Case ID: us-ct-cl_7/html/0543-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, J., LOR.TNG-, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Henry S. Bulkley v. The United States.
    
      On the Proofs.
    
    
      An army transportation contract provides, 1 si. That tho contractor shall receive and transport during certain months such military stores as shall he turned over to him: lid. That the stores tendered to him shall not he less than 100,000 pounds, nor more than 10,000,000 pounds in the aggregate ; 3d. That he shall he untitled to the transportation of all the stores for which the Quartermaster’s Dipartment may require transportation on this route during the year 1865 : ■tth. That notice shall he given to him of the quantity and kind- of stores to he 
      
      transported at any one time. The contractor receives stores under the contract exceeding in the aggregate 10,000,000. He is also notified at various times of stores to he transported, and malees his preparations under the notices, and is ready to perform. Butit is then found that the Quartermaster Department does not, in fact, require transportation, and the stores are not furnished to him. He treats the withholding of the stores as a violation of the contract, and sues to recover the profits which he might have made if allowed to perform.
    
    I. Whore the parties contract for a specific amount, the profits on that amount will bo dcomel to have been contemplated by them when they made the contract as the measure of damages. But whore they contract for such unknown amount as the uncertainty of military affairs ma}require, the contractor agrees to share in that uncertainty, and cannot recover his profits unless his services were actually required.
    IT. The law contemplates incases of contracts broken two elements of damage: first, losses sustained; second, gains prevented. Where the defendants have violated their contract through its entire scope, so that the contractor has been deprived of profits which he might have made, within the contemplation of the parties when they made the contrast, there lie should recover his gains prevented, as well as losses sustained. But where the broach relates to a minor matter in the contract, and has merely thrown upon the contractor needless expanse, there lie should recover only the damage which lie has actually sustained.’
    
      Mr. V. F. Fecit for the claimant:
    Thus is a.claim for unliquidated damages, arising but of violation of a contract by defendants, and has not been presented for settlement in any Department.
    The contract violated consists in the original agreement in writing, made March 21, 1865, and notices in writing served upon the claimant by defendants’ agents.
    It will be seen the claimant first agreed with defendants to transporten route No. 1, during theyear 1865, ten million pounds of supplies, if the defendants required, so much transported &?/ contract.
    
    Subsequently the claimant, at the request of defendants, agreed to transport the aggregate amount of 14,277,537 pounds of supplies.
    On June 24, 1865, Colonel Potter wrote as follows:
    ' “ Depot Quartermastee’s Oppicuo,
    
      u Fort Leavenworth, Kansas, June 24, 1865.
    “ Sir: Transportation is required from this depot for military • .supplies asfollows, viz: 1,700,000 pounds to Salt Lake; 1,500,000 pounds to Fort Laramie. As you bave already been notified of tlie full amount required to be transported under your present contract with tlie United States, you are requested to notify this office if you are prepared to transport this additional freight; and, if so, please state within what time you can place the stores en route to their destination.
    “ Respectfully, your obedient servant,
    “J. A. POTTER,
    “ Colonel and Quartermaster,
    “ H. S; Búleley,
    “Leavemoorth, Kansas.”
    
    To this the claimant replied as follows :
    “Leavenwoeth, Kansas, June 27,1865.
    “Sir : Your favor of the 24th instant, requiring me to transport freight, as therein stated, is received. In reply I would state that I will transport the stores upon the terms and conditions of my contract of March 21,1865, and that a large portion of them will be shipped within fifteen days from date, and the balance as soon as jiracticable. •
    “Respectfully,
    “HENRY S. BULKLEY.
    “Colonel J. A. Potter,
    “ Quartermaster, Fort Leavemoorth.”
    
    Thereupon the claimant entered upon the performance of the service specially referred to in the foregoing correspondence, and carried it forward in conjunction with all the service covered by all the former notices, and the entire service was performed with the following exceptions, which the general commanding the department countermanded August 1 and 2, 1865.
    We maintain that the acceptance by the claimant of the service proposed by defendants’ agent, following as it did the requirements made theretofore, was an agreement between the claimant and defendants for the transportation by claimant of all the supplies covered by all the prior notices, and of the supplies covered by that notice. It was an agreement to transport 1,700,000 pounds of supplies from Fort Leavenworth to Balt Lake, and 1,500,000 pounds of supplies from Fort Leavenworth to Fort Laramie, in addition to all the supplies covered Toy all prior notices.
    
    This agreement having been entered into by the claimant, involving him in an extraordinary outlay and risks, he had a right to a fall performance of the same on the part of the defendants, and this right he never waived or forfeited. He is therefore entitled to recover as damages the profits he would have made if there had been a full performance.
    
      Mr. Alexander Johnston (with whom was the Assistant Attorney-General) for the defendants:
    I. Even if the defendants had agreed to furnish the claimant for transportation all the freight he claims that he had a right to carry under his contract, that agreement has more than been complied with. The 10,000,000 pounds specified in the contract, and the 3,200,000 provided for under the arrangement of June 24, only make 13,200,000 — and the claimant has actually transported 13,443,720.
    II. But the defendants entered into no such agreement. Such a contract, if made by any quartermaster, would be void. The statute limits the power to contract for transportation to “ the necessities of the current year.” (Act March 2d, 1861, ch. 84, § 10; 12 Stat. L., 220.) Colonel Potter could not exceed this — and he did not attempt to do so. The contract was for the transportation of all military stores and supplies for which the Quartermaster’s Department might require transportation by contract; with a limitation, as to amount, in favor of the contractor.
    
   Nott, J.,

delivered the opinion of the court:

This is an action upon an army transportation contract, and the damages are laid at $60,864.21.

The contract was for the transportation of army supplies upon the western plains, and the court must look to the object of the contract and the circumstances amid which it was made, to construe it aright and ascertain the true intent of the parties.

The first article of the contract provides that the claimant u shall receive at any ti7nev ufrom April to September,” 1865, “ all such military stores and supplies as may he offered or turned over to him for transportation,” and transport the same with ail practicable dispatchThe second article binds the claimant u to transport under this agreement ” any member of pounds of military stores and supplies from and between 100,000 and 10,000,000 in the aggregated The eleventh article binds the defendants that the claimant “ shall transport all the military stores and supplies for which the Quartermaster'’s Department may require transportation ” “ during the year 18(35, provided the loeight of such military stores and supplies shall not exceed in the aggregate 10,000,000 pounds,” with a furthet proviso that the defendants may use their own means of transportation whenever deemed advisable.

The contract, therefore, was not an agreement for the transportation of 10,000,000 pounds or less of military stores; but was an agreement for the transportation of “ all the military stores and supplies for which the Quartermaster’s Department may require transportation” during the year 1865,” with a condition in favor of the claimant that he should not be required to carry less than 100,000 pounds, nor more than 10,000,000 pounds in the aggregate, and with a like condition in favor of the defendants that they should not be bound to furnish him, of the stores they might need to transport, more than 10,000,000 pounds, nor any that they might prefer to convey by their own means of transportation.

Under this contract, it was the right of the parties to waive respectively the conditions inserted for their protection. If, for example, the freight tendered to the claimant was but 50,000 pounds, and he carried it, the carriage would be a service under the contract, subjecting him to all of its restrictions and responsibilities. Conversely, if the freight tendered and conveyed exceeded 10,000,000 pounds, the defendants were bound by all the other terms of their agreement. Whether the service rendered was for less than the minimum or more than the maximum, it was still service rendered under the contract, so long as it related to u military stores and supplies for which the Quartermaster’s Department may require transportation ” u during the year 1865.”

So far it is apparent that the contract imposed no obligation upon the defendants to furnish any specific amountof freight, but only that for which the Quartermaster Department might require transportation; anil no breach could be alleged by the claimant unless the freight contemplated was actually diverted from him'and given to another contractor. The object was not the transportation of 100,000 pounds of freight or more, nor of 10,000,000 pounds or less, but of “ all the military stores and supplies for which the Quartermaster’s Department might require transportation ” u during the year 1865,” and the claimant participated in the risks growing out of the uncertainty of the amount as fully as the defendants. (Grant’s Case, ante, p. 53.)

But there is another provision in the contract. The fourth article provides that, uin order that” the claimant “ shall be in readiness to meet the demands and requirements made upon him for transportation under this agreement, due notice shall be given him or his agent of the quantity and. hind of stores to be transported at any one time, at what points the stores will be ready for delivery to him, and the place of their destination and the contract then proceeds with great particularity and care to designate the length of the notices that shall be given for different quantities of freight to be carried. It is, therefore, further apparent that, without this notice, the claimant was not bound to take any step toward the fulfilling of his contract; while the giving of the notice threw upon him the obligation of being in readiness to transport the specified freight, provided, of course, that it came within the limitations of the contract. Undoubtedly the defendants could not give this notice wantonly and be clear of all the consequences. Undoubtedly their giving the notice threw upon them some reciprocal responsibility. Was that responsibility an obligation to furnish the freight notified of, irrespective of the requirements of the Quartermaster Department; or to respond in damages for such needless loss as they may have cast upon the claimant ? In other words, it is a simple question as to what should be the measure of damages.

The law contemplates, in cases of contracts broken, two elements of damage: first, “ losses sustained;” and, second, gains jmevented.” Griffin v. Colvin, (16 N. Y. R., p. 494.) In this case it is manifest that there have been losses sustained. It is not so clear that there have been gains prevented.

If the parties had contracted for a specific amount, the profits on that amount would have been the inducement to the claimant, and the parties would be deemed to have contemplated those profits as the measure of damages when they made the contract. But, as we have seen, they did not contract for a specific amount, but for such, unknown amount as the uncertain exigencies of military affairs might require. In that uncertainty, within certain bounds, the claimant agreed to share.

The claimant was notified, pursuant to the terms of the contract, to transport certain specified quantities of freight between certain specified points. In one instance the quartermaster alluded by letter to the fact that 10,000,000 pounds of freight had already been transported, and requested the claimant to notify him uifhe was prepared to transport this additional freight.” In reply, the claimant notified the quartermaster of his willingness. In the other instances, no special correspondence passed between the parties, but the notices were ordinary requisitions, made under the contract. In all instances, the claimant made all needful preparations, and held himself in readiness to perform. A part of the freight for each route was delivered, and a part withheld. In fact, the necessity for sending the freight suddenly ceased, and the transportation thereof would have been needless and improper. Ought we to hold that, as between the contracting parties, the defendants were still bound to send it, and that, “ in contemplation of the parties when they made the contract ,” which is the test the law imposes, there have been gains prevented, when no freight was in fact transported, and none required?

It has been termed a “ cardinal principle ” that “ the plaintiff must shoio himself to have sustained damage, or, in other words, that actual compensation will only he given for actual loss.” (Sedgwick, Mea. Dam., p. 223.) Here the claimant has sustained damage, and for that he should be compensated; but he should not recover an actual compensation for profits under the contract unless, within the contemplation of the contract, there was an actual loss of profits.

The rule which I think should govern the case may be thus stated: Where the defendants have violated their contract through its entire scope, so that the contractor has been deprived of profits which he might have made within the contemplation of the parties when they made the contract, there he should recover his gains prevented as well as losses sustained. But where the defendants’ breach relates to a minor matter in the contract, and has merely thrown upon the contractor needless expense, there he should recover only the damage which he has actually sustained.

The evidence in this case shows clearly enough that the defendants’ officers gave notices under the contract, at various times, for the transportatiou of specified quantities of freight to four designated points, and that of the freight whereof the claimant was thus notified there was withheld—

Pounds.

From Leavenworth to Fort Kearny. 591,308

From Leavenworth to Laramie. 043, 725

From Leavenworth to Denver. 168,296

From Leavenworth to Salt Lake... 286, 765

It also appears that the claimant prepared and was ready to transport' this freight, and that, from being required to prepare to perform, he has suffered actual damage. But the case has been tried upon the theory that the profits which might have been made, had the freight been furnished, constitute the true measure of damages, and therefore the actual losses sustained have not been shown.

The case will be remanded to the trial docket, with leave to the parties to furnish evidence upon that specific point, viz, the amount of losses actually sustained by the claimant, in accordance with the principle indicated by this opinion. Should,' however, the claimant prefer to stand upon, the theory upon which the case ivas tried, and elect, within thirty days, to carry it to the Supreme Court in its present form, the order now to be entered will be vacated, and the findings of the court will be filed and judgment entered dismissing the petition.

The order of the court is that the case be remanded to the trial docket, to remain there without further notice- by the parties, and with leave to either party to take testimony and furnish evidence as to the amount of the claimant’s actual damages caused by the defendants, in accordance with the opinion of the court.

LOR.TNG-, J.,

dissenting:

These transportation contracts of the Government are important from the amounts they involve, and they are likely to be, as they have been, of frequent occurrence. And as the Government fixes their terms and provides their own measure of safety, I think they are to be administered according to their terms and by the rules that govern such contracts between individuals.

It is true that in these cases the amount of transportation the Government may actually need cannot be determined beforehand, nor when the contract is entered into; and, therefore, the contracts always provide that the amount of transportation required shall be left to be determined by the Government when its needs shall arise and be known to it; and to this end the contracts provide that notice shall be given by the United States to the contractor of the specific amounts, places, and times for which transportation will be required ; and by such notice the contractor becomes absolutely bound to transport the amount specified ,• and the contract is then for him a contract for a specific amount; and on the principle of mutuality of contracts I think it should be so for the Government, and that it cannot be made specific for the contractor and not for the Government. If the contractor has thus the liability of a specific contract, he is entitled to the profits of it by the rule that governs between individuals, and for the same reason that parties do not undertake specific contracts for the mere cost of executing them.

I think the petitioner is entitled to the profits he would have made if the amount of freight specified by notice to him had been furnished, and that is here merely a matter of arithmetic from data furnished.