#### J. J. PREIS & COMPANY v. THE UNITED STATES.

[No. 34700.

Decided February 12, 1923.]

*On the Proofs.*

*Contract; supplemental contract; evidence.*— Where plaintiff enters into a contract with the United States to make certain garments out of cloth furnished by the Government and to return to the Government the unused cloth, and afterwards enters into a supplemental contract with the United States by which the Government binds itself to pay to plaintiff a premium on the unused cloth returned, the evidence must show the amount of unused cloth returned under each contract.

*Same; want of consideration.*— Query, as to whether a supplemental contract which binds the Government to pay plaintiff for something he was required to do under his original contract without pay is not void for want of consideration.

*The Reporter's*statement of the case:

*Mr. George R. Shields*for the plaintiff. *King & Kmg*were on the briefs.

*Mr. George H.*Foster, 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. On June 12,1917, a contract in writing was entered into between the plaintiff, J. J. Preis & Co., a corporation organized under the laws of the State of New York, and the United States, represented by Col. M. Gray Zalinski, Quartermaster Corps, United States Army, which contract was designated as contract No. 1324, and by the terms of which the plaintiff undertook to manufacture and deliver about 100,000 olive-drab overcoats to the defendants at a price of $1.947 each, the same to be made from materials principally furnished by the United States. A copy of said contract is filed with the petition, marked Exhibit A, and is made a part hereof by reference.

On November 5, 1917, another written agreement was entered into by the parties whereby an agreed number of short-length overcoats was substituted for a specified number of *82long overcoats provided for in the contract marked “ Exhibit A,” above referred to; and on January 2,1918, another agreement in writing was entered into between the parties whereby the contract price of a number of coats, specified in the contract of June 12, 1917, was reduced; and on January 29, ■ 1918, another agreement in writing was entered into by the parties whereby it was agreed that 6,000 service coats should be substituted for 4,000 overcoats called for in the contract of June 12,1917. Copies of all of the aforesaid agreements are attached to the petition, marked “Exhibits C, D, and E,” and are made a part hereof by reference.

II. On October 10,1917, the aforesaid parties entered into another contract in writing, the United States being represented by Col. Thomas H. Slavens, Quartermaster Corps, United States Army, whereby the contract of June 12, 1917, was modified so as to provide that the plaintiff should use its best efforts to avoid all possible waste in cutting textile materials furnished by the United States for use in the manufacture of garments. For the additional work and special care so involved the plaintiff was to be paid as separate compensation and premium an amount equal to 20 per cent of the net cost price of such Government-owned materials to the extent of the savings in uncut yardage on comparing the quantities actually used in the cutting with the allowances for the purpose listed in the accompanying schedules — the material of the yardage so saved to remain the property of the United States. A copy of this agreement is attached to the petition, marked “ Exhibit B,” and is made a part hereof by reference.

III. The plaintiff under the contract of June 12, 1917, provided necessary and adequate working space and facilities and proceeded promptly with the work of making the overcoats as soon as the United States began the delivery of the necessary materials. Delivery of completed garments began August 1, 1917, and continued until August 18, 1918, when the contract was completed. Before the execution of the contract of October 10, 1917, the plaintiff, in the performance of its contract, used its best care in the receipt, handling, and cutting of the material furnished by the United States.

*83After the making of the contract of October 10, 1917, the plaintiff took the same care that it would have taken in its regular clothing business. After October 10, 1917, the plaintiff’s superintendent devoted all of his time to the uniform plant, whereas before he had divided his time between civilian and Army business. The care exercised resulted in a reduction of rags and clippings. The rags and clippings were returned to the Government and the plaintiff was paid the sum of $25,494 for the same.

IV. Under the contract of June 12, 1917 (No. 1342), the plaintiff cut and manufactured a total of 52,228 long overcoats and 44,894 short overcoats and 7,996 service coats, unlined, which were accepted and paid for by the Government. Under another contract made with the Government by the plaintiff, known as No. 3356, and dated February 7, 1918, the plaintiff manufactured 10,043 service coats, unlined, which were accepted and paid for by the Government. There was no provision in this contract for any premium for savings.

For the making of the garments enumerated above an allowance of 30-ounce melton under the Government’s schedules was 315,090 yards and 6 inches; the allowance of canvas was 127,7004 yards; and the allowance of silesia was 17,351 yards and 27 inches. The plaintiff used in making the garments under the contract a total of 304,061 yards of 30-ounce melton, 100,899 yards canvas, and 15,143 yards of silesia. The plaintiff returned to the United States 11,029 yards of melton, 26,801:} yards of canvas, and 2,208 yards 27 inches of silesia. The 30-ounce melton cost $3.50 per yard, the canvas 35 cents per yard, and the silesia 40 cents per yard. The value of the melton thus returned to the United States by plaintiff was $38,601.50, the value of the canvas $9,380.35, and the value of the silesia $883.20. If these returns are to be considered as savings made by the plaintiff under the terms of the contract of October 10, 1917, the value of them Avould be $7,720.30 on the melton, $1,876.07 on the canvas, and $176.64 on the silesia. But there is included in the quantities above stated a return of 1,170 yards and 20 inches of melton under the contract of February 7, 1918, and this return must be deducted from the total quantity of melton *84set out above, and tlie amount claimed by the plaintiff must be reduced by $819.50, making its claim for savings of melton $6,900.80.

There is no evidence to show how many overcoats were made before the execution of the contract of October 10,1917, nor how much cloth, etc., was cut, nor how much cloth, etc., was saved during that pei’iod. There is no evidence to show what amount of cloth, canvas, and silesia was saved after the contract of October 10,1917, was entered into; nor what amount of cloth, canvas, and silesia was saved by extra care, as diffei’entiated from what would have been saved by the care which the plaintiff was bound to exercise under the terms of the contract of June 12,1917.

It appears from the evidence that the return of cloth made by the plaintiff to the Government on the contract which did not provide for a bonus was 6 per cent, while the return made on the contract in suit was only 3-J- per cent.

Y. On August 31, 1918, the Government paid to the plaintiff the sum of $6,693.49, representing wlxat at that time the Government believed was due the plaintiff under the contract of October 10, 1917, by reason of saving of melton cloth. On June 23,1919, a deduction of $7,229.98 was made from other accounts of the plaintiff with the Government; this amount so deducted represented the sum of $6,693.49 paid as aforesaid and $535.89 as interest thereon to January 21, 1920. The interest so charged against the plaintiff was erroneously charged against it, and this amount has not been paid to the plaintiff by the defendant, and the defendant concedes that this amount is due to the plaintiff.

YI. The defendant has set up a counterclaim, but has not proved it.

Hat, *Judge,*

delivered the opinion of the court.

This is a suit brought by the plaintiff against the United States to recover the value of certain alleged savings on certain materials furnished by the United States to the plaintiff.

On June 12, 1917, the plaintiff entered into a written contract with the United States whereby it agreed to manufacture certain garments out of materials furnished it by the United States. By the terms of this contract the plaintiff *85was to receive material from time to time and was to manufacture the garments provided for in the contract. The contract provided that certain allowances should be made for said garments and the plaintiff was not to exceed those allowances, and any materials unused within the allowances were to be returned to the defendant. In performing this contract the plaintiff was bound to exercise due care in the cutting of the materials furnished and was to be charged with any quantities of material issued in excess of the allowances provided for.

On October 10, 1917, after the contract had been in part performed another contract was entered into between the parties, whereby the contract of June 12, 1917, was so modified as to provide that the plaintiff should use “ best efforts to avoid all possible waste ” in cutting textile materials furnished by the United States for use in the manufacture of garments. For the additional work and special care so involved the plaintiff was to “ be paid as separate compensation and premium an amount equal to twenty per cent of the net cost price of such Government-owned materials to the extent of the savings in uncut yardage on comparing the quantities actually used in the cutting with the allowances for the purpose listed in the accompanying schedules— the material of the yardage, so saved to remain the property of the United States.”

The plaintiff bases its right to recovery upon the provisions of the contract of October 10, 1917, and claims that it saved in the performance of that contract the amount of materials set forth in its petition.

It has included in its alleged savings all materials returned by it to the United States under the contract of June 12, 1917. Before the supplemental contract was entered into the plaintiff had performed a part of its contract entered into on June 12, 1917, and had used in the manufacture of the garments therein provided for some of the materials furnished it by the United States. It does not appear what amount of materials had been used by it between June 12, 1917, and October 10, 1917, the date of the supplemental contract. Evidently that supplemental con*86tract can not apply to materials cut and used before its date. It does not appear wliat amount of materials were used after October 10, 1917, nor what amount of them was saved after that date.

If entitled to recover at all under the supplemental contract the plaintiff is only entitled to recover for the value of the materials saved by it as a result of its extra care under that contract. It must show its savings under the contract upon which it relies. It must differentiate between the savings which it made under the supplemental contract and the savings which it would have made under the original contract; for under the original contract it was bound to exercise reasonable and proper care in its use of the materials furnished it by the United States; and it is a significant fact that the plaintiff returned a larger per cent of materials to the United States under a contract which did not provide for a premium than it returned under the contract providing for a premium. There is no evidence to show to what extent savings were made under the supplemental contract. To entitle the plaintiff to recover it must show definitely how much material was saved by reason of the contract upon which it sues, and, having failed to do that, there is nothing upon which the court can give judgment. The court can not indulge in guesswork.

Our attention has been directed by the Government to another phase of the case. That is, that the contract of October 10, 1917, was void for the want of consideration. Without at this time passing upon that question it may not be amiss to say that contracts of this character will not be looked on with favor by the court. The contract in question imposed no additional obligation on the plaintiff, while it did bind the Government to pay the plaintiff for something which the plaintiff was bound to do under the original contract. Officers of the Government are not expected nor can they contract for premiums to be paid by the United States on contracts which in themselves bind the parties to do what the premium is offered for. It may well be determined that such contracts are void, not only for want of consideration, but also as being against public policy.

*87The test in such cases is whether or not there was any benefit to be derived by the United States from the execution of the supplemental or modified contract. In the case at bar no such benefit is provided for in the supplemental contract.

For the reasons above given the petition of the plaintiff must be dismissed, except as to the item of $535.89 interest erroneously charged against it.

It is so ordered.

GRAham, *Judge;*DowNey, Judge, and Campbell, *Chief*Justice, concur.