Case Name: Henry M. Field v. The United States
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1880-12
Citations: 16 Ct. Cl. 434
Docket Number: 
Parties: Henry M. Field v. The United States.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 16
Pages: 434–450

Head Matter:
Henry M. Field v. The United States.
On the Proofs.
In 1876 the claimant enters into formal contracts for the delivery of as much corn, <fa., as should he needed at Binggold Barracks. JSe.is notified that a certain quantity will he required, hut is subsequently notified that the qua/ntity ordered will not he needed. When■ the latter notice is given, he, in consequence of the former, has procured and transported the corn to the place of delivery, and has done substantially everything required by Ms contract. It appears that before entering into these contracts he agreed with other parties that they should sh are in the enterprise. This agreement was in good faith and not for the purpose of influencing bidding.
I. The provision of the feevised Statutes (§ 3737) declaring that the transfer of a public contract shall cause the annulment thereof does not apply to a preliminary arrangement for the honest purpose of uniting capital to obtain the necessary means to fulfill such a contract, there being no intent to influence bidding or evade the duties and responsibilities of a public contractor. The distinction between this case and those wherein public contracts have been held void, stated.
II. The rules for the measure of damages in ordinary cases whore a party, contrary to the obligations of his contract, refuses to receive goods tendered to him, stated.
IIL Where the contract is to supply all tho corn or hay that may be needed at a certain post for a specified time, and it is impossible to know in, advance what quantity will be needed, each party is bound to due diligence in keeping both himself and the other informed of facts and circumstances tending to render certain that which was left undetermined.
IV.The chief purpose of such a contract is to supply the wants of the Army’at the post or place designated, and no more.
V. Tlie receiving officer, under such a contract, may change or revoke his orders at any time before delivery.
VI. The measure of damages in such cases ordinarily will be the cost and expense to which the contractor was needlessly subjected; but where the defendants’ officers notified him that he must furnish a designated quantity, and allowed him to incur, substantially, all the cost, expense, and trouble which he would have been subjected to if the goods had been accepted, he will recover his profits under tho general rule.
The Reporters’ statement of the case:
The following are the facts of this case as found by the court:
I. On the 5th of August, 1876, the claimant entered into the following contract with the defendants, for the delivery of corn; which contract was duly made and approved:
‘‘TJwited States oe America:
“ Articles of agreement entered into this 5th day of the month of August, A. D. 1876, between Oapt. E. D. Baker, assistant quartermaster U. S. Army, acting chief quartermaster Department of Texas, and his successors in office, of the one part, for and on behalf of the United States of America, and H. M. Field, of Brownsville, Texas, of the other part, for and on behalf of himself, his heirs, executors, administrators, and assigns, wit-nesseth:
“That the said Capt. E. D. Baker, assistant quartermaster U. S. Army, acting chief quartermaster Department of Texas, for and on behalf of the United States of America, as ’said, and the said H. M. Field, for himself, his heirs, executors, administrators and assigns, as ’said, have mutually agreed, and do by these presents mutually covenant and agree, to and with each other as follows:
“First. That the said H. M. Field shall furnish, or cause to be furnished, the quartermaster’s department, U. S. Army, at the military post of Ringgold Barracks, Texas, with nine hundred and eighty-eight thousand pounds, more or less, of good merchantable corn of the best quality, free from dirt and dust, and in new gunny sacks of about two bushels each (weight of each sack to be deducted), subject to a rigid inspection.
“ Second. That the said II. M. Field shall deliver the said nine hundred and eighty-eight thousand pounds of corn, more or less, the increase in said quantity not to exceed one-third of aforementioned quantity, between the first day of July, 1876, and the thirteenth day of June, 1877, at such times and iu such quantities as the receiving officers may require for the wants of the post during the fiscal year ending June thirtieth,' 1877; provided, that when the corn herein stipulated to be delivered is deficient in quantity or quality, the receiving officer shall have power to supply the deficiency by purchase and have the contractor charged with the difference in the cost to the government, subject to the approval of the department commander.
“Third. That the said II. M. Field shall receive for each and every bushel of corn so delivered, the sum of one dollar and forty-nine cents per bushel, in United States currency; provided that the United States are not liable for any amounts beyond the sums appropriated for such purpose during the fiscal year in which supplies are to be delivered, and that this contract shall be of no effect until such appropriations are made, and shall terminate and cease June 30,1877. Payment to be made monthly when the department is, for this purpose, in funds; and that at any time when two thousand bushels of corn have been delivered, inspected, and received, a voucher may be prepared and payment thereon made for one thousand bushels of the same, and thereafter for such amount as may be delivered until final delivery, when the one thousand bushels retained shall be paid for on final settlement upon duly made voucher.
“Fourth. That if any objection shall be made to the said corn a board of three United States officers shall be convened, to decide whether the said corn is receivable according to the conditions of this agreement, the decision of the same to be filed when approved by the department commander.
“Fifth. That it is expressly understood by the party of the second part that in conformity to the requirements of section 3737 of the Devised Statutes, neither this contract nor any interest therein shall be transferred to any other party or parties, and that any such transfer shall cause the annulment of the contract so far as the United States are concerned, all rights of action, however, for any breach of this contract by the contracting party being reserved to the United States.
“Sixth. That no member of Congress, nor any other officer or agent of the United States, shall be admitted to any interest or share in this contract, or the results to arise therefrom.
“ This contract is subject to the approval of the commanding officer of the Department of Texas and the commanding officer of the Military Division of the Missouri.
“In witness whereof the said jmrties have hereunto subscribed their names and affixed their seals the day and date first above written.
“(Executed in quintuplícate.)
“E. D. BAKER, [SEAL.]
AssH Quartermaster U. 8. Army, Acting Chief Quartermaster.
“H. M. Field, [seal.]
“Brownsville, Texas.
“Witnesses:
“0. Bollingker.
“William Kelly.
“Approved:
“E. O. O. Ord,
“ Brig. Gen. TJ. 8. A., Comd’g Dep’t of Tx.,r
II. On tbe 12th of May, 1877, the claimant received the follow-in g order from the officer having authority to issue it:
“Post Quartermaster's Oeeioe,
“ Ringgold Bárreteles, Tex., 12th Mety, 1877.
“H. M. Field,
Brownsville, Tex.:
“Your contract for corn is increased one-third. Commence to deliver as soon as practicable.
“ Lure, A.. A. Q. MP
And on the 24th and 25th of May, 1877, he received the following notices:
“Post Quartermaster’s Oeeice,
“Ringgold Bctrraelcs, Tex., Mety 21th, 1877.
“H. M. Field,
“Brownsville, Texas:
“No more corn is required from you' under present contract. All former orders are revoked. Acknowledge receipt.
“ Luee, A. A. Q. MP
“Post Quartermaster’s Oeeice,
“ Ringgold Bárreteles, Tex., 25th May, 1877.
“H. M. Field,
“Broivnsville, Texas:
“Under present orders I cannot receive any corn offered by you.
“Luee, A. A. Q. MP
III. Before the receipt by the claimant of the notice of May 24, and in pursuance of his agreements and orders, the claimant, in addition to the corn previously delivered and paid- for, had purchased and obtained 6,044 bushels of corn which he would have seasonably delivered but for said notice, and which he subsequently tendered and which were refused. As to this corn, he had incurred substantially all the cost and expense incident to its purchase and delivery.
Upon the refusal of the defendants’ officer to receive this corn the claimant disposed of the same to the best advantage he could, and the net proceeds thereof received by him were $5,016.52.
IY. On the 8th of August, 1876, the claimant entered into the following contract with the defendants, for the delivery of hay, which contract was duly made and approved:
“ Articles of agreement entered into this 8th day of August, in the year of our Lord one thousand eight hundred and sev enty-six (1876), between Captain E. D. Baker, assistant quartermaster U. S. Army, acting chief quartermaster of the Military Department of Texas, for and on bebalf of the United States of America, party of the first part, and H. M. Field, of Brownsville, Texas, party of the second part, for himself, his heirs, executors, administrators, and assigns, witnesseth:
u That the said parties have covenanted and agreed, and by these presents do covenant and agree, to and with each other, as follows, viz:
“First. That the said H. M. Field, his heirs, executors, administrators, and assigns, shall sell, furnish, and deliver to the troops, depot, and garrison of or at the military post of Fort Brown, Texas, all the hay, be the same more or less, that shall be required thereat by the proper military authorities, for and during the fiscal year beginning July 1,1876, and ending June 30, 1877, to say, twenty-four hundred and fifty tons of wild upland hay, from cultivated fields, cut in the months of July, August, September, October, and November, 1876, and properly cured, of good merchantable quality, to be delivered as it may be required, provided the whole of the above quantity shall be deli vexed by November 30,1856, in the hay yard at the post, or at other designated points that may be indicated by the post quartermaster who shall receive it. The said hay to be carefully stacked, after, weighing, by the party of the second part, in conical circular stacks, not to exceed fifteen (15) tons each, duly rounded and topped off to shed rain, with the tops properly secured by poles or weights against the action of the wind, or in ricks, as the post authorities may direct. It is understood that if the quantity of hay required shall exceed the quantity herein above written, then thirty (30) days’ notice, in writing, before November 1, 1876, shall be given to the said party of the second part for any additional quantity required. Delivery under this contract to begin on or before July 1,1876. This hay shall be delivered by weight of two thousand (2,000) pounds per ton.
“ Second. That the said hay shall be subject to such inspection as the party of the first part may deem necessary, to determine the quality, quantity, and condition at time of delivery, and whether the terms of this contract have been fully complied with. Thisinspection shall be made and the weight taken as the hay is delivered, and shall be subject to the revision and approval of the department commander in case of disagreement or appeal by the contractor.
u Third. That in case of failure of the said party of the second part to deliver, any part of the twenty-four hundred and fifty tons, more or less, of hay, as stipulated by this contract, then the said party of the first part shall have power to supply the deficiency by purchase or otherwise, and the party of the second part shall pay the difference in cost, using any money due the contractor at the time of such failure, to pay the difference, on supplying the deficiency above mentioned.
“ Fourth. That the said H. M. Field, party of the second part, shall receive the sum of seventeen dollars and eighty-five cents per ton for each and every ton of hay delivered and accepted, as stipulated in articles first and second of this agreement; and that at any time when two hundred (200) tons of hay have been delivered, inspected, and received, a voucher may be given and payment made for one hundred (100) tons of the same, and thereafter for such amount as may be delivered until final delivery, when the (100) tons retained shall be paid for on final settlement.
“Fifth. That payment shall be made in the customary manner, after the delivery of the hay as stipulated in article first of this agreement, provided that the voucher be complete, reciting' that the hay has been weighed and inspected as required, and has the approval of the post or department commander, and provided, also, that the contractor be not indebted to the government at the time, in the funds furnished by the United States for such disbursements; and in the event of the quartermaster contracting being without funds for this purpose when payment is due, then payment shall be made as soon thereafter as funds are received by him for that purpose.
“Sixth. It is expressly stipulated and agreed between the parties to this contract that upon mutual agreement it may be extended or reduced, changed, altered, modified, or abrogated in whole or in part; but no such extension or reduction, change or alteration, modification or abrogation shall be interpreted as entitling the contractor to an increased rate over the rate specified in article fourth of this agreement.
“Seventh. It it is expressly understood that this contract shall not be so construed as to involve the government in any obligation for the payment of money in pxcess of the appropriation for the fiscai year ending June 30,1877, and that it shall be of no effect until such appropriations are made.
“ Eighth. That it is expressly understood by the party of the second pkrt, that in conformity to the requirements of section. 3737 of the Eevised Statutes neither this contract nor any interest therein shall be transferred to any other party or parties, and that any such transfer shall cause the annulment of the contract so far as the United States are concerned; all rights of action, however, for any breach of this contract by the contracting parties being reserved to the United States.
“Ninth. That no member of Congress, officer or agent of the government, or any person employed in the public service, shall be admitted to any share herein, or to any benefit to arise here-from.
“ Tenth. That this contract is made subject to the approval of the commanding general of the Department of Texas and of the Military Division of the Missouri.
“ In witness whereof the undersigned have hereunto placed their hands and seals the day and year first above written.
“E. D. Bailee, [seal.]
“Asst. Quartermaster U. 8. Army, Acting Chief Quartermaster.
“E M. Field, [seal.]
Brownsville, Texas.
“ In presence of—
“ C. Bollingeb.
“ WilliaM Kelly.”
Y. On the 11th of May, 1S77, the claimant was notified, through Mr. Kelly, his agent and partner, by an officer of the defendants, having authority therefor, as follows:
“To Wi. Kelly,
“ Menger House, San Anto.:
“ You are ordered to fill your hay contract and one-third more, so you will have to be lively to get the hay, and I think you had better return without delay as soon as business is settled.
“Devin.”
On the 6th of June, 1877, he received the following notice from an officer having authority to give it:
“Oeeice Post Quabtebjmastee,
“Fort Brown, Texas, June 6th, 1877.
“Mr. H.M. Field,
“ Hay Contractor, Fort Broten, Texas :
Sib: I have the honor to inform you that I will require, com* mencing with delivery this a. m., about one hundred and sixteen (116) tons of hay.
“Under recent orders from headquarters Department of Texas, no more than this amount can be received. ,
“ You will please make your arrangements accordingly.
“ Yery respectfully, your ob’d’t serv’t,
“ Geo. F. Foote,
“1st Lt. & B. Q. M 8th Cavhj, A. A. Q. M.”
YI. Before the receipt of the notice of June 6, 1877, and in pursuance of his agreement and orders, the' claimant, in addition to the hay then and afterwards accepted, had procured ten other tons of hay, and would have reasonably delivered the same but for said notice, and did thereafter tender them and they were refused. As to said ten tons of hay he had incurred substantially all the cost and expense incident to the purchase and delivery thereof.
Upon the refusal of the defendants’ officers to receive said ten tons of bay, tbe claimant disposed of the same to the best advantage he could, and the proceeds thereof received by him. were two dollars and fifty cents per ton.
He had also made some progress towards obtaining additional hay acording to and within the limits of his contract and the order first given to him, and had entered into some arrangements with other partiesfor the purchase andsupply of the same. But it does not appear what, if any, expenses he incurred, or what was or is the extent of his liabilities, if any, on account of the arrangements so made with other parties.
VII. About the 1st of July, 1876, after said contracts had been awarded to claimant upon his bids, but before they were made and sigued, the claimant executed the following agreement, which had been orally entered into between the parties-on the 6th of May, 1876, when it bears date:
“ Brownsville, Texas, May 6,1876.
“Articles of agreement made and entered into between Charles Andre, H. M. Field, and William Kelly, all of Brownsville, Texas, this 6th day of May, A. D. 1876.
“Whereas the proper military officers of the United States in the Department of Texas have caused advertisements to be made that proposals from intending contractors for the required transportation and supplies needed for the troops at the posts of Fort Brown, Ringgold Barracks, and Fort McIntosh, during the fiscal year ending June 30, 1877, the beforemen-tioned Andre, Fielcl, and Kelly do hereby mutually covenant and agree to and with each other that they will bid in the name of either of the parties, as may hereafter be agreed upon, for the furnishing of the said transportation and supplies, and that if they or either of them should be successful in obtaining any or all of the contemplated contracts, that such contract shall be held and operated for their mutual benefit in equal proportion, provided that for all advances in cash made by any one of the said parties, interest at the rate of one per cent, per month shall be allowed and paid to the party so advancing for such-advances before any division of profits shall be made; and for-the faithful performance of the foregoing we hereby bind ourselves, our heirs and administrators in the penalty of damages-
“Witness our hands, at Brownsville, Texas, aforesaid, the. day and date first herein written.
“Chajiles Andke.
“H. M. Field.
“WilliaM Kelly.”
This agreement was made in good faith by the contracting parties, for the purpose of raising money to carry on the contracts with the government, and not for the parpóse of influencing the bidding therefor, or otherwise to prejudice the rights or interests of the United States. It was carried out in like good faith without injury to the defendants, and it does not appear that any objection thereto was made by any officers •of the government.
VIII. It does not appear that any more corn and hay were needed at the posts mentioned in said contracts during the fiscal year therein specified than the quantities received and accepted. Nor does it appear that the defendants’ officers acted ■otherwise than in good faith and in accordance with their best judgment in issuing the orders fixing the quantities to be furnished, and the notices changing the same as set forth in findings.
Mr. George S. Williams for the claimant.
Mr. John 8. Blair (with whom was the Assistant Attorney - ■General) for the defendants.
After the contracts were awarded, Field by written agreement covenanted to hold and operate them for the mutual benefit of himself, Kelly, and Andre in equal proportion, and agreed to a division of profits. That this was done prior to the ■signing of the agreements makes it none the less an assignment ■of two-thirds interest in the contract. (See Garfield v. The United States, 93 U. S. K., 242.) It is further to be considered that it was made on the 1st of July or after, that is, within the fiscal year prescribed by the contracts for their operation. Furthermore, it never was disavowed by Field after the contracts were signed, and as late as January, 1881, he brings his partners into this court as co-claimants.
. If an agreement to transfer made between the awarding and the signing of a contract carried out and acted under after the ■signing does not, under section 3737 Revised Statutes, annul the contract, the law becomes a dead letter. Every reason which could influence Congress in prohibiting a transfer after the signing of a contract would be equally potent as to transfers prior thereto. Attorney-General Bates in a similar. case said •(10 Oifin., 525): u They exhibit as clear and direct a viola tion of the letter and spirit of the act of 1802 as can be imagined, and one which no act can make more apparent.” See'also McCord v. The United States (9 C. Ols. B., 156); Wheeler v. The United States (5 ib., 504), and Francis v. The United States (11 ib., 638).

Opinion:
Bichardson, J.,
delivered the opinion of the court:
In August, 1876, the claimant entered into two contracts with the defendants, one to furnish corn to the quartermaster's department of the Army atBinggold Barracks, Texas, and the other to furnish hay to the troops, depots, and garrison of or at the military post of Fort Brown, Texas.
This action is brought to recover damages for alleged breaches on the part of the defendants in not receiving and accepting all the corn and hay contracted for which the claimant was willing and ready to furnish. He has been paid for all that was actually delivered and accepted.
The claimant sets forth in his petition, among other matters, that on or about the 6th day of May, A. D. 1876, he entered into a verbal agreement with Charles Andre and William Kelly, which on or about the 1st day of July, 1876, was reduced to writing and signed by the parties thereto, of which the following is a copy:
"Brownsville, Texas, May 6,1876.
" Articles of agreement made and entered into between Charles Andre, H. M. Field, and William Kelly, all of Brownsville, Texas, this 6th day of May, A. D. 1876.
"Whereas the proper military officers of the Dnited States in the Department of Texas have caused advertisements to be made that proposals from intending contractors for the required transportation and supplies needed for the troops at the posts of Fort Brown, Binggold Barracks, and Fort McIntosh during the fiscal year ending June30,1877, the before-mentioned Andre, Field, and Kelly do hereby mutually covenant and agree to and with each other that they will bid in the name of either of the parties, as may hereafter be agreed upon, for the furnishing of the said transportation and supplies, and that if they or either of them should be successful in obtaining any or all of the contemplated contracts, that such contract shall be held and operate d for their mutual benefit in equal proportion, provided that for all advances in cash made by any one of the said parties, interest at the rate of one per cent, per month shall be allowed and paid to the party so advancing for such ad- vanees before any division of profits shall be made; and for the faithful performance of the foregoing we hereby bind ourselves, our heirs and administrators, in the penalty of damages..
" Witness our hands at Brownsville, Texas, aforesaid, the day and date first herein written. . '
"Charles Andre.
"H. M. Field.
"WilliAM Kelly."
It is found by the court that this agreement was made in good faith by the contracting parties, for the purpose of raising-money to carry on the contracts with the government, and not for the purpose of influencing- the bidding therefor or otherwise to prejudice the United States; that it was carried out in like good faith without injury to the defendants, and that it does not appear that any objection thereto was made by any officer of the government.
The counsel for the defendants now insists that this agreement was a transfer of the contracts or an interest therein which, of itself, caused the annulment of both contracts so far as the United States are concerned, and bars the claimant from maintaining an action thereon for damages on account of nonperformance by the government, under the following section of the Revised Statutes:
" Sec. 3737. No contract or order, or any interest therein shall be transferred by the party to whom such contract or order is given to any other party, and any such transfer shall cause the annulment of the contract or order transferred, so far .as the United States are concurred. All rights of action, however, for any breach of such contract by the contracting parties are reserved to the United States.
The cases of Wheeler v. The United States (5 C. Cls. R., 504),. Wanless v. The United States (6 ib.,123), and Francis v. The United States (11 ib., 638), are. relied upon in support of this objection to the claimant's right to maintain his action.
There is an important distinction between those cases and the present one. In each of the reported cases the contractor was a merely nominal party who never himself performed or attempted to perform the contract, but so transferred it as to substitute the assignee in his place as the real party in interest throughout.
In Francis's Case (11 ib., G38) we held that an irrevocable power of attorney given by Francis, the contractor, after the making of bis contract, to one Myrick "to take and receive all vouchers and the same sign and draw the money thereon," under the circumstances of that case constituted an assignment. But the attending circumstances were these: Myrick not only did all the work, delivered all the wood contracted for, and received all the money paid by the defendants, but brought his action in this court, and alleged in his petition, what does not appear in the case as reported, that—
" For a valuable consideration to him paid by Nathan Myrick, he did sell, assign, and transfer to said Myrick all thatportion and interest in said contract relating to or pertaining to furnishing wood for Fort Bansom, Dakota Territory; and that he did then and there authorize and fully empower said Nathan Myrick to execute and perform that portion of said contract and receive the pay and compensation therefor from the United States in the same manner that he could have done if said assignment had not been made and said power given."
Thereby referring to the power of attorney which was proved. Moreover, it appeared that with the giving of this power of attorney Francis wholly disappeared from the case and Myrick became the only person having further dealings with the government officers concerning the business.
But this case is different. The claimant, Field, seems to have been a bona fide contractor who gave his time and attention "to the business, and assumed and undertook all the responsibilities which he had agreed to take with the United States. The agreement with his associates was for the honest purpose of uniting capital in order to obtain the means necessary to fulfill the contracts with the government, and not with the design of avoiding personal responsibility himself' or of screening his associates from liability. Besides, this agreement was entered into before the making of the government contracts and constituted rather articles of copartnership than an assignment or transfer. Since the execution of his contracts the claimant has made no transfer of any interest therein. (Gordon v. Dalby, 30 Iowa, 223.)
The statute provision is a stringent one. It was enacted in time of war when stringent measures were deemed of pressing necessity. It first appeared in the Act of 11th July, 1862 (12 Stat. L., p. 596, § 14, ch. 200), relating mostly to the Army, and had reference, no doubt, principally to Army and Navy contracts, although general in its language. It was followed by another section, to which it was an important and material accompaniment, and which is significant of the principal object to^ which it was directed. It was as follows:
" Sec. 16. That whenever any contracQu' for subsistence, clothing, arms, ammunition, munitions of war, and for every description of supplies for the Army or Navy of the United States, shall be found guilty by a court-martial of fraud or willful neglect-of duty, he shall be punished by fine, imprisonment, or such other punishment as the court-martial shall adjudge; and any person who shall contract to furnish supplies of any kind or description for the Army of Navy shall be deemed and taken as a part of the land or naval forces of the United States, for which he shall contract to furnish supplies, and be subject to the rules and regulations for the government of the laud and naval forces-of the United States."*
This section seems to have been regarded by Congress as applicable only to times of war; and in revising the statutes in 1874 it was omitted from the revision and repealed. Such, however, was the law when each of the contracts in tine cases relied upon by the defendants' counsel, and already referred to, was executed and was taken into consideration by the court in determining the construction to be given to the section prohibiting assignments in reference to those contracts. That provision was not in force when the present claimant entered into his contracts.
As the agreement between the claimant and his associates was a partnership arrangement, made before the execution of the contracts with the government, and the court has found that- it was made in good faith and not for the purpose of influencing the bidding or otherwise to prejudice the United States, Ave are of opinion that it is not a transfer which annuls the contract within the meaning of section 3737 of the Revised Statutes.
On the merits, so far as any question of law is involved, the contiwersy between the parties groAVS out of that part of each contract by which the quantity of corn or hay to be furnished and received was fixed or might be determined, and relates to the measure of damages.
In contracts made in the usual form, between individuals, Avhere the parties agree, the one to sell and the other to receive and pay for a fixed and certain quantity of goods, and the con-tractorprocures and tenders the goods and they are not accepted, the measure of damage is the difference between the contract price and tbe amount for which he sells them in open market,, and in good faith, for account of his purchaser. If he retains and uses the goods himself, then it is the difference between the contract price and the value to him, or the market value if there'be any, according to the circumstances. If the goods are of no value to the contractor and he is unable to obtain anything for them by sale, and they are a total loss, then it is the whole contract price without deduction.
If before tender, but after, the contractor has incurred expenses and made more or less progress towards fulfillment on his part, he is notified that the goods will not be received, and he proceeds no further, the measure of damage is his losses incurred and his gains prevented.
In each and every case the principle is that the contractor must be fully indemnified for the damage caused to him by the action of the other party, in both profits and losses.
But in many and probably in most of the Army contracts of the United States, for supplies and transportation, there is introduced an element of uncertainty as to the quantity of goods or amount of service which may be required.
In the claimant's hay contract it is provided that he is to " deliver to the troops, depots, and garrison of or at the military post of Fort Brown, Texas, all thehay, be the same more or less, that shall be required thereat by the proper military authorities, for and during the fiscal year ending June 30, 1877."
That the parties contemplated and provided for an increase of an uncertain quantity much larger than that which would be admissible under the words "more or less" as ordinarily interpreted in such an agreement, is shown by the following clause of the contract:
"It is understood that if the quantity of hay required shall exceed the quantity hereinabove written, then thiyty days' notice in writing, before November 1, 1876, shall be given to the said party of the second part for any additional quantity required."
So by the corn contract, the claimant was to furnish—
" Nine hundred and eighty-eight thousand pounds, more or less, of good, merchantable corn, # the increase in said quantity not to exceed one-third of aforementioned quantity, between the 1st day of July, 1876, and the 30th day of June, 1877, at such times and in such quantities as the receiving officer may require for the wants of the post during the fis. cal year."
We find similar provisions, in different forms of language, in other Army contracts which have been the subject of litigation in this court. (Grant's Gase, 1 C. Cls. R., 61, and 7 Wall., 331; Bulkley's Gase, 7 C. Cls. R., 543, and 19 Wall., 37; Brawley's Gase, 11 C. Cls. R., 522, and 96 U. S. R., 168; Parish's Gase, 12 C. Cls. 609, and 100 U. S. R., 500; Merrlam's Gase, 14 C. Cls. R., 290; Baldwin's Case, 15 ib., 297.)
In cases of this class the main object is to provide for all the supplies or service which the wants of the Army at the particular places named may require.
As it is not possible always to know in advanpe exactly what those wants may be, an approximate quantity or amount is inserted, and any variation of increa.se or decrease is left to be determined by future circumstances.
The risk arising from this uncertainty is shared in part by each party to the contract, and each is bound to act in good faith towards the other, to exercise due diligence, and to keep himself and the other party informed of whatever facts within the means of his own knowledge and information may contribute towards rendering certain that which is left undetermined.
It is the duty of the contractor to make inquiries at the proper times and of the proper officers, and of the officers to inform the contractor by direct orders, in reasonable time, of what the requirements prove to be. When the contractor is formally notified to supply a quantity or amount, he is justified in proceeding to incur expenses and in making arrangements to comply with the terms of the order. Bat as the main object is to supply the wants of the Army at the post or place designated, and no more, the receiving officer, or other officer representing the United States, may change or revoke his orders at any time when he finds that he has overestimated the quantity or amount which will ultimately be required. The rule of damage is then somewhat .different from that in other cases. The contractor will lose iiis anticipated profits, and the government will be subjected only to the payment of the cost and expenses which its officers have needlessly cast upon him.
The measure of damage is this: For such supplies as the contractor had on hand ready to deliver, and as to which, in consequence of the defendants' notices, he had incurred substantially all the cost, expenses, and trouble which he would have been subjected to if the supplies had been accepted, and little or no tiling remained to be done except tlie formal tender of tbe goods, he is entitled to recover under the general rule his profits as well as his losses, precisely as though a tender had previously been made, or as though the goods had been actually needed. As to that, the contractor may be considered as having substantially fulfilled his agreement and entitled to his profits without diminution. For his preparation and progress toward furnishing other supplies not in condition, or, not substantially, ready for delivery, he is entitled to recover the cost, expenses, and losses actually incurred, but nothing for prospective profits. The loss of anticipated profits is the result of the risk which the contractor takes on his part from the uncertainty as to the quantity which may ultimately be required; an uncertainty which both parties know from the beginning to be involved in the contract.
These principles of the measure of damages are deducible from the decisions of this court and of the Supreme Court in the cases already cited, and reconcile them with each other and with the general rules of the common law applicable to contracts.
Applying them to the present case, we find that the claimant is entitled to recover the sum of $3,989 under the first cause of action set forth in the findings, upon his contract for the delivery of corn, that being the difference between the contract price of the 6,044 bushels of corn which he had ready for delivery when the order reached him that no more would be received and the net amount which he received from the sale of it.
Under the, second cause of action, upon his contract for the delivery of hay, the claimant is entitled to recover $153.50, which is the difference between the contract price of the ten tons of hay which he had on hand for delivery when the notice reached him that no more would be accepted and the net amount for which he sold it.
For his preparations towards procuring hay which he never had ready for delivery he can recover nothing, because he has proved neither the expenses actually incurred nor the extent of his liabilities entered into on that account, if any.
The court, from vague and uncertain evidence, cannot undertake to estimate the amount of possible or probable expenses incurred which are not proved, nor the amount of unascertained and unliquidated damages which the claimant may be liable for to other parties on account of engagements entered into by him in the course of preparations made toward fulfilling Ms contract.
The claimant must prove his case. The burden of proof is upon him. If he fails to sustain it, the fault or the misfortune is his own, and he must abide the consequences.
Judgment will be entered for the claimant for the sum of $4,142.50.