Case ID: us-ct-cl_46/html/0353-01.html
Source: Caselaw Access Project
Author: {"author": "Atkinson, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MORNAY D. HELM v. THE UNITED STATES.
    [No. 30031.
    Decided April 10, 1911.]
    
      On the Proofs.
    
    The contract is ior packing twine for the use of the Post Office Department. It provides that if articles delivered are found, in the opinion of the Postmaster General, to be not in accordance with the contract requirements, he may reject them; but if in his judgment “ the exigencies of the public service require the acceptance of any such inferior articles, the right is hereby accorded, to him absolutely, to fix such price therefor as may seem to him just and reasonable," “ and the payment of such price shall be a complete discharge of liability." The contractor furnishes inferior twine; he is notified of its inferiority, but fails to furnish a better article; the Postmaster General makes a deduction from the contract price; the claimant accepts what the Postmaster General allows and now sues for the balance withheld.
    I. Where a contract provides that the Postmaster General may reject an inferior article, but may, “ if the public service requires the acceptance of such inferior articles, fix the price therefor," he is not an interested party but has the right to do what this provision of the contract authorizes him to do.
    II. Where no pretense is set up that deductions made by the Postmaster General embodied fraud, bad faith, or gross negligence, his action can not be subjected to the revision of the courts without doing violence to the provisions of the contract.
    
      The Reporter's statement of the case:
    The facts of the case will be found set forth in the opinion of the court.
    
      Mr. L. T. Michener for claimant. Mr. P. G. Miehener was on the brief.
    We challenge the validity of that part of the contract which undertakes to vest in the Postmaster General the power to accept inferior twine, and “ fix such price therefor as may seem to him just and reasonable under the circumstances.”
    1. The Postmaster General is one of the parties to the contract because he signed it in his official capacity. The first United States (by the Postmaster General).” The last sentence of the contract declares that “ the said Postmaster-General has hereunto fixed his signature,” etc. The Postmaster General executed the contract for the United States, but that does not negative the fact that he was the active, directing, and executing contract party or official. The whole power of decision and judgment is left to him, one of the parties to the contract. This is in no sense the power of arbitration, because the contract does not provide for the designation of a third, or disinterested, person or official, as in Dobson's case (31 C. Cls. It., 423).
    made with and by the Chief of the Bureau of Yards and Docks, in which the parties “do hereby covenant and agree to and with the United States,” etc., page 515. In the fourteenth article of that contract, page 520*, “ the parties to this contract ” agreed that doubts or disputes should be referred to the Chief of the Bureau of Yards and Docks, whose decision should be final, but subject to the right of appeal to the Secretary of the Navy, whose decision should be final. The party bound there, as in the case at bar, was the United States, but the officer who was designated as arbitrator made, signed, and performed the contract, and the officer to whom appeal might be taken was the Secretary of the department, the superior of the chief of the bureau. The vice is that the officers who make the contracts and in the administration or performance of them, represent the United States in all things, are the ones named therein as arbitrators. Of such a contract Chief Justice Nott said, in the Barlow case, on page 546 :
    “ It in effect binds one party to abide as to every matter of fact, and as to every question of legal right, by the decision of the other party. Lord Coke said centuries ago that it becomes no man to be both judge and party in the same case.”
    It is a maxim that no one shall be a judge in his own case. (Wash. Ins. Oo. v. Price, Hopkins Chancery, 1, 2-; Moses v. Julian, 45 N. H., 52; Cooley on Const. Lim., side pp. 175, 410, 413; 1 Hudson on Build. Con., 3d eel., 362.)
    
      2. An agreement to depend upon the disposition of a party to it is a nullity — no contract — for it is not definite and certain. Both parties must be bound or there is no contract (King y. Warfield, 67 Maryland, 246; 1 Am. St. Rep., 384; Leake on Contracts, 13, 14, 637), and they can not be bound except by that which is definite and certain (Pollock on Contracts, side pp. 42-45; Wait on Eng. & Arch. Juris., sec. 340). For instance, an agreement to render services or sell property for such compensation as the other party may see fit or deem right to give can not be enforced or be held to furnish a right of action. (Roberts v. Smith, 4 H. & N., 315; Taylor v. Brewer, 1 M. & S., 290; Leake on Contracts, 13,14, 637; Pollock on Contracts, side pp. 42-45; Wait on Eng. & Arch. Juris., sec. 340.)
    The rule was admirably stated by Judge Bell in Smith V. B. G. <& M. B. Go. (36 N. H., 458, 490), where it was held that an agreement was not binding on the vendor which left it to the purchaser to fix the price.
    3. In the Kihlberg case (97 U. S., 398) the question raised here was not presented or considered. The report of the case in 13 C. Cls., 148, 149, shows that the contract was entered into by Maj. Gen. L. C. Easton, “ chief quartermaster of the Department of the Missouri, for and on behalf of the United States ”; and on page 152 of that report, as well as on page 400 of 97 U. S., it appears that the contract contained a stipulation that the distance was to be “ ascertained and fixed by the chief quartermaster of the district of New Mexico.” It is common knowledge that a military department is one thing and a military district is another and much smaller thing. Gen. Easton was chief quartermaster of the department, but who was the chief quartermaster of the district is not stated, nor do we know. It is apparent that the contracting officer was not the chief quartermaster of the district, and hence it was right and proper, from the legal standpoint, for the parties to stipulate that the “ chief quartermaster of the district of New Mexico ” should ascertain and fix the distance.
    On page 155, 13 C. Cls. R., is copied the notice that Gen. Easton forwarded to the depot quartermaster at Fort Leavenworth, and it states that “ the following distances are fur-
    
      nished you for your Government in making settlements under the contract of F. O. Kihlberg.” The record does not show that Gen. Easton ascertained and fixed the distances and we are bound to infer and believe they were fixed by the u chief quartermaster of the district of New Mexico.” It follows, therefore, that Gen. Easton, in this letter or order to the depot quartermaster at Fort Leavenworth, did nothing more than transmit in that form the determination of the “ chief quartermaster of the district of New Mexico.” There is nothing in the two reports of that case to indicate that this view of the facts and law was brought to the attention of this court or of the Supreme Court, or that any question was raised as to the right in law of Gen. Easton to make a contract which would vest in himself the power to decide that important question of distance.
    In the opinion written by Chief 160, 161) he quoted the stipulation under consideration as if it contained the words “ chief quartermaster of the Department of'the Missouri,” whereas in truth the contract, as will be seen by examining the second paragraph from the top of page 152, used the language “ chief quartermaster of the district of New Mexico.”
    It seems, clear that both opinions in the Kihlberg ease misconceived the contract but. reached the right result, because it was found as a fact that before any transportation had been performed the distance had been fixed and the claimant was paid accordingly. (13 C. Cls. E., 161.) He furnished the transportation with full knowledge of the distance fixed. That fact alone was sufficient to defeat the claimant, and all that was said by the two courts, from which counsel now infers that they affirmed the validity of such a contract as the one in the case at bar, was either contrary to or beyond the record and is of no controlling force here. It was obiter, clearly, to say the best of it. It is plain and positive that the question here raised was not there considered or adjudicated.
    4. The acts here complained of were done by the purchasing agent, not by the Postmaster General. No such power was given the former by the contract or the law. Fie was not authorized thereby to accept inferior articles and fix the prices. That power was withheld because not granted. The contractor, if the contract be valid, was entitled to the judgment and action of the Postmaster General, for so it was written in the agreement. (King's case; 37 C. Cls. B., 428, 436; Baldwin’s case, 15 C. Cls. B., 297; Ketchan’s case, 40 C. Cls. B., 220, 228.)
    
      Mr. 8. 8. AsKbaugh (with whom was Mr. Assistant Attorney General John Q. Thompson) for the defendants.
   Atkinson, J.,

delivered the opinion of the court:

This is an action upon a contract to furnish wrapping twine for the Post Office Department for the fiscal year ending June 30, 1906. Different shipments of twine were made by plaintiff during the contract period, and because of imperfections in the tensile strength and yardage of the twine, the Postmaster General made certain deductions from the contract price which aggregated the sum of $2,591.82, and to recover said amount this suit is prosecuted.

obligated himself by the contract to furnish wrapping twine to measure not less than 600 yards to the pound, with a tensile strength of not less than 20.4 pounds, i. e., the strength to bear or sustain 20.4 pounds of dead weight. The contract further provided that in case the twine to be furnished did not measure up to the standard required the Postmaster General or the purchasing agent of his department should have authority to reject the same or to retain the same and to fix a price therefor that might to him seem just and equitable, and that he might withhold payment thereon if it should appear that in any particular the requirements of the contract had not been fulfilled.

case The main question, however, to be determined is whether the twine, during the period of controversy, possessed the tensile strength required by the contract; and as there are a number of witnesses on both sides of the case who testify in contradictory terms, we find it difficult to arrive at the true merits of the controversy.

year June 30, 1905, and ending June 30, 1906. The first complaint made by the Government to plaintiff as to the deficiency in the tensile strength of the twine furnished under the contract was on July 31, 1905. On August 1 plaintiff replied: “All trouble of this kind will soon be rectified and the standard of quality, in every respect, maintained.” Plaintiff thereupon informed the manufacturer of the twine of its deficiency in strength and was told that better twine would thereafter be furnished, and added that “the trouble lies in the single yarn being too fine, thereby increasing the yardage at the expense of the tensile strength.” In the meantime complaints were coming into the Post Office Department from postmasters and postal clerks on trains from many parts of the country as to the tensile strength of the wrapping twine, and again and again the 'purchasing agent for the Post Office Department demanded of the plaintiff a better grade of twine, explaining to him from reports made by the inspectors of the purchasing department that the tensile strength of the twine he was furnishing on an average was below 17 pounds, while the contract required 20.4 pounds. As a result of this continued shortage, the department, on November 21, 1905, began to charge to the plaintiff, in his current account, at the rate of 3 cents per pound, the difference between the tensile strength of the twine received, as shown by the department’s testing machine, and the strength of 20.4 pounds required by the contracts, which deductions from that date up to and including December 6 amounted to $2,591.82.

These deductions caused plaintiff to challenge the correctness of the department’s testing machine, and at his request it was taken to the Government Bureau of Standards for examination. This examination showed several irregularities in the machine, but when it was recalibrated by the Bureau of Standards, the tests made by it showed three-tenths greater strength than the machine used by the Bureau of Standards. Several balls of plaintiff’s twine were then tested. The bureau’s machine revealed the tensile strength of them to be 16.8 pounds, and the Post Office Department’s machine, after it had been recalibrated, revealed a tensile strength of the same twine to be 17.1 pounds. Thus it was shown that the twine was, at the lowest figure, 3.6 pounds below the standard fixed by the contract.

It is contended, however, by the plaintiff that the few halls of his twine which were tested by the Bureau of Standards should not be regarded as a fair or just average of all the twine he had furnished during the several months em- • braced in this controversy. On the other hand, defendants insist that the testing machine used by the Post Office Department was an accurate machine, and that the irregularities therein which were found by the Bureau of Standards resulted from the removal of the machine from the Post Office Department to said bureau.

It appears from the testimony that a carload of about 30,000 pounds of twine was returned to plaintiff on account of weakness in tensile strength, and it further appears that after an inspection of the same by the manufacturer who was supplying the twine to plaintiff, all of said twine was returned to the Post Office Department, except about 1,000 pounds which was regarded as deficient, and it was accepted and used by said department. It further appears that large quantities of defective twine were used because of urgent necessity, and for this reason plaintiff was charged 3 cents per pound for such shortage, as provided in section 4 of the contract hereinafter quoted.

But claimant’s counsel contends that the Postmaster General, being one of the parties to the contract, did not possess the legal right to decide that the exigencies of the postal service required the acceptance of inferior twine and that he did not possess the absolute right to fix such, price as might seem to him just and reasonable under the circumstances. In other words, counsel insists that by so doing he assumed the functions of a judge sitting in his own case. Article 4 of the contract reads:

“ That if any articles delivered under this contract are found, in the opinion of the Postmaster General, to be not in accordance with the contract requirements, the Postmaster General may reject any or all of such articles; but if, in the judgment of the Postmaster General, the exigencies of the public service require the acceptance of any such inferior articles, the Postmaster General may, and the right is hereby accorded to him absolutely, to fix such price therefor as may seem to him just and reasonable under the circumstances; and the payment of such price for the articles so accepted shall be a complete discharge of liability on the part of the United States therefor.”
We can not agree with that contention. The contract is ' between the United States, as the party of the first part, and the plaintiff in this case, as the party of the second part. The Postmaster General, therefore, is in no wise interested except to see that the interests of the United States are properly protected.'
The fourth article of the contract above quoted distinctly provided for such deductions from the stipulated price as the Postmaster General might deem reasonable and just. Under this authority he, as the legally constituted arbiter of both parties, deducted from the price stipulated in the contract the sum of 3 cents per pound for certain shipments of twine which fell below the standard required by the contract. By so doing he was exercising the authority given to him by the contract; and as there is no claim made that such deductions embodied fraud, bad faith, or gross negligence on his part, nor is such misconduct anywhere shown by the evidence, his action can not be subjected to the re-visory power of the courts without doing violence to the plain words of the contract.

In the case of Kihlberg v. United, States (97 U. S., 398, 401), wherein the contract relating to a certain freight route, made the chief quartermaster the arbiter of the length of the route, it was said:

“ Indeed, it is not at all certain that the Government would have given its assent to any contract which did not confer upon one of its officers the authority in question. If the contract had not provided distinctly, and in advance of any services performed under it, for the ascertainment of distances upon which transportation was to be paid, disputes might have constantly arisen between the contractor and the Government, resulting in vexatious and expensive and, to the contractor oftentimes, ruinous litigation. Hence the provision we have been considering. Be this supposition as it may, it is sufficient that the parties expressly agreed that distances should be ascertained and fixed by the- chief quartermaster, and in the absence of fraud or such gross mistake as would necessarily imply bad faith, or a failure to exercise an honest judgment, his action in the premises is conclusive upon the appellant as well as upon the Government. The contract being free from ambiguity, no exposition is allowable contrary to the express words of the instrument.”

That case is on all fours with the case at bar, and in our judgment should be regarded as controlling in this controversy.

Considering the whole case, our conclusion is that the Post Office Department was justified in making the deductions from the wrapping twine furnished by plaintiff, because it was materially below the tensile strength required by the contract; and, inasmuch as bad faith, negligence, or fraud is not shown, the petition is dismissed.