United States v. Cosgrove

26 F. 908
District Court, D. Kansas·Decided July 1, 1886·Published

Opinion

Foster, J.

This action is brought by the United States to recover from the defendant a large sum of money, to-wit, $>140,000, alleged to have been paid him wrongfully and illegally, by order of the postmaster general, between October, 1878, and July, 1882, for carrying the mail on route No. 39,109, from Las Yegas to Las Cruces, New Mexico. ’ The declaration contains three separate causes of action. The first charges that the defendant entered into a contract with the postmaster general for the United States, to carry the mail over said route three times a week, for the contract price of $14,900 per year; that at different times in 1878 the postmaster general increased and expedited the service on said route, and made the following orders:

“1878, September 12, (7,772,) modified. Embrace Roswell on this route between Fort Sumner and Fort Stanton, from July 1,1878. Distance and pay hereafter to be determined.” .
“1878, October 24, (9,444.) Modify order of September 12, 1878, (7,772,) so as to increase distance 62 miles; contractor’s pay $2,517.16 per annum, being pro rata.”
“1878, October 29, (9,614.) Reduce schedule time from 180 hours to 120 hours, and allow contractor $21,876.55 per annum additional pay, being pro rata from November 15,1878. (2) Increase service four trips per week, and allow contractor $52,120.96 per annum additional pay, being pro rata from November 15, 1878.”

It is charged that the order of October 29th, making allowances for expedited service on said route, was based upon a sworn statement of the defendant, of which the following is a copy.

“WASHINGTON, D. C., October 23, 1878.
“Hon. D. M. Key, P. M. General — Sir: In order to reduce the running time on route 39,109, from Las Yegas to Las Cruces, New Mexico, from the present schedule of seven and one-half days to five days, as contemplated, I respectfully submit that to perform tri-weekly service upon this route upon the present schedule will require twelve carriers and thirty-six animals. To shorten the running time to five days’ schedule will necessarily require nine [909]*909additional carders and fifty-two animals additional to increase said speed as desired. This to the best of my knowledge and belief.
[Signed.] “Cornelius Cosgrove, Contractor.
“Acknowledged and sworn to before me, this twenty-third day of October, A. D. 1878. JOHN W. CARSON, Notary Public.”

It is further alleged that said statement was false and untrue in this: that it did not require the additional number of carriers or animals as therein stated, to perform the expedited service, but that in fact no additional carriers and no additional animals wore either required or used by reason of the expedition of the schedule time; and by reason of said false allegations the postmaster general was misinformed and misled, and made such allowance under a mistake of fact; that said payments to the said defendant under the order during said time amounted to the sum of §132,577.49.

The second count charges that the order of October 24, 1878,. whereby said defendant was allowed an additional compensation of 02,517.16 per annum for supplying the Eoswell post-office was made by the postmaster general in the understanding and belief that said office was not in fact located on the line of the original route, but was at a distance, requiring 62 miles additional travel every trip; whereas, in fact, said office of Eoswell was located directly on the' line of the only practicable and regular traveled route between Fort Sumner and Fort Stanton, and was directly on the route selected and traveled by the defendant under his original contract, and no additional travel whatever was required to supply said office; that under the defendant’s contract he was expressly bound to supply all offices thereafter to be established on the line of his route, without any additional compensation, and that said additional allowance was made by the postmaster general and paid the defendant under a misunderstanding of the facts in the case, and during said time there was paid the defendant, on account of said service, the sum of 035,000.

The third count charges the defendant with the sum of §800, being the amount paid the defendant on account of supplying the Eos-well office from -July 1 to October 24, 1878, the latter being the date when the order was made, and that all payments for services prior to the date of the order were retroactive, and in violation of section 3960 of the Eevised Statutes of the United States.

The defendant interposes a general demurrer, that the allegations do not constitute a cause of action. It will be observed that the petition nowhere charges a willful or intentional misrepresentation of the facts on the part of the defendant, or any fraudulent intent on the part of either the defendant or the postmaster general in the transaction; and it is urged by defendant’s counsel that such fraudulent Intent is necessary to create a liability on the defendant; that the statement made by him being merely an expression of an opinion, and made without any bad faith, however erroneous it might [910]*910prove to be, would not make the defendant liable. On general principles, and in the absence of any statutory provision or contract obligation, this principle is amply sustained bv an impregnable volume of American cases cited by defendant’s counsel. Stitt v. Little, 63 N. Y. 427; Arthur v. Griswold, 55 N. Y. 405; Mooney v. Miller, 102 Mass. 217; Wheeler v. Randall, 48 Ill. 182; Byard v. Holmes, 34 N. J. Law, 296; Hammatt v. Emerson, 27 Me. 308. They proceed upon the theory that when the truth is as accessible to the one party as the other, and there is no bad faith nor a warranty, but merely the expression of a belief or an opinion, although erroneous and acted upon by the other party, there is no liability. The English cases are not so decided, but seem to permit a recovery where the pa“yor has not been guilty of laches, but has used some degree of care to ascertain the truth. Kelly v. Solari, 9 Mees. & W. 57; Bell v. Gardiner, 4 Man. & G. 23; Townsend v. Crowdy, 8 C. B. 492. And again, there may be a liability for money had and received where it has been paid under a mistake of facts, either by the payor or a mutual mistake by both parties, as where a contractor was to be paid a stated price per yard for paving a street, and an error was made in the measurement of the work and the party was overpaid. Neitzey v. U. S., 17 Ct. Cl. 127; Sharkey v. Mansfield, 90 N. Y. 227; Wheadon v. Olds, 20 Wend. 175. Where parties had mutual accounts between them, and one party, in making a statement of his account, by mistake omitted a charge of $5,000, and thereby overpaid the other party, held, he might recover it back. Lawrence v. American Nat. Bank, 54 N. Y. 435; National Bank v. Allen, 59 Mo. 313.

In the case at bar there are several provisions in the acts of congress, as well as the contract between the parties, which have a very important bearing on the question at issue. Section 3960 of the Revised Statutes reads as follows:

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United States v. Cosgrove, 26 F. 908 (D. Kan. 1886).

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