Case Name: JOHN H. STARIN v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1896-01-06
Citations: 31 Ct. Cl. 65
Docket Number: No. 16642
Parties: JOHN H. STARIN v. THE UNITED STATES.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 31
Pages: 65–90

Head Matter:
JOHN H. STARIN v. THE UNITED STATES.
[No. 16642.
Decided January 6, 1896.]
On the Proofs.
In 1884 the Government adopts a new policy of removing passengers' hag-gage from incoming steamers to a public building for examination. The collector of the port, under direction of the Secretary of the Treasury, enters into a contract, running for three years, for the necessary barges and steamboats to transport the baggage. Before the contract expires the defendants terminate it by notice under a provision in the contract.
I.A Government contract for a term of three years is not void though it extends beyond the official tenure of the Secretary who made it.
II.Municipal contracts running for unreasonable lengths of time are void on the ground of public policy. An officer can not bind the corporation so as to deprive it of the right to take advantage of varying circumstances in the future. But the period must be unreasonable and prejudicial.
III.The Secretary of the Treasury has an implied authority to make necessary contracts for the removal and examination of passengers’ baggage arriving in ports of the United States.
YI. The fact that a contract recites that it is to carry out the provisions of a certain act when the act is not broad enough to cover it, will not invalidate it, if the contracting officer has other legal authority to make it.
Y. Where a contract provides that it may be terminated “ upon sixty days’ notice for good and sufficient cause,” the phrase “good and sufficient cause” is not to be limited to a cause good and sufficient in law. The words merely require that the termination of the contract shall not be arbitrary.
VI. A contract to famish, boats and barges and remove passengers’ baggage thereon is not a hiring of the boats, but the undertaking of a service; the contractor has a right to perform other services •with his boats for other parties.
VII. Where a contractor agrees to furnish the necessary boats for transporting' all passengers’ baggage arriving in a certain port, he is entitled to all; if a part be diverted he may recover the profits which he would have made.
The Reporters’ statement of the case:
The following are the facts of this case as found by this court:
I. Under the statute of 1878, chapter 212, the Secretary of the Treasury caused to be erected at the revenue dock in the city of New York a “barge office” for purposes therein mentioned.
II. Subsequently, upon the 23d of May, 1884, the United States, by the collector at the port of New York, who therein acted under the direction of the Secretary of -the Treasury, duly advertised and gave other public notice, inviting proposals for the transfer from vessels in quarantine at the said port to the said Barge Office of the baggage of cabin or saloon passengers arriving in steamships from foreign ports, excepting steamships whose docks were in Jersey City or Hoboken; said transfers necessarily to include the transfer of such passengers as m ight'desire to accompany their baggage.
III. On the 11th of June, 1884, the claimant and others, in accordance with said advertisement, addressed to the collector proposals as aforesaid, which having been submitted to the .Secretary, that made by the claimant was found to be the lowest bid, and was accepted; and upon the 16th of August, 1884, an agreement was entered into between the plaintiff and the United States, being the same set forth in the fifth paragraph (including Exhibit E) of the petition in this case.
IY. Upon the 20th of August, 1884, the collector of customs at New York notified the White Star, German, Ounard, Guión, French, and other leading foreign passenger steamship lines doing business there of the existence of the contract.
Y. The claimant thereupon executed the penal bond in the agreement required, and also provided steamboats sufficient, suitable, and approved by the collector, to carry out the provisions of the said advertisement and contract.
YI. Upon and. after tbe 27tliof August, 1884, until the 10th. day of September, 1885, the claimant caused said steamboats' to meet the passenger steamers aforesaid at ■ the time and places above mentioned, and then and there received, safely stowed, and transferred and delivered at the wharf of the Barge Office and unloaded upon the bulkhead of said wharf all baggage from steamers of the description mentioned in the contract in finding hi, above.
YII. Except as hereafter mentioned, during the period last aforesaid, the United States duly paid the claimant sixty-seven cents per piece for all pieces of baggage other than hand baggage so transferred, and in all other respects performed all parts of the contract by it to be performed.
VIII. Upon the 10th day of July, 1885, the claimant received from the said collector, by direction of the Secretary, a notice in writing as follows:
“Custom-House, New York, “Collector’s Office, July 10,1885.
“Sir: By direction of the honorable Secretary of the Treasury, I hereby notify you that your contract for the transfer of baggage from steamships to the Barge Office will be terminated at the expiration of sixty days from this date.
‘ 4 Yery respectfully,
“E. L. Hedden, Collector.
“Hon. John H. Starin,
“Neio Yorh, Pier 18, Worth River.”
IX. After the 2d and 9th of July, 1885, the Ounard and other steamship lines at New York were notified by the Secretary of the Treasury that they would no longer be required to transfer their passengers and baggage at quarantine, as by such contract provided.
X. After giving such notice and before as well as after expiration of the sixty days and until the time of the expiration of the contract according to its original terms, the United States refused to comply with the said contract in the particulars hereinafter mentioned, and prevented the claimant from performing the same, the latter all the while being ready and willing to do so. In particular—
1. Between August 31 and September 10,1885, the claimant received at quarantine, port of New York, 762 pieces of baggage (other than hand baggage) belonging to cabin and saloon passengers by steamers just arrived from foreign ports and not having their usual places of landing in the State of New Jersey, and thereupon transported such baggage as aforesaid to the Barge Office and delivered the same there. And in that connection he also provided on said steamboats suitable accommodations for the transfer free of expense of all cabin and saloon passengers, and also of their hand baggage arriving on said steamers. Thereupon he duly rendered bills for said service. But the United States refused to pay such bills or any part thereof, and upon that account there is due to the claimant $510.55.
2. Between July 6 and September 10,1885, the United States also refused to deliver to the claimant 15,715 pieces of the same class of baggage as above, although the claimant during all that time was ready duly to receive and transfer the same. By such transfer he would have received a profit of $4,935.81.
3. Between the 10th of September, 1SS5, and the 27th of August, 1887,239,527 pieces of baggage within the terms of the contract arrived at quarantine aforesaid. But the United States refused to deliver the same to the claimant. The profit which the claimant would reasonably have realized in this regard during the period last named would have been $50,081.30.
XI. The net profits on the baggage diverted, as shown in clause 2 in finding x, and the baggage arriving in the port of New York, as shown in clause 3 in finding x, and the unpaid amount in clause 1 of finding X, is the sum of $55,527.72.
XII. Prior to August 27,1884, the customs examination of the baggage of cabin and saloon passengers arriving at the port of New York in steamships from foreign ports was made by the United States customs officers at the respective landing-places of the several steamers. These landing places afforded reasonable accommodation for the examination of such baggage, with due regard for the comfort and convenience of passengers.
XIII. For a long time prior to the year 1867 the United States had occupied as a barge office a building situate on the shore of the East Biver, near the Battery, in the city of New York. This Barge Office was one of the offices of the surveyor of the port and the central office for customs inspectors, who were taken thence in barges to meet incoming vessels. In 1867 the United States bought a piece of land near the old Battery wall, for the purpose of erecting a new Barge Office and other buildings for tbe transaction of tbe public business connected with tbe revenue service and for tbe landing of Government boats and barges.
XIV. Under tbe Act of Jime 15,1878 (20 Stat. L., 133), a triangular strip of land adjoining the said property on tbe west was bought by tbe United States in 1879, and tbe Secretary of tbe Treasury caused to be erected on tbe northwestern part of tbe said property a new Barge Office, completed about January 1,1883, which was thenceforward used in place of the old Barge Office, and for the same purposes. He also caused to be erected on tbe remainder of the said property, including the said triangular strip, and immediately in the rear of the Barge Office, a shed, which was completed about May 23,1884. The Barge Office, the shed, and the dock or basin, with their necessary bulkheads and approaches, occupied the whole of the entire property that had been purchased by the United States as aforesaid.
XY. On August 16,1884, tbe contract, as shown by Exhibit E to tbe petition, was made between tbe claimant (who had for jmars been engaged in the steamboat business and had a controlling interest in a corporation owning a number of steamboats) and the collector of the port of New York. On September 18,1884, the claimant, with four sureties, executed the bond required by the contract.
XYI. The claimant performed the service with steamboats belonging to the corporation aforesaid, and which be had previously used in his business. He understood the clause providing for a termination of tbe contract as entitling him to terminate it at any time on sixty days’ notice, in case be could ñnd a more profitable use for bis steamboats.
XVII. Between August 27,1884, and July 5,1885, tbe collector of the port of New York required all the baggage of cabin and saloon passengers, arriving from foreign ports by vessels not having their usual places of landing in tbe State of New Jersey, to be delivered to the claimant at quarantine, and between those dates the claimant performed tbe services required by tbe contract, for which services he was paid in full. He was also paid for the transportation of 6,681 pieces of baggage from quarantine to the Barge Office shed, carried by him under the contract between July 6,1885, and August 31, 1885.
XYIII. Between July 6,1885, and September 10,1885,15,715 other pieces of cabin and saloon baggage as shown in finding!were brought to the port of New York from foreign ports by-passenger steamers not having their usual places of landing-in the State of New Jersey, but the Secretary of the Treasury and the collector of the port allowed this baggage to be carried by the steamers to their own landing places, where the customs examination took place. The claimant’s profit on these 15,715 pieces would have been $4,935.81. He received $1,625 from the use of his boats from private parties for excursions between the above dates. It does not appear that he could not have carried said baggage and performed the service of the excursions during said time. The service which, he performed in said excursions was not taken from the service which he could have performed for the defendants in carrying- tlie baggage under the contract.
XIX. The Burge Office shed only sufficed to accommodate at one and tlie same time, for the purpose of the examination of baggage, the passengers and baggage of two large steamships with full passenger lists, or in the case of the largest steamships, those of one only. It was impracticable, for lack of space, to allow passengers to be met by their friends in the Barge Office shed, as had previously been allowed at the various landing places, but all friends of passengers were required to remain behind an iron railing near the door of exit.
XX. Between August 27,1884, when the claimant’s contract went into operation, and the close of October, 1884, the Barge Office shed proved on certain occasions too small for the amount of work required to be done there. This occurred from the simultaneous arrival of two or more large steamships filled with passengers. The shed then became overcrowded^ to the delay and discomfort of the passengers and to the hindrance of the customs examination. Sometimes more passengers and baggage arrived simultaneously than could be received into the Barge. Office shed at one time, so that the passengers from one steamer would be kept from landing until the baggage from other steamers, arriving before them, had been examined and removed and the passengers dismissed. This arrival of more passengers and baggage than could be conveniently received into the shed at one time was practically certain to occur from time to time in every year during the season of the greatest westward bound travel, i. e., August, September, and October; and as tlie average volume of travel increases from year to year, the accommodations of tbe Barge Office sbed were certain to become relatively smaller each year.
It was not practicable to relieve the strain of a sudden influx of passengers by requiring those who could not be conveniently received at the Barge Office shed to be taken to the steamers’ wharves, because those wharves, being no longer used for the reception of cabin passengers and the examination of their baggage, could not have been prepared for their reception without even greater delay than occurred at the Barge Office shed. The shed was a very hot place in warm weather, and correspondingly cold in cold weather.
XXI. Owing to the decks of steamships being much higher above the water than those of the steamboats used by the claimant under his contract, the transfer of passengers was inconvenient, especially when the water was rough or the weather (to which the passengers were necessarily exposed in crossing from one deck to the other) bad. For similar reasons the transfer of baggage was somewhat difficult, and baggage was sometimes — not often — -injured by falling on the steamboat’s deck or lost by falling into the wate'-. Owing to the fact that the steamship wharves were built with special reference to the landing of passengers and baggage from the steamships, such landing was, as a rule, effected with some greater speed, comfort, and safety than was possible in making the transfer to the claimant’s steamboats at quarantine. This grew out of the fact of the difference between a wharf and a boat. The transfer was sometimes delayed (about three times), from the fact that the claimant’s boats were not invariably on hand at the arrival of steamships at quarantine.
XXII. When there were many passengers, or the weather was disagreeable, the trip from quarantine to the city of New York was less comfortable on the claimant’s steamboats than on the steamships. The strength of the currents, owing to the position of the Barge Office property at the extreme southern point of Manhattan Island, sometimes prevented the claimant’s steamboats from making the landing without having to draw off and repeat the approach. Only two of these steamboats could lie alongside of ’the landing place at. one time, so that sometimes passengers and baggage had to cross over an niter-; veiling steamboat in order to reach the landing place. If, as sometimes happened, baggage was overlooked at quarantine, delay would result from the necessity of bringing- such baggage to the Barge Office shed from the steamship wharf. The landing places of the leading steamship companies were much nearer the railroad stations and ferries, the principal hotels, and the residence parts of the city.
XXIII. O wing to the discomfort and delay at times involved by the transfer of passengers and baggage from the steamships at quarantine to the Barge Office shed, and by the examination of baggage at the shed itself, especially when overcrowded, the Barge Office system became a serious source of complaint among transatlantic passengers.
XXIY. Owing to the limited space at the Barge Office shed, it would have been inconvenient to have required the baggage from the steamships which landed at Jersey City and Hoboken to be examined at the shed, and as the system of requiring baggage to be examined there was objected to by many passengers, some of those companies who were under that system were placed at a disadvantage in conducting their cabin-passenger business as compared with the companies landing at Jersey City and Hoboken.
XXY. The system of examining passengers’ baggage at the Barge Office shed did not result in any increase in the amount of duties collected by the United States over the amounts previously collected at the several landing places, but it increased the expenses of collection by the amounts required for the claimant’s services on his contract (averaging about $7,300 a month), the employment of men to handle the baggage at the shed, and its maintenance for this particular purpose.
It does not appear that the system was of any advantage to the traveling public to an extent that would at all offset the delays and discomforts which the system at times necessarily involved.
XXYI. Prior to July 2,1885, the Secretary of the Treasury was informed by the Chamber of Commerce of the State of New York, by the agents of theOunard and French steamship lines, and by a supervising agent of the Treasury Department, of the delays, discomforts, and risks necessarily- involved in the system requiring the transportation of passengers and baggage from quarantine to the Barge Office shed, and the examination of baggage at the latter place, as well as of the objection of passengers to that system, and tbe consequent injury to the business of some of the companies who are under that system. The said Chamber of Commerce adopted and transmitted to the Secretary of the Treasury the report of an investigating committee of its body, “unhesitatingly recommending an immediate return to the former practice of landing at the steamers’ docks,” the supervising agent’s report contained a similar recommendation, and the agents of the Cunard and French lines requested to be in any event exempted from subjection to the Barge Office system.
XXVII. On July 2, 1885, the Secretary of the Treasury authorized the Cunard and French lines to land their cabin passengers and baggage attheir own wharves, where the examination of baggage has since been made, and about the same time similar permission was given to such other steamship companies as desired it. Since September 10,1885, all baggage of cabin passengers arriving at the port of New York from foreign ports has been examined at the landing places of the several steamship companies, and the Barge Office shed has been used for other purposes.
Mr. 8. F. Phillips and ilír. F. D. McKenney for the claimant:
We submit that the clause “ for good and sufficient cause,” can not be eliminated from this discussion. The United States did not reserve to itself an arbitrary power to terminate the contract, but in that respect placed itself upon the samo footing with the contractor — “either party” might terminate the contract “for good and sufficient cause.” There are of course cases in which (ex. gr., contracts for carrying the mail) the United States for good reason may and do require contractors to place themselves very much in hands of officers who represent it. (24 O. Cls. B., Cl; ibid, 148; 97 U. S., 398.) •
In the present case, we are under no need to discuss the kind, or degree, of cause which would satisfy the condition in question. No material facts supervened differing from those in existence when the contract was made. This is apparently a case of mere “ sic voluitan open nullification of a clause which the Secretary who made the contract had inserted as something material in favor of the contractor.
In passing upon the rights and obligations of the Government as j)arty to a contract with a private citizen, it is a maxim tbat tbe former is to be put upon the same footing as the'latter, as being merely a“ moral agent” and “ individual.” This court has had occasion very recently to recognize and restate this principle. (Southern Pacific B. B. Go. v. United States, 28 C. Gis. R., 77-103; and see Smoot’s Case, 15 Wall., 30, 46.)
In Speed’s Case (8 Wall., 77, 79, and 2 C. Gis. R., 437), the great and unlooked for rise in the price of hogs might have beeu a good reason for suspending purchases by the Government, but it was not one for an abandonment of its previous contract to furnish hogs for slaughtering within a certain time. Notwithstanding the manifest public interest in suspending the purchases, Government remained liable for the profits which Speed would have made'in ease the wasteful purchasing had gone on.
And so in Behan’s Case (111 U. S., 338), the circumstance that during the progress of the work, the plan turned out to be a failure without any fault of the claimant, left the Government, notwithstanding, responsible for damages upon an abandonment of the work (p. 339, bot.); and the court said that these damages might have included direct' profits if the evidence had shown that any such would have been realized from the further execution of the contract (p. 344). Therefore, unless there were some special provision which justified it, the United States had no power to put an end to the contract wfith Starin, even admitting that it had power to change the methods of landing baggage at the Barge Office. In the absence of such special provision, its termination'of the contract rendered it liable for damages just as if it had been a private person. In the meantime the contract contains no such provision.
The only expression which can be supposed to be such is that set out in finding in, viz: “That this contract may be terminated by either party hereto upon sixty days’ notice for good and sufficient cause.”
The genesis of that expression in the present case appears to have been as follows:
In giving instructions to the collector at New York for drawing the contract, the Secretary of the Treasury had said, amongst other things, “It is to be understood that the contract is to be terminable at the pleasure of either party.”
Afterwards, acknowledging the receipt of a form for the contract with Starin, the Secretary informed the collector that he- bad decided “to require the contractor to incur the liability of a common carrier, and the expression in the contract as drawn giving' the right to either party to terminate the contract after sixty days’ notice has been qualified by the addition of the words ‘for good and sufficient cause,’ as I think the contractor is entitled to that condition.”
The phrase “for good and sufficient cause,” therefore, was deliberately suggested by the Government as a provision thought by it to be fair for Starin, and perhaps also as practically a counterweight to the “common-carrier” clause inserted in the same connection. The phrase itself means cause good and sufficient in law for relieving either party from the contract; the third party, the traveling public, being at the same time protected from the inconvenience of a sudden termination by the sixty days’ notice. The .phrase is familiar in matters of business. A “ good and sufficient deed” is one competent to convey the grantor’s title. Gazley v. Price, 1C Johns., 266. Wilcox v. Pwing, 141 U. S., 627.
It may or may not have been good public policy to put an end to the Barge-Office arrangement. We have no reason in the present connection to question that it was; but the rights of contractors with the Government are not held subject to the winds of public policy, nor does a special clause which, as here, gives to “either party” a right to terminate a contract upon notice “for good and sufficient cause” include therein requirements of current public policy. The “cause” so provided for is, as already said, one within the verge of the laws of private business only, such as, vice versa, “either” party might complain of, and not affairs of Government, or accidents in the relations of the latter with third persons, such as steamship lines, immigrants, travelers, etc.
Mr. Charles G. Binney (with whom was Mr. Assi&tcmt Attorney- General Podge) for the defendants :
(1) The Secretary of the Treasury had no authority to bind the United States by the contract upon which the present claim is founded.
It is familiar and well-settled doctrine that the Government, whether National, State, or local, can only be bound by the acts and contracts of its officers or agents when they have acted within the scope of their authority as conferred and1 limited bylaw (Mechem on Public Officers, §§ 828-834; Public Officers, 19 A. & E. Encyc. of Law, 510); and further, that such authority is strictly construed (The Floyd Acceptances, 7 Wall., 666; Stansbury v. United, States, 8 id., 33; Chase v. United States, 155 IT. S., 489), the fact that the same or a similar act might have been within the scope of the authority, if created by a private individual, being far from conclusive. ('Whiteside v. United States, 93 U. S., 247; Mayor of Baltimore v. Bselibach, 18 Md., 276, 282; Same v. Reynolds, 20 id., 1, 11.) Moreover, as to contracts with the United States, it is expressly enacted that—
“No contract or purchase on behalf of the United States shall be made, unless the same is authorized bylaw or is under an appropriation adequate to its fulfillment, except in the War and Navy Departments, for clothing, subsistence, forage, fuel, quarters, or transportation, which, however, shall not exceed the necessities of the current year.” (Rev. Stats., § 3732.)
In the present case, no specific appropriation was made for the transportation contracted for, nor for any purpose which would include such transportation, or as to which it might proj)erIy be implied that it was intended to include it. The permanent appropriation “for the exjmnses of collecting" the revenue from customs” (Rev. Stat., § 3687) could properly be applied to pay for such transportation if the contract were itself authorized, but no authority to make the contract can be gathered from the mere existence of such an appropriation.
The contract of August 16, 1884, between the claimant and the collector of the port of New York, is expressly declared to have been made “to carry out the-provisions of the act of Congress dated June 15, 1878, making appropriations for the building of a barge office, Mor the examination of passengers’ baggage.’” The first thing to be noticed is that the contract misrecites the act (20 Stat., 133), which did not provide for a barge office for the examination of passengers’ baggage, but authorized and directed the Secretary of the Treasury “to cause to be erected a barge office at the revenue dock, in the city of New York, with suitable sheds for the accommodation of passengers arriving by European steamers, and in which [i. e., in which sheds] to examine the baggage of such passengers.” What is more important, however, is that the act did not authorize, even by implicatiou, the making of such a contract as this.
The Secretary of the Treasury is required “to superintend the collection of the revenue,” and to prescribe “rules and regulations, not inconsistent with law, to be used * * * in
carrying out the provisions of law relating to raising revenue from imports, or to duties on imports,” and a large permanent appropriation is at his disposal “ for the expenses of collecting the revenue from customs.” (Revised Statutes, §§ 248, 251, 3687.) Congress having provided Mm with a shed for the reception of passengers and the examination of their baggage, so that import duties might be collected thereon, his general authority extended to the superintendence of such examination in the shed, the prescribing of rules and regulations in regard to the use of the slmd for that purpose, and to the payment of all expenses required by such superintendence and the carrying out of such rules and regulations.
It follows from the above that the contract of August 16, 1884, though declared to be made to carry out the provisions of the act of June 15, 1878, was not authorized by that act, and further, that unless it was within the general authority of the Secretary, as conferred by the statutes already cited, it was unauthorized and void.
In the recent case of Chase v. United States (155 U. S., 489, 502) it was held that, even before the passage of the law forbidding contracts for the future payment of money in excess of appropriations for the fiscal year in which the contract was made, the general authority “to establish post-offices” did not of itself imply authority to bind the United States by a contract to lease or purchase a post-office building, and that, in the absence of any statute giving such authority, either expressly or by implication, the lease of the post-office at Lafayette, Ind., was void.
(2) The Secretary of the Treasury had no authority to bind the United States by a contract running for a longer time than was required by the needs of the public service and the character of the work to be done under the contract.
It can not be seriously contended that the words in regard to the purpose of the sheds were meant to so control the Secretary’s action as to require him to have the examination of baggage held there. The words “ for the accommodation of passengers,” and “ in which to examine the baggage,” can not be understood as equivalent to “in which, and nowhere else, passengers sliall be accommodated and their baggage examined,” without putting into the sentence mandatory words which Congress never employed. Except when the rights of third parties are affected, statutory provisions in regard to official action are to be regarded as directory unless the language is clearly mandatory. (Endlich on Interpretation of Statutes, §§ 436, 437; Sedgwick on Statutory Construction, 2d ed., 316, note.) In the present case, it can not be imagined for a moment that Congress intended that after the Barge Office shed was finished no valid examination of passengers’ baggage could be held elsewhere in the port of New York, or that unless it were held in that shed a passenger whose baggage had been examined and passed could be charged with having imported merchandise in violation of the requirements of law. Moreover, where a public officer has, by statute, a very wide discretion, as is certainly the case with the Secretary of the Treasury in regard to the collection of the revenue, this discretion can only be taken from him by express words. Now, the act of 1878 contains no such express words, nor is there anything in the main object of the act — which is to provide for the erection of certain public buildings — to require that the Secretary’s discretion should be limited in any way whatever. Any supposition that Congress purposed, in this indirect way, to prescribe where baggage should be examined, is negatived by-the facts, first, that the law regulating the importation of passengers’ baggage (Bev. Stats., §§ 2799-2801) does not require it to be examined at all, but simply authorizes its examination in case the collector and naval officer deem it expedient, and secondly, that the structure authorized to be built was necessarily inadequate for the purpose. The words “passengers arriving by European steamers” can not be restricted to cabin and saloon passengers, but include steerage passengers also.
The doctrine which has been repeatedly applied to the engagements undertaken by a State for the public good, viz, that they may “be varied or discontinued, as the public shall require” (Butler v. Pennsylvania, 10 How., 403, 416), is clearly applicable to the present case.
The Secretary of the Treasury authorized the making of a contract to effectuate a certain public purpose. If, while that contract' was in operation, the object sought to be thereby accomplisbed turned out to be useless or detrimental, so that tbe public good required its abandonment, tben tbe continuance of tbe contract would bave involved “a reward for acts neither desired nor performed,” a thing wbicb tbe Supreme Court has stated to be “ reconcilable with neither justice nor common sense.” Tbe same doctrine is seen in Newton v. Commissioners (100 U. S., 548), wbicb sustained tbe right of a State legislature to change a county seat which a prior act bad provided should be considered as permanently established at a certain town provided tbe citizens should do certain things, wbicb it was admitted bad been done; also, in Stone v. Mississippi (101 IT. S., 814), bolding that tbe charter of a lottery company'could not be irrevocable.
(3) The contract was terminable by either party, on sixty days’ notice, for any “good and sufficient cause,” among wbicb class of causes tbe uselessness to tbe Government of tbe further performance of any services under tbe contract must of course be reckoned.
Tbe contract was expressly drawn so that it could be terminated by either party on sixty days’ notice “for good and sufficient cause.” What did those words, “good and sufficient cause,” mean? It was held in Cummer v. Butts (40 Mich., 322) that a provision for tbe cancellation of a contract “for good cause” was too indefinite to amount to more than a requirement of good faith, a prohibition of wrong or trickery.
In Whieher v. Benton (50 N. H., 25) tbe words “for good cause shown,” when used in a statute defining a court’s power to limit and allow costs, were held to mean that tbe court bad power “to limit and allow such costs as they may deem just and reasonable,” a decision wbicb was equivalent to bolding that “good cause” was any cause wbicb a court would regard as good.
Gazley v. Price was overruled years ago, and it is settled law that a “good and sufficient deed” meant a deed conveying a “good title,” a title good not only as against tbe grantor himself, but as against everyone else. (Bunvell v. Jackson, 9 N. Y., 535, 545; see also Pomeroy v. Drury, 14 Barb., N. Y., 418, 424; liawle on Covenants for Title, 5th ed., § 32.)

Opinion:
WeldoN, J.,
delivered tbe opinion of tbe court:
Oil tbe 6th day of August, 1884, tbe claimant and tbe collector of customs of tbe port of New York, who acted on behalf of the defendants, made a contract, in substance, as follows:
"First. That said party of the first part (claimant) agrees to provide suitable barges, steamboats, or other vessels, according to the condition of the weather and subject to the approval of the collector of the port, to meet, between sunrise and sunset every day, each and every passenger steamer from a foreign port upon her arrival at quarantine, save and except such steamers as have their usual places of landing in the State of New Jersey.
" Second. And to receive from every such passenger steamer all baggage belonging to the cabin and saloon passengers, furnishing the labor to receive and properly and safely stow such baggage on said barges,-steamboats, or other vessels, when delivered to him from said steamer, on board the vessels of the party of the first part, said delivery to be made by the employees of the steamship companies.
"Third. And to transport such baggage from each and every such before-mentioned passenger steamer (except those having landing places in New Jersey as aforesaid) by such barges, steamboats, or vessels, to the wharf .of the new Barge Office at the foot of Whitehall street in the city of New York and there to unload such baggage upon the bulkhead of said wharf.
"In consideration whereof the party of the second part (defendants) agrees to pay the party of the first part, the sum of sixty-seven cents for each piece or package of the before-mentioned baggage, except such pieces as are commonly known as-hand baggage.
"And it is agreed by the parties hereto that this contract shall commence and take effect from the twenty-seventh day of August, in the year one thousand eight hundred and eighty-four, and shall terminate on the twenty-seventh day of August, in the year eighteen hundred and eighty-seven.
"And it is further expressly agreed that this contract may be terminated by either party hereto upon sixty days7 notice for good and sufficient cause."
On the 27th day of August, 1884, as provided in the agreement, the claimant entered upon the discharge of his duties, and continued to perform such duties until the suspension or annulment of the contract as hereinafter stated.
On July 10,1885, the collector of the port of New York, by direction of the Secretary of the Treasury, notified the claimant in writing, that at the expiration of sixty days from said date the contract "for the transfer of baggage from steamships will be terminated." The sixty days' notice ended on the 8th day of September, 1885.
This suit was brought to recover damages as profits for the termination of the contract, upon the theory that such termination was without authority of laAv and in violation of the contractual rights of the claimant.
It is alleged that from the 10th of September, 1885, to the end of the time of the agreement, there arrived at quarantine at the port of New York passengers having 246,263 pieces of baggage coming within the description of such baggage as claimant had the right to carry under the contract, and that upon the performance of the contract as to such baggage he would have made a large profit.
The claimant also alleges as a cause of action, that between July 6,1885, and September 10,1885, there arrived at said port 16,063 pieces of baggage which he was entitled to carry under the contract, and upon which he would have made a large profit.
As another and distinct cause of action, the claimant alleges that between the 31st of August, 1885, and September 10,1885, there arrived at said port 786 pieces of baggage coming within the description of the contract, which were carried by him in pursuance to his obligation, but for which he has not been paid by the defendants.
Because of the termination of said contract and the unpaid amount, the claimant alleges he has suffered damages to the amount of $123,382.87, and for the recovery of that sum he brings this suit.
The plaintiff at the time he executed the agreement was one of the steamboat owners of the city of New York, had ample facility to perform the obligation of the contract; and the findings show that he performed and was ready to perform whatever was required of him by the defendants in pursuance of the agreement. It does not appear that the claimant made a formal protest against the cancellation of the contract; but he did not acquiesce, and was ready and willing to proceed in the execution of the agreement for the full term of three years as provided in the contract. There was no claim on the part of the defendants that the plaintiff had failed to perform his obligation, and in the cancellation of the contract they simply claimed to have exercised the power given them under that clause of the agreeement which provides: "This contract may be terminated by either party hereto upon sixty days' notice for good and sufficient cause."
The findings show that 7C2 pieces of baggage (other than hand) was carried by claimant for which he has not been paid; that from July C to September 10,1885, the United States refused to deliver to claimant for carriage 15,715 pieces of baggage, which during that time had been received at the port of New Tork; and between the 10th of September, 1885, and the 27th of August, 1887, there arrived at said port 239,527 pieces of baggage coming within the description of the contract.
It is further shown by the findings that the damage in the way of profits to said claimant on the baggage not delivered and compensation for baggage delivered and carried for which he has not been paid amount to the sum of $55,527.
It is insisted by the counsel for claimant that the provision in the contract as to the right of termination simply "means cause good and sufficient in law for relieving either party from the contract," and that it is limited even under the construction contended for by defendants to causes "that should arise after the contract was made."
As a defense, it is insisted by counsel for the Government that under that provision of the contract it was within the power of the defendants to terminate the continuance of the agreement for any cause which in good faith the officer in charge of the execution of the agreement deemed sufficient, and that in this instance the Secretary was actuated by the highest and best motives of public policy. That the system established by the contract was an experiment which was not successful, and for that reason the Secretary had full power upon notice to discharge the Government from future obligation after the expiration of sixty days. It is also insisted that the Secretary had no authority to bind the United States by the contract upon which the present claim is founded; and if not void for want of power in the collector to make a contract as to the subject, then, that the collector had no authority to bind the United States by a contract running for a longer time than was required by the needs of the public service and the character of the work to be done.
Taking the defenses of the Government in the inverse order stated, and addressing the question of the right of the Secretary to make the contract as to the full length of time covered by its contemplated performance, it is true that decisions of courts have held upon the question of the power of a municipal corporation to make time contracts, that as to many subject-matters, contracts covering unreasonable lengths of time are void on the ground of public policy. As has - been said, it is insisted by the counsel for the defendants that in the making of the contract for the space of three years the collector exceeded his authority (even if he had a right to make an agreement as to the subject-matter) and that there can be no recovery beyond perhaps what was actually earned by performance. To support this theory the counsel relies on the case of Stone v. Mississippi (101 U. S., 814):
" The power of governing is a trust committed by the people to the Government, no part of which can be granted away. The people, in their sovereign capacity, have established their agencies for the preservation of the public health and the public morals, and the protection of public and private rights. These several agencies can govern, according to the scope of their discretion, if within the scope of their general authority while in power, but they can not give away nor sell the discretion of those that are to come after them in respect to matters the government of which, from the very nature of things, must ' vary with varying circumstances.' "
We do not regard the agreement in this proceeding open to the objection recognized in the Stone Case. It is true that the three years for which the contract was to run went beyond the probable limitation of the official tenure of the then Secretary, but that is not in itself sufficientj the contract must be void upon grounds of public policy in attempting to bind a municipal corporation to the exclusion of the right of succeeding officers to deal with the affairs of the public, and the deprivation of the right on the part of a corporation to take advantage of the varying circumstances and situations of the public good.
Considering the purpose for which the contract was made, the preparation and capital necessary to its performance, and the service to be performed, unvarying in its character, the objection that it was void upon the ground that it was let for a longer time than was required by the needs of the public is not well taken.
If the Secretary had the power to make the contract as to the subject-matter, the term of three years was not an unrea sonable and illegal exercise of tlie power. It was not against public policy that tlie Government and tlie successors of the collector and Secretary should be bound by the terms of the agreement. If the contract had been made for an unreasonable period of time, impairing'the discretion and power of succeeding collectors and Secretaries and binding the rights of the defendant through the varying conditions and circumstances of such period, a very different question might arise as to the rights of the parties.
It is also contended by counsel for the defendants that the Secretary had no power to make the contract as to the subject-matter, and that therefore no recovery can be had in this proceeding based as it is upon the alleged legality of the agreement. Tlie contract purports to be made to carry out the provisions of the Act June 18, 1878 (20 Stat. L., 133), making appropriations for the building of a barge office for the examination of passengers' baggage. The statute is as follows:
11 That the Secretary of the Treasury be, and he is hereby, authorized and directed to cause to be erected a barge office at the revenue dock, in the city of New York, with suitable sheds for the accommodation of passengers arriving by European steamers, in which to examine the baggage of such passengers, and for this purpose and for the extension of the sea wall on the present Barge Office site the sum of two hundred and ten thousand dollars is hereby appropriated out of auy money in the Treasury not otherwise appropriated."
This act, as its title expresses, is an act for the construction of a public building, and does not in terms provide for the making of a contract such as is shown by the terms of the agreement on which this suit is based. The appropriation is limited to the sum of two hundred and ten thousand dollars which would have been more than exhausted by the compensation to be paid the claimant. The act does contemplate the bringing of baggage to the Barge Office, and to that extent the contract is germane to the purposes and object of the statute of 1878. But the fact that the agreement recites that it is to carry out the provisions of an act of Congress, and that such an act may not be broad enough to cover it, will not invalidate it as a binding contract, if under any law, by express provision or necessary implication, or regulation made in pursuance of law, the collector by the authority of Secretary had a right to make such an agreement. " When a State descends from the plane of its sovereignty and contracts with private persons, it is regarded pro hac vice as a private person itself and is bound accordingly." (Hall v. Wisconsin, 103 U. S., 5; Davis v. Gray, 16 Wall., 203.)
It is tlie duty of tlie Secretary of the Treasury to collect through his multiplied agencies the revenue due the United States from custom duties, and the performance of that task is perhaps the most extensive and responsible duty assigned to any officer in the executive department of the Government. Section 3687, Revised Statutes, is as follows:
"There is appropriated, out of any money in the Treasury not otherwise appropriated, the sum of two million seven hundred and fifty thousand dollars, for the expenses of collecting the revenue from customs for each half year, in addition to such sums as may be received from fines, penalties, and forfeitures connected with the customs, and from fees paid into the Treasury by customs officers, and from storage, cartage, drayage, labor, and services."
For the purpose of discharging the duty of the Secretary in the collection of customs a very elaborate system of regulations has been adopted, changed and modified from time to time, as the public service required. In the regulations of 1884 it is provided as follows:
"Art. 684. Public cartage of merchandise in the custody of the Government shall be let, after not less than thirty days' notice, to the lowest responsible bidder giving sufficient security, subject to the approval of the Secretary of the Treasury. (18 Stat., 186, sec. 25.)
"Art. 685. All goods in bond, whether passing from the vessel or other conveyance in which imported to the warehouse, or from one vessel or conveyance to another, or from the warehouse on permits for exportation; all unclaimed goods, and all goods ordered to the appraiser's stores for examination, and goods exported under the internal-revenue laws without payment of tax, will be carted, drayed, or lightered by responsible cartmen, draymen, or lightermen, under contract, or appointed by the collector, who shall require from each appointee a satisfactory bond, with approved sureties, conditioned for the faithful performance of the business assigned 1o such appointee, and who, while performing duty, will be known as customhouse cartmen, draymen, or lightermen, and, as such, held to a strict compliance with the warehouse regulations.
"They shall be under the control and direction of the inspector of the vessel, or storekeeper of the store, as the case may be, from which the goods are sent, and subject, while so employed, to the orders of the collector."
Section 3087 appropriated the sum of two million seven hundred and fifty thousand dollars semiannually for the "expenses of collecting the revenue from customs;" and the act of 1878 provided for the establishment and erection of a "barge office" in which to examine the baggage of passengers for the purpose of preventing frauds upon the Treasury. The contract was made in order that the defendants might more efficiently examine the baggage of passengers at the Barge Office, and at the same time facilitate the landing of passengers by avoiding the interruptions and delays incident to the former mode. Prior to August 27,1884, the customs examination of the baggage of cabin passengers arriving at the port of New York in steam ships from foreign ports was made by the United States customs officers at the respective landing places of the several steamers. The transportation' of baggage from the landing to (he Barge Office for examination was a change of policy, and to some extent an experiment on the part of the revenue officers, to accomplish more efficiently the prevention of frauds, the consequent collection of revenue, and for the further purpose of facilitating the landing of passengers.
It will be seen by reference to the Treasury regulations of 1884, that provision is made for cartage, drayage, and light-erage of certain goods, and while the baggage of a passenger does not come technically within the classes enumerated in the regulations, it is legally analogous to property transported while in the possession of the Government. The charge of 67 cents agreed to be paid by the United States to the claimant could not be imposed upon the passenger or the steamship company, and had to be paid by the defendants in order to carry out their policy of examining baggage at the Barge Office. The court holds, therefore, that it was within the j»ower of the collector by the authority of the Secretary to make the contract in controversy as to its subject-matter, and the only remaining question is, What are the rights of the parties under the agreement?
The serious question, in the opinion of the court, arises on that provision of the contract giving to either party a right to terminate the contract for "good and sufficient cause" upon giving sixty days' notice. It is insisted in the able brief filed by the claimant's counsel and also in oral argument, that " good and sufficient cause for the termination of a contract about a matter of business means cause good and sufficient in law." The logical effect of that position is, that without a substantial failure to perform the agreement upon the part of one party, the other party would have no right to terminate the contract.
The contract was terminated by the notice of the defendants on the 9th of September, 1885, it having become operative from the 27th of August, 1884. It was terminated by the defendants for the reason that the plan of examining the baggage of passengers at the Barge Office was a failure, that it was expensive to the Government, inconvenient to the public, and did not tend to increase the efficiency of the service in the collection of duties. There- is no finding tending to show that the officers of the defendants in terminating the contract acted capriciously, or in bad faith, but, on the contrary, the findings show that they acted in good faith, and upon grounds of the highest public policy.
The plan contemplated by the agreement was to a large extent an experiment, and when it was found from an experience of about a year that it was objectionable it was determined by the Secretary of the Treasury to terminate its operation by giving the sixty' days' notice. Both parties understood the agreement as it was construed by the defendants in their election to terminate the agreement. The fact that the contract specifies a fixed period for the notice of termination, and that, too, a substantial period, is an indication that the parties regarded the right to terminate as an important part of the agreement. The right to terminate the contract upon sixty days' notice unaffected by the terms "for good and. sufficient cause" would be an undisputed power, and can the effect "for good and sufficient cause" be such as to limit the right to terminate the contract, to what may be denominated legal causes, such as a failure to perform, or any other defection on the part of either party? The right to cancel the contract for those causes is by the law presumed to exist upon the side of both parties, and needs no formal recognition by the terms of the agreement. Can it be said that the sixty days' limitation refers to a condition dependent upon legal causes? If so, the contract would not terminate until sixty days after the notice was given, notwithstanding there may have been during the whole period a refusal to perform some of the most substantial requirements o-f the agreement.
What did the parties mean by " good and sufficient cause," because that is the inquiry which the court makes in the interpretation of the agreement. Chitty says, 'The object of the maxims which govern the exposition of contracts is to discover and give effect to the intention of the parties, so that the contract may be enforced according to the sense in which they mutually understood it at the time it was made." (Chittv on Contracts, vol. 1, p. 104.)
The phrase "for good and sufficient cause" must be kept in the agreement, and it must be made to perform the function which was intended for it by the parties. Court may construe, but they can not eliminate substance, when it can be reconciled with other parts of the agreement and can be made useful in developing the thought and purpose of the parties. It seems that both parties thought and acted upon the theory that the right to terminate existed as it is now claimed by the defendants. In this connection, we may again refer to Chitty, "And where the intention of the parties to a contract is sufficiently apparent, effect must be given to it in that sense, though some violence be thereby done to its words; for greater regard is to be had to the clear intent of the parties than to any particular words which they may have used in the expression of their intent." (Chitty on Contracts, vol. 1, p. 105.)
It is not necessary, as insisted by defendants, to go to the extent of holding that the words "good and sufficient cause" are ineffective. We hold that .in this case thej'' are effective to the extent that they circumscribe the power of the defendants to the limits of good faith, and change the power of cancellation from an arbitrary and absolute power to a power regulated by good faith on the part of the party exercising it.
The findings show most serious complaint by the public, shipowners, and by the Chamber of Commerce of the city of New York against the continuance of the system of examination made by the contract, and to avoid the inconvenience of it, and objection to it, the collector, under the direction of the Secretary, terminated the contract. The findings also show that the defendants acted in good faith, upon grounds reasonable and substantial, and which would induce a faithful public officer to do what was done, and therefore within the right of the defendants to terminate the contract for "good and sufficient cause."
This view of the law disposes of the liability of the defend ants as to the time for wbicb tbe contract was to run after tbe end of tbe sixty days.
For tbe baggage carried, there is due tbe claimant tbe sum of $510.55, and profit on baggage not carried (but wbicb was diverted by tbe defendants) during tbe sixty days covered by the notice tbe sum of $4,935.81, making tbe sum of $5,446.36. This amount is not contested (in case tbe contract is binding) subject to a deduction of $1,625 wbicb was made by claimant with bis boats during tbe time wbicb be might have carried tbe packages. It does not appear that tbe claimant could not have earned tbe $1,625, if tbe baggage bad been furnished, or that tbe defendants were deprived of tbe services of tbe claimant to that extent from services due from him under the agreement.
Tbe contract is not a hiring of a specific boat or number of boats, but an agreement on tbe part of tbe plaintiff to furnish a sufficient number of barges, steamboats, and other vessels to perform a certain service, and if that service was performed, tbe plaintiff had a right to perform any other services with bis barges and steamboats not incompatible with liis duty to tbe defendants. Tbe service for wbicb be received tbe sum of $1,625, was not taken from what be owed tbe Government, and was not tbe result of labor on tbe part of boats tbe whole time of wbicb was due tbe defendants.
Tbe right of tbe claimant to recover- damages as profits is well established by tbe decision of this court affirmed by tbe Supreme Court.
In tbe case of Speed (2 C. Cls. R., 429) it is said:
"Tbe measure of damages for tbe refusal to furnish for tbe slaughtering tbe whole number of bogs stipulated by tbe contract is tbe clear net profits tbe contractor would have made if tbe whole number bad been delivered according to tbe contract."
In affirmation of tbe judgment of this court, tbe Supreme Court said:
"Tbe measure of damages is tbe difference between tbe cost of doing the work and the price agreed to be paid for it, making reasonable deduction for the less time engaged and release from tbe care, trouble, risk, and responsibility attending its full execution." (8 Wall., 77.)
In the case of Behan (18 C. Cls. R., 687) this court held, in substance, that prospective profits, if proven, was an element of damages wbicb might be recovered, and the Supreme Court in affirmance of tbe j udgment said, in substance, that profits might be recovered when they were the direct fruit of the contract and not too remote and speculative. (U. S. v. Behan, 110 U. S., 339.) These decisions indicate the uniform current of the law.
The judgment of the court is that the claimant recover the sum of $5,446.36.