Case Name: SAMUEL MONROE AND DAVID M. RICHARDSON v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1900-02-26
Citations: 35 Ct. Cl. 199
Docket Number: No. 20003
Parties: SAMUEL MONROE AND DAVID M. RICHARDSON v. THE UNITED STATES.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 35
Pages: 199–207

Head Matter:
SAMUEL MONROE AND DAVID M. RICHARDSON v. THE UNITED STATES.
[No. 20003.
Decided February 26, 1900.]
On the Proofs.
The question in the case is whether the approval of the formal contract by the Chief of Engineers was essential to the validity of the contract, which provided that “this contract shall he subject to the approval of the Chief of Engineers.”
I.Where a contract provides that it is subject to the approval of a designated officer, such approval need not be in writing.
II.Where a contract provides “that this contract shall be subject to the approval of the Chief of Engineers,” it is impossible for the court to hold that the words are meaningless or that they mean that a prior contract had been approved.
III. If a contract made by a subordinate is in terms subject to the approval of his superior, approval is a condition precedent to the validity of the agreement.
IV. Where approval is a condition precedent to the validity of a contract, and work under it is done without the knowledge or direction of the officer in charge, and no benefit results to the Government, the service is voluntary. The contractor may act in good faith, but it is at his own risk.
V.No one can thrust a contract upon another. There must be agreement, or something from which agreement can be inferred— request, acquiescence, knowledge, or the retention of a consideration which can be returned. A contract can not be implied from the voluntary acts of one party.
VI.At nisi prius a defendant may move for a nonsuit, or may demur, or request the court to direct a verdict in his favor, and thus test _ the sufficiency of the plaintiff’s case. An analogous practice may be followed in this court.
VII. Where claimants desire to appeal, the court will find the facts and assess the damages. The findings will then stand as a verdict taken subject to the opinion of the court.
VIII. It is a matter of judgment as to what constitutes a reasonable profit. Numerous cases indicate that it ranges from 10 to 25 per cent.
The Reporters’ statement of the case:
The following are the facts of the case as found by the court:
I. The claimants are citizens of the United States and of the State of Ohio. On or about the 25th day of May, 1892, the United States, through W. L. Marshall, a c'aptain in its Corps of Engineers, published the following advertisement inviting-proposals for constructing a canal to be known as the Illinois and Mississippi Canal:
“UNited States Engineer Oefice,
“Room 90, 134 Van Burén St.,
“Chicago, III., May 25th, 1892.
“ Sealed proposals in triplicate for constructing three miles or less of the trunk of the Illinois and Mississippi Canal near the mouth of Rock River; for screening, sorting, and delivering sand and pebbles, and for excavating the lock pits, and constructing the foundations for three locks, will be received at this office until 12 noon, central time, Saturday, June 25th, 1892, and then opened. Bidders are invited to be present. Blank forms of proposals and specifications will be furnished on application. General plans of the works can be seen and other information can be had at the office of Assistant Engineer L. L. Wheeler, at Milan, Illinois.
“ The attention of bidders is invited to acts of Congress approved February 26, 1885, and February 23, 1887, vol. 23, page 332, and vol. 24, page 414, Statutes at Large. Preference will be given to materials of domestic production, conditions of quality and price (including duties) being equal. The United States reserves the right to reject any or all bids.
“W. L. Marshall,
“ Captain, Corps of Engineers, U. 8. A.”
II. In response to said advertisement claimants submitted a bid or proposal to do certain parts of said work, which was accepted by Captain Marshall, acting under the following authority from the Chief of Engineers United States Army:
“United States Engineer Office,
“1637 Indiana Ave., P. 0. Drawer 132,
“ Chicago, 111., Jwie29, 1892.
“Brig. Gen. Thos. L. Casey,
“ Chief of Engineers, U. 8. A., Washington, D. C.
“General: I have the honor to forward herewith abstract of proposals, together with one copy of each proposal received, for constructing three miles or less of canal trunk, Illinois and Mississippi Canal, with the following recommendations, viz:
“That bid of Messrs. Monroe & Richardson, of Portsmouth, Ohio, be accepted for the following works:
“Earthwork for 3 miles canal trunk.
“ Sand and pebbles at Lock 36.
“Sand and pebbles at guard lock.
“Dock pit and foundation at Look 36.
‘4 That the bid of Michael H. King, of Des Moines, Iowa, be accepted for—
“Lock pit and foundation at guard lock.
“That bid of Andrew J. Whitney, of Rock Island, Ill., be accepted for—
“Lock pit and foundation of Lock 37.
“Sand and pebbles at Lock 37. .
“The above recommendations are made provided none of the bidders named above appear at Engineer Department on list of failing contractors.
“Very respectfully, your obedient servant,
“W. L. Marshall, “Captain, Corps of Engineers.”
[1st indorsement.]
“EnGR. DEPARTMENT, July ®, 189®.
“Oeeice Chief Engineers, July 6, 189®.
“Respectfully returned to Captain Marshall, Corps of Engineers, who is authorized to accept the bid of Monroe & Richardson for the earthwork for the three miles canal trunk, for sand and pebble at guard lock, and for lock-pit foundation at Lock 36.
“The bid of Michael H. King, of Des Moines, Iowa, for lock pit and foundation at guard lock, and the bid of Andrew J. Whitney, of Rock Island, Ill., for lock pit and foundation of Lock 37 and for sand and pebble at Lock 37, these bidders being the lowest for the several items.
“The Chief of Engineers desires to know what objection exists to awarding the contract for sand and pebbles at Lock 36 to Wilcoxon, Quigley & Moore, of St. Louis, Mo., they being apparently the lowest bidders for that item.
“ By command of Brig. Gen. Casey:
“Thos. Turtle,
“ Capt., Corps of Engineers.”
[2d indorsement.]
“Rec’d Chicago, July 8, 1892.
“II. S. Engineer Opeioe,
“ Chicago, III., July 8,189®.
“ Respectfully returned to the Chief of Engineers U. S. A.
“ Under the terms of the specifications (par. 45) the awards for sand and pebble were to be made, if at all, to the contractors for that part of the canal trunk containing the deposits, delivery of sand and pebble to be considered with the earthwork, and under these terms, Monroe & Richardson, being the lowest bidders for that part of trunk containing deposits, as well as for the lock pit and foundation at Lock 36, it was recommended that their bid for sand and pebble be accepted for Lock 36 and guard lock.
“ W. L. MARSHALL,
“ Captai/n, Corps of Engineers.”
[3d indorsement.]
“Rec’d Engr. Department, July 11,1892. •
“Office of Chief of Engineers, U. S. Army,
“July 12, 1892.
“Respectfully returned to Captain Marshall, Corps of Engineers, who is authorized to accept Monroe & Richardson’s bid for sand and pebbles at Lock No. 36. When such record as may be necessary has been made, this paper will be returned to this office.
“By command of Brig. Gen. Casey:
‘ ‘ Thos. Turtle, •
“ Captcvin, Corps offfiigrs.”
III. On the 20th day of J uly, 1892, Captain Marshall forwarded to claimants the formal contract, annexed to and forming part of the petition, and bonds to be executed within ten days thereafter, all which claimants fully executed and returned to the said engineer on the 28th day of J uly, 1892, which formal contract was duly signed by Captain Marshall. The form of the contract had been prepared by the Chief of Engineers and . forwarded to Captain Marshall for use in such cases. Immediately upon receiving notice of the acceptance of their said bid, claimants began preparation for the commencement of said work. They shipped their plant from Portsmouth, Ohio, to Rock Island, Ill.; rented and furnished a boat and had the same taken to Rock River, in the vicinity of the work, to be used as a boarding house for men emploj^ed on the work; built stables for their teams; hired men and teams; purchased a large amount of plant, consisting of shovels, plows, scrapers; and the like, and generally equipped themselves in a proper manner to expeditiously perform the work, and commenced the work with men and teams about the 1st day of •August, 1892. On the 6th day of August, 1892, without fault on their part and while the work was progressing, claimants were stopped by the United States and their contract abrogated against their consent, and the work that they had con- tr.acted to do readvertised, for the alleged reason that by the act of August 1, 1892, no work could be prosecuted by the United States without a stipulation in the contract binding the contractor not to permit his workmen to labor more than eight hours per day, and the United-States refused to permit claimants to continue the work either under the terms of the contract or under the terms of the law of August 1,1892, but immediately, and against the protest of claimants, readvertised and let the said work to other parties. In the prosecution of said work under said contract, prior to the abrogation thereof on August 6, 1892, claimants expended the sum of $618.21, which has not been paid to them. By reason of the abrogation of said contract claimants lost the following sums expended and were deprived of the following profits which they would have made in the execution of said work:
Expenses incurred. §678.21
Profits if they had been permitted to perform.7,150.00
Mr. S. A. Putnam for the claimants.
Mr. F. W. OolUns (with whom was Mr. Assistant Attorney-General Pradt) for the defendants.

Opinion:
Nott, Ch. J.,
delivered the opinion of the court:
On the 1st of August, 1892, the contracting officer of the United States mailed the contract in suit at Chicago, duly executed by both parties, to the Chief of Engineers in Washington for his approval. It was immediately disapproved, and returned to the officer with instructions to readvertise the work. This was done and the work was subsequently let to other parties. The contractors bring their suit accordingly for their- losses sustained and gains prevented.
Whether the reason for which the Chief of Engineers disapproved the contract was a good and valid one the court has not been called upon to determine. The question involved in the case is, whether the approval of the formal contract by the Chief of Engineers was essential to its validity, or, stated differently, whether in the circumstances of the case he could annul an otherwise valid contract by the mere act of his disapproval.
In Speed's Case (8 Wall., 77) the Supreme Court held, con-, cerning a contract which in terms provided that it should be subject to the approval of the Commissaiy-General, that his approval need not be in writing. This court had found from circumstantial evidence that the contract and the performance of the contractors under it were known to the Commissaiy-General and that he had indicated his approval 'by letter to the contracting officer, and the court had held that the contract had been approved. The decision was affirmed by the Supreme Court for the reason that neither the instrument itself nor any rule of law prescribed the mode in which the approval should be evidenced, and that a jury would have been justified in finding as this court had done. In this case the contract likewise contained a provision that "this contract shall be subject to approval of the Chief of Engineers." But there the resemblance between the two cases ends. In the former case the superior officer impliedly and indirectly, though informally, approved; in this case, without laches or delay, he unequivocally disapproved.
In the somewhat similar case of Darragh (33 C. Cls. R., 377) it was held "that where a contract is in tesms subject to the approval of the Quartermaster-General, approval is a condition precedent to the legal effect of the agreement." The counsel for the claimant Seeks to take this case out of the rule of that decision by reason of certain peculiar facts and circumstances.
These facts and circumstances show that the printed form of the agreement was prepared by and furnished to the contracting officer by the Chief of Engineers, and therefore was within his knowledge and to that extent had his approval; that the contracting officer submitted the contractors' bids to the Chief of Engineers before entering into the contract, and was duly authorized and empowered by the Chief of Engineers to accept the bids and enter into the agreement; that the objection of the Chief of Engineers did not relate to any provision of the contract, but was based simply upon the fact that he himself had not approved it before the 1st of August, 1892, when the act was passed making it penal for a contractor to permit or allow more than eight hours' work in any calendar day. {Act of August 1, 1892, 27 Stat. L., 340.)
As before said, it is not the duty of this court to pass upon the question whether the reason for which the Chief of Engineers disapproved the contract was valid and sufficient. Neither is the court required bjr the circumstances of the case to find whether there was an implied or circumstantial approval of the contract. The action of the Chief of Engineers was certainly prompt and unequivocal. If he had done nothing and had allowed the contractors to proceed with the work, and had approved vouchers for payment as the work progressed, it is probable that the case would be considered as coming within the rule sanctioned by the Supreme Court in Speed's case. But here the written formal contract, the final act of the parties, expressly provided in so many words "that this contract shall be subject to approval of the Chief of Engineers," and it is impossible for the court to hold that those words meant nothing, or that they meant that a prior contract had been approved by the Chief of Engineers. On the contrary, the court must reiterate the decision in Dar-ragh's case and say that where a contract entered into by a subordinate is in terms subject to the approval of his superior, approval is a condition precedent to the validity of the agreement.
In addition to gains prevented, the claimant seeks to recover for certain expenses to which they were put by the action of the defendants' officer's. The contract bears date the 19th July, 1892, It provides in terms that the contractors "shall commence work on or before the 1st day of August, 1892," but it appears by evidence aliunde that the instrument was not mailed to the contractors for signature until the 20th July, 1892; that it was returned for corrections; that it was not finally mailed for signature until the 27th of July, 1892, and that it was not signed by the contractors until some day between the 27th of July and the 1st of August, 1892. On the faith of the agreement executed by the contracting officer, but without his knowledge or direction, the contractors proceeded to make ready for their work and, indeed, performed to some extent, incurring thereby a loss of $678.21. This makes what is commonly called ' ' a hard case. " Nevertheless, if the approval of the Chief of Engineers was a condition precedent to the validity of the contract and the work was done without the knowledge or direction of the officer in charge and no benefit resulted thereby to the defendants, it must be held that the service was voluntary. The contractors acted in good faith, but at their own risk. No man can thrust a contract upon another. There must be agreement or something from which agreement can be inferred — request, acquiescence, knowledge, or the retention of a considei'ation which can be returned. Á contract- can not be implied from the voluntary acts of only one party.
The case has come before the court upon a motion of the defendants which their counsel has likened to a demurrer to the evidence. If it were being tried in another court at nisi jyriius, the defendants might move, in like circumstances, that the claimants be nonsuited, or 'might demur to the evidence, or request the court to direct a verdict for the defendants. Here the claimants have closed their evidence and rested their case. In modern practice the defendants would be entitled in another court to test the sufficiency of the claimants' case in some way without being put to the trouble and expense of' refuting it by evidence. If their motion, or demurrer, or whatever it might be, should be sustained, th^t would be the end of the case; if overruled, they would proceed with their defense. There is no objection to a like practice in this court. It may necessitate two arguments; but that is an objection which would also exist in any other court. Certainly the Government ought not to be put to the expense and trouble of taking evidence where a case can be disposed of on a question of law.
But inasmuch as the claimants may wish to appeal and the evidence can not go up, this court will now find the facts and assess the damages which the claimants have suffered. The findings will then be, to all intents and purposes, a verdict taken subject to the opinion of the court. The claimants, as has been said, have exhausted their testimony, and the counsel for the defendants, in view of this motion, is content therewith. The case is simple, for the reason that there has been no partial performance of the work. If the work had proceeded, as in the ordinary ease of contract, to partial completion, the claimants would be entitled to the two elements of damage which the law recognizes, "losses sustained"'and "gains prevented." {Bulkley's Case, 7 C. Cls. R., 543; affirmed, 19 Wall. R., 37.) But in this case substantially nothing has been done, and it is simply their profits which must be a matter of computation. In the contemplation of all parties who enter into express agreements it is supposed and understood that a reasonable profit shall be made by him who performs. (BulMexj's Base, supra.) It is a matter of judgment what a reasonable profit is, and there have been numerous cases before the court showing that from 10 to 25 per cent is regarded, prospectively, as the range of profits which contractors hope or expect to make. Taking this in connection with the evidence in the case, the court finds the amount which the claimants would have made if they had been permitted to perform and the amount of the expenses which they have incurred upon the faith of the contract which they signed; but upon the law the court holds that judgment must be for the defendants.
The judgment of the court is that the petition be dismissed.