"Provided, It appears that such loss, capture, abandonment, destruction, or death was without any fault or negligence on the part of the owner of the property, and while the property was actually employed in the service of the United States.” (Rev. Stat., 694, § 3483.)
But the same policy substantially appears in the Act March 2,1861, on which we also rely as an answer to the proposition that, if General Thayer intended to go as far in approval of these contracts, he acted ultra vires. Still, however, looking to the question raised concerning public policy, we now refer to the following words of the last-named statute, as quite clearly indicating that we do not mistake the policy applicable to .such contracts:
“All purchases and contracts for supplies or services in any of the departments of the Government, except for personal services, shall be made by advertising a sufficient time previously for proposals respecting the same, when the public exigencies do not require the immediate delivery of the articles or performance. When immediate delivery or performance is required by the public exigency, the articles or service required may be procured by open purchase or contract at the places and in the manner in which such articles are usually bought and sold or such services engaged between individuals.” (Revision, 738, § 3700; 12 Stat. L., 220.)
Thompson’s Case, already cited, was decided by a divided court. As far as the opinion of Mr. Justice Nott in that case distinguishes between the just-quoted legislation and the act of July 4, 1864, perhaps the language used in that opinion may appear to the learned judge himself to need restriction. We refer particularly to these words:
“There is a difference between the two statutes, upon which a very substantial distinction may be placed. The one (that of 1861) as construed by the Supreme Court vests the discretion in the purchasing officer; the other expressly vests it in the commanding general.”
The language of the act of 1864 is not that “ then it shall be lawful for the commanding general,” &o., but that “ then it shall be lawful for the commanding officer of such army or detachment.” (13 Stat. L., 396.) And the opening of the section in which those words are used is of this tenor:
“ That when an emergency shall exist requiring the immediate procurement of supplies for the necessary movements and operations of an army or detachment,” &c.
Mr. Chief-Justice Drake appears to give the true reading of the language here in question, where, in his dissenting opinion in the case of Thompson, he lays down “ that to the commanding officer of the army or detachment is left the question of the existence of the emergency authorizing the immediate procurement of supplies without advertisement.” We respectfully insist, therefore, that it is not well argued on the other side that “ the commanding general alone is vested with discretion to decide whether .the exigency is so great as to render necessary purchase or contract without advertisement.” Such, it seems to us, was not the meaning of the powers that made the law that is here to be construed. We have already asked attention to the law enabling any “ commanding officer,” by ordering the abandonment or destruction of certain property, (including railroad engines and cars,) to make the Government liable to compensate the owner. This is reasonable in itself, and the principle appears to us clearly applicable to the construction of the Act March 13, 1861, as well as to that of July 4, 1864. The highest as well as the lowest military officer may greatly err in exercising his discretion in a time of war, and especially in the midst of a civil war. But he must act with promptitude and energy for what appears to him the public welfare. If loyal proprietors be thereby injured, or if the Government thereby sustains a loss, we can only regret the necessity that caused the exercise of that so perilous discretion and authority.
To the question, Gan an officer of the Government for a consideration, pecuniary or otherwise, in a time of great and public danger, insure the property of one of its citizens we may well respond by citing Clyde's Case, (9 O. Ols. R., 184.)
That was a case involving the validity of a charter-party relating to a barge in the military service of the United States ■during the rebellion, and providing that the war-risk should be borne by the United States, the marine risk by the owners. The decision just referred to held that insurance, in the circumstances, to be fully warranted by military necessity. We rely, also, on the Mcmnahasset Case, (3 O. Ols. R., 76,) declaring the validity of this provision in the charter-party by which the schooner Mannahasset was, during the rebellion, chartered by the Government: “ It is further agreed by the party of the first part that the war-rislc on the above-named vessel,t amounting
thirteen thousand dollars, is assumed by the Government of the United States until her discharge from this charter.”
The maxim delegatus non potest delegare has no application to such cases. This we say in answer to the suggestion that, when the commanding officer commits his discretion under the laws in question to another, it is for the court to inquire into the manner of its exercise, and that “ it is no argument to say that a bona-fide contractor is not bound to go back of the decision of the quartermaster.” We are told that no exigency can be eon-eeived of which would have necessitated the delivery of 2,000 tons of bay within the distance of seven miles from said post, instead of at the post itself, as stated in the advert isement.” But we must insist that it is not necessary that a non-military tribunal, or that a member of the bar, however learned and ingenious, should be able to “conceive of” matters essentially belonging to the art of war, and committed by the law to the judgment and discretion of military officers. (Thompson’s Case; see, also, Speed’s Case.) It is also not well objected, we conceive, that it does not appear that any such necessity was declared. No formal finding and declaration of that sort can be considered necessary.
In the light of that decision, and of the statutes to which we have referred, we may well say that we have fully auswered the argument on the other side, that “all that General Thayer meant in approving the contract, and all that he could reasonably hope to accomplish, was to furnish escorts and guards in as great strength and as promptly as th,e necessities and interests of the public service permitted,” and that “if he went farther than this his act was ultra vires.” We have also, we conceive, responded to the suggestion that no statute can be pointed out which gave to him or any other officer the power to impose on the defendants any greater obligations. Mr. Justice Nott, in Thompson’s Case, supra, forcibly remarks that “ the truth is that military emergencies are things which cannot be measured by formal or precise rules.” It follows that the rules which govern the responsibility of the United States in cases like the present are not to be laid down with narrowness and in a spirit hostile to contractors. We contend that contracts, such as those on which we now insist, are clearly beneficial, economically, to the Government in time of civil war. {Tenney’s Case, 10 G. Gis. B., 269;) Porter’s Case, 9 O. Cls. B., 356.)
The counter-claim of the defendants seems to us a little bald. It has assuredly no merits. The payments mentioned were voluntary, and, as an action would not lie on them, they cannot be set up by way of counter-claim. Sohlesinger’s Case is quite in point. (1 O. Gis. B., 16.) It holds that a voluntary payment to a public officer cannot be recovered back on an implied contract, though the payment appears to have been made “ in mutual mistake of law.” The rule must also be that a voluntary payment made by a public officer cannot be recovered back on an implied contract, the more especially where the payments have been made in consequence of decisions such as are presented for consideration by this record. (Folsom v. The United States, 4 C. 01s. B., 360; Mays v. Cincinnati, 1 O. State Beports, 268.) This was a disputed claim for losses and expenses, and its adjustment by the accounting-officers and the voluntary payment and receipt of the money constitute a settlement and compromise which cannot be.disturbed. (Child, Pratt & Fox v. The United States, 7 C. Cls. B., 209; Clyde's Case, ibid., 262; Comstoole v. The United Stales, 9 id., 141.)
If the defendants -were dissatisfied with the adjustment of the accounting-officers, they could have referred the whole case to this court. (Rev. Stat., § 1063; Delaware S. B. Co. v. The United'States,5 O. Gis. B., 55.)
There was neither mistake of law nor mistake of fact in the payments made to claimant. We rely on the Act March 3,1817, entitled “An act to provide for the prompt settlement of accounts,” (3 Bev. Stat., 366,) and which is carried into the New Bevision, page 39, section 236. The second section of this act provides that “ all claims and demands whatever by the United States or against them, and all accounts whatever in which the United States are concerned, either as debtors or creditors, shall be settled and adjusted in the Treasury Department.”
Surely this language is broad enough to support the action of the accounting-officers of the Treasury in making the settlement on which the defendants’ counter-claim is based. It is within the truth to affirm that thousands of like settlements, in like cases, have been made by the Third Auditor and Second-Comptroller, and that payments have been made pursuant to such settlements by the defendants, with the approval of the heads of the several Executive Departments of the G-overnment interested in the disposition of the claims thus settled and paid.
We repeat that we rely on this law and the practice and policy of the Government under it. Ever since its enactment the law in this class of cases has been defined and held to be that while the Auditor and Comptroller have no general authority to award damages, as for tori on contract broken, yet where the loss is the direct and immediate result of such breach, or where the loss is, as it was in this case, in the nature of expenses incurred and lost in a bona-fide effort to fulfill a contract, they have authority to adjust and direct the payment of a claim for such expenditure and loss, to the extent of mere compensation or reimbursement.
It is clear to us that the law of March 3,1817, and the rule, practice, and policy which have prevailed and grown up under it, are alike just, proper, and necessary, equally beneficial to the Government and the contractor. (Digest of Decisions of Comptroller, edition 1805, paragraphs 328, 330, 337, 350, 375, 376; Vanderheyden v. Young, 11 Johnson, 158; Ops. Atty. Gen., vol. 2, 408; id., vol. 3, 28o!)
Mr. John 8. Blair (with whom was the Assistant Attorney-General) for the defendants:
No exigency can be conceived of which would have necessitated the delivery of 2,000 tons of hay within the distance of seven miles from said post,” instead of at the post itself, as stated in the advertisement. Nor does it appear that any such exigency was declared. The contract, therefore, is in violation of section 10 Act March 2, 1861, (12 Stat. L., 220,) and void. The advertisement and proposals being statutory essentials to a contract, neither the quartermaster nor the commanding general had power to bind the Government to greater obligations than set forth in them. The guarantee of protection, which found its way into the contract, would have been a material element in the competition among bidders, and would have reduced the bids of others as well, as of plaintiff. The obligation, therefore, was to furnish such protection as the necessities and interests of 'the service might admit, and this was done.
The contract of 18th of July, 1864, is based upon the order of Brigadier-General Thayer, and it is to be noticed that it contains no positive instructions to contract without- advertising. That there was ample time “to.advertise and regularly let the contract,” as stated in the order, is apparent from a comparison with the contract of June 20, 1864. The latter was made upon an advertisement dated May 27, 1864, and was to be completed before the 1st of September, 1864. The interval between the advertisement and the last day of delivery under the contract was 97 days.
By the Act July 4, 1864, (13 Stat. L., 396, § 4,) it is provided that when an emergency shall exist requiring the immediate procurement of supplies, &c., then it shall be lawful for the commanding officer “ to order the chief quartermaster of such army or detachment' to procure such supplies during the continuance of suck emergency-, but no longer, in the most expeditious manner and without advertisement.” It is this law, and not the proviso in the Act March 2,1861, that governs the contract now under consideration, and it is contended that the commanding general alone is vested with discretion to decide whether the exigency is so great as to render necessary purchase or contract without advertisement. When he commits that discretion to another it is for the court to inquire into the manner of its exercise, and it is no argument to say that a bona-fide contractor is not bound to go back of the decision of the quartermaster. The power of the quartermaster to purchase or contract without advertisement, after July 4, 1864, was dependent upon an absolute order of his commanding general, and a contractor was bound to inquire into his authority. In this case the plaintiff was bound to see that Captain Durbin was authorized to contract, and when he found that Durbin’s power to dispense with advertisement was dependent upon circumstances, it was his duty as much as Durbin’s to inquire into them. We ask that the finality of the decision of the officer laid down in Sjpeed’s Case, (7 C. Cls. R., 95,) shall be limited to the officer in whom the discretion is reposed by statute. It may well be questioned whether discretionary power thus lodged in an officer can be delegated to another.
The breach of contract alleged by plaintiff is the failure to supply such protection as would absolutely prevent encroachment and interference from the enemy, and he seeks to hold the defendants responsible for the wrongful acts of the public enemy' by construing the contract to mean that the United States would re-imburse him for all losses suffered through any such wrongful acts, although they should be powerless to prevent them. The language of the contract is ‘‘that sufficient escorts and guards shall be furnished to protect the contractor while engaged in the fulfillment of this contract.”
In the case of Porter, (9 C. Gis. R., 356,) the court held the Government to nothing but the liability which it had expressly assumed, but here it is a question of how much responsibility a guarantee of protection throws upon the United States when circumstances or an overwhelming force renders compliance impossible. Can any officer of the Government for a consideration, pecuniary or otherwise, in a time and place of great public danger, insure the property of one of its citizens ? Clearly a contract which involved the Government in such responsibilities as plaintiff asserts would be against public policy. Its fulfillment by the United States might, and in this case did, require that the post of Fort Gibson should be abandoned and its garrison divided between the two hay-fields. In the then condition of that country there was reason to expect any day a battle with the enemy, yet the contract would be violated in case of the defeat of our forces. If the rebel army had been precipitated into the Indian Territory, a sufficient escort would have been a force superior to theirs. Yet the plaintiff insists that General Thayer not only intended, but had the power, to bind the Government to conserve his profits and protect his property from every attack, and that it was his duty as well as the duty of every officer of the Government to subordinate the objects of the war to the interests of the contractor.
All that General Thayer meant in approving the contract, and all that he could reasonably hope to accomplish, was to furnish escorts and guards in as great strength and as promptly as the necessities and interests of the public service permitted. If he went further than this, his act was ultra vires. No statute can be pointed out which gives to him or any other officer the power to impose on the defendants any greater obligations.
The plaintiff was not entitled to receive pay from the Treasury Department for hay and property destroyed while in his possession.
That he was not entitled, under the Aet March 3, 1849, (9 Stat. L., 415, § 2,) is fully settled by Porter’s Case, (9 C. 01s. K., 356,) Shaw’s Case, and by Guttman & Stuart’s Case, (9 0. 01s. It., 60, 18 Wall., 84,) and we think that the latter further decides that no such rights were conferred by the terms of his contracts. Mr. Justice Hunt says, (9 0. 01s. It., 71,) “The tenth article of the contract requires no discussion. It is quite immaterial in any view of the case.” Plaintiff was not entitled to this money unless the Government agreed to indemnify him against all acts committed by the public enemy; the contract does not do this expressly, and it is contended by the United States that no such implication arises from its terms, and that, if it did, the contract would have been not only beyond the ■power of Captain Durbin and General Thayer to make, but illegal. It is contended by the United States that the agents of the. Government were not authorized to make the payments; that tlie plaintiff, by presumption, knew that they had no such authority; and that the defendants are therefore entitled to judgment for $34,713. (Stevenson v. Mortimer, Cowper, 805; The United States v. Bartlett, Davies’ R., (2 Ware,) 9.)

Opinion:
Nott, J.,
delivered the following opinion :
This case contains four, causes of action, two of which are presented by the claimant and two by the defendants. The facts, briefly stated, are these :
In 1864 the claimant and a quartermaster entered into two contracts, the terms of which, however, are substantially identical. The claimant covenanted to furnish large quantities of hay at certain designated points in the Indian Territory; the defendants covenanted as follows: "It is expressly understood by the contracting parties that sufficient guards and escorts shall be furnished by the G-overnment to protect the contractor while engaged in the fulfilment of this contract." The claimant delivered a portion of the hay contracted for, and it has been paid for, and is not an element in the present controversy. As to the remainder, he was stopped in the midst of performance, in part by the acts of the public enemy, in part by the orders of the post commander at Fort Gibson, but in all cases for the want of "sufficient guards and escorts." The accounting-officers of the Treasury treated the covenants above quoted as covenants of indemnity, and adjusted and settled the claimant's accounts for losses actually suffered, and the claimant accepted and acquiesced in the settlement. ' The subject of profits was not considered in the settlement, for the reason that such unliquidated damages are never adjusted at the Treasury. The claimant now brings his action to recover them exclusively; the defendants deny the validity of the contracts, and file their counter-claims to recover back the allowances made by the accounting-officers as moneys paid in mistake of law.
I. The claimant's first cause of action is founded on a contract made in June, 1864, which was founded on a quartermaster's •advertisement for proposals. This advertisement called for the delivery of 3,000 tons of hay at Fort Gibson, and promised the contractor such military protection" "as the necessities and interests of the service may admit." The contract departed from these terms by dividing the quantity of 3,000 tons into two parcels, one to be delivered at Fort Gibson at $30 per ton, the other seven miles distant at $22; and in covenanting to furnish "sufficient guards and escorts" to protect the contractor ivhile engaged, in the fulfillment of this contract P Because of these discrepancies, it is insisted by the defendants that the contract was void, and that no action can be maintained upon their breach.
As to the first discrepancy: The Act 2d March, 1861, (12 Stat. L., 220, § 10,) though it requires a contracting-officer to advertise, still leaves with him a very large discretion. The time is not prescribed, nor the form, nor the substance of the advertisement; nor is the officer even restricted to accepting the lowest bid. In this the statute differs from other advertisement acts, and notably from the post-office act, which recently received a liberal construction from the Supreme Court. (Garfielde's Case, 11 C. Cls. R., 322.) Dividing the hay into two parcels, deliverable at different places at different prices, was a variation, in the judgment of the contracting-officer, for the benefit of the Government, and fairly within his discretion. Such discretion has been exercised by officers of the Quartermaster Department ever since the first advertisement act was passed. The distinguished officer who has long presided over that Department, and guided its administration with an inflexible and frugal hand, in his well-known communication to General Blair, August 28, 1861, relating to the affairs of General Fremont's department, said — and it was not questioned then and has never been questioned since:
" Whatever a general commanding orders, the subordinates of his staff are, by regulations, compelled to do, if possible." "In regard to advertisement and delivery, the law of 1861 and the regulations expressly provide that in case of public exigencies supplies are to be bought in open market as between individuals. Bxercise this power. Moreover, advertisements or public notice does not require postponing opening of bids for a month or a week or two days. If forage, wagons, horses are wanted, the law, the necessity, are fully met by putting a notice in the papers and purchasing as fast as offers come in. The next day or the-same day take the then lowest bid or- the then most advantageous offer. The day. after you will have a still better offer; take that for a portion of your supplies, and so on till you have all you need."
The second discrepancy between the advertisement and the contract,, or, rather, between the proposals and the contract, forms the foundation and subject of this cause of action. What the claimant sues upon was not offered by the advertisement nor stipulated for by the proposals, but was a subsequent obligation thrust into the formal contract. The thing to be furnished by the contractor remained the same; the price to be paid by the Government remained the same; and then, in addition to the bargain made by the advertisement and proposals, the quartermaster gratuitously gave to the claimant a guarantee or covenant of insurance against war risks, upon which, exclusively, his present demand is founded. As this insurance was not promised by the advertisement, nor required by the proposals, nor given in exchange for anything which had been the subject of negotiation, it seems to us to be an obligation beyond the officer's discretion, and evasive of that competition which the statute was intended to secure. If the thing promised by the advertisement had been indefinite it would have been proper to render it certain in the contract; but here the advertisement bound the Government to do substantially nothing, and left the war risks of the undertaking entirely with the contractor, while the contract created a new obligation that bound the Government to furnish all needful protection, and transferred to it the risk which constitutes the present cause of action. It is not to be understood that this addition voided the entire contract; it s only this obligation of the defendants that is without legal foundation. The covenants of the claimant, and the consideration which supports them, remain intact.
IL The claimant's second cause of action rests upon a. contract made without advertisement the 17th July, 1864.
It is objected by the defendants that the order of the commanding officer which gave rise to this contract did not declare an emergency, as was required by the Act 4th July, 1864, (13 Stat. L., 394, § 4.) The construction which I think should be given to that statute I have heretofore expressed in Thompson's Case, (9 C. Cls. R., 187-196,) and subsequent reflection confirms the conclusions which were there reached. They maybe summed up in the following rule: Where a statute expressly defines the powers of an officer or agent, it is notice to all the world; but where a statute confides a discretion, to an officer, a party dealing with him in good faith may assume that the discretion is properly exercised ; and if the discretion is vested in a superior officer, while the transaction is with his subordinate, the contractor may assume in like manner that the discretion has been properly exercised, and that the subordinate is acting in accordance with Ms superior's orders and carrying out the exercise of his superior's discretion.
Conceding, however, for the purposes of this decision, that a contractor dealing with a quartermaster during the existence of the act of 1864 was chargeable with knowledge of all the orders by which a commanding officer might seek to provide for military emergencies in the midst of a great war, I am nevertheless of the opinion that in this instance the order sustains the contract.
The statute was passed exclusively for the late war, and was intended to impose upon the discretion vested by law in unnumbered inexperienced assistant and acting assistant quartermasters the discretion of their commanding officer. It did not prescribe formalities. Its purpose was to secure the judgment of a commanding officer as a basis for the action of a quartermaster. In this instance the commanding officer's judgment was clearly the basis and the only basis of the quartermaster's action. If the order had never been issued no contract would have ever been made. The order in fact related to two distinct things; it declared an emergency, and directed how the quartermaster should proceed to provide for it. The direction " should there not be time to advertise and regularly let the contract, you will make the arrangements for the delivery of the hay on the best terms you can," did not confer discretion to judge whether there was or was not an emergency which would or would not require the designated quantity of hay. It only designated the ways and means by which the quartermaster was to proceed in his part of the work, and to that extent, indeed, limited and lessened the discretion which he might otherwise have exercised.
The fallacy of the defendants' argument is in this :• that it supposes that a commanding officer must not only declare an emergency, but must also decide that the supplies on hand are insufficient to meet it, and that the procurement of others must be by immediate purchase. I apprehend, on the contrary, that a commanding officer is not chargeable with these responsi bilities, which properly belong to his quartermasters. If he should say to his chief quartermaster, " This army will begin a retreat in thirty days; have then sufficient teams ready for the movement," he would have determined all that the law required him to decide. The quartermaster should then ascertain the number of teams which would be required, the number on hand, the deficiency to be provided for, the proportion thereof that could be procured by advertisement, and the balance that must be bought in the market. In the administrative details of providing for the emergency after it had been declared, he was by law invested with all necessary discretion, and those details properly belonged to him and not to his commanding officer. Thus the order of the commanding general in this case merely enjoined the quartermaster to do precisely what it would have been his duty to do without the order, and left nothing to his discretion which the law had not already placed there.
It is also objected that the quartermaster did not proceed in the proper way to meet the emergency, if one was indeed declared. But it is manifest that if the quartermaster was authorized by law to act, this court cannot review the manner in which he acted. Undoubtedly judges upon the bench would make a contract with more deliberation, wisdom, and solemnity than quartermasters in the midst of hostilities; but the statute was made for ordinary men, little learned in the law, and laden with the severest responsibilities that ever tax or distract the mind. It is enough here for us to know that the contracting quartermaster thought this the most immediate method possible for the procurement of the supplies; and it does not rest with courts of law to find a better method after the transaction.
In like manner it is objected that upon the face of the order and contract the contractor was chargeable with knowledge that no emergency in fact existed, and that an agreement made in July to furnish hay through August and September could not possibly be the means for providing for a military emergency. But the emergency contemplated by the statute is not restricted to a march or a battle on the day when the order is given. In this case, when the commanding officer discovered that he would need a large quantity of hay during the ensuing winter in a remote situation where it could not be bought: that the haying season was already far advanced; that implements and hands had to be brought a great distance before the work could begin, he decided, as it was his duty to do, that he had a very serious emergency to provide for; aud it was not a time when a prudent person would have wasted a week or a day in the solemn trifling of advertising for proposals in a region beyond the boundaries of civilization.
This cause of action, then, depends upon the effect which should be given to the covenant promising sufficient guards and escorts; and it may be best understood in the light of the circumstances amid which the contract was made, and the contemporaneous construction which the parties mutually gave to their agreement.
The circumstances were, that the contract was made in the midst of war, and was to be fulfilled on the scene of actual hostilities. The contemporary construction was, on the part of the post commander, that he recognized the risk which had been assumed for the Government, aud forbade the working parties of the contractor going out to make hay without the sufficient escort which it had been agreed should be furnished, but which he deemed it inexpedient to send; on the part of the contractor, that he recognized the right of the commanding officer to control his performance in this particular, and obeyed his commands.
The counsel for the defendants has argued that this covenant was a mere agreement by a military officer, to protect a citizen in the performance of his own business; that it was gratuitous, beyond the powers of military officers, and void. Undoubtedly such an agreement to protect a citizen in the pursuits of his ordinary avocations would be void. But here the covenant in question manifestly was given for a very different purpose.
The contract was in form a contract of sale and delivery, but in substance a contract for work and service. When I employ a man to go upon my land and cut and deliver my hay at so much per ton, the property remains in me, whatever be the form of the agreement, and what I pay for is not his property in the hay, but the labor which he has expended upon it. Here the hay indisputably was to be cut upon the public domain, and the property in it was aud remained in the defendants. But the point need not be discussed, for it was considered in Spencer's Case, (10 C. Cls. R., 255,) and expressly so decided.
The purpose of the covenant, then, was not to protect a citizen generally in his business, but to protect a contractor in specific work and service which he had agreed to perform for the Government; that is to say, in the fulfillment of a specific obligation into which he had entered at the request of the Government, and from the fulfilment of which the Government expected to reap an advantage. If the defendants' officers had arbitrarily refused to furnish a guard, clearly the contractor would have been relieved from his obligation to perform. (Porter's Case, 9 C. Cls. R., 366.) Gan it, then, be held that the covenant was not a moving consideration for the contract, without which the contractor would not have entered into it, or that it is not as obligatory upon the defendants as any obligation which he had assumed on the faith of it ? As was said by the learned counsel who represented the claimant on the first trial of this case, "There was a war-rislc to be run, and the question when they made the contract was, which party should bear it." The contract, recognizing the risk, answered that it should be upon the defendants; and the obligation thus assumed was analogous to those numberless charter-parties made during the war, where the Government agreed to assume the war-risks of the vessels which it chartered, though manned and navigated by the owners — agreements the validity of which has never been questioned in the Supreme Court, nor in this.
If this covenant had been simply to furnish a guard, and the commanding officer had furnished one which proved insufficient, it might be held that the defendants had complied with their covenant, and that the risk remained with the contractor. But here they covenanted to do two things: first, to furnish " guards and escorts ;" second, that those guards and escorts should be "sufficient" to secure " the fulfillment of this contract." The agreement, moreover, was construed by the officer who made it as a covenant of indemnity, which would render the defendants liable for all of the contractor's losses caused by the public enemy; and, to lessen that indemnity as much as possible, the commanding officer interfered positively by forbidding the contractor to proceed with the fulfillment which the defendants had covenanted to protect. That an indemnity against losses may be given to a contractor by the agents of the Government was established by the Supreme Court in Baird's Case, (8 C. Cls. R., 13.)
III. The defendants' first counter-claim is to recover back certain payments allowed by the Second Comptroller of the Treasury upon the insurance-clause in the first contract, before referred to; that is to say, the Comptroller deemed the covenant valid which this court now decides to have been invalid, and the counter-claim is to recover back the money paid on his adjustment. It is conceded that the payment was not procured by fraud, nor made in mistake of fact, and that it could not be recovered back by any other party than the Government, and by it only on the ground that its agents are not its agents when they make payments which are not authorized by law. The recent case of McElratlh (ante, p. 201) is regarded as decisive authority upon the point.
Between this case and McElrath's, however, there is a very broad difference. The Second Comptroller was the agent of the United States to adjust and settle the accounts of officers in the Navy. McEIrath was not an officer in the Navy, nor had he been for any part of the period over which his pretended account extended ; nor had he rendered any service as such; nor hiyi any legal relations between him and the Government existed. The Second Comptroller, therefore, acted ah initio without authority ; and his mistake, whether of law or of fact, that he had jurisdiction of the pretended account gave him none. If in the adjustment of an account which he was authorized to adjust— the account of a veritable officer in the Navy — he had made an incidental mistake of law in allowing to the officer some item of pay which in the judgment of the courts should have been disallowed, and the defendants had brought their cross-action to recover back the over-payment, the case would have been like this.
That settlements made by the accounting-officers of the Government with its creditors, untainted by fraud, and free from mistake of fact, possess the element of finality, I think is clear for many reasons.
1. The Comptrollers of the Treasury are neither contracting nor disbursing officers. Within the proper functions of their offices they are above the review of the highest executive authority, and their decisions are subject to only judicial revision. Substantially all accounts must pass under their eye and receive their approval. Even the accounts of the Secretary of the Treasury and of the President come to them for allowance.' In the case of disbursing-officers the policy of the Government has been to acknowledge no payments as made on its behalf save those which were authorized by law. If an officer makes a mistake of law the payment is disallowed when his accounts come in for settlement, and charged to him as if the money were still in his hands. But the business of the Comptrollers is to determine what payments shall or shall not be made on behalf of the United States. These functions of office were a part of the wondrous birth of the Treasury system, and have remained unchanged from the foundation of the Government to the present time. The only statute which has been passed since the First Comptroller's office was established is declaratory and mandatory as to their powers. (Act 30th March, 1868, 15 Stat. L., 54.)
2. If the Comptrollers' settlements have not the ordinary element of finality: if those officers are not the agents of the Government to make final settlements with its creditors, the Government has had the power and the means to take advantage of their errors of law for the last eighty years by going into any court as plaintiff and suing the party to whom money was paid in mistake of law. Y et, from the first day that the Treasury did business until this counter claim was set up, it is safe to say that no such suit was ever brought, and that no man ever supposed that such an action would lie. .A practical construction, going back to the very beginning of the Government, is overwhelming, and cannot be overturned at this late day with safety by anything short of statutory amendment.
3. As no statute of limitations closes inquiry into the past transactions of the Government, all of the settlements which present and past Comptrollers have ever made will be liable to be re-opened. It is well known that the Comptrollers have sometimes construed statutes in one way, and the courts subsequently in another. Such diversity of judgment is inevitable in the administration of human affairs, and the wonder is that there has been so little of it on the part of these officers. The Act 3d March, 1849, (9 Stat. L., 415, § 2,) will furnish one of many illustrations. The Treasury always held that this act extended to vessels in the military service, though navigated by their owners, (Reed's Case, 4 C. Cls. R., 132;) the Supreme Court has recently held the contrary, (Shato's Case, ante, p 1.) Can it be possible that all such past transactions are now liable to be reopened; that nothing has ever been settled; that no payment ever made is to be considered final ? Such a ruling caunot promote the public welfare, and, in my judgment, would be prolific in public mischiefs.
4. It is manifest that so broad a rule as is contended for by the defendants would be holding in effect that the accounting-officers of the Treasury are the agents of the Government so long as their mistakes of law are favorable to their principal, but that their agency ceases eo instanti whenever they err incidentally against the Government in the difficult task of construing the statutes of the United States. The result of such a rule would often be that as to one-lialf of a settlement the accounting-officers would be agents and the settlement final; that as to the other half it would be binding upon the creditor if he took the money, but not upon the debtor, and that practically mutuality and finality would be stripped from all Treasury adjustments.
It is not possible, I think, that such a rule can ever be upheld. Certainly the courts have been open to the Govennmeut ever since courts were established, and it has never been supposed that such an action could be maintained. The real question here, I apprehend, is one of agency and not of mistake. When the accounting-officers are authorized by law to adjust an account or settle a claim, the principles of law that would govern the settlements of individuals will govern theirs. The true rule to be laid down, I think, is this: Where the accounting-officers of the Treasury are authorized to settle an account or claim against the Government, a mistake of lato committed incidentally in the adjust-mentioillnot, after payment of the balance found to be due, affeetthe finality of the settlement or entitle the Government to recover back the money paid in mistake of law ex equo et bono.
IY.' The second counter-claim of the defendants is to recover back the money awarded upon the indemnity clause in the second contract, which a majority of the court now hold to have been valid. The only point made which has not been considered is, that part of the amount awarded by the Comptroller was for hay of the claimants destroyed by the public enemy, and that the accounting-officers have not jurisdiction of such damages.
To this objection there are three sufficient answers : 1st. The hay destroyed was not the property of the claimant, but, on the contrary, the property in the hay was always in the defendants, and the contract to furnish hay cut from the public domain was a contract for work and service, as was determined in Spencer's Case, (10 C. Cls. R., 255.) 2d. The accounting-officers correctly ascribed that effect to the contract, and their award was not for hay destroyed, but for work and services expended by the claimant on that hay of the Government which was destroyed. 3d. The award was based upou the indemnity-clause of the contract, and the loss of the claimant upon this hay was because of the defendants' breach of that covenant, and the form which the award took was merely for the convenient ascertainment of the damages suffered.
The conclusions which a majority of the court are agreed upon are these:
1. The claimant is not entitled to recover upon the contract of June 20, 1864.
2. The claimant is entitled to recover upon the contract of July 17,1864, the profits which he would have realized if he had been enabled to perform, to wit, the sum of $29,557,
3. The defendants are entitled to recover upon their counterclaim the moneys paid by them to the claimant for hay destroyed, under the contract of June 20,1864, to wit, the sum of $12,600.
4. The defendants are not entitled to recover upon their counter-claim for moneys paid by them to the claimant for hay and property destroyed under the contract of July 17, 1864.
The judgment of the court is, that the claimant recover of the defendants the sum of $16,957.
Loring, J., agreed in all of the conclusions reached by the majority of the court.
Peck, J., agreed in the opinion read by Nott, J., except that he was of the opinion that the claimant should recover upon the contract of June 20,1864, and that the covenant of military protection thereby assured to the claimant was valid and binding upon the defendants; as to which, being absent when the case was decided, he subsequently filed the following reasons:
Because there is not even a pretense of wrong or bad faith in or about the advertisement which preceded that contract, nor in the making of it.
The advertisement promised to any person who should become a contractor "such military protection as the necessities and interests of the service [might] may admit," reserving to the defendants the exclusive, right to decide what or how much protection would be furnished. The contractor had no power or control over the matter. He might, to be sure, refuse to -execute a contract, unless it stipulated for the furnishing of sufficient protection, (which would have been wise as the result has shown,)-but he could not direct anything in that behalf. The fact of such a notice in the advertisement indicates plainly enough that peril and damage were anticipated.
The officer acting for the defendants might have thought, and probably did think, that the "necessities and interests of the service" would be advanced (and as to this he reserved the right to judge) by promising the protection stated in the contract, and so stipulated. It appears to me quite certain that no responsible party, under the circumstauces, would have contracted without that or some equivalent guarantee. At least, there is not anything to show that any other person offered to do so. All discussion about the advertisement and proposals are out of place, since these were merged in the contract. The claimant had a right to know what military protection, in the opinion of those representing the Government, would be necessary to save its interests, as well as his own, before he should undertake to perform on his part, and if more was gratuitously offered by the defendants than was prudent he could not be expected to decline what was to his advantage. In the transactions and business of life, so far as my observation goes, men are not prone to reject such advantages as are offered them j and few, if any, favors are offered which are not expected to result in some way to the benefit of the proponent.
The defendants, like a minor civil corporation, must transact' business by agents; but whoever thought of annulling a contract made by a civil corporation, because a party contracting with one of his agents, in perfect good faith, accepted a more favorable condition in a concluded contract than it was after-wards thought wise to offer him ?
The question is asked with solemn gravity, Where is the statute which expressly authorizes a quartermaster to agree to furnish protection to a contractor ? .Others may ask with equal gravity, if they have equal courage, Where is the statute that forbids it? If he may contract for the delivery of property costing any number of millions, may he not be supposed to have the power to tlo so on the best terms which would secure the delivery and use of that property to the Government he represents? It should always be presumed that he contracts only for such property as the necessities of the Government demand and cannot be dispensed with. There is, as I believe, a legal principle recognizing' that the power to contract, or do a particular thing', implies that the person so empowered may do all that is requisite for the success of the object desired. Hence, if an agent may contract for the delivery of an article, he may stipulate for all that is requisite to insure the success of the contract, which might, with as much propriety, be repudiated because he contracted for too great a quantity, as because he contracted for too much protection, when his power or authority to do one is no more restricted than it is to do the other.
The contract of 20th June was known to the superior officers of the quartermaster who made it and not objected to by them, but apparently approved, as is shown by the instructions of General Thayer in reference to the making of the second contract.
At this time and distance from the transaction, and with but little, if any, correct knowledge of the surrounding circumstances or threatening dangers of the occasion, it is alike unjust to the quartermaster and the claimant to scrutinize and pass judgment upon the exercise of a discretion and condemn it which was at the time, and long afterward, approved for its soundness.
The astute and subtle reasoning resorted to to evade obligations, I cannot help thinking, would never have found tolerance, if the present action was between those imaginary veteran litigants, John Doe and Richard Roe, instead of between the Government and a citizen-claimant. I do not choose to strain analogies or coerce authorities to favor either party. My desire is to properly adjust the relative influences of principle and authority with as much precision as is consistent with the character of the subject to be considered, so as to do and promote justice between contestants.
Jurisprudence is supposed to be a rational science, founded upon principles of moral rectitude, modified, it is true, by authority and the habits of mankind, but never failing to do justice equally to all parties, without reference to the power and dignity of either, nor omitting to do so because, on some possible and unforeseen occasions, men may act in an unprecedented manner against their interests without any excuse or pretext for their conduct; like waiting for the sky to fall in order to catch larks.
The idea that the protection promised placed the entire Army of the United States in the leading-strings of the claimant, and therefore rendered the contract void because, by possibility, all the quartermasters, with or without reason or excuse, might do some absurd act, or make some absurd agreement for protecting contractors and thereby dispose of the whole Army, I shall not discuss, but will repeat the language of one of our learned judges, long since pronounced, that "in the construction of contracts words are to be taken in their natural and obvious meaning, unless some good reason be assigned to show that they should be understood in a different.sense." This is trite law, but not new.
Mr. E. P. Norton, now deceased.