Brief for the Respondents in Opposition — Globe Indemnity Co. v. United States

Point A.

Point B.

Point. C.

Point D.

Point: E.

SUBJECT INDEX,

The case of Illinois Surety Company vs.

United States to use of J. A. Peeler, et al,

240 U. S. 214, which is relied on by peti-

tioner, is distinguishable on its facts and is

not contrary to the decision of the Court

ME SconivGuescseneerieer ee ?

The case of Consolidated Indemnity and In-

surance Co. v. W. A. Smoot and Co., Inc., .

o7 F. (2nd) 995, As, distinguishable on its

facts and is not pa rary to the decision of

¢

Our present case ig ruled by Lambert Lum-

ber Co. v. Jones Wotneerien & Construc-

tion Co., 47 F. (2nd) 74, certiorari denied

OP OS ieee

The letter of the Department of the In-

terior was not a settlement ............. I.

Every reported case in which a claim

reached the General Accounting Office holds

final settlement to have been made by that

Mr PEE ETER TL CTP STE TT CPE Tere rorer

Page

10

TABLE OF CASES CITED.

ee a 3 Page

Illinois Surety Co, vs. United States to use of J. A,

Peeler et al, 240 U. S. MOe HE 4, 5, 6,7

Cook vs. United States, 91 U.S. 389.000.0000. ge (7

Consolidated Indemnity & Ins. Co. vs. W. A. Smoot

and Co., Inc. 57 F, ( 2d) 995, Certiorari denied 287

U. S. WU Hauhi ve sankns Sevewaciecevees. cle: 8

Lambert .Lumber Co. ys2 Jones Engineering & Con-

. struction Co., 47 F. (2d) 74 Certiorari denied 283

U.S. BHD eee eee eee 8 4, 5, 8,9, 10, 11, 12

Masses vs. Patton, 246 Fed. 24, 158 CG. . 2 11

United States vs. French, 52 F. (3d), 235,........... 11

TABLE OF STATUTES CITED. -

Hurd Act, Act of August 13, 1894, 28 Stat. at’ L. 278

Chap. 280; 40 U.S.C. A.©70 as amended. :2, 4, 8, 10, 11

Budget and Accounting Act of June 10, 1921, e. 18,

See, 304, 305; 42 Stat. at L. ai See marek SF

R. S. See. 236; Comp. Stat. 1913, Sec. 368...... 1,5, 7,8, 11

Act of July 31, 1894, c. 174, See. 8....... eerewswe ——

IN THE |

Supreme Court of the United States

October Term, 1933. No. 419, ‘-

; il \

GLOBE INDEMNITY COMPAN . &

| Petitioner,

vs.

THE UNITED STATES OF AMERICA, to the use of

STEACY-SCHMIDT MANUFACTURING COM.

PANY, INCORPORATED. = -

BRIEF OF RESPONDENT IN OPPOSITION TO

| PETITION FOR CERTIORARI |

In this case the respondent relies on the Budget and

Accounting Act of 1921, the pertinent provisions of which

are as follows:

‘‘All claims and demands whatever by the Govern-

ment of the United States or against it . . . shall be

settled and adjusted in the General Accounting Office.’’

R. $. 236; June 10; 1921,¢. 18, Sec. 305; 42 Stat. at L. 24.

“Nothing in this chapter shall prevent the General

Accounting Office from suspending items in an account

in order to obtain further evidence or explanations

necessary to their settlement. The Secretary of the

Treasury shall make regulations fixing the time of

,

aemene _~. ay

9

~

payment which shall-expire before a warrant be tssued

im payment of an amount certified as provided in this

section. ,

‘Disbursing Officers, or the head of any executive de-

partment, . . . may apply for and the General Ac.

counting Office shall render his decision upon ary

‘question involving a payment to be made by them or

under them, which decision, when rendered, shall gov-

ern such office in passing upon the account containing

said disbursement."’ July 31, 1894, & 174, see, 8 28 Stat,

207; June 10, 121, ¢. 18, See. 304; 42: Stat. at 1. 24.

‘all powers and duties now conferred or imposed by

law upon the comptroller of the Treasury or the six

auditors of the Treasury Department . . . shall, so

far as not inconsistent with this Act be vested in-and

imposed upon the General Accounting. Office and

exercised without direction from any other officer.

- The balances certified by the Comptroller Cien-

.? eral shall be final and conclusive upon. the executive

brancly of the Government.”’ Act of June 10, 1921,

c. 18, See. 804; 42 State at 1.7 24.

The General Accounting Office issued its Certificate

of Setflement (R. 38) and under the authority of the above

quoted Act of Congress that certificate became the final -

‘settlement of the contract under the Hurd Act, and the

one year's limitation for the bringing of the suit began

e _. to run from the date of that Certificate. This suit was,

therefore, brought within the time allowed.

The cases relied upon by the petitioner’ are not in

point for’the reason that in nane of them was there ever

", any submission in any way, shape, or form of the figures

or the contract to the General Accounting Office under the

Act of 1921, or. to the Treasury Department under prior

acts. A fair reading of those cases should convince the

court that. the only -question determined in those cases

3

~

was what was a final settlement, and not which depart-

ment or agency of the government was authorized to make

the settlement. It was contended in some of them that

payment was necessary to a final settlement. In others

that formal vouchers or orders of the Treasury were

_ prerequisites to a final settlement, and in still other cases

the argument was that.a final settlement had not been

made if there had been held open a small item for some

further review. or adjustment. In not one of those cases

was there considered the relative authority of the depart-

mental officer and the General Accounting Office; or its

predecessor under acts previous to 1921, the Treasury

‘Department, and yet petitioner has adopted the casual -

", observations of the judges writing those opinions as auth-

ority for propositions of law which were never before

them. :

It must be evident that even though the office of the

Secretary of the Interior had forwarded a communication

in which the statement was made that the claim had- been

finally settled by that office and then referred the whole

matter to the Accounting Office, that such finding by the

Secretary of the Intérior would have been of no’ effect

whatsoever because the result of such action by the Secre-

tary would have been an attempted denial of all the pro-

visions of the Act of 1921. As Judge Kenyon has shown

in his opinion in the Lamber¥ case (infra),.as soon as the

matter was referred to the General Accounting Office, no

matter what action might have been taken by the for-

warding office, the General Accounting Office became the

sole judges of the whole situation and their finding consti-

tutes the final settlement in the case.

This interpretation of the Act of 1921 is that adopted

by the majority opinion of the court below (Record 74)

- which states:

‘‘This Act empowers the General Accounting Office

¢ .

mee i ee ern e e . i

to make all settlements and to render decisions upon

any question involving.a payment to be made by dis-

‘bursing officers or by the head of any executive de-

partment. It provides that the balances certified by

‘the Comptroller General shall be final and conclusive.

The decision in Lambert Lumber Co. y. Jones Kngi-

neering & Construction Co.; Inc., 47 F. (2d) 74, cer-

tiorari denied, 283 U. S. 842, sustains the view that

the General Accounting Office is authorized to settle

claims. .

“We are of the opinion that the General Accounting

Office in the instant case was charged with the duty of

making final settlement and performed that duty, as

evidenced by its certificate of settlement issued in

Ovtober, 1927. The plaintiff’s suit therefore was

brought within the one year allowed by the Hurd

Act.’” |

The respondent, therefore, makes the following reply

to petitioner’s brief:

POINT A. The case of Illinois Surety Com-

pany vs. United States to use of J. A. Peeler, et al,

240 U. S. 214, which is relied on by petitioner, is

distinguishable on its facts and is’ not contrary to

the decision of the Court below.

In our present case, the issue is,—Did the letter of the

First Assistant Secretary of the Department of the In-

terior (R. 38) or ‘did the certificate of settlement of the

Comptroller General of the General Accounting Office (R.

38) constitute the final settlement under the Hurd Act?

If it be assumed that the Secretary’s letter is.by its ©

‘own terms sufficient to constitute a settlement (which as- :

sumption the*petitioner makes and which is entirely un-

warranted,—see page 10 of this brief) then our present

case requires a decision as to the relative authority of /

”

@

~ a ieibatidiamttiidibiedetatsiscscammaniaal

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. .

5

the General Accounting Office and of the department hav-

ing charge of the work under contract. For the Peeler

case to have any direct bearing on our present case, that

case must have involved some similar conflict of authority.

- But such a conflict did not exist and the Peeler case is not

in point. There was in force at that time R. S. 236 (Comp. —

Stat. 1913, See. ,368) which provided that all claims by

and against the. United States should be settled in the

Treasury Department, and as that department in the

Peeler case had had charge of the work under the contract,

the Treasury Department was at the same time the office

by law charged with the duty of settling. claims against

the United States and the department having charge of —

the work. The entire transaction from beginning to end

never left the Treasury Department. The court did not

- have to decide which of two departments made the final

settlement and the only question before the Court was

whether a determination of the amount due or payment

of that. amount constituted the final settlement. In our

present case we must go further and decide which of two

offices is authorized under the law to fix the amount due

by the Government. In commenting on the Peeler case,

Judge Kenyon in Lambert vs. Jones (47 Fed. 2nd 74)

states (page 83):

‘‘The learned justice is careful to point out that the

contract in question was a Treasury Department con-

‘ tract. It did not hold or indicate that the same con-

clusion would apply if the contract were in the Navy,

Interior, or other departments of the Government.’’

Respondent earnestly submits that a careful reading

of the opinion in the Peeler case will fail to disclose that

Mr. Justice Hughes, who wrote the opinion, gave any

weight whatsoever to the fact that the Treasury Depart-

ment was in charge of the work or that that fact influ-

enced him in the slightest degree in arriving at his deci-

,

oe eter “

ee be ee oy

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; ‘

sion, and yet on page 12 of petitioner’s bret appears the

following: ‘‘. . . this court found that performance and

final settlement took place on the date on which the Ad-

ministrative Department having charge of the work ap-

proved the balance due to the contiactor.’? The same

phrase ** Administrative Department having charge of the

work” in nearly the same language also appears‘on page 13

and twice on page Ll. In so far as those words imply that

‘the fact the Treasury Department had charge of the work

affected the decision, they are without any foundation

Whatsoever, The frequent repetition of these misleading

phrases in petitioner's brief is without any logical justifi-

cation and their constant use attributes to the court a

reason for its decision which cannot be found in the

opinion itself,

.

Also by the use of those phrases, the petitioner would

have the court believe that the word “administrative”? ay

used by Mr. Justice Hughes refers to the department

having charge of the werk. Such an assumptian is like-

Wise without any foundation. On the contrary, immedi-

ately following that part of the opinion which is quoted

on page 12 of petitioner's brief, the opinion itself distin--

guishes hetween an ‘‘administrative determination” and a

**judicial determination”’:

‘*Whether the amount so fixed is due, in law and fact,

undoubtedly remains a question to be adjudicated, if

properly raised in judicial proceedings, but this does

not affect the running of the time for bringing action

under the statutory provision.’’ (page 221) .

For all that appears in the opinion a determination of the

amount due by the General Accounting Office (in our case)

or by the Treasury Department (in-the Peeler case) is as

fully an ‘‘administrative determination’? as one made by.

ie

the department in charge of the work. See also the quo-

tation below,this page. : , “

Furthermore, the petitioner misinterprets the Peeler

case in another respect. On page 13 and again on page 14

of its brief, it states that Mr: Justice Hughes necessarily

held that the date of final settlement was not determined

by proceedings under R. 8. 236. When it is considered

that that statute requires claims against the United States

to be settled in the Treasury Department and that Mr.

Justice Hughes found the settlement in the Peeler case

to have been made in the Treasury Department (just

where R. S. 236 requires it should have been made), it is

difficult to see how petitioner comes to the conclusion that

the Peeler case is authority for the proposition that R. S.

236 is inapplicable. Nothing Mr. Justice Hughes says

supports such an argument. As a matter of fact, a reader

of the opinion is quite definitely given to understand that

the Treasury Department by virtue of R. S. 236 should

_ effect the final settlement, regardless of. what department

did the work. In reviewing the Acts of Congress, the

learned Justice-quotes the pertinent part of R. 8. 236 and

then states (page 219) :

‘‘The words ‘settled and adjusted’ were taken to mean

the determination in the Treasury Department for °

administrative purposes of the state of the account

and the amount due. 2 Ops. Atty. Gen. (Hall)

518, 625, 629, 630.”’ |

He also quotes with approval the statement of Mr. Chief

Justice Waite, Cook vs. United States, 91 U. S. 389, 399,

reading in part: ; |

‘‘Thus it is seen that all claims against the United

States are to be settled and adjusted ‘in'the Treasury

- we

Department’ ... -.

8

Mr. Justice Hughes was ‘deciding whether a determi-

_ nation of the amount or payment constituted a final settle-

ment. Had he desired to go beyond the question before

him, and declare what gover — agency should make

the settlement or declare R. S,.236 inapplicable to settle-

ments under the Hurd Act, - dictum to that effect would

have been clear and it would not have been necessary for

the petitioner in this case to build its case on its own as-

sumption of what he intended but certainly never said.

POINT B. ‘The case of Consolidated Indem-

nity and Insurance Co. v. W. A. Smoot and Co.,

Inc., 57 F. (2nd) 995, is distinguishable on its

facts and is not contrary to the decision of os

Court below.

In this (the Smoot) case, not only did the constructing

quartermaster reach an agreement with the contractor as

to the amount due and prepare a voucher therefor, but

that amount was paid by the War Department and there

was never at any time any submission of the matter in any

form whatsoever to the General Accounting Office. The

court rightly decided the War Department made the settle-

ment. It would be absurd to find the government had

not made a final settlement when it had not only come to

an agreement with the contractor as to the amount due

but had actually paid out the money. To hold otherwise

would bé an extreme hardship on the: material-man and_

would be opposed to the spirit of the Hurd Act.

The court in the Smoot case does state (page 997) :

ually makes the administrative determination of the

amount due, as in Lambert Lumber Co. v. Jones Engi-

neering & Construction Co., (C. C. A. 8th) 47 F., (2d)

74, his determination is the settlement within the

meaning of the act.’’

‘‘Undoubtedly, where the Comptroller General act- |

9

In our present case, the certificate of settlement of

the Comptroller General (R. 38) is apparently on a form

identical word for word with the ‘“‘administrative deter-

mination’’ of the Comptroller General in the Lambert vs.

Jones. case. Is it not reasonable to suppose, in view of.

the above quotation, that the learned, author of. that opin-

ion, having agreed that the Comptroller General’s certifi-

cate in the Lambert v. Jones case was an administrative ©

determination and a final settlement, would likewise de-

clare the certificate in the present case to have been the

final settlement? ‘

| POINT C. Our present case is ruled by Lam-

bert Lumber Co. v. Jones Engineering & Construc-

tion Co., 47 F. (2nd) 74, certiorari denied 283 U. S.

842.

In that case, the Veterans Bureau sent to the General

Accounting Office a letter not materially different from

the letter of the Department of the Interior in this case.

There was a complete calculation of the amount due, and .

with the letter were sent all ‘the correspondence and

~ documents relating to the claim, just as in,the present case.

The General Accounting Office then issued its certificate

of settlement apparently on a form identical with the one

in the present case. Judge Kenyon of the 8th Circuit

wrote the opinion, declaring ‘the final settlement to have

been made by the General Accounting Office by virtue of

its authority under the General Accounting Act of. 1921.

This opinion contains a most exhaustive. study of the Acts

of Congress, the reasons therefore, and a review of all

the authorities, and applying as it does to facts on all

fours with those now before this court, it is a most impor-

tant réference.

Upon petition to this court, a certiorari was denied *

(283 U. S. 842). This court has therefore affirmed the

‘

‘

10

authority of the General Accounting Office to make a final

settlement under the Hurd Act. .

POINT D. The letter of the Department of

the Interior was not a settlement.

In view of the Lambert case (supra) the authority, of

‘the General Accounting Office to make a final settlement

may be considered as established. ‘If that is so what effect,

if any, did the letter of the Department of the Interior

have.on the right of the General Accounting Office to. exer-

cise its authority? :

The letter (R. 33) is addressed to the General Ac. a

counting Office and begins “I am enclosing herewith for

direct settlement claim of (the contractor) .-. . ’’ It in-

cludes a complete statement of how the amount was ar-

rived at and the reasons therefor and continues, ‘‘En-

closed for your consideration is the following correspon-

dence relative to the delay and extension requested’’ and

appends a list. of 75 letters, reports and other documents

which were enclosed with the letter. :

From a grammatical standpoint that letter ‘‘settles”’

or ‘‘determines’’ nothing. It specifically states the claim:

is sent to the General Accouting Office ‘‘for direct settle-

‘ment’’. It is true that the Secretary has approved the

amount but he has just as plainly left to another authority ~

the duty of determining that that is. the amount the

government must pay. If the Secretary had felt he was

binding the government, why does he *“*recommend’’ instead

of ordering payment? Assuming the Secretary did not

intend to make a final settlement, is. the letter not just

what he would be expected to write?’ Or assuming he did

intend to make a settlement, why does he write such a

letter?

As Judge Kenyon says of the letter to the General

Accounting Office in the Lambert case (supra) p. 78,

| il

“If it had been intended that the action of the Vet-

erans’ Bureau and the Bureau of Yards and Docks

of the Navy Department should be a final settlement,

there would have been no need of any such a letter .

- as is set forth in finding 10. It ‘would merely have

asked for approval of the voucher.”

, Furthermore, there is a presumption ‘that public offi-

cers in the performance of their official duties comply with »

the law. ; : |

Masses vs. Patton, 246. Fed.'24, 158 C. ©. A. 250; _-

-22 Corpus Juris 130, et seq. |

There is a legal presumption, therefore, that the Secretary

- must have intended, not that he was making thé settlement,

but that the General Accounting Office, to which Congress

had delegated that duty, would do so. Any doubt as to

his intention should certainly be resolved in favor of the

respondent.

POINT E. Every reported case in which a

claim reached the General Accounting Office holds

final settlement to have been made by that Office.

_ A great many of the cases under the Hurd Act, in-

cluding those cited by petitioner on pages 18 and 19 of

his brief, reveal the practice of government officials of

» making their own settlements without submitting the

claims to the General Accounting Office as required by

the Act of 1921 or to the Treasury Department as required

by R. S. 236. Such cases are not in point. :

In every case in which the matter did reach the Gen-

eral Accounting Office, the court has held that that office

made final settlement. In addition to the Lambert case

(Point C), see |

UNITED STATES vs. FRENCH, 52 F. 2d, 235.

= , iY

12

Respondent submits that the decision of the court be-

low is not contrary to any reported case, but that: it is

squarely in accord with the Lambert case (Point C) the

decision in which has received the express approval of

this Court.

Samugt W. Cooper,

Attorney for Respondent.

Russe. C. GouRLey,

Of Counsel. a

e