#### CHARLES SCHAEFER, Jr., v. THE UNITED STATES

[No. A-13.

Decided January 21, 1924]

*On the Proofs*

*Contract; failure to accept; measure of damages.*— Where, under a contract to deliver oats to the United States, the Government refuses to accept the balance of the oats so contracted for, and after repeated and unsuccessful efforts to secure their acceptance the plaintiff sells them in the open market at the prevailing market price, there is a breach of a contract of sale by the failure of the Government to complete the purchase, and the measure of damages is the difference between the contract price and the market price at the time the contract was breached.

*The Reporter’s*statement of the case:

*Mr. Jennings 0. Wise*for the plaintiff. *Murm, Anderson de Mimn*were on the briefs.

*Mr. Howard J.*Bloomer, 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. Charles Schaefer, jr., is the surviving partner of the firm of Charles Schaefer & Son, which was a copartnership *135composed of Charles Schaefer, sr., and the plaintiff, Charles Schaefer, sr., having died on January 17, 1919. The said firm of Charles Schaefer & Son on August 14, 1917, entered into a contract in writing with the United States whereby the said firm agreed to deliver to the United States at Camp Devens at Ayer, Massachusetts, 26,019,090 pounds of white oats at $2.9575 per hundred pounds, said deliveries to be completed on June 30, 1918. The said contract was executed on behalf of the United States by Julian Codman, captain, Quartermaster Corps, United States Army. A copy of said contract is filed with the petition of the plaintiff as Exhibit A and is made a part of this finding by reference.

II. The said firm of Charles Schaefer & Son delivered to the United States before June 12, 1918, 19,910,267 pounds of oats, and could have delivered the entire quantity of oats contracted for before June 30, 1918, had it not been delayed in the delivery thereof by the United States. The quantity of oats not delivered on June 12, 1918, was 6,108,823 pounds.

III. On June 12, 1918, Lieut. Col. J. R. Musgrove, who had succeeded Capt. Julian Codman as contracting officer at Camp Devens, sent the following telegram to the firm of Charles Schaefer & Son:

JtTNE 12, 1918.

Camp Quartermaster, Camp Devens, Mass.

Chas. B. Schaefer Sons, 304 Meserole St., Brooklyn, N. Y. Contract on oats.

1. Information is furnished that you are granted an extension until September 30, 1918, to complete delivery of oats purchased under contract made with the Northern Department on August 14, 1917.

J. R. Musgrove,

*Lt. Ool, Q. M. O., N. A.*

IY. 6,708,823 pounds of oats were purchased by the said firm in August, 1918, at an average cost of 80 cents per bushel in order that it might deliver 6,108,823 pounds of oats to Camp Devens prior to September 30, 1918, and in August, 1918, 930,077 pounds were delivered by said firm to the United States at Camp Devens, leaving a balance of 5,178,746 pounds undelivered.

*136On August 17, 19, and 20, 1918, the said firm was notified by tbe camp quartermaster, Captain Schumacher, who had succeeded Lieutenant Colonel Musgrove in that office, that the contract of August 14, 1917, had expired on June 30, 1918, and that no more oats would be accepted by the United States. The attention of Captain Schumacher was called to the extension of time granted by his predecessor in office for the delivery of the oats, and the matter was referred to the Quartermaster General of the Army, and on October 9,1918, the said firm was requested to advise the camp quartermaster if it was willing to waive its rights to deliver the undelivered portion of the oats called for in the contract. The said firm on October 17, 1918, declined to waive its rights, and the matter was then referred to the depot quartermaster, Boston, Mass., and on November 26, 1918, the said firm was notified by the subdepot quartermaster, Camp Devens, Mass., that it had been decided that the 5,178,746 pounds of oats still undelivered would be accepted, and the 930,077 pounds of oats delivered in August would be accepted and paid for. And the said firm on December 6, 1918, was directed by the office of the zone supply office, Boston, Mass., to deliver the remaining 5,178,746 pounds of oats to Camp Devens. On December 18, 1918, the instructions to deliver the oats to Camp Devens were countermanded by a telegram from the zone supply officer, and the firm was notified on December 27, 1918, by the zone supply officer, Boston, Mass., that the question of future deliveries under the contract had been referred to Washington. During all of these negotiations the said firm had on hand and in its possession the oats necessary to comply with the requirements of its contract.

V. On January 17, 1919, the said firm was notified that the Director of Purchase and Storage had decided not to authorize the acceptance of the oats undelivered under the contract of August 14, 1917. The said firm made repeated efforts to induce the Government to accept and pay for the said 5,178,746 pounds of oats, but the Government refused to receive them, and the said firm, after notifying the Government of its intention, in February, 1919, sold the said oats *137on the open market for an average1 price of 68 cents per bushel, which was the market price of oats at that time. The actual loss to the said firm on the resale of the 5,178,746 pounds of oats was the sum of $19,420.20, the said oats having been bought in August, 1918, at 80 cents per bushel and sold in February at 68 cents per bushel. The difference betAveen the price agreed on in the said contract of August 14, 1917, for the 5,178,746 pounds of oats Avhich Aver.e not delivered under the contract and the price realized for the said oats when sold in February, 1919, was thé sum of $43,113.61, the market price when sold being 68 cents per bushel.

Hat, Judge,

delivered the opinion of the court:

This is a suit for the recovery of $43,113.61 which the plaintiff claims is OAving to him by the United States. The plaintiff is the surviving partner of the firm of Charles Schaefer & Son, which firm entered into a contract in writing with the United States on August 14, 1917, to furnish to the United States at Camp Devens, Massachusetts, 26,019,-090 pounds of white oats at $2.9575 per hundred pounds Under the terms of the contract the deliveries of oats were to be completed on or before June 30, 1918. The contract also provided that additional time could be granted for the performance of the contract.

Before June 12, 1918, the contractor delivered to the United States 19,910,267 pounds of oats, and could have delivered the entire quantity of oats contracted for before June 30, 1918, had the deliveries not been delayed by the United States. The quantity of oats not delivered on June 12,1918, was 6,108,823 pounds.

On June 12,1918, an extension of time was granted to the contractor for the complete performance of the contract, the time being extended to September 30, 1918.

In August, 1918, the contractor purchased 6,708,823 pounds of oats prior to September 30, 1918, and in August, 1918, 930,077 pounds of oats Avere delivered and were finally accepted and paid for. This left a balance of 5,178,746 pounds undelivered in August, 1918. The contractor was *138prevented from delivering tlie 5,178,746 pounds of oats which he had and was ready to deliver prior to September 30, 1918, by the refusal of the United States to receive them. On October 9,1918, the firm of Charles Schaefer & Son (the contractor) was requested to advise the contracting officer if it was willing to waive its rights to deliver the undelivered portion of the oats called for in the contract. This the firm declined to do. On November 26, 1918, the contractor was notified that it had been decided that the 5,178,746 pounds of oats tVould be accepted, and on December 6, 1918, the contractor was directed to deliver the said oats at Camp Devens. On December 18, 1918, the instructions to deliver the oats were countermanded by telegram, and on December 27,1918. the contractor was informed that the question of future deliveries under the contract had been referred to Washington. On January 17, 1919, the contractor was notified that the Director of Purchase and Storage had decided not to authorize the acceptance of the oats undelivered under the contract of August 14,1917.

The contractor made repeated efforts to induce the Government to accept the oats, but the Government refused to accept them, and the contractor, after notifying the United States of its intention, in February, 1919, sold the said oats on the open market for an average price of 68 cents per bushel, which was the market price of oats at that time. The difference between the price agreed on in the contract of August 14, 1917, for the 5,178,746 pounds of oats and the price realized for the said oats when sold in February, 1919, was the sum of $43,113.61.

Under this state of facts the court is of opinion that the plaintiff is entitled to recover. Where there is a breach of a contract of sale by the failure of the purchaser to complete the purchase the general rule is that the measure of damages is the difference between the contract price and the market price at the time the contract was breached.

Upon the agreement to sell, if the purchaser fails to execute his contract, the true measure of damages for its breach is the difference between the price of the goods agreed on and their value at the time of the breach, which may fairly *139be stipulated to be the price they bring on a resale. *Harkness*v. Russell, 118 U. S. 663, 667. The same doctrine is laid down in the case of *Moore*v. *United*States, 196 U. S. 157-168, in which case the question was whether the United States was liable when it refused to receive coal which it had contracted for, and Moore sold it in the open market for $3,161/4 per ton less than $9, the contract price. The loss to Moore was $1,120.87. The court said: “ The obligations of parties were reciprocal; one to deliver, the other to receive, about 5,000 tons of coal, and equally reciprocal is the liability for nonperformance of the obligations.”

The rule above referred to is well established and there is nothing in this case which would justify a departure from it.

Judgment will be awarded to the plaintiff in the sum of $43,113.61. It is so ordered.

GRAHAM, *Judge;*Downey, *Judge;*Booth, *Judge;*and Campbell, *Chief*Justice, concur.