Case ID: us-ct-cl_61/html/0334-01.html
Source: Caselaw Access Project
Author: {"author": "Graham, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIAM A. FERSON AND JAMES W. AMRINE, CO-PARTNERS, DOING BUSINESS UNDER THE FIRM NAME OF W. A. FERSON HAY CO., v. THE UNITED STATES
    [No. D-361.
    Decided December 7, 1925]
    
      On the Proofs
    
    
      Contract; extension of twne; breach.- — Where an unconditional extension of time for delivery is accepted by the plaintiff without reservation, and the defendant breaches the contract by refusing to take delivery at the date to which it has been postponed, the fair market value, in the measurement of damages, is to be determined by the time for delivery as originally fixed by the contract.
    
      The Reporter’s statement of the case:
    
      Mr. George A. King for the plaintiff. Mr. George R. Shields and King & King were on the brief.
    
      Mr. Edwin S. McCrary, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. William A. Ferson and James W. Amrine were in June, -1920, and for the period here involved, copartners engaged in the business of. buying and selling hay and grain products, under the name and style of W. A. Ferson Hay Co., at Kansas City, in the State of Missouri.
    II. On June 7, 1920, plaintiff entered into a written contract with the United States through its duly authorized representative, by which it contracted to furnish and deliver, upon the order of the contracting officer, during the months of June and July, 1920, at Camp Funston, Kans., 21,983 bushels of oats, at $1.21 per bushel; 21,983 bushels, at $1.30 per bushel; 120 tons of bran, at $2.72 per hundredweight; 120 tons of bran, at $2.77 per hundredweight; 120 tons of bran, at $2.88 per hundredweight; and the remaining 91 tons of bran, at $2.87 per hundredweight. Said contract was entered into on behalf of the United States by Major Asa Irwin, Quartermaster Corps, United States Army, who was designated therein as the contracting officer, said officer having been duly authorized to make said contract for the United States.
    A true copy of this contract is attached to plaintiff’s petition, marked “ Exhibit A,” and is made a part of this finding by reference.
    III. The quantity of oats called for by the contract was, upon the call of defendant, delivered by plaintiff, and the agreed price paid therefor by the United States.
    IY. Defendant accepted one delivery of bran which was made by plaintiff shortly after the execution of the contract. This delivery covered 176 tons (351,900 pounds), which, after delivery, were paid for.
    Y. The difference between the market price, at the time and place of delivery fixed by the contract, and the contract price for the undelivered portion of the bran amounted to $2,281.36.
    YI. On June 12, prior to the delivery of the bran mentioned in Finding IV, the contracting officer who executed the contract on behalf of defendant wrote to plaintiff requesting it to consent to the cancellation of the contract. Plaintiff did not consent to the cancellation. On June 21 the contracting officer mailed to plaintiff a copy of the contract involved here executed by the defendant. On July 23 plaintiff notified the contracting officer that it was ready to deliver the balance of the bran when called upon, and on August 25 and 26 notified the supply officer to the same effect. On the 27th of August the supply officer wrote plaintiff that on account of lack of storage facilities it would be impossible to handle the balance of the bran before the first of the year 1921, and on September 8 plaintiff acknowledged this letter and consented to postpone delivery until that time. On the 6th of January plaintiff offered to deliver the balance of the bran and requested to be advised as to what disposition to make of it, but defendant refused to accept delivery, claiming that the contract had been canceled.
    YU. The bran mentioned in Finding IY, delivered at Camp Funston, cost the contractor $2.41 per hundredweight, which was the fair market price at the time of delivery. During the months of June and July, 1920, the period for delivery of the bran under the contract, plaintiff could have secured and delivered at Camp Funston the quantities called for by the contract, at a cost not exceeding $2.41 per hundredweight. During the said months and subsequent thereto plaintiff was ready to deliver the balance of the bran called for by the contract, and insisted that it be allowed to do so. After receipt of the letter of August 27, 1920 (Finding VI), from the supply officer saying it would be impossible to accept the balance of the bran before January, 1921, plaintiff made no effort to deliver before that time.
    VIII. Plaintiff purchased no bran for delivery under the contract except the quantities stated in Finding IY. From July 81, 1920, to January, 1921, the market value of bran declined from $2.41 per hundredweight in September, 1920, to $1.30 per hundredweight in January, 1921. During this period plaintiff did not have on hand a. sufficient quantity of bran to fulfill the contract and had made no contracts to secure it. But bran was plentiful and available and could have been procured in the market and delivered in quantities sufficient to meet the requirements of the contract had defendant given the necessary calls and the shipping instructions therefor. Had the plaintiff been allowed to deliver the bran in June or July, 1920, it would have realized a profit at the contract price of $2,281.36, and had it been allowed to deliver it in January, 1921, it would have made a profit of $8,387.47 on the basis of the contract price. The plaintiff submitted a claim for $8,871, for damages sustained by reason of the failure of defendant to accept delivery of the remainder of the quantity of bran under the contract to the Comptroller General of the United States, who disallowed the claim, and, after a hearing on request of plaintiff, affirmed the disallowance.
    The court decided that plaintiff was entitled to recover, in part.
   Graham, Judge,

delivered the opinion of the court:

The parties in this case contracted in writing for the purchase of certain quantities of oats and 451 tons of bran, to be delivered during the months of June and July, 1920, at the prices and place fixed in the contract. The plaintiff delivered all of the oats, for which it was paid. It delivered on a shipping order, and the defendant accepted and paid for 176 tons of bran. After plaintiff had made arrangements for shipping the said 176 tons of bran, but before it delivered same, it received a communication from the contracting officer requesting it to consent to the termination of the contract. Plaintiff did not consent to said termination. Thereafter the supply officer at Camp Funston wrote to plaintiff stating that it would be impossible to handle the undelivered portion of the bran before the first of the year 1921, as every available building for storage was filled. On the 23d of July plaintiff notified the contracting officer that it was ready to deliver the balance of the bran whenever called upon, and on August 25 notified the supply officer to the same effect. On the 6th of January, 1921, plaintiff wrote to the contracting officer stating that it was ready to make delivei'y of the balance of the bran. The defendant, through its representative, replied to this letter and refused to accept delivery, claiming that the contract had been terminated. The findings do not show that the contract was canceled.

The contract (Article IX) contained the following provision :

“ Sec. 2. Termination in public interest: If in the opinion of the Quartermaster General the public interest shall so require, this contract may be terminated by the United States by fifteen days’ notice in writing from the contracting officer to the contractor, and such termination shall be deemed to be effective upon the expiration of fifteen days after the giving of such notice, and shall be without prejudice to any claims which the United States may have against the contractor under this contract. After the receipt of such notice the contractor shall not order any further materials, or facilities, or enter into any further subcontracts or make any further purchases in connection with the performance of this contract without written consent previously obtained from the contracting officer; but inspection of the completed article or work and acceptance thereof by the United States in accordance with the terms of this contract shall continue during such period of fifteen days as though such notice had not been given.”

It does not appear that any steps were taken by defendant to comply with the requirements of this provision; that is, it does not appear that 15 days’ notice in writing was given by the Quartermaster General or, for that matter, by anyone declaring the contract canceled. (Burton Coal Co. v. United States, 60 C. Cls. 294, decided February 2, 1925.) The findings disclose a request made of plaintiff to consent to a cancellation and that plaintiff did not consent. There having been no cancellation of the contract, it remained in force, and the refusal of defendant to accept delivery of the balance of the bran called for by the contract was a breach of it, for which plaintiff is entitled to recover such damages as the circumstances justify.

The plaintiff had a contract for the delivery of 451 tons of bran. One hundred and twenty tons were to be delivered at the price of $2.72 per hundredweight, 120 tons at $2.77 per hundredweight, 120 tons at $2.88 per hundredweight, and 91 tons at $2.87 per hundredweight. One hundred and seventy-six (176) tons were delivered, for which plaintiff was paid, leaving undelivered 275 tons. The time of delivery under the contract was June and July, 1920, on receipt of shipping instructions from defendant. The postponement, by mutual agreement, of the time of delivery did not affect the contract. It remained as it was as far as the date for fixing the market value is concerned; that is to say, the date for this purpose remained the time of delivery fixed by the contract. The extension of it was unconditional and without reservation by the plaintiff. It is to be assumed that the plaintiff knew that in purchasing the quantities of bran needed to carry out the contract ic might be called upon to pay more or less in January than in July preceding. Plaintiff was a jobber, and while it had some bran on hand in January (how much does not appear) , it did not have a sufficient amount to complete delivery under the contract. But bran was plentiful and it could have procured it in the market. Had the price of bran gone up, it is fair to assume that plaintiff would not be here contending that January was the time for estimating the market value.

As stated, plaintiff had some bran on hand. It does not appear that it sold this bran. So that this is not a case of a refusal to accept, and notice of an intention to sell, and a sale of the material on hand at a loss as compared with the contract price.

It must be held, therefore, that the measure of damages is the usual measure of damages in case of a breach such as we have here, viz, the difference between the contract price and the fair market price of the commodity at the time and place of delivery fixed by the contract. This has been found by the court to be $2,281.36. Aside from this, the extension of the time of delivery in accordance with the request of the supply officer at Camp Funston, who had no authority to alter the contract by granting or agreeing to the extension, would not change the time of delivery fixed in the contract.

Plaintiff should have judgment for the amount stated, and it is so ordered.

Hay, Judge; Downey, Judge; Booth, Judge; and Campbell, Chief Justice, concur.