Case ID: us-ct-cl_37/html/0281-01.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

ST. LOUIS HAY AND GRAIN COMPANY v. THE UNITED STATES.
    [No. 22453.
    Decided February 17, 1902.]
    
      On the Proof*.
    
    The contract in suit is for the sale and future delivery of hay. It consists of a quartermaster’s advertisement, the claimant’s bid and the quartermaster's acceptance of the bid, but is not reduced to writing and signed by the parties as required by statute. The quartermaster unreasonably prolongs the deliveries beyond the period named in the advertisement; but the claimant delivers when required to do so, and accepts payment at the contract rate. The claimant objects to the delay, which causes heavy losses, but complies with the quartermaster's demands under the coercion of his withholding money due and threatening to buy hay in the open market.
    
      I.It is well settled that where contracts are required to be in writing and signed by the parties as prescribed bjr the Revised Statutes (§ 3744), no action can be maintained for the defendant’s breach unless the requirements of the statute have been complied with.
    II.It is also well settled that where a recovery will be in quantum, mem it, and the price to be paid is undetermined by agreement, acceptance of a price as payment closes the transaction, and the contractor can not afterwards allege that his goods were worth more than the price which he consented to take for them.
    III.The fact that officers of the Government neglected their statutory duty, prescribed by Revised Statutes, § 3746, and that the contractor, being ignorant of the law relied upon them, and complied with their demands in the belief that he was legally bound to do so, when he was not, does not take his case out of the statute. Ignorance of law does not change the law.
    
      The Reporten? statement of the case:
    The facts of the case are stated in the opinion of the court.
    
      Mr. George A. King and Mr. William K. Ilwrveij for the claimants. Mr. William B. King was on the brief.
    1. The claim is in effect for the market price of goods actually sold and delivered. In this view it is sustainable, irrespective of a special contract. Miehell v. United States, 19 C. Cls. R., 39, 15; South Boston Iron Company's case, 18 C. Cls. 11., 165; BurchieVs case, 4 C. Cls. R., 549; Ileaih-field's case, 8 id., 213; Salomon's case, 19 Wall., 17, and 9 C. Cls. R., 54; Clarke. United States, 95 U. S., 539; Salomon v. United States, 9 C. Cls. R., 54, 60.
    In this case the parties have shown beyond dispute that the value of the goods at the time and place of delivery was far greater than that named in the special contract. In this there is nothing which in anjr manner contradicts the terms of the special contract. The contract looked to a delivery to be completed in sixty days. The enhanced values are those of more than six months later — some of them nearly a year later. It is not surprising, therefore, that the value should have been very different from what it was at the time of the signature of the contract. In this respect the case is like Senvmes v. United States, 26 C. Cls. R., 119; Fkgh v. United States, 8 C. Cls. R., 319.
    2. While the advertisement, proposal, and acceptance doubtless constituted a valid order by competent military authorities for an immediate delivery of the goods, they did not constitute a binding executory contract, for the reason that the contract was not reduced to writing and signed by the parties, as required by Revised Statutes, §§ 3714, 3744. This distinction was stated in precise terms in the case of Barehielx. United States (4 C. Cls. R., 549, 551).
    In the present case, therefore, if, after the acceptance of the proposal, and without the claimant having done anything in preparation for carrying it out and without the Government deriving any benefit from it, the whole transaction had been revoked, there could be no right of action for loss of profits, etc., as upon a valid executory contract. It is only by the actual delivery of supplies, and their receipt and acceptance by the Government, that any claim or right of action arises in this case. If the claimant could base no right of action upon these proceedings as constituting a special contract, neither, on the other hand, can the Government base an3r right upon it as a limitation of the amount payable for the goods which formed its subject-matter. If one party is not bound, neither is the other.
    3. It would require strong language in a contract to justify the conclusion that the claimant corporation in this case had agreed to hold itself in readiness to deliver hay at any time of the year when it might be demanded at a fixed and unvarying price. If liable to be called upon to deliver during the following winter and spring, they could be called upon to do so during any number of years until the whole nine million pounds had been delivered, and, indeed, an amount twenty per cent in excess thereof if desired. No such conclusion can legitimately be drawn from cither the language of the contract or the character of the transaction. As a purchase of haj' for immediate delivery the transaction was intelligible and legal. As a contract for delivery of hay during an indefinite period it not only would have been unlawful but lacking in the elements of ordinary common sense, which may fairly be presumed to enter into all business affairs.
    4. But the very failure to enter into a contract with the formalities prescribed by Revised Statutes, section 3744, constitutes the most persuasive evidence of the character of the transaction as understood by the parties themselves. If it had been intended as a permanent arrangement for a supply of hay for an indefinite period, undoubtedly the contract would have been signed with every legal formality. Instead of this, not even the usual bond was required to accompany the proposal. The very failure to require such a bond or to sign a regular contract marks the character of the transaction as an order for quick delivery, not permitting the delaj^s incident to the execution of formal written instruments. Thus the understanding of the parties accords with the theoretically legal character of the transaction.
    Whether, therefore, the transaction bo looked upon as a contract for the delivery of haj7 or as the mere giving of orders, the whole being of no force until actual delivery of the goods, the claimant is entitled to be paid for the hay supplied after the expiration of the sixty daj^s at the value of that article at the time and place of delivery.
    5. If the transaction of July, 1898, constituted a contract it was one of which time was of the essence. Under the provisions of the advertisement that delivery should be at the rate of at least one-sixtieth of the amount daily, it was a mathematical certainty that if deliveries were made as- therein provided the entire quantity would be delivered by the expiration of sixty days. The Government broke the contract by delaying its calls for delivery until the market value of hay was far in excess of what it had been at the time the contract was entered into and for sixty days and more thereafter. For this breach the claimant is entitled to be made whole by a judgment allowing the full enhanced value which it had to pay to get hay for delivery, solely by reason of the action of the officers of the Government in delaying their calls far beyond the season at which the low prices on which the claimants based their proposal were ruling for hay.
    Even if the language used be construed as .susceptible of a more indefinite construction than has been suggested, the Government ivas bound to accept in a reasonable time, that being a term implied in all contracts for the sale of goods where no time of delivery is expressly stated. (Blydeiibicrg v. Welsh, Bald., 331, 338; S. C., 3 Fed. Cases, Ho. 1583; Cameron 
      y. Wells, 30 Vt., 623; Boydv. Gunnison, 14 W. Va., 1; Howe v. Huntington, 15 Me., 350.)
    In the case of Hipwell v. Knight (1 Younge & Collyer, Eq. Exck., 101, 115, 416) Baron Alderson gave a clear definition of tbis principle.
    Accordingly, it was held (citing the case just quoted) by the Supreme Court of Illinois that—
    “It is true that, in general, time is not, unless so declared by the parties, of the essence of the contract; but the rule has exceptions, as, if the thing sold be of greater or less value, according to the effluxion of time, it is manifest that time is of the essence of the contract.” {Wilson y. Boots, 119 Ill., 379, 392.)
    The specific case of hay came before the Supreme Court of Michigan (Cooley, J., being one of the members of the court) in Coony. Spaulding (47 Mich., 163). Here the contract sued on was dated September 25, 1879, and provided for delivery of hay “ in a reasonable time after being pressed. ” Spaulding & Rogers did not call for hay until November 22, 1879, when Coon refused to let them have it. Held that the delay was unreasonable and the contract could not be enforced.
    (See also Oameron v. Wells, 30 Vermont, 633; Blydenburg v. Welsh, Baldwin, 331, 338; S. C., 3 Eed. Cases, No. 1583; Garter v. Phillips, 144 Mass., 100; S. C., 10 Northeastern Reporter, 500.)
    
      Mr. Assistant Attorney-General Pradt for the defendants:
    The contention that there is a valid express contract in this case seems to be disposed of by the decision of this court in the case of the South Boston Iron Oompany (18 C. Cls. R., 165).
    It seems very clear that the contract made was that the claimant should deliver the hay at daily rates of at least one-sixtieth of the whole amount unless on due notice different quantities and different times were designated'by the officer representing the Government. The quantity thus called for might be at a greater rate than one-sixtieth per day or might be less than one-sixtieth, and either daily or at some other stated period. And this was necessarily so because of the purposes for which the hay was required. At the time that this agreement was entered into there was a very large number of animals at Camp Thomas, whose subsistence would require even a greater quantity than one-sixtieth daily of the amount of hay to be delivered by the claimant. If the exigencies of the war required that this number of animals should be increased, there would, of course, be a corresponding increase in the amount of hajr to be delivered daily; but if, as proved to be the case, the number of animals at the camp was largely diminished, the deliveries would, of course, be correspondingly diminished. All this was thoroughly understood by the president of the claimant company, as appears from his testimony. Such being the terms of the contract, it is difficult to see what foundation there is for the argument of counsel that the contract was broken by the defendant through the action of its agent at the camp in suspending deliveries. On the contrary, it seems perfectly clear that this is precisely what the claimant had agreed might be done. But even admitting that the contract gave to the claimant the absolute right to deliver at the rate of one-sixtieth per day, and that the duration of the life of the contract was thus limited to sixty days, nevertheless the claimant has no legal ground of complaint, since it conclusively appears from the evidence that it did not stand upon the contract, but acceded to all directions and requests of the agent of the defendant as to stoppage of deliveries and resumption of the same, and all unmistakably in fulfillment of the original contract. Since such action on the part of the claimant was voluntary the contract was not broken by the defendant, and the claimant has no right of recovery upon a condition of the contract which was not insisted upon by him. (Gibbons y. United States, 2 C. Cls..B.., 421; S. C., 8 Wall., 269.)
    As already stated, there seems to be no question that this case is ruled by the decision of this court in the case of the South Boston Iron Company (supra). The various written documents which together constitute the agreement in this case do not conform to the requirements of section 3744 of the .Revised Statutes. In other words, the contract is not reduced to writing, as contemplated by that statute, nor signed by the contracting parties with their names at the end thereof. This statute is, in effect, a statute of frauds. Indeed, when enacted it was entitled “An act to prevent and punish fraud on the part of officers intrusted with making of contracts for the Government.” (12 Stat. L., 411.) Such is the view of the Supreme Court (Clark v. United States, 95 U. S., 539) and of this court (South Boston Iron Company). Adopting’ this view of the case, claimant insists that it has a cause of action upon an implied contract for the reasonable value of the hay delivered by it to the defendant, but the facts in the case will not support this contention. The conclusive answer to the claims thus presented is to be found in the fact that the agreement between the parties — the contract of the parties — although invalid and nonenforceable because within the terms of the special statute of frauds relating to such contracts, has, nevertheless, been fully7- executed by both parties. Under such circumstances the invalid contract constitutes a perfect defense to an action by either party upon an implied contract.
    “The court have not treated those contracts (within the statute of frauds) as absolutely void. When fully executed the}7 define and measure the rights of the parties thereto,„and if this contract had been fully executed and the plaintiff had earned the price stipulated and had then brought quantum meruit on the grounds that the services were reasonably worth more, the contract so executed would have been a full answer.” (Stone v. Dennison, 13 Pick., 1; King v ^Hame, 5 Gray (Mass.), 44.)
    To the same effect are McMurray's Appeal, 101 Pa. State, 427; Gillespie v. Battle, 15 Ala., 276; Williams v. Beemis, 108 Mass., 91; Tovmsend v. Hargreaves, 118 Mass., 325; Byan v. Tomlinson, 39 Cal., 644.
    The statute of frauds has no application to an executed agreement, and is no defense to an action brought to recover money which a party is bound by the contract to pay. {Remington v. Palm.er, 62 N. Y., 31; Larson v. Johnson, 78 Wis., 306; Me Cm v. Smith, 9 Minn., 258; Ilouser. Bern-heim, 59 Conn., 133; Webster v. Lecompte, 74 Md., 258-9; Bibb v. Allen, 149 U. S., 497.)
    In this latter case (74 Md.) the court adopted the rule laid down by the same court in Crane v. Gough (4 Md., 333).
    It is true that where services have been rendered or goods delivered under a contract within the statute of frauds an action may be maintained on the quantwn meruit as upon an implied contract, but only where the defendant is in default.
    Where payments are made or services rendered upon a contract void by the statute of frauds, and the party receiving the services or paj'ments refuses to go on and complete the performance of the contract, the other party may recover back the amount of such payments or the value of the services in an action upon an implied assumpsit, but he must show that the defendant is in default. (Galvin v. Prentiss, 45 N. Y., 164; Day v. Railroad Go., 51 N. Y., 583; King v. Brown, 2 Hill (N. Y.), 487; Coughlin v. Knowles, 7 Met., 61-62.)
    But even in such a case it has been held that the amount recovered can not exceed the amount stipulated in the void contract. King v. Brown, supra; Brown on Statute of Frauds, section 126. See also Gole v. Smith, 4 Ind., 79; Wolfe v. Hawes, 20 N. Y., 203; Clark v. Gilbert, 26 N. Y., 283.
    The plaintiff relies upon Clark v. United States (95 U. S., 239) and Kighv. United States (8 C. Cls. R., 319); but neither of these cases meets the argument above made, nor, indeed, will they be found upon examination to be applicable to the facts in this case.
   Nott, Ch. J.,

delivered the opinion of the court:

The ultimate facts of the case are these:

1. The officers of the Quartermaster’s Department entered into an agreement with the claimant for the sale and delivery of hay. “The estimated quantity” was 9,000,000 pounds. The quantity might “be increased or decreased at the option of the United States, not exceeding 20 per centum thereof.” Should “the troops be wholty or in part withdrawn” from the camp at Chickamauga Park, “the award” — that is to say, the agreement — was to become inoperative to the extent of such reduction.” Deliveries were to begin within five days “and proceed at daity rates of at least one-sixtieth of amount, or in such quantities and at such times afterwards as may be designated by the chief quartermaster or his authorized representative.” In case of failure “to furnish and deliver the supplies ” the contractor was to “be charged with all expense resulting from such failure.”

2. Under and in pursuance of this agreement the officers of the Quartermaster’s Department called for. and the claimant delivered 4,685,949 pounds of hay between the 12th of July and the 28th of August, 1898; that is to say, within the first forty-seven days after the agreement went into effect. The depot quartermaster — i. e., the ofhc.'r charged with the business at the camp — then stopped further deliveries; the claimant, by its officers, remonstrated against this. Fifteen days later, on the 12th of September, the quartermaster in charge resumed issuing orders for the delivery of hay, but in relatively small quantities; and these orders continued until June, 1899, so that between September 12,1898, and June 13, 1899, the claimant ivas required to deliver, and did deliver, 3,814,490 pounds. The claimant remonstrated against being compelled so to deliver, and represented that the price of hay had seriously risen, and that the change of delivery from summer and autumn to winter and spring greatly increased the freight charges upon the hajT, which were to be borne by the claimant. Nevertheless the officer in charge compelled the claimant to deliver when called upon. This compulsion consisted in ■withholding money due for hay and threatening to purchase in the .open market at the cost of the contractor. The suspension of orders for the delivery of haj" and the diminished and protracted orders for delivery given by the depot quartermaster in charge were consequent to the removal of troops from the camp at Chickamauga Park and the decreased number of animals there requiring forage.

3. The agreement before referred to consisted of the advertisement of the chief quartermaster of Camp George H. Thomas, at Chickamauga Park, where the hay was to be delivered, of the proposals of the contractor and the acceptance of the proposals by the chief quartermaster. Beyond this the agreement was never reduced to writing and signed by the contracting parties, as prescribed by Revised Statutes, section 3744.

4. The claimant remonstrated against the suspension of deliveries in August, 1898, and against being compelled to deliver, as before set forth, after the price of hay had risen and the purchase of hay could not be made in the country, but had to be made in St. Louis, throwing upon it additional cost and increased freight charges, but did not treat the contract as rescinded or refuse to deliver. Payments for all deliveries were made bj^ the officers of the Quartermaster’s Department upon the usual' vouchers as for hay delivered under the agreement, and the claimant receipted therefor without protest or reservation made at the time of payment. The losses suffered by the claimant upon hay delivered after the 12th of September, 1898, exceeded the price it received by 17,869.

As to the agreement, which is relied upon by the claimant, its intent and moaning do not seem as clear to the court as to the claimant’s counsel. Deliveries were to begin within five days, and ‘ ‘ proceed at daily rates of at least one-sixtieth of the amount, or in such quantities and at such times afterwards as may be designated by the chief quartermaster or his authorized representative.” The provision that deliveries wore “to begin within five days from date of award and proceed at daily rates of at least one-sixtieth of the total amount,” standing by itself, would cast a reciprocal obligation upon the defendants to receive one-sixtieth daily if tendered, under the decision of the Supreme Court in Speed's Case (8 Wall., 77). But this clause is qualified immediately by the words “in such quantities and at such times as may be designated by the chief quatermaster or his authorized representative.” Furthermore, the agreement previously provides that “if the troops shall be wholly or in part withdrawn the award shall become inoperative to the extent of such reduction.” The troops were withdrawn. Did the agreement become “inoperative to the extent of such reduction,” i. e., was the total quantity of 9,000,000 pounds of hay to be reduced in proportion to the diminishing number of animals remaining in the camp, and were the deliveries to be daily until the reduced total of the hay was delivered, or had the quartermaster the right to hold the claimant for the full amount of 9,000,000 pounds and stretch the period for deliveries over many months? In a word, did the claimant agree to deliver as much hay as might be required within a reasonable time, or bind itself to furnish 9,000,000 pounds of hay at Chickamauga Park as slowly or rapidly as the military exigencies there might require and take the. chances of its contract extending1 over the whole period of the war?

As to the agreement itself, the court is constrained to hold, under the leading case of Clark v. United States (95 U. S. R., 539), and many decisions since, that the transaction between the parties was not a purchase in open market under the pressure of a military exigency, and that the agreement not being-in writing and signed by the parties, as required by the Revised Statutes, section 3714, was not a valid contract upon which an action can be brought for damages caused by the defendant’s breach.

As to the right of the claimant to recover, irrespective of the express contract, what the hay was actually worth at the time and place of delivery, the court is again constrained to hold that the claimant can not recover. It is true that, under the authority cited, a party whose contract is for this statutory reason invalid and void may recover in quantum meruit; and it is true that, where there is an express valid contract, payment by a debtor of a part of his debt is not satisfaction of the whole, even though a receipt in full be given. (United States v. Bostwick, 94 U. S. R., 53.) But nevertheless it has been uniformly held by this court since Kirkham & Brown (4 C. Cls. R., 223) in cases of implied contract where the recovery will be in qumitum meruit and the price to be paid is undetermined by agreement that, where the defendant has paid and the contractor has accepted a price as payment in full, it closes the transaction, and the contractor can not come in and be allowed to allege that his goods were worth more than the price which he consented to take for them. (Comstock's Case, 9 C. Cls. R., 141.) Acceptance of a smaller sum than the one claimed does not leave the defendants open to further claim, if the acceptance of the smaller sum was voluntary, without intimidation, and with full knowledge of all the circumstances. (Savage v. United States, 92 U. S. R., 382.)

The counsel for the claimant has warmly pressed upon the court the fact that the failure to reduce the contract to writing, as required by the statute, ivas the failure and default of the officers of the Government; that the claimant did everything in its power to make a complete and valid agreement, and that the defense which would preclude a party from recovering damages upon the contract if it was valid, or in quantum meruit if it was invalid, is grossly inequitable.

It must be acknowledged that this case belongs to that class which has been termed by many courts “ hard cases,” and that the hardness of it was caused by officers of the Government neglecting their statutory duty (Revised Statutes, sec. 3746), and that the claimant being ignorant of the law might well rely upon the officers of the Government to reduce the contract to a legal form.

The court is aware that citizens of the United States transact their business generally under State laws, and are not familiar with acts of Congress, and might well rely in such matters upon the knowledge and good faith of the officers of the Government. But these facts can not validate that which is declared by statute to be invalid. Ignorance of law does not change the law.

The judgment of the court is that the petition be dismissed.