Court Opinion

ID: 6839477
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:13:40.72416+00
Date Added: 2024-06-11T16:04:48.320688
License: Public Domain

DIETRICH, Circuit Judge
(dissenting). I dissent in respect of the conclusion reached by the majority on the first eause of action.
Of date February 23, 1922, the purchasing department of the Panama Canal, by direction of the Secretary of War, issued a circular letter inviting proposals for the purchase of a large amount of material, specifically inventoried and designated therein as “surplus iron and steel.” Attached to the inventory was a sheet entitled “General Conditions,” containing numerous paragraphs.
Responding to the invitation, appellants submitted a proposal to purchase certain of the material, which in due course was accepted, with the approval of the Secretary of War. Accordingly on May 16, 1922, a formal written contract, prepared by the department, in harmony with the advertisement and offer to purchase, was executed. After reciting the facts already stated, the contract set forth that the appellants, referred to as the contractor, agreed to purchase and accept delivery, f. a. s. Balboa, Canal Zone, pay for, and remove, in the manner prescribed, 5,436 net tons of iron and steel as described in an itemized list, consisting of 37 pages, attached to the contract, at the pnce of $14.55 per ton, or a total of $79,093.80, and also 1,240 gross tons of cast iron scrap at $10.75 per ton, or a total of $13,300.
It was stipulated that the weights specified were approximate only, and that payment was to be made for actual weights delivered, “the selling weight to be determined by the Panama Canal’s official scales.” Classification of material was guaranteed by the appellee, but not the condition of the material. There followed detailed requirements covering notice to be given by the contractor of the arrival of vessels and of its shipping arrangements. The entire amount of material was to be removed by the contractor within six months from the date of the contract. Penalties were stipulated to be paid by the contractor in case of failure so to remove the material, and in the event of delay for more than six months appellee was at liberty to cancel the contract, sell the material, and charge expense and loss on account of resale to the contractor.
It was further stipulated that, before commencing to load the material, the contractor should “designate some suitable person as his representative on the Isthmus of Panama, within the Canal Zone, to whom the necessary orders in connection with the contract may be given,” with authority to act for it in all matters effecting the prosecution of the work of removing the material. Provision was also made for the time, place, and manner of payment, and it was stipulated that title should not pass until the material was fully paid for. Assignment of the contract was forbidden, and finally it was declared that no member of Congress or any person employed in the service of the United States should have any interest in the contract or share in the benefits thereof. The instrument was duly executed upon behalf of both parties.
It is conceded that the proposal, its acceptance, and the contract all related to the same specific, identified, lot of material then owned by the Panama Canal; that under .such conditions as existed or could be foreseen at all times up until after .the contract was executed and a part of the material delivered, the Panama Canal had no use therefor, and that the same was in the judgment of the Secretary of War “surplus”; and that the government declined to deliver 217 tons of the lot of 5,436 tons, not because of any shortage in actual weight, but because, in view of “unforeseen conditions” subsequently arising, its officers later concluded it would *842be advisable for tbe Canal to retain and use this amount.
The point most insistently urged by the appeliee is that as to the undelivered material the contract was void, for the reason that administrative officers had the power to sell only “surplus.” Such may be the limitation of their authority, but under a familiar rule the findings of such officers, exercising their judgment in good faith, upon questions of fact, are conclusive, and at the time the contract was entered into the material was by them held to be surplus. While under the rule it is not highly material, we have hero the additional consideration that, at the time such determination was made, it was the only view that could be reasonably taken, for under any conditions that could be foreseen the material would not be needed. Pushed to its logical conclusion, the appellee’s position is that unforeseeable conditions subsequently happening may retroactively operate to render void from the beginning a contract whieh was valid when it was entered into. And if it had the right to decline to make the delivery in question it could with equal propriety recover the material it did deliver, if under conditions subsequently devloping it reached the conclusion that it could itself advantageously use it.
It is further argued that, if the contract be held valid, it is to be taken as qualified by paragraph 5 of the “General Conditions” contained in the circular letter inviting bids, which is as follows:
“5. The weights shown in the above items are approximate, and payment shall be made for actual weights delivered, the selling weight of the material to be determined on the Panama Canal’s official scales at the Isthmus. All bids submitted will be subject to prior sale of part or all of the material bid upon, and to reduction in quantities of any item if unforeseen changes in the situation make such action advisable; however, it' is believed such action would be necessary in very few oases, if any.”
But, as we have seen, the instrument of May 16th upon its face appears to be a full and comprehensive expression of the final agreement of the parties, and I am clearly of the opinion that it was intended and understood to be the exclusive evidence of such agreement. It is not a case where parties proceed upon the assumption that the advertisement, proposal, and the acceptance thereof, constitute the contract; nor is it a case where the court is asked to resort to antecedent or contemporaneous writings between the parties to resolve an ambiguity in the instrument, or to supply an inadvertent omission therefrom upon a material detail. The instrument of May 16th is clear and complete, and imports nothing from the other writings by reference or adoption.
Prom the beginning both parties contemplated that the negotiations would so culminate, for by the circular letter bidders were advised that the conditions thereof would be made a part of the contract to be entered into. And upon comparing the final contract with the circular letter we find in it such of the conditions as apparently were thought to be material and then applicable. The sentence, “All bids submitted will be subject to prior sale of part or all of the material bid upon, and to reduction in quantities of any item if unforeseen changes in the situation make such action advisable, * * * ” was intended as a caveat to bidders and not a warning to contractors. It advised them that, in case the stated contingencies occurred prior to acceptance of the bids, bidders must expect to take contracts for smaller amounts of material than those specified in the advertisement and in the bids. As the advertisement stated, “bids,” not “contracts,” were made subject to the conditions.- In the circular letter “reduction in quantity” and “prior sale” are co-ordinate phrases, and, if the one operated to reserve to the appellee the right after the contract was entered into to reduce the contract quantity because of “unforeseen conditions,” the other was equally effective to reserve the right to “sell” and thus reduce the deliverable quantity. -
In that view the appellee would be under no absolute obligation to make any delivery at all, and an apparently binding contract would become wholly wanting in mutuality. If contractors must take such chances, it is inconceivable that intelligent men would bid for “surplus” material, or at least that they would bid a fair price therefor, and hence a practice in harmony with the contentions of the appellee would result in frustrating the very purpose for which competitive bidding is sought, and the government would be unable to get fair -offers for its materials. That appellee’s officers did not intend the provision of the circular to be a condition in the contract is not open to doubt. Some of the conditions contained in the circular letter are incorporated in the instrument in almost identical language. The officers who prepared the contract were careful to embody therein the first sentence of this paragraph 5 of the “Conditions,” but the other sentence *843thereof, the one here in question, and, under the contention now urged, the more onerous, they omitted. To assume inadvertence would be preposterous, and the only reasonable explanation is that they thought, as I think, it was intended to be a condition only of the bids, and not of the contract. The contemporaneous construction put by a p.arty upon his own writings may be of great weight. Lowrey v. Hawaii, 206 U. S. 206, 222, 27 S. Ct. 622, 51 L. Ed. 1026.
Sections 3744 and 3745, U. S. R. S. (41 USCA §§16 and 17), require that in certain eases, including one like this, public officers, upon entering into a contract, must cause the same to be reduced to writing and signed by the contracting parties, and must make a return of their acts by filing in the returns office of the Department of the Interior, attached together, a copy of the c'ontraet, a copy of any advertisement for bids, and copies of all 'proposals made in response thereto, supported by an affidavit of the officer in the form prescribed. And because of this provision it is argued that “the ‘contract’ must be read with the adverüsment for bids, the bids, offers, and proposals.” Undoubtedly the object of the statute was to impose upon public officers a restraint and deter them from entering into reckless engagements, and to provide against fraud and perjury incident to the false assertion of alleged oral agreements. Clark v. United States, 95 U. S. 539, 542, 24 L. Ed. 518. But a provision intended to regulate the conduct of government officers by requiring them to make a verified return of negotiations leading up to the execution of a contract, which is reduced to writing and signed by the parties, is not to be construed as destructive of the fundamental rule that the ultimate writing purporting to be complete in itself supersedes all prior negotiations, and when clear upon its face becomes exclusive evidence of the agreement. Brawley v. United States, 96 U. S. 173, 24 L. Ed. 622; Simpson v. United States, 172 U. S. 379, 19 S. Ct. 222, 43 L. Ed. 482.
Under appellee’s contention, its officers deliberately violated the statute, and the wholesome purpose for which it was enacted would be defeated. It was the duty of the officers to reduce the ultimate agreement to writing and cause it to be signed by the contracting parties; whereas under appellee’s view they caused only a part of it to be so embraced in the contract. And if the government is at liberty, by resorting to evidence aliunde, to vary or add to the terms of the signed contract, which is clear upon its face and apparently complete, the door is open for like action on the part of the contractor, when it is to his interest to make it. Instead of the intended statutory certainty, we would therefore have only confusion and controversy. We need not consider what would be the effect of the statutory return, if it appeared therefrom that the contract as executed was beyond the range of the advertisement, or was inconsistent therewith, or was not awarded upon the best bid. Admittedly the contract here was fairly and duly awarded, and it is found to be in harmony with the advertisement and the bid.
It is hardly necessary to add that the clause to the effect that the weights were approximate only becomes immaterial in view of the fact that the sale was admittedly of a specific identified lot, the actual weight of which was up to the estimate. Had the actual weight turned "out to be 5,219 tons, instead of 5,436, of course, the appellee would have rested under no obligation to make good the shortage.