Case ID: us-ct-cl_40/html/0220-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, Ch. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIAM P. KETCHAM v. THE UNITED STATES.
    [No. 22933.
    Decided February 13, 1905.]
    
      On the Proofs.
    
    Tlie contract is for the purchase of oats in the United States deliverable in Cuba. The contracting quartermaster in New York reserves the right to annul the contract; but the receiving quartermaster in Cuba may vary the quantity to be delivered monthly 20 per cent above or below that named in the contract. He notifies the contractor that he will require a quantity materially less than the minimum. He also accepts less than he has ordered, and for two remaining months he does not order any.
    I. For the receiving officer under a contract to order the delivery of oats pursuant to the terms of the contract and subsequently to refuse to receive the quantity ordered constitutes a breach of the contract.
    II. The measure of damages where the purchaser refuses to receive the goods which the other party is entitled to deliver is the amount of money which would put the injured party in the same condition that he would have been in if no breach had been committed — expenses where he has incurred expenses and profits where he' has been deprived of profits.
    III. Where the vendor acquiesces in the purchaser’s not ordering goods as contemplated by the contract he can not recover for the breach.
    IV. Where the purchasing quartermaster in New York has the right to annul the contract, it is incumbent upon the contractor so to act that the officer can annul the contract if it will be for the interest of the Government that he do so.
    V.Where a responsibility is divided between two public officers at two different places, it is incumbent upon a contractor to do nothing and to leave nothing undone which may mislead either officer.
    VI.Where the receiving quartermaster refuses to receive oats and to give the contractor the inspection which the contract requires, the proper course for him to pursue is to sell the oats and sue for the difference in the price received and the price stipulated in the contract. 1-Ie can not maintain an action for putting the oats in a condition better than that required by the contract.
    
      The Reporters’ statement of the case:
    The following are the facts of the case as found by the court:
    I. In October, 1901, the depot quartermaster of the United States Army, in New York, published the following advertisement for proposals:
    “ General depot of the Quartermaster’s Department, Army Building, Whitehall street.
    “ Specifications and conditions under which proposals must be made for furnishing and delivering of forage alongside of vessels in New York Harbor as may be designated by the depot quartermaster at New York City, or delivering same at the following ports in Cuba and Porto Bico: Santiago, Manzanillo, Cienfuegos, Matanzas, Gibara, Nuevitas, and Havana, Cuba, and San Juan, Porto Bico.
    “ The quantities named in the advertisement are the estimated quantities which will be required monthly, but bids may be accepted in whole or in part and contracts made accordingly; the contracts made under the accepted bids will provide that the quantities of supplies contracted for may be increased at the option of the United States, not exceeding 20 per cent thereof, and may be diminished not exceeding 20 per cent at any time during the continuance of the contract. And, further, that should changes occur and the exigencies of the service require 'smaller quantities than the minimum specified the contract shall become inoperative to the extent of such reduction. In case of change in the quantity required, notice of such change will be served upon the contractor by the depot quartermaster, New York City.-
    “ Each month’s supply to be delivered not later than the loth of the month preceding that for which it is intended, one month’s supply to be delivered at a time, in such quantities as the depot quartermaster, N. Y. City, shall designate, and subject to an inspection by an agent of the Quartermaster’s Department. If contract is awarded for delivery in New York, inspection of the forage will be made and weight, of same determined there. If, however, contract is awarded for delivery at points in Cuba and Porto Rico, the inspection and weighing will be accomplished at the respective points of delivery.
    “All bids to be per one hundred (1Ó0) pounds, delivered at the points designated, and where bids are for delivery at points in Cuba or Porto Rico the charges made will include any charges that may be made for lighterage, port charges, etc.
    “ The oats to be of the highest recognized commercial grade, of the best merchantable quality, free from dust and other foreign matter, and to be equal to the standard sample to be seen in the office of the depot quartermaster, New York City, and to weigh not less than 34 pounds to the bushel. The above oats must be sacked in 26-inch bjr 40-inch sacks, containing not less than 100 pounds each; sacks to be made from good, strong, new burlap weighing not less than 12 ounces to a yard, to be securely sewed, and to become the' property of the U. S. Government. Both oats and sacks to be subject to U. S. Government inspection, and the oats must be inspected, weighed, and sacked alongside or on board of vessel if contract is awarded for delivery in New York.
    “ The estimated quantities of hay and oats required monthly at each of the stations are as follows:
    Santiago_ 312,500 lbs. oats, 200,000 lbs. liay.
    Manzanillo_ 225.000 137,500
    Oienfuegos_ 150,000 137.500
    Matanzas_ 302,500 237.500
    Cribara_ 200,000 50,000
    Nuevitas_ 200,000 50,000
    Havana_ 575,000 475,000
    San Juan, P. R_ 215,000 275,000
    “ In case contract is awarded for delivery alongside vessel in New York Harbor the contractor, if required, must-have the forage ordered alongside the vessel ready for delivery within forty-eight hours from the time of receipt of order, and in case of failure on the part of the contractor to deliver the required quantity of forage ordered, and to comply with the stipulations of the advertisement and specifications according to the true intent and meaning thereof, the U. S. Government shall have the power to purchase the quantity of forage remaining to be supplied in open market, and the difference in cost to be charged to the failing contractor.
    “ Should the contractor, for any reason whatsoever, fail to deliver the forage in quantity and of qualitj’’ provided by these specifications and award within the time specified, he will be held liable for the payment of freight on any portion of the forage that has not been delivered in time for the loading to admit the vessel to sail on scheduled time.
    “ Payments will be made by the depot quartermaster at New-York City monthly, when in funds, and when not, as soon as such funds shall be provided, upon presentation of certified voucher of receiving officer.
    “ F. VON SCHRADER,
    “ Major and Quartermaster, TJ. S. Army,
    
      '■'■Acting Depot Quartermaster.”
    Subsequently, on the 3d of December, 1901, the seven contracts declared upon in the petition were entered into by the depot quartermaster in New York and the claimant, each of which was in the form following:
    “ This agreement entered into this third day of December, nineteen hundred and one, between Colonel A. S. Kimball, assistant quartermaster-general, United States Army, of the first part, and W. P. Ketcham, of 76 Cuba street, of Havana, in the county of-, State of Island of Cuba, of the sec-
    ond part, witnesseth that the said Colonel A. S. Kimball, assistant quartermaster-general, U. S. Army, for and in behalf of the United States of America, and the said W. P. Ketcham, do covenant and agree to and with each other as follows:
    “ That the said W. P. Ketcham shall deliver at Santiago, Cuba, at such times from January 1, 1902, to June 30, 1902, and in such quantities as may be directed by the chief quartermaster, Dept, of Cuba, one million eight .hundred and seventy-five thousand (1,875,000) pounds of oats, in strict conformity with and subject to all the conditions and specifications embodied in the circular attached hereto and made a part, of this contract.
    “ That deliveries on this contract shall, if required, commence on the first day of January, nineteen hundred and two, provided that the agreement is approved by the proper authorities of the War Department; otherwise, not until such approval is obtained.
    “ That it is expressly agreed and understood that this contract shall be noneffective until an appropriation adequate to its fulfillment is granted by Congress and is available.
    “ That for and in consideration of the faithful performance of the stipulations of this agreement the party of the second part shall be paid, at the office of the chief quartermaster, Dept, of Cuba, or the depot quartermaster, XJ. S. Army, at New York City, New York, as follows: Two (2) dollars and four (4) cents for each and every one hundred pounds of oats delivered and accepted under this contract.
    “ That in case of failure of the said party of the second part to comply with the stipulations of this contract according to the true intent and meaning thereof, then the party of the first part shall have the power to supply the deficiency b}'' purchase in open market or otherwise, and said party of the second part shall be charged with any expense resulting from such failure.”
    II. The oats deliverable under these contracts in January, February, March, and April were duly delivered, accepted, and paid for.
    III. On the 20th of March, 1902, the receiving quartermaster in Cuba gave the following order for oats, deliverable at the places named, for the quantities specified, for the month of May:
    “ WAR DEPARTMENT,
    “ HEADQUARTERS DEPARTMENT OP CUBA,
    “ Office of Chief Quartermaster,
    “ Havana, Ouba, March 20th, 1902.
    
    “ Mr. W. P. Ketciiam,
    
      “ Contractor, 76 Cuba street, Havana, Cuba.
    
    “ Sir : I have the honor to inform you that the following quantities of oats for May delivery will be required at the posts mentioned hereafter, viz:
    Cienfuegos-_ 4, 9.12 lbs.
    Rowell Barracks-(176932) __ 172,000
    Morro Castle (Santiago) _142,500 “
    Guantanamo-(201462) __ 58,962 “
    _ 242,740 “
    Havana_ _ 300, 000
    921,134
    
      u Very respectfully,
    “ Ci-iauncey B. Baker,
    “ Captain of Infantry, Quartermaster,
    
      “ Chief Quartermaster.”
    
      The contractor • thereupon proceeded to purchase oats in the United States deliverable, if required, before the 15th of April, as prescribed in the contract. After he had made such purchases and arrangements' for shipping the same to Cuba, the receiving quartermaster in Cuba sent him, on the 29th of March, 1902, the following notice:
    “ War Department,
    “ Headquarters Department of Cuba,
    “ Office of Chief Quartermaster,
    
      “ Havana, Cuba, March 89th, 1908.
    
    “ W. P. Ketci-iam, Esq.,
    “Contractor, 76 Cuba street, Havana, Ouba.
    
    “ Sir : I have the honor to notif}"- you that the order given you under date of March 20th, 1902, for oats to be supplied for public animals owned by the United States'in the Department of Cuba, for the month of May, under your contract with the United States Government, is hereby canceled. “ Very respectfully,
    “ Ci-iauncey B. 'Baker,
    “ Captain of Infantry, Quartermaster,
    “ Chief Quartermaster,”
    To this notice the claimant made the following reply:
    “ March 31, 1902.
    “ Captain Ci-iauncey B. Baker,
    “ Chief Quartermaster, Deportment of Cuba.
    
    “Sir: I beg to acknowledge receipt of your.letter of the 29th instant, advising of your purpose to cancel the order given me March 20th for the supply of oats to cover May re-' quirements under my contract. I beg to call your attention to the terms of the contract and specifications which stipulate that orders for monthly requirements of oats are to be issued by the chief quartermaster, Department of Cuba, and that supplies for each month are to be delivered the previous month; therefore, the order of March 20th was given me in the regular course of business, was placed by cable with my correspondents in the United States, and under these conditions the order can not equitably be canceled within the terms of the contract and specifications without the consent of the contractor. Any other course of procedure will subject him to serious loss and damage through conditions for which he is in no way responsible. Owing to a sudden emergency, the U. S: Government finds it has smaller requirements of oats than the quantity ordered, and I respectfully urge that the equitable and fair course of procedure is to accept the shipment of oats; or, if it is deemed preferable, cancel the order and adjust the loss and damage with the ■contractor, who will arrange for a settlement on that basis. I hand you herewith a statement of cost and net proceeds of the shipment under the terms of the contract. Out of the profit shown of $1,598.38 I will have to deduct the cost to cancel the order of purchase of oats. I respectfully offer to arrange the cancellation of the order of March 20th on payment, by voucher of the quartermaster’s department, of said sum of $1,598.38 in full liquidation of all claims for loss and damage occasioned by such cancellation.
    “ I beg to respectfully call the attention of the department to the fact that my contract has caused the saving of over $30,000 to the Government from that of the next' lowest bidder, and had the full quantities provided for in the specifications been delivered the saving would have been $50,000 or more.”
    The claimant also in various other ways objected to the cancellation of the order of March 20.
    IY. The claimant was not permitted to furnish and deliver the oats ordered bjr the receiving quartermaster on the 20th of March, 1902. Iiis expenses involved in purchasing and making arrangements to ship to Cuba have not been shown. The profits which he would have made on the oats so ordered, if he had been permitted to deliver them, would have been $1,598.38.
    Y. The whole quantity of oats deliverable under the seven contracts for the month of Ma3^ was 2,025,000 pounds, which the receiving quartermaster, by the terms of the contract, might diminish 20 per cent, leaving 1,620,000 pounds which the claimant was entitled to deliver according to the terms of the contract. But the claimant made no tender of the oats and made no request to deliver other than as set forth in finding in. The profits which the claimant would have realized if he had been permitted to deliver the above 1,620,-000 pounds of oats would have been $2,811.07.
    VI. The whole quantity of oats deliverable under the seven contracts for the month of June was 2,025,000 pounds, which the receiving quartermaster, by the terms of the contract, might diminish 20 per cent, leaving 1,620,000 pounds which the claimant was entitled to deliver according to tlie terms of tlie contract. But the claimant made no tender of the oats, nor requested that he might deliver the same, and gave no notice of any kind to the depot quartermaster in New York of the action of the receiving quartermaster, or of his desire and willingness to deliver the oats. The depot quartermaster at New York never gave notice, as required by the contract, that the defendants would require a smaller quantity of oats than the minimum specified in the contract. The profits which the claimant would have realized if he had been permitted to deliver the above 1,620,000 pounds of oats would have been $2,811.07.
    
      Mr. L. T. Miehener for the claimant. Dudley ds Mich-ener and Mr. Robert E. Hollingsworth were on the brief:
    The contracts all stipulated that the notices to the claimant concerning changes in the quantity of oats required should be served by the depot quartermaster, New York City, and that officer should designate the times and the quantities to be delivered each month. The contracts or circulars did not name any other officer as possessing those powers. The mention of that officer so explicitly operated to exclude all others, and no other officer or officers had any right, power, or authority to make such designations or serve such notices. To hold to the contrary would be to hold that the contracts on those points were but idle and useless forms. (King’s case, 37 C. Cls. K., 428; McLaughlin <& Go., 37 C. Cls. K., 150,189; Barlow’s case, 184 U. S., 123, 133.)
    In the case at bar the claimant had contracted with the United States that the latter had the option to increase or diminish the quantities of oats to be delivered, not exceeding 20 per cent, at any time during the continuance of the contract, and “ that should changes occur and the exigencies of the service require smaller quantities than the minimum specified the contract shall become inoperative to the extent of such reduction.” Then the contract goes on to specify that, in case of change in the quantity required, notice of such change should be served on the contractor by the depot quartermaster, New York City.
    Instead of these things being done in the way agreed upon, Captain Baker, stationed at Iíabana, Cuba, served notice of the annulment of the entire order of March 20 for the May delivery over the protest and objection of the claim-, ant, and from that time on not another order was given him.
    The same argument applies to the inspection and weighing of the pats, but the contract rule was violated over the protest and objection of the claimant.
    
      Mr. John Q. Thompson (with whom was Mr. Assistant Attorney-General Pradt) for the defendants.
   Nott, Ch. J.,

delivered the opinion of the court:

This action is brought upon seven contracts for the sale in this country of oats, the delivery of the same to be at seven different towns in Cuba.

An anafysis of the contracts shows that the depot quartermaster in New York, the contracting officer, reserved to himself the right to annul the contract in whole or in part. But this right was subject to two conditions: The first condition was that changes must occur and the “ exigencies of the service require smaller quantities than the minimum specified.” That is to say, the quartermaster in New York was not at liberty to annul the contract and go into the market and buy oats from other persons because he could buy at a less price. The second condition was that “ notice of such change will be served upon the contractor by the depot quartermaster, New York City.” This meant that, inasmuch as the oats were procured by the contractor in this country for transportation to Cuba, and inasmuch as the contract required “ each month’s supply to be delivered not later than the 15th of the month ” and “ one month’s supply to be delivered at a time,” notice must be given in writing, and must be given in New York, i. e., in this country, where the oats were procurable. To this term “ notice ” the law would attach the term “reasonable.” But as no such notice was given, it is not incumbent upon the court to define what “ reasonable ” would be.

As the oats were to be delivered in Cuba, at jfiaces distant from the official residence of the officer purchasing, the contracts also provided that the deliveries in the different towns were to be “ in sucli quantities as may be directed by the chief quartermaster of the Department of Cuba.” But this authority of the chief quartermaster of the Department of Cuba was also subject to two provisions: First, that he might call-for an additional quantity of oats “ not exceeding 20 per cent ” of the quantity prescribed in the contract; and, second, that he might diminish the quantity prescribed in the contract not exceeding 20 per cent. Beyond the margin of 20 per cent above the contract quantity and 20 per cent below the contract quantity the chief quartermaster in Cuba was, therefore, without discretion; and the right to diminish the quantity below 20 per cent, or to annul the contract entirely, was reserved exclusively by the depot quartermaster in New York.

u Each month’s supply to be delivered not later than the loth of the month preceding that for which it is intended, one month’s supply to be delivered at a time,” were also provisions of the contract. It is manifest, therefore, that when, on the 20th of March, 1902, the chief quartermaster in Havana notified the contractor that 921,134 pounds of oats would be required for .May delivery at certain posts mentioned in the notice, it behooved the claimant to go into the market and buy oats and make arrangements for shipping them to Cuba, so that they would be ready for delivery by the loth of April. It is equally manifest that for the defendants’ officers to have revoked this notice after the claimant had proceeded to act upon it and to refuse to receive the oats so ordered was a breach of the contract.

In such a case the measure of damages is the amount of money which would put the injured party in precisely the same condition that he would have been in if no breach had been committed. The contractor here would be entitled to recover for the expenses to which he was needlessly put and for the profits which he would have made; but as no expenses have been shown his relief must be limited to the profits which he would have made.

The contract quantity of oats deliverable in May was 2,025,000 pounds; from this might be deducted 20 per cent, which was the deduction the receiving quartermaster was at liberty to make, leaving 1,620,000 pounds which the contractor had the right to deliver and which the defendants were bound to receive in the absence of any action on the part of the depot quartermaster in New York. The quantity of oats which, the receiving quartermaster did order on the 20th of March, 1902, was 921,134 pounds. Deducting this amount from the preceding 1,620,000 pounds leaves 698,866 ■pounds, deliverable in May, but not ordered by the receiving quartermaster in March.

For his profits on this last-named quantity of oats not ordered, the claimant would be entitled to his profits if he had insisted on his right to deliver. But, apparently, he acquiesced in that surplus not being ordered. Fie did not appeal to the depot quartermaster in New York; and in his appeal to the receiving quartermaster of March 31, 1902, all that he asked was that he be paid his profits and losses on the oats ordered on the 20th of March, 1902, and refused on the 29th of March. It also appears, inferentially, that he did not purchase or make arrangements for purchasing this surplus, and, as before stated, acquiesced in a less quantity of oats being called for than the contract entitled him to deliver.

This seems to the court a case where a party might insist on his contract rights, or might find it to his own benefit to waive them; and having waived them, whether beneficially or not, can not recover upon them.

The claimant also seeks to recover for the profits which he would have made on the oats deliverable in June. The ground upon which this is claimed is that the chief quartermaster in Cuba was not authorized to do more than diminish or increase the contract quantity of oats to be delivered above or below 20 per cent of the quantity specified in the contract, and that his action in so doing was ultra vires, the only officer authorized to do so being the depot quartermaster in New York. But it seems to the court that it was incumbent upon the contractor to do something, either to tender the oats or to give to the depot quartermaster in New York an offer or notice which would be equivalent to a tender. The claimant, apparently, did nothing which ivould put the depot quartermaster on his guard and enable him to either accept the oats when tendered or to annul the con•tract because of tlie changes which had occurred in the exigencies of the service.

The court does not suppose that the contractor intentionally concealed the facts from the depot quartermaster. But in a case like this, where responsibility was divided between two public officers who were at two different places, it was incumbent upon the contractor to do nothing and to leave nothing undone which might mislead either officer or leave him in a position where be could not understandingly protect the interests of his principal,' the defendants.

The claimant also seeks to recover for needless expenses to which he was put because some of the oats tendered at different places in Cuba were rejected by boards of officers-appointed by the commanding officers of the different posts where the deliveries were made, and because officers of the Quartermaster’s Department were not members of such boards.

The contract contains two provisions on the subject of inspection: The first is that oats shall be delivered subject to an inspection by an agent of the Quartermaster’s Department.” The second is, “ both oats and sacks to be subject to United States Government inspection.”

If the receiving quartermaster refused to receive the oats and refused to give to the contractor the inspection which the contract required, the proper course for him to have pursued was to sell the oats and sue for the difference in the price received and the price prescribed by the contract. He did not do so, but cleaned and put the oats in a condition which made them acceptable to the boards of survey, and they were accepted and paid for. The court is of the opinion that, on these facts, he can not maintain an action for the expenses thereby incurred.

It is proper to say that the evidence to sustain these allegations consists exclusively of the claimant’s own personal testimony. Some of it is of matters of which he could have had no personal knowledge; some of it is less than secondary, being mere statements of written orders, and it is altogether so vague that it is impossible for the court to make a findings of fact which will present the legal questions involved.

Upon the whole case the court is of the opinion that the claimant can recover only for the losses caused by the receiving quartermaster’s letter of March 29, 1902.

The judgment of the court is that the claimant recover $1,598.38.