Case ID: us-ct-cl_17/html/0437-02.html
Source: Caselaw Access Project
Author: {"author": "Mr. Chief Justice Waite", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(14 C. Cls. R., 74;
    not reported in U. S. R.)
    The Continental Bank Note Company, appellants, v. The United States, appellees.
    
      On the claimants’ Appeal.
    
    
      The claimants contract to manufacture and furnish the official postage-stamps which may be required by the Post-Office Department, at 80 cents per 1,000. The contract expires by its own terms ZOth April, 1877. On the 2ith April a second contract is made, to furnish the same hind of stamps from the 1st May at 11 cents per 1,000. On the 1st May the claimants have on hand a large quantity of stamps. These are subsequently delivered to the Post-Office Department. The claimants insist that they were manufactured under the old contract and should be paid for at 80 cents per 1,000; the department insists that they xoere delivered under the new contract and should be paid for at 11 cents. The claimants accept payment at the nexo rate xoithout prejudice to their rights.
    
    
      The court below decides: (1) That where one contract binds a manufacturer to keep on hand a certain supply of postage-stamps, and a second contract fixes a reduced prioe for stamps, it must be held that stamps made during the life of the first contract, but delivered during the term of the second, were sold and delivered uuder the second and can be paid for at the reduced price; (2) That the manufacturer took the risk of keeping a supply on band and fixed a rate which should compensate him for the excess left on hand.
    The judgment of the court below is affirmed on the same grounds.
    
      The Reporters statement of the case:
    In 1873 the defendants, as party of the first part, and the claimants, as party of the second part, entered into a written contract for the manufacture of ordinary postage-stamps by the latter and their sale and delivery to the former. The material clauses of this contract are the following:
    “The said party of the second part agrees—
    “ 1st. To furnish and deliver all the adhesive postage-stamps which may be required by the Post-Office Department for a term of four (4) years, commencing on the first day of May, one thousand eight hundred and seventy-three (1873).
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    “4th. To securely pack all stamps to be transmitted by sea-routes in hermetically-sealed tin cases, wrapped in strong manilla paper ; all others to be either packed in strong binder’s-board boxes, bound on the edges and corners with muslin, and enveloped in two thicknesses of strong manilla paper, or inclosed in strong manilla envelopes, as the quantity to be transmitted may require; all packages to be so inclosed as to enable the agent of the department to officially seal them.
    “ 5th. To deliver the stamps in separate packages, as above provided for, at the post-office in the city of New York, or in such quantities at the Post-Office Department, Washington, D. O. (each denomination being kept separate), as the Postmaster-General may direct.
    “6th. To furnish labels and direct the same for each package in accordance with the daily lists furnished by the agent of the department, together with all other blanks required to be inclosed with the stamps; also, all blanks for daily, weekly, monthly, and quarterly returns, relating to the number and denominations of stamps furnished and stock on hand and in process of manufacture.
    * * * * # * #
    “10th. To furnish the agent of the department and his clerks suitable office and desk room, at the place of manufacture, for the transaction of the business of his agency, without cost to the United States; and to conform in all respects to such regulations as the department or its agent may from time to time •adopt for the security of the government.
    “And the said party of the first part agrees to pay the said ■party of the second part for the stamps delivered in pursuance of this agreement at the rate of fourteen cents and ninety-nine one-hundredths of a cent (14-^%-) for each one thousand (1,000) •stamps, which shall be full compensation for everything required to be done or furnished under this contract. Payments to be made quarterly; that is to say, in July, October, January, and April, after a proper examination and verification of the accounts.
    “It is further mutually agreed by and between the contracting parties as follows:
    “1st. That an agent of the department shall have supervision -of the manufacture, storage, and issue of the stamps, who shall at all times have full and free access to the apartments, safes, •and vaults where the stamps are manufactured and stored, for the purpose of inspecting the same, and whose duty it will be to require the stipulations of the contract to be faithfully observed.”
    •Jr ^ ^ ^ irfc "Ji
    In 1874, after Congress had required the Postmaster-General ■“to cause to be prepared a special stamp or stamped envelope to be used only for official mail-matter for each executive department,” the same parties contracted in writing for the manufacture and delivery of official postage-stamps. This contract was to expire at the same time with the former contract. The claimants’ engagements and the mutual engagements were identical with those extracted from the first contract, except that they related to official stamps only. The defendants’ engagement was identical in form with their engagement under the first ■contract, except that the compensation was to be at the rate of •of 80 cents for each 1,000 stamps.
    Later in 1874 the same parties made a third contract orally, by which the claimants agreed to deliver to the defendants all the newspaper and periodical stamps that should be required by the Post-Office Department, and the defendants agreed to pay for the same at the rate of $1 a thousand. This contract had no fixed term; it was practically treated as expiring with the others, on the 30th April, 1877.
    On the 24th day of April, 1877, the same parties entered into ■a fourth contract, the material parts of which are as follows:
    “The parties of the second part do hereby jointly and severally undertake, covenant, and agree with the United States of America, and do bind themselves in manner following, to wit: 1st. To furnish and deliver all the adhesive postage-stamps which may be required by the Post-Office Department for a term of four years, commencing on the first day of May, one thousand eight hundred and seventy-seven, of the following descriptions, to wit: 1. Stamps for the use of the public; 2.. Official stamps for the use of the executive departments; 3. Newspaper and periodical stamps.
    ###***#
    “And the said party of the first part contracts and agrees to pay the said Continental Bank Note Company, party of the second part, for the stamps manufactured and delivered in pursuance of this agreement, at the following rates; that is to say, for stamps for the use of the public,nine cents and ninety-eight one-hundredths of a cent for each one thousand; for official stamps for the use of the several executive departments, eleven cents for each one thousand; for newspaper and periodical stamps, fifteen cents and ninety-eight one-hundredths of a cent for each one thousand.”
    
      Mr. John R..Dos Passos for the claimants, appellants.
    
      Mr. Solicitor-General Phillips for the United States, appellees :
   Mr. Chief Justice Waite

delivered the opinion of the Supreme Court, March 20, 1882:

The appellant by its several contracts sued on was bound to furnish the Post Office Department all the adhesive postage-stamps that might be required during a period ending on the thirtieth day of April, 1877. As part of the several contracts,, also, it bound itself to keep on hand at all times a stock of the several denominations of stamps sufficient to meet all the orders of the department, and to provide against any and all contingencies likely to occur, so that each and every order might be promptly filled. For this the United States agreed to pay at the stipulated prices for all stamps delivered, and by express stipulation this was to be “full compensation for everything required to be done or furnished under” the contracts. Deliveries were to be made at the post-office in New York, or the department in Washington. From this it is apparent there was no liability on the part of the United States to pay until — 1,. there had been a requisition by the department; and 2, a delivery in conformity with what was required. The contracts were limited to a fixed period. The United States were neither bound to order nor the appellaut to deliver after the end of the-term. Although the stock on hand was manufactured and stored under the supervision of an agent of the department, it remained the property of the appellant until delivered under the contracts. The inspection and supervision of the agent during the manufacture and storage were to guard against losses and frauds, and to insure promptness in delivery. The ownership was not changed until the delivery which the contracts provided for was complete. If loss occurred by reason of the failure of the United States to call for the whole stock on hand before the end of the term, it was compensated for in the payment for what was delivered. Such was the express agreement, of the parties.

The judgment is affirmed.