APPEALS from the Court of Claims.
The facts, as found by that court, were thus:
Russell, Majors & Waddell had contracts for supplies and transportation, to be furnished to the army in Utah. By these contracts, they were to be paid either by the quartermaster at St. Louis, or by his drafts on the assistant treasurer of the United States in New York. In all the contracts, except one, these payments were to be made on the final delivery of the supplies in Utah; but in one contract there was an agreement that partial payments should be made when the trains were started. In all cases, such payments were to be made upon certificates of the proper quartermaster.
The performance of these contracts required a very large outlay of money, and Russell & Co. finding it difficult to advance this and wait for its return until they were entitled to receive payment under their contracts, made an arrangement with the Secretary of War, under which they should draw time-drafts on him, payable to their own order, at the Bank of the Republic in New York, which should be accepted by the secretary. On these drafts they were then to raise the money necessary to enable them to perform their contracts, and as the money for the transportation and supplies became due, they were to receive it, and take up the acceptances of the secretary before or at maturity. Under this arrangement the secretary accepted drafts to the amount of $5,000,000, most of which were taken up by Russell, Majors & Waddell, as agreed; but over a million of dollars in amount remain unpaid.
The drafts, with unimportant verbal differences and differences of date, were in this form:
$5000.
WASHINGTON, November 28, 1859.
Ten months after date, for value received, pay to our own. order, at the Bank of the Republic, New York City, five thousand dollars, and charge to account of our contract for supplies for the army in Utah.
RUSSELL, MAJORS & WADDELL.
Hon J. B. FLOYD, Secretary of War.
[Indorsement.]
'RUSSELL, MAJORS & WADDELL.'
[Acceptance.]
WAR DEPARTMENT, November 28, 1859.
'Accepted:
JOHN B. FLOYD, Secretary of War.'
The drafts passed into the hands of different holders; among them T. W. Pierce, the Dover Five Cent Saving Bank, E. D. Morgan, and the Boatmen's Saving Institution; and Mr. Floyd having retired from the War Department, and the department refusing to pay the acceptances, Pierce, by his separate bill, and the other parties in a proceeding treated by the Court of Claims as one in substance, brought suit in that court. The petition of Pierce averred:
'That the said Floyd, as Secretary of War, and in behalf of the United States, and as the principal officer of an executive department, had authority to accept the drafts, and that, in accepting them, he acted in his official capacity, and in behalf of the United States. And that he, in behalf of the United States, as such Secretary of War, was authorized to accept drafts of such and the like tenor and effect as the drafts aforesaid; and that the said Pierce, relying upon the apparent, as well as upon the actual authority of the said Secretary of War to make such acceptances, and upon the fact of his acceptance of the bills, became the holder and owner of them, in a regular course of business, before they severally matured and for valuable consideration.'
Similar averments were made in the petitions of the other three parties. And by an amended petition they set forth the further facts:
That when the bills were accepted, and when they became due, the government owed the contractors a larger sum than the amount of them.
That at that time the army in Utah was in imminent danger from cold and starvation; that it was the duty of Floyd, as Secretary of War, to save it; and that to so save it he authorized the drawing of the bills and accepted them.
That as secretary he had authority by law to make advances to the contractors after their trains were ready to start; and that their trains being ready to start, he did what was done.
That he had authority by law to ascertain and determine the debt of the United States to the contractors, and did so determine; that there was due them the sums specified in the bills; and that the bills so drawn and accepted were conclusive evidence of the debt as against the government.
These same additional matters were considered by the court below in the case of Pierce. The general issue was pleaded in all the suits.
To present the case more completely, it must be stated that by statute of 31st January, 1823, it is enacted: