Source: https://supreme.justia.com/cases/federal/us/262/489/
Timestamp: 2019-04-20 12:35:52+00:00

Document:
1. A contract for the purchase of coal by the government at a stated price per ton which does not require the government to take, or limit its demand to, any ascertainable quantity is unenforceable, for lack of consideration and mutuality. P. 262 U. S. 492.
Appeal from a judgment of the Court of Claims denying the appellant's claim for the difference between the market price of coal furnished the Navy and the price stated in a contract.
claims that it is entitled to the market price at the time of delivery, $6.50 per ton. The United States claims that appellant was bound by contract to furnish it for $2.85 per ton. The Court of Claims made findings of fact, and concluded that appellant was not entitled to recover.
"to be delivered . . . at such times and in such quantities as may be required during the fiscal year ending June 30, 1917, . . . 10,000 tons steaming coal . . . for delivery . . . Hampton Roads, Va. per ton $2.85, . . . $28,500."
"Quantities Estimated. -- It shall be distinctly understood and agreed that it is the intention of the contract that the contractor shall furnish and deliver any quantity of the coal specified which may be needed for the naval service at the places named during the period from July 1, 1916, to June 30, 1917, irrespective of the estimated quantities stated, the government not being obligated to order any specific quantity. The estimated quantities have been arrived at from records of previous purchases. While they represent the best information obtainable as to the quantities which will be required, . . . they are estimated only, and are not to be considered as having any bearing upon the quantity which the government may order under the contract. "
"Deliveries. -- Deliveries to be made promptly, and in lots or quantities specified . . . on call and at the prices accepted by the Department. . . ."
"Reservations. -- The government reserves the right to reject any or all bids and in accepting any bids; . . . the right is also reserved to make such distribution of tonnage among the different bidders for suitable and acceptable coals for the naval service as will be considered to be for the best interests of the government."
"Notes. -- Bids on less than the entire quantity of coal specified under each class will be received and considered. Such partial bids must state the amount of tonnage it is proposed to furnish, subject to the other conditions of these specifications."
Appellant was notified of the acceptance of its proposal, and, on June 5, 1916, a contract was made containing the portions of the bid and specifications above referred to.
March 26, 1917, appellant was informed by the Department that the quantity estimated in its contract would be exceeded by ten percent Appellant answered that, when it had furnished 10,000 tons, it would consider its obligation under the contract discharged, and that it was prepared to furnish the balance. The Department cited the provisions of the contract as authority for requiring the additional tonnage, stated that the same requirement was made of other contractors, and expressed the hope that it would not be necessary to resort to extreme measures to accomplish compliance. Later, the Department informed appellant that the steamer Kennebec had been directed to coal with it, and that the quantity required was 2,180 tons. Appellant answered that the balance due under the contract was 560 tons, which it was ready to supply at any time, and that this amount was all that it was able to furnish. The Department insisted that the full cargo assigned to the Kennebec must be furnished.
Appellant reiterated its position. June 9, the Department advised appellant that failure to supply the tonnage ordered would necessitate immediate purchase in the open market for its account. June 12, appellant replied that it had arranged to supply the Kennebec the full quantity required, and that it was "doing this under protest, which can be straightened out later." June 14, appellant wrote that it would agree to supply the 2,180 tons ordered, with the understanding that no further assignments would be made to it; that this was 1,620 tons more than it was obligated to deliver; that this excess would be furnished under protest, reserving the right to take the proper steps to recover the difference between the current market price and the contract price; it asked confirmation from the Department and stated that, on receipt thereof it would furnish the coal.
"Your company will please supply Kennebec with 1,560 tons coal, or such quantity as may be necessary to bring the total tonnage delivered by you under contract 26,492 up to total estimated quantity plus 10 percent or total 11,000 tons. Balance Kennebec cargo will be obtained elsewhere."
"It shall be distinctly understood and agreed that . . . the contractor will furnish any quantity of the coal specified [i.e., of the kind and quality specified] that may be needed . . . irrespective of the quantities stated, the government not being obligated to order any specific quantity,"
"are estimated, and are not to be considered as having any bearing upon the quantity which the government may order under the contract; . . . the right is also reserved to make such distribution of tonnage among the different bidders . . . as will be considered for the best interests of the government."
There is nothing in the writing which required the government to take, or limited its demand to, any ascertainable quantity. It must be held that, for lack of consideration and mutuality, the contract was not enforceable. Cold Blast Transportation Co. v. Kansas City Bolt & Nut Co., 114 F. 77, 81; Fitzgerald v. First National Bank, 114 F. 474, 478; A. Santaella & Co. v. Otto F. Lange Co., 155 F. 719, 721 et seq.; Golden Cycle Mining Co. v. Rapson Coal Mining Co., 188 F. 179, 182, 183.
United States v. Purcell Envelope Co., 249 U. S. 313, is not inconsistent with the conclusion that the contract here was not enforceable. There, the making and acceptance of the bid consummated the contract, and it was construed to bind the company to furnish and the Department to take the envelopes and wrappers specified which the Department would need during the period covered by the contract.
2. While the contract at its inception was not enforceable, it became valid and binding to the extent that it was performed. St. Louis Hay & Grain Co. v. United States, 191 U. S. 159, 191 U. S. 163; Hartman v. Butterfield Lumber Co., 199 U. S. 335, 199 U. S. 338; United States v. Andrews, 207 U. S. 229, 207 U. S. 243.
The judgment of the Court of Claims is affirmed.
* See Insurance Co. v. Dutcher, 95 U. S. 269, 95 U. S. 273; Topliff v. Topliff, 122 U. S. 121, 122 U. S. 131; Old Colony Trust Co. v. Omaha, 230 U. S. 100, 230 U. S. 118; Nelson v. Ohio, 188 F. 620, 623; Bunday v. Huntington, 224 F. 847, 854; Bransford v. Regal Shoe Co., 237 F. 67, 69.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.