Case ID: us-ct-cl_56/html/0413-01.html
Source: Caselaw Access Project
Author: {"author": "DowNev. Judge,\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLARD, SUTHERLAND & COMPANY v. THE UNITED STATES.
    [No. 34222.
    Decided November 7, 1921.]
    
      On the Proofs.
    
    
      Contract; quantity estimated; quantity needed. — The Navy Department issued invitations for bids in a schedule containing general specifications and conditions and printed forms of proposals to furnish 600,000 tons of coal, the general specifications stating that it was the intent of the contract that the contractor should furnish and deliver any quantity needed for the naval service for the fiscal year, irrespective of the estimated quantities stated, the Government not being obligated to order any specific quantity. The general conditions in the schedule applicable to all classes provided that bids for less than the entire amount of coal specified would be received and considered, but such partial bids must state the amount proposed to be furnished, subject to the other conditions of the specifications. The plaintiff submitted a bid to furnish 10,000 tons at $2.85 per ton, the bid having been made on the prescribed form by writing 10,000 tons instead of 600,000 tons. Its bid was accepted and it entered into a contract to all intents on the same conditions as if it had bid to furnish the whole number of tons. It was afterwards required to furnish 11,000 tons, the ten per cent excess being the amount prorated among all the other contractors. In the meantime the price of coal had risen to $6.50 per ton. Held, that plaintiff is not entitled to recover the increased price on the additional amount of coal furnished.
    
      Protest; performance. — It a contractor under protest furnishes supplies which it was not required to furnish under its contract, the protest gives no additional rights.
    
      The Reporter’s statement of the case:
    
      Mr. Gibbs L. Balcer for the plaintiff. Mr. Karl Knox Gart-ner and Baker <& Baker were on the briefs.
    
      Mr. Alexander H. McCormick, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant.
    The following are the facts of the case as found by the court:
    I. The plaintiff is a copartnership composed of Le Baron S. Willard and John E. Sutherland, doing business under the firm name and style of Willard, Sutherland & Company, and is and was engaged in the mining and shipping of coal with its principal place of business in the city of New York and with operating branches in Philadelphia, Baltimore, Newport News, and Boston.
    II. In the spring of 1916 the Navy Department, being desirous of procuring contracts for coal for that department for the next ensuing fiscal year to be delivered in varying quantities at different stations, issued its invitations for bids in the form of a schedule numbered 9485, containing general specifications and conditions and printed forms of proposals for deliveries in stated quantities at ten different ports or stations. Included therein and designated as “ class 18 ” was a form of proposal for the furnishing of 600,000 tons of steaming coal to be delivered f. o. b. vessels or barges under chutes at respective piers, Hampton Hoads, Virginia.
    
      The general specifications contained the following provisions under the subhead “ Quantities estimated ”:
    “ It shall be distinctly understood and agreed that it is the intention of the contract that the contractor shall furnish and deliver any quantity of the coal specified which may be needed for the naval service at the places named during the period from July 1, 1916, to June 30, 1917, irrespective of the estimated quantities stated, the Government not being obligated to order any specific quantity.
    “ The estimated quantities have been arrived at from the records of previous purchases. While they represent the best information obtainable as to the quantities which will be required during the period covered by the contract, they are estimated only and are not tó be considered as Saving any bearing upon the quantity which the Government may order under the contract.”
    Under the subhead “ Reservations ” appeared the following :
    “ The Government reserves the right to reject any or all bids, and in accepting any bids for the different ports of delivery named the right is also reserved to make such distribution of tonnage among the different bidders for suitable and acceptable coals for the naval service as will be considered to be for the best interests of the Government.”
    Under the subhead “ Notes ” appeared the following:
    
      “ (a) Bids on less than the entire quantity of coal specified under each class will be received and considered. Such partial bids must state the amount of tonnage it is proposed to furnish, subject to the other conditions of these specifications.”
    III. The plaintiff upon said form submitted its proposal for the furnishing of 10,000 tons of said 600,000 tons at $2.85 per ton and was notified of the acceptance of its proposal to furnish said amount. On June 5,1916, a contract numbered 26492, and made a part of the petition herein by reference as Exhibit A, was entered into between the parties. The. contract in its physical construction was made up largely of portions of the general specifications, notes, etc., and the printed proposals contained in said schedule numbered 9485, which were clipped therefrom and pasted on and thus made a part of the contract and the paragraphs quoted in Finding II, were thus made a part thereof.
    
      IY. On March 26, 1917, plaintiff was informed by the Paymaster General of the Navy that it had been ascertained that the quantity estimated in its- contract would be exceeded by about ten per cent. In reply to this communication the plaintiff stated that the notice of award, issued to it upon the day of the opening of the bids, had specifically mentioned 10,000 tons, and that when it had furnished said amount it would consider its obligations under its contract discharged; that it was prepared to furnish the balance due under its contract upon notice. In reply thereto the Paymaster General of the Navy cited quoted provisions of the contract as authority for the requiring thereunder of an additional tonnage over and above the 10,000 tons, stated that the excess tonnage required was being prorated and the same requirements were being made of other contractors and expressing the hope that it would not be necessary to resort to extreme measures to accomplish compliance.
    The steamer Kennebec had been directed to load coal with the plaintiff company about June 11, 1917, of which plaintiff had been informed, and that the quantity required of it for this purpose would be 2,180 tons. On the 1st of June, 1917, plaintiff informed the Navy Department that the balance due under its contract was 560 tons, which it was rea,dy to supply at any time, and on Juné 2d, in response to a telegram from the Paymaster General of the Navy, the plaintiff again stated that the balance due was 560 tons and that this amount was all that it was able to furnish and that that amount would complete the amount required of it under its contract. On June 6th the Paymaster General informed the plaintiff that the full cargo assigned to the Kennebec must be furnished, in reply to which plaintiff stated that its contract specified 10,000 tons, that it had delivered 9,440 tons, and that the balance of 560 tons was available at any time. On June 9th the Paymaster General advised the plaintiff that failure to supply the tonnage ordered would necessitate immediate purchase in the market for its account, in reply to which, on July 12th, the plaintiff stated that it had arranged to supply the Kewmbec the full quantity required and that it was “ doing this under protest which can be straightened out later,” and on June 14th the plaintiff by letter informed the Navy Department that it would agree to supply 2,180 tons ordered for the Kennebec with the understanding that no further assignments would be made to it, that it would thereby be furnishing 1,620 tons more than it was obligated to furnish under its contract, which it was furnishing under protest, and reserving the right to take proper steps in due course for the recovery of the difference between the current market price of the coal and the contract price, and requesting confirmation of the above from the Navy Department upon receipt of which it would give the necessary orders for the loading of 2,180 tons on the Kennebec. On June 15th the Paymaster General acknowledged receipt of the plaintiff’s letter of the 14th, but not acceding to any proposition therein contained, directed plaintiff as follows:
    “ Tour company will please supply Kennebec with fifteen hundred sixty tons coal, or such quantity as may be necessary to bring the total tonnage delivered by you under contract twenty-six four ninety-two up to total estimated quantity Slus ten per cent, or total eleven thousand tons. Balance iennebec cargo wúll be obtained elsewhere.”
    V. The plaintiff thereupon furnished to the steamer Ken-nebec 1,560 tons of coal, making the aggregate amount of coal furnished to the United States 11,000 tons. At the time that this amount of coal was furnished to the Kennebec the market value thereof was $6.50 per gross ton; 1,000 tons of coal then furnished by the plaintiff to the Kennebec was worth in the market $3,650 in excess of the contract price therefor.
   DowNev. Judge,

delivered the opinion of the court:

The plaintiff seeks to recover the difference between the market value of 1,000 tons of coal delivered to the defendant and the amount it was paid therefor under a contract under which the defendant then contended and nowr contends that it was required to furnish it.

Seeking contracts for coal for the fiscal year 1917, the Navy Department issued a “ schedule ” containing general specifications, notes, etc,, and ten printed forms of proposals bearing different “ class ” numbers, each applicable to a different port or station and each containing therein in print the estimated amount needed at the named port or station. Among them was a form of proposal, “ class 18,” for the furnishing of 600,000 tons of steaming coal for delivery at Hampton Roads.

Note (a) of tbe general provisions in the schedule, applicable generally to all classes, provided that—

“ Bids on less than the entire amount of coal specified under each class will be received and considered. Such partial bids must state the amount of tonnage it is proposed to furnish subject to the other conditions of these specifications.”

The plaintiff bid to furnish 10,000 tons at $2.85 per ton, the bid being submitted on the prescribed form by inserting 10,000 ” in lieu of the “ 600,000 ” printed therein. It was notified of the acceptance of its bid for 10,000 tons, and a contract was entered into made up physically of the bid and portions of the specifications, conditions, and notes clipped from the “ schedule ” and pasted on and thus made a part of the contract.

The plaintiff’s contention is that under the clause (a) above quoted it elected to and did submit its bids to furnish 10,000 tons of the estimated required amount of coal; that its bid was accepted for 10,000 tons; and that under its contract it had discharged its contract obligation when it had furnished that amount and could not be required to furnish more. The defendant maintains that by reason of certain provisions in the contract it had the right to require of the plaintiff under its contract the 1,000 tons in question. A construction of the contract in this x*espect is therefore necessary.

It is unfortunate that in matters of such moment the-United States must resort to such a patchwork method of constructing a contract rather than to simple and plain English so used as to express clearly the mutual rights and obligations of the parties to the avoidance of such controversies.

It seems to us quite pertinent as bearing upon the proper determination -of plaintiff’s obligation under the contract in question to consider the situation as it would have been had one party, the plaintiff or anyone else, bid to furnish the entire 600,000 tons stated in the submitted form of proposal and, upon acceptance of its bid, entered into a contract in the form now under consideration. What would have been the limits of the contractor’s rights and obligations? Would tlie contract of necessity be construed as for the specific amount named or might there be a variance dependent on the needs of the naval service at that port?

In such circumstances note (a) would have had no office to perform, but other conditions stated in the schedule and incorporated in the contract, as they are in this instance, would be vital.

It sufficiently appears that the contracts sought are annual contracts for supplying the estimated needs of the Navy at certain named ports and stations during the ensuing fiscal year. Such needs, it will be conceded, could not be accurately stated in advance. Past experience, any known change in conditions being considered, furnished the best index. The general conditions incorporated in the schedule under the head “ Quantities estimated ” and incorporated also in the contract, contained these provisions:

“ It shall be distinctly understood and agreed that it is the intention of the contract that the contractor shall furnish and deliver any quantity of the coal specified which may be needed for the naval service at the places named during the period from July 1, 1916, to June 30, 1917, irrespective of the estimated quantities stated, the Government not being obligated to order any specific quantity.
The estimated quantities have been arrived at from the records of previous purchases. While they represent the best information obtainable as to the quantities which will be required during the period covered by the contract, they are estimated only and are not to be considered as having any bearing upon the quantity which the Government may order under the contract.”

The first paragraph of the quotation may be passed as immaterial here since it is designed simply to relieve the Navy Department from obligations to take any part of the estimated quantity which it may not need. The second paragraph informs bidders that the quantities stated áre estimated only and states the basis of the estimate which it is said furnishes the best information obtainable “ as to quantities which will be required during the period covered by the contract.” “ Required,” .beyond question, by the Navy Department at, in each instance, the port or station named. And following is the very specific provision that they, the estimated quantities, “ are not to be considered as having any beáring upon the quantity which the Government may-order under the contract.” . •

Incorporated in an annual contract entered into by.a bidder who proposed to furnish the entire estimated quantity of 600,000 tons, can there be any doubt that these provisions would relieve the Government from ordering more than 500,000 tons if perchance no more was needed or would permit it to order and require the contractor to furnish .700,000 tons if needed by the Navy Department at this port? If one contract had thus been made for the entire estimated quantity, it is not at all likely that such a question, as is'here presented would ever have arisen. Contracts indefinite in quantity but measured by a need are enforceable . to the extent of the need. Brawley v. United States, 96 U.S. 168.

The contention of the plaintiff is predicated on note (a) quoted above and the fact that thereunder it bid to. furnish 10,000 tons. The effect of that clause is for consideration, not standing alone, but in the light of the other provisions just discussed and other pertinent facts. And the discussion of the effect of the other provisions upon this one is abbreviated, in fact practically rendered needless, by the concluding words of the note which attach to the required statement as to the amount it is proposed to furnish, the further condition that it be a statement of the amount it is proposed to' furnish, subject to the other conditions of these specif cations'. (Italics ours.)

We are not permitted to disregard this language. ' There is nothing in it of repugnancy or inconsistency. And given its plain meaning it must require that the conditions ■ discussed as applicable to an assumed contract for the- entire estimated needs apply to a contract such as this for an apportioned part thereof.

It is readily to be urged that such a construction imposes a burden in excess of that intended to be assumed and perhaps beyond the possibility of performance. That, tinder such a construction, one proposing to supply a minor part of an estimated need might be required to. supply the entire need. We need not discuss an assumed case of extreme possibilities. We are limited in our needs for present purposes to a construction of this contract in the light of all its provisions to the extent of determining whether it imposed on the plaintiff the obligation asserted by the defendant.

The estimated quantity of coal needed was large. It was evidently conterixplated, as found to be the case, that bidders hot able to furnish the entire quantity might desire to furnish a part thereof. And it was no doubt contemplated that from all the bids received the Government would award such acceptances as in the aggregate would be commensurate with its estimated needs. Would it be reasonable to assume that the Government, specifically declaring with reference to one proposal for the entire amount that it could only estimate its needs and that its estimate should not be considered as having any bearing on the quantity which might be ordered, would attempt when it allotted its needs to a dozen bidders to contract severally and hence in the aggregate for a specific amount? !

It was provided in the general conditions of the schedule incorporated in the contract that such distribution of- tonnage among “ the different bidders for suitable and acceptable coals for the naval service ” might be made as should be considered for the best interests of the Government, and when the distribution was made it was evidently the intention to apportion the obligation of supplying the needs rather’ than to apportion a specific quantity.

If the conclusion was right that under a single assumed contract for the entire estimated amount, with the attendant' conditions attached, the Government might have ordered but 500,000 tons, or, on the other hand, might have required the furnishing of 700,000 tons if it needed that amount, the conclusion must follow that under an apportionment plan the plaintiff must assume its proportionate part of the entire obligation and be subject pro .rata to the same requirement. This is all that was required of it and for present purposes Ave are not concerned Avith any question as to the result had the attempt been made to impose on it the burden of some other contractor. The correspondence clearly indicates an intention to equitably distribute the burden as to the needs in excess of the estimated quantities and shoAvs that the requirement of the plaintiff was in direct proportion to the total excess needs over the estimated quantity.

We. are therefore of the opinion that no more was required of the plaintiff than might rightfully be required under its contract and the .case might be permitted to rest upon that proposition, but, if we should assume for the sake of the argument that this conclusion is not tenable, there is yet another ground upon which it must be held that the plaintiff can not recover.

!■ It maintains and the record shows that it furnished this additional 1,000 tons of coal under protest and that it specifically reserved the right to take proper steps for the recovery of the difference between the market and the contract price x>f the coal. Assuming that it was not obligated under the contract to furnish this additional amount, can a mere protest give it.' any rights of recovery in the face of the fact that it did furnish in response to a specific demand that it should furnish it under the contract? There was never at any time any other attitude on the part of the representative of the Government' than that the plaintiff was obligated under its contract to furnish the coal in question. At all times the demand was that it be furnished under the contract and the plaintiff so understood the demand. There was nothing in the whole transaction from which could, be inferred any intention on the part of the officer in charge for the defendant to purchase or pay for this coal otherwise than under the contract. The minds of the parties never met upon any proposition in that respect and, immaterial though it may be, the officer in charge never even gave recognition to the plaintiff’s attempt to reserve a right to seek recovery of additional compensation.

What, then, must be the conclusion? The defendant demanded the coal under the contract and the plaintiff furnished the coal. If the plaintiff under such circumstances has any rights of recovery, it must be because its protest against a demand with which it need not comply gave it that right. We do not think a protest in such circumstances can servé any such purpose. The plaintiff’s right was to refuse to deliver the coal in response to the demand made.

It is fully realized that the invoking of such a doctrine must in some cases work a hardship, for in troublous times patriotic citizens are loth to refuse the demands of their Government even though they may seem to them to be unwarranted, but it is our province only to announce the law of the case as we believe it to be.

Upon either or both of the grounds stated we must conclude that the plaintiff is not entitled to recover.

Grahaji, Judge; Hat, Judge; Booth, Judge; and Campbell, Chief Justice, concur.