Case: THE PURCELL ENVELOPE CO. v. THE UNITED STATES
Abbreviation: Purcell Envelope Co. v. United States
Decision Date: 1911-12-04
Docket Number: No. 22855
Citation: 47 Ct. Cl. 1
Volume: 47
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: THE PURCELL ENVELOPE CO. v. THE UNITED STATES.
Judges: 
Pages: 1–27

Head Matter:
THE PURCELL ENVELOPE CO. v. THE UNITED STATES.
[No. 22855.
Decided December 4, 1911.]
On the Proofs.
The Postmaster General advertises, inviting proposals for furnishing stamped envelopes during a perior of four years. The claimant's bid is accepted and the Postmaster General forwards a contract to be executed, which is duly signed, acknowledged, and returned to the department with a bond in the sum of $200,000 conditioned upon the faithful performance of the contract. Between the forwarding of the contract to the claimant and the return of it to the department the Postmaster General goes out of office and his successor comes in. lie does not sign the contract upon the ground “ that he has concluded that the claimant is not a suitable or proper person or body politic to be intrusted with the carrying out of the contract."
I. YVliere an advertisement for proposals was regularly made by the Post Office Department, and the claimant's bid was accepted and the Postmaster General forwarded a contract to the claimant .for execution, which was duly signed and acknowledged and promptly returned to the Post Office Department with an accompanying bond conditioned upon the faithful performance of the contract, it was a completed and binding contract under the decision in Garfield v. The United ¡States (93 U. S. R., 242), although it was not signed by the Postmaster General.
II. A Postmaster General can not justify his annulment of such a contract on the ground that he had concluded that the claimant was not a suitable or proper person or body politic to be intrusted with the work.
III. Where the advertisement and specifications of a post-office contract required the successful bidder to furnish a bond satisfactory to and approved by the Postmaster General, his satisfaction is a necessary condition to the completion of the contract; but it need not be expressed in writing and can be made known by his accepting the bond and by his silence in regard to it.
IV. There may be a breach of contract in different ways. The refusal of the Postmaster General to recognize the claimant as contractor and his advertising for new proposals and awarding the contract for the same services to another party constituted a breach entitling the contractor to damages.
V. It is well settled that when the Government enters into a contract with an individual it divests itself of its sovereign character and has no right to recede from the fulfillment of its obligations.
VI. Where a contract contains stipulations empowering the other party to abrogate it in certain specified cases, but nothing like an arbitrary power to annul it, he can not do so on a belief that the contractor is not a proper person to perform the work.
VII. If an error was made by a Postmaster General in awarding a contract to an incompetent or improper person, neither he nor his successor in office possesses the power to arbitrarily re-cind it.
VIII. In such a case the measure of damages is that laid down by the rule in Speeds’ ease (2 O. Cls. R., 429 ; 8 Wallace, R., 77, 84).
The Reporter’s statement of the case:
The following are the facts of the case as found by the court:
I. Claimant, The Purcell Envelope Co., is, and ever since July 3, 1894, has been, a corporation duly formed under the laws of the State of New York, with the objects of manufacturing, stamping, embossing, and printing envelopes and newspaper wrappers.
II. On or about February 28,1898, the Postmaster General published the following:
“ Post Oefice Department,
“ Washington, D. 0., Fel). 28,1898.
“ Sealed proposals are invited, and will be received at this department until 12 m. on Wednesday, the 30th of March, 1898, for furnishing stamped envelopes and newspaper wrappers in such quantities as may be called for by the department during a period of four years beginning on the first day of October, 1898. Proposals must be made on the blank forms provided by the department, securely enveloped and sealed, indorsed ‘Proposals for furnishing stamped envelopes and newspaper wrappers,’ and addressed to the Third Assistant Postmaster General, Washington, D. C. Bids delivered in person must be handed in at or before the hour above specified for the receipt thereof; otherwise they will not be considered.
“Blank forms of proposal, with full specifications and samples of the envelopes .and wrappers, will be furnished upon application to the Third Assistant Postmaster General.
“James A. Gakv,
* “Postmaster General.”
III. On or about the 30th day of March, 1898, claimant made and submitted its proposal in response to said advertisement on the blank form and in the manner therein specified, and which, together with 10 other proposals, was duly received and opened at the Post Office Department on the 30th day of March, 1898.
A true copy of claimant’s proposal is as follows:
“ The undersigned, The Purcell Envelope Co., doing business as envelope manufacturers in the city of Holyoke, Mass., hereby submit to the Post Office Department, in conformity to an advertisement dated February 28, 1898, and to the specifications referred to therein, a printed copy of which advertisement and specifications is hereto attached and made part hereof, the fololwing proposal for furnishing all the stamped envelopes and newspaper wrappers of the several sizes and qualities called for by said specifications, and samples of which are also hereto attached and made part hereof, at the following prices, namely:
“ In the event of the acceptance of the foregoing bid, the said The Purcell Envelope Co. agrees, within ten days from the date of such acceptance, to enter into contract according to the terms, conditions, and requirements of the advertisement and specifications aforesaid; in which contract the contractor and its sureties shall covenant and agree that in case the said contractor shall fail to do or perform all or any of the covenants, stipulations, and agreements of said contract on the part of the said contractor to be performed, as therein set forth, the said contractor and its sureties shall forfeit and pay to the United States of America the sum of two hundred thousand dollars, .for winch said fprfeiture the said contractor and its sureties shall be jointly and severally liable as fixed and settled damages, and not as a penalty to be reduced or diminished, to be sued for in the name of the United States.
“The Puecell Envelope Co.,
By James Purcell, President.”
“Guaranty.
“ We, the Fidelity and Deposit Company of Maryland, a corporation of the State of Maryland, having its principal office at the city of Baltimore, in said State, for value received, guarantee and bind ourselves and each of us, Our and each of our heirs, executors, and administrators, in the event that a contract for furnishing stamped envelopes and newspaper wrappers, according to the advertisement and specifications of February 28, 1898, shall be awarded to The tent; and in case of failure of the said The Purcell Envelope Co., will, within the time limited by the specifications, enter into and duly execute, as required by the Said specifications, a contract accordingly, and this guaranty is based upon and governed by the said specifications as to its scope and extent ; and in case of failure of the said The Purcell Envelope Co. to enter into contract as above, that we will forfeit and pay to the United States the sum of twenty-five thousand dollars, for which sum we will be jointly and severally liable as fixed and settled damages, and not as a penalty to be reduced or diminished.
“ Dated New York City, March —, 1898.
“ Fidelity AND Deposit Company op MarylaND.
“ JOHN W. Wooten, Attorney.”
' “ Certificate.
“ The undersigned U. S. district attorney, in the State of New York, certifies, under his oath of office, that he is acquainted with the above guarantor, and knows it to be a surety corporation and able to make good their guaranty.
“ Dated New York City, March 25th, 1898. •
“Henry L. Burnett,
“Z7. S. AttyP
IV. On the 20th day of April, 1898, the Postmaster General (then the Hon. James A. Gary) made and entered an order as follows:
“ Order No. 149.
“ OFFICE OF THE POSTMASTER GENERAL,
“Washington, D. G., April BO, 1898.
“ It is hereby ordered:
“ 1st. That all the bids for furnishing stamped envelopes presented to this department on the 30th ultimo under the advertisement and specifications of February 28, 1898, which involve the use of paper different from that described in the specifications as the Government standard, be rejected.
“2nd. That the contract for furnishing the envelopes called for by the advertisement and specifications referred to be awarded' to the Purcell Envelope Company, of Holyoke, Mass., as the lowest bidder for the Government standard of paper, at the following prices a thousand, namely:
“ James A. Gary,
“Postmaster General.”
Y. On the same day, April 20, 1898, the Third Assistant Postmaster General addressed a letter to James Purcell, claimant’s president, as follows:
“ Post Oeeice Department,
“ Office of Third Assistant Postmaster General,
“Washington, D. G., April BO, 1898.
“ Mr. James Purcell,
“ President of the Pureell Envelope Go.,
“ Washington, D. G.
“ Sir : I send you herewith copy of an order of the Postmaster General, dated to-day, awarding your company the contract for furnishing this department with stamped envelopes during the four years beginning on the 1st of October next, at the prices stated in the company’s proposal received here on the 30th ultimo.
“As soon as it can be prepared, a form of contract will be sent to you for formal execution.
“ Respectfully, yours,
“ John A. Merritt,
“Third Assistant Postmaster GeneralP
YI. On the next day, April 21, 1898, the Third Assistant Postmaster General addressed a letter to Mr. James Purcell, president, of the Purcell Envelope Co., New York, N. Y., as follows:
“ Post Oeeice Departmext,
* Office of ThiRd Assistant Postmaster General,
“Washington, D. G., April M, 1898.
“ Mr. James Purcell,
“Prest. Purcell Envelope Go.yNew York, N. Y.
“ Sir : I send you herewith contract in quadruplicate, to be entered into by your company for the furnishing of stamped envelopes for this department during the four years beginning on the 1st day of October next.
“ Please execute this contract at once, and return it to this office.
“ Respectfully, yours,
“John A. Merritt,
“Third Assistant Postmaster GenercdP
VII. Claimant received said letter (Finding YI) with form of contract in New York April 22, 1898, and on the same day returned to the Third Assistant Postmaster General said form of contract with the signature of the Purcell Envelope Co., by its president, James Purcell, and its surety, the Fidelity & Deposit Co. of Maryland, by its vice president.
The contract is printed as a part of the amended petition* to which reference is made.
VIII. The contract was not formally signed by the Postmaster General or by any officer on behalf of the United States.
IX. Claimant was ready and willing at all times to fully perform its contract with defendants, and to make and deliver the stamped envelopes and newspaper wrappers according to the terms of said contract; but the Postmaster General, the defendants, or any department or officer of the Goveriir ment never made any call or request upon claimant to furnish or deliver any of said envelopes or wrappers to him or to any or either of them during the term of the contract, and claimant’s said plant, kept intact ready for the performance of the contract hereinafter mentioned, remained idle during that period. Claimant’s plant or factory was equipped with Gordon presses and not with the latest machinery for making envelopes, known as the Wickham Envelope Machines. Said presses would entail a greater loss of material and more time than would be required by the Wickham machine process.
X. April 27,1898, the Third Assistant Postmaster General wrote claimant, in reply to its telegram of that date, that the Postmaster General had not signed the contract, but was holding the matter in abeyance, and requesting claimant to suspend all action under the department letter of April 21, 1898, until further orders.
XI. The following order was addressed to and received by the claimant company:
“ Order No. 301.
“ Office of the PostmasteR Geheral,
“ Washington, D. G., July 1898.
“ Be it ordered:
“That so much of Postmaster General’s Order No. 149, bearing date April 20, 1898, as awarded to the Purcell Envelope Company, of Plolyoke, Massachusetts, the contract for furnishing stamped envelopes to the Post Office Department, based upon the bid of said company submitted March 30, 1898, in response to the advertisement of the Postmaster General of date February 28,1898, be and the same is hereby revoked and canceled and declared to be null and void; and that all letters and notices from any officer of the Post Office Department' addressed to said company, advising it of said award, be and the same are hereby recalled and annulled.
“ Ci-i. Emory Smith,
“Postmaster General.”
XII. On or about July 22,1898, claimant having received information that the Postmaster General designed readver-tising for proposals (to furnish the stamped envelopes), and refusing to sign claimant’s contract, filed its bill of complaint in the Supreme Court of the District of Columbia for an injunction, praying that the Postmaster General be enjoined and restrained from setting aside, annulling, or refusing to perform said contract, or permitting or authorizing anyone other than the claimant to furnish said envelopes and wrappers or from entering into any contract with any other person or corporation therefor, or from doing any act or thing to interfere with or in any way hinder the performance of said contract by claimant; and said cause coming on to be heard on the bill of complaint and answer of the Postmaster General was dsimissed on or about August 15.1898.
True copies of said bill of complaint, answer, decree of dismissal, and order dismissing appeal are filed as exhibits to the amended petition.
XIII. On July 22,1898, the Plimpton Manufacturing Co. made an offer, in writing, to the Postmaster General.
On July 26,1898, the Postmaster General entered an order accepting the offer made by the Plimpton Manufacturing Co. as follows:
“ July 26, 1898.
“ Order No. 308.
“ Ordered, that the offer in writing, bearing date of July 22.1898, by the Plimpton Manufacturing Company, of Hartford, Conn., and the Morgan Envelope Company, of Springfield, Mass., to furnish all the stamped envelopes and newspaper wrappers which may be required by the Post Office Department between October 1, 1898, and January 1, 1899, at the prices named below, be and the same is hereby accepted under the provisions of section 8709, Revised Statutes, relating to the authority of any department of the Government in case of public exigency, to procure supplies by open purchase or contract, which said exigency will arise by reason of the fact that the existing contract for the furnishing of said envelopes and newspaper wrappers will expire by limitation September 30, 1898; the envelopes and newspaper wrappers to be furnished under the offer aforesaid to conform, as to kinds and qualities, to the specifications set out in the advertisement of the Postmaster General for proposals to furnish stamped envelopes and newspaper wrappers, of date February 28, 1894, and included also in the terms and conditions of the existing contract aforesaid, for supplies of this character at the following prices per thousand, to wit: ”
‡ ‡ ¡'fi
XIY. On October 25,1898, the Postmaster General entered into a written contract with said company to furnish all the stamped envelopes and newspaper wrappers that the department might call for during the four years beginning on the 1st day of January, 1899.
XV. The envelopes and wrappers were furnished by said companies during the term of claimant’s contract at a price largely below the amount for the same agreed upon in claim ant’s contract; and by the making of the said contracts claimant was wholly prevented from performing its said contract for the manufacture of said envelopes and wrappers.
* * * * *
XVI. The total cost to claimant for materials and the manufacture and delivery 'of stamped envelopes and newspaper wrappers in accordance with the terms of claimant’s contract would have been $2,275,224.46. Deducting this amount from claimant’s contract price of $2,460,556.22 leaves a difference of $185,331.76, which represents claimant’s profit had it been allowed to complete its contract.
XVII. Upon the foregoing findings of fact the court finds the ultimate fact, so far as it is a question of fact, that the contract for breach of which this action was brought was a valid, binding contract between the parties the same as if it had been signed by the Postmaster General on behalf of the United States.
Mr. Henderson Peck and Mr. Frank S. Black for the claimant.
Mr. IF. W. Scott (with whom was Mr. Assistant Attorney General Thompson) for the defendants:
The bid in the Garfield case (93 U. S., 242) was accompanied by a bond as required by the advertisement, and when the Postmaster General accepted the Garfield bid he approved the bond, and no other bond was required. The Purcell bid offered to do the work for so much, and as required by the specifications, proposed to later execute a contract with surety in the penalty of $200,000, the responsibility of such surety to be satisfactory to the Postmaster General. This contract and the surety thereon was never approved by the Postmaster General. The Hon. James A. Gary was Postmaster General on the 20th of April, 1898, and caused to be entered the order 149 accepting the Purcell bid with its offer to do the work for a certain sum and its promise to execute a contract with surety in the penalty of $200,000, the responsibility of the surety to be approved by the Postmaster General. Thus far the minds of the two parties to the alleged contract met, but in order to complete the contract there was another step to be taken by the Purcell Envelope Co., to wit, the execution of the contract with the said surety as it promised to do in its bid. On the 22d day of April, 1898, Hon. Charles Emory Smith was Postmaster General, and to him, as such officer, was presented the form of contract signed by the Purcell Envelope Co. and its surety, and the minds of the two parties to the alleged contract could not meet on the question of the responsibility of the surety until after the 22d of April, 1898, and on this day Mr. Smith was the Postmaster General and he declined to give his approval to the form of contract bearing the signature of the Purcell Envelope Co. and its surety by refusing to sign the same, and caused an investigation to be made to' inform himself as to the capability and responsibility of the parties signing the conttact to perform the work required by it. After such investigation he issued the order 301, setting aside his predecessor’s order 149, and readvertised the work. In this way it will be seen that the minds of the parties never met ■ on the question of the responsibility of the surety signing the contract. While it is true Postmaster General Gary accepted claimant’s proposal and awarded the contract to the Purcell Envelope Co., the acceptance was conditional — that is, the proposal was accepted upon the express condition that the Purcell Envelope Co. would enter into a contract, with approved surety, and had he been in office when the form of contract signed by the Purcell Envelope Co. and its surety was presented to the Post Office Department it would have been necessary for him as Postmaster General to take another step toward completing the contract and examine it and ascertain whether or not the parties signing as principal and surety were capable and responsible. The mind of Postmaster General Gary never had an opportunity to meet the mind of the claimant on this one question. When this question was presented to the Postmaster General for consideration and action he was no longer in office and his successor very promptly declined to approve it.
This same question was before the Supreme Judicial Court of the State of Maine in the case of Howard v. Maine Industrial School. In that case the court held:
“A mere bid in answer to an advertisement for proposals for building does not constitute a contract.
“A conditional acceptance, such as requiring a bond, delays the completion of the contract until the condition is complied with.” (78 Maine, 230-232.) (Jenness v. Moumt Hope Iron Go., 53 Maine, 20; Maryland v. Tabor, 53 Maine, 511; Cumberland Bone Go. v. Atwood Lead Go., 63 Maine, 167 (78 Maine, 232); Gleason v. Henshaw, 4 Wheat., 225; Insurance Go. v. Youngs, Admr., 23 Wall., 85; Tilley v. County of Go oh, 103 U. S., 155; Minn. & Si. Louis By. v. Columbus Rolling Mill, 119 U. S., 149-151; Drahely v. Gregg, 8 Wall., 242.)
In the case of Bristol, Cardiff, and Swansea Aerated Bread Company v. Maggs (44 Law Eeports, Chancery Division, 616) an English court held that—
“Although two letters standing alone might be evidence of a sufficient contract, yet a negotiation for an important term of purchase and sale carried on afterwards is enough, on the principle of Hussey v. Home-Payne, to show that the contract was not complete.”
A condition precedent calls for the performance of some act or the happening of some event after the terms of the contract have been agreed upon, before the contract shall take effect. That is to say, the contract is made in form but does not become operative as a contract until some future specified act is- performed or some subsequent event occurs. Hence it is said, “ a condition precedent doth get and gain the thing or estate made upon condition, by the performance of it; as a condition subsequent keeps and continues the estate by the performance of the conditions.” (.Redman et al. v. The Aetna Insurance Go., 49 Wis., 431, 439.)
In this case the question as to the responsibility of the surety on the contract was not to be left to the Purcell Envelope Co. and neither is it left to your honorable court, or to any court or jury to say whether or not the requirements of the specifications were met when the Purcell Envelope Co. tendered contract signed by the Fidelity & Deposit Co. of Maryland, as surety. This question as to the responsibility of the surety was left by the specifications to the Postmaster General alone, and the claimant has offered no evidence whatever to show that he was satisfied with the surety’s responsibility. (Zaleski v. Clark, 44 Conn., 218; Gray v. The Central Railroad Go. of N. J., 11 Hun. N. Y. Supreme Court, p. 70.)
In the case of Blackwa'll v. Fosters (58 Ky. Reports, p. 88), a case where one party stipulated to deliver property at a fixed price on a future day and the other party agreed to pay therefor on delivery and the parties bound themselves “to give security for their respective performance of the contract if at any time required,” the court held that—
“A covenant in a contract for the sale of property to be delivered and paid for in future, that the parties are £ to give security, for their respective performances of the contract, if at any time required,’ is not a mere independent stipulation, but an essential condition, going to the whole of the consideration.”
In the case of the National Bank v. Hall (101 U. S., 48, 50) it was said:
_ “ Where a contract is a unit, and left uncertain in one particular, the whole will be regarded as only inchoate, because the parties have not been ad idem,, and, therefore, neither is bound.” (Appleby v. Johnson, Law Rep., 9 C. P., 158.)
The fact that the specifications required the contractor to execute a bond in a penalty of .$200,000 and that the surety should qualify in the sum of $400,000 and the magnitude of the work covered by the contract and specifications, which, as Postmaster General Smith said in his report for the year ending June 30, 1898, involved an expenditure of several million dollars, certainly made the giving of the bond an essential condition to the completion of the contract. And the fact that the Postmaster General was to be satisfied with the responsibility of the surety made his assent to that surety absolutely necessary, and without his assent the contract was a nullity, his approval of the bond or the responsibility of the surety being indispensable to the final completion of the contract. (Barnes et al. v. Barrow, 61 N. Y., 39; Grant v. Naylor, 4 Cranch, 224; Bleelcer v. Hyde, 3 McClain, 279; Taylor v. IVetmore, 10 Ohio, 490; Taylor v. McGlung, 2 Houst. Del., 24; Hunt v. Smith, 17 Wend. N. Y., 179; Oramer v. Higginson, 1 Mass., 322; Russell v. Perleinson, Id., 368.)
“A condition precedent ” is defined in Anderson’s Law Dictionary as follows:
“A condition precedent is one which must happen before either party becomes bound by the contract. (Story on Contracts, sec. 40, 42-43; Jones v. Z7. S., 96 U. S., 227-229.)
“ Whether a qualification, restriction, or stipulation is a condition precedent * * * depends upon the intention of the parties as gathered from the whole instrument.” (Lowber v. Bangs, 2 Wall., 736, 746; 2 Bl. Com., 156-157; 4 Kent, 130.)
Defining further “ a condition precedent ” the same dictionary says:
“ Failure to perform a ‘ condition precedent ’ bars relief and that such a condition must be literally observed.” (2 Bl. Com., 154; 4 Kent, 125; 3 Pt., 374; 9 Wheat., 341.)
Story, in his work on Contracts, says:
“A waiver of the performance of a condition is not to be implied from the mere silence of the other party in case of a breach, unless such silence be inconsistent with any other explanation.” (Story on Contracts, vol. 1, p. 40, sec. 48.)
In considering the bond the Postmaster General necessarily had to consider the financial ability and the capabilities of the Purcell Envelope Co. to execute the contract, as well as the responsibility of the surety on the contract. The contract involved an expenditure of several million dollars. The fact that his predecessor had, on the 20th day of April, 1898, entered Order 149 awarding the contract to the Purcell Envelope Co. should not make it compulsory on his part to attach his name to a contract of such magnitude without a thorough examination and a complete knowledge of what he was doing. Tie certainly was entitled to a reasonable length of time for an examination as to the ability and responsibility of the signers to the contract to execute the same.
“Where no time is fixed within which a condition shall be performed, the rule is that it must be performed within a reasonable time. Of course, no universal rule can be laid down as to what constitutes reasonable time which will apply to all cases.” (Story on Contracts, vol. 1, sec. 46.)
The Purcell contract had no provision fixing the time Avithin which the Postmaster General should act upon the responsibility of the surety signing the contract. The Postmaster General, however, acted promptly.
In Barrages case (33 C. Cls. E., 377) the court held:
“ 1. Where a contract in terms is ‘ subject to the approval of the Quartermaster General,’ approval is a condition precedent to the legal effect of the agreement.
“ 2. Though the failure of the Quartermaster General to act within a reasonable time might validate a contract, he is nevertheless entitled to time for inquiry and investigation and the discharge of the ordinary business of his department.”
The same rule was made by this court and affirmed by the Supreme Coui-t in Monroe’s case (184 U. S., 524), wherein it was held:
“ The approval of the Chief of Engineers was necessary to the legal consummation of the contract in this case.
“A final reviewing and approving judgment was given to the Chief of Engineers by a covenant so expressed as to constitute a condition precedent to the taking effect of the contract.
“ The contract Avas not approved, and the legal consequence of that can not be escaped.”
This same question was before your honorable court as i'ecently as December, 1908, in the Little Falls Knitting Mills case, wherein the court said:
“A contract in terms subject to the approval of the head of a department is not a contract until approved.” (44 C. Cls. E., p. 1.)
In a New York case which grew out of an alleged contract for the sale of a house the court held as follows:
“ In written communications, and especially in cases where the law requires the assent to be evidenced by a writing, the writing must be delivered by the party to be bound thereby in such a manner as to deprive him of the right to recall it. The intent is the governing and controlling element in the determination of the question whether a contract has or has not been concluded in a given case.” (53 N. Y., 217, How. Pr.)
The action of Postmaster General Smith in revoking the order of award entered by his predecessor on April 20, 1898, ’simply receded before the contract was finally concluded, and in this way the contract never became invalid. (Diets v. Parish, 53 N. Y., How. Pr., p. 217.)
In an Ohio case it was held that—
“ The acceptance of a bid legally made under said section (referring to a section of the Ohio law which required the lowest bid to be accepted) only gave to the bidder a right to a contract embracing the stipulations expressed or implied in the records or files relating to the improvement, including amongst them the notice, the plans and specifications, the bid, and the resolution of acceptance.” (Hughes v. Village of Clyde, 41 Ohio State Reports, 339-340.)
In an Illinois case (Waggeman v. Brochen) growing out of an action brought to recover a balance due for the building of a house, the court, speaking on what was or was not a contract, said:
“An article of agreement, purporting to be made between two parties, imposing mutual obligations upon them, showing upon its face it was to be executed by both parties before it would be binding on either, but only executed by one of them, can not be given as evidence to the jury for any purpose, not even against the party executing it.” (52 Ill., p. 468.)
As to whether or not the head of a department can, by mandamus, be required to sign a contract was before the Court of Appeals of the District of Columbia (2 Appeals, D. C., 532), wherein it was held:
“ Where in instructions to bidders for doing public work it is provided that any conditions, limitations, or provisos attached to proposals will be liable to render them informal and cause their rejection, and the right is reserved to the Government to reject any and all bids, and a proposal filed departs from the terms of the specifications as to the time for the performance of the work, the bid so made may be properly rejected by the head of the department authorized to enter into contracts for such work, notwithstanding the previous approval and acceptance of the bid by a subordinate.”
This same question was before your honorable court in Brown?s case (6 C. Cls. IT, 171). Mr. Justice Nott delivered the opinion of the court, and among other things said:
“ There are two decisions of the Supreme Court relating to mandamus indicative of two classes of cases. In the first, Kendall v. The United States (12 Peters, p. 527), it was held that the Postmaster General could be compelled, by mandamus, ‘ to credit the relators with the full amount of the award,’ because this was ‘ a precise, definite act, purely ministerial, and about which the Postmaster General had no discretion whatever.’ In the second, Decatur v. Paulding (14 Peters, p. 497), it was held that the Secretary of the Navy could not be compelled to pay a pension under an act of Congress because the construction of the statute was an executive and not a mere, ministerial act; and ‘where the law authorized him to exercise discretion or judgment,’ the court could not revise his judgment or interfere with his discretion. The first of these decisions has been neither repeated nor overruled, but it has been questioned on the same bench (Mr. Justice Catron, 14 Peters, 520) ; the second has grown into a class of cases: Bras-hear v. Mason (6 How. R., p. 92); Reeside v. ~W alicer (11 id., p. 272); United States v. Guthrie (17 id., p. 284) ; United States v. The Commissioner Land Office (5 Wall., p: 563) ; Gaines v. Thompson (id., 347) ; The Secretary v. McGarrahan (9 id., 298). (6 C. Cls. R., 186.)”
See also the case of Dunlap, Rose, and Miller v. The Commissioner of Pensions (128 U. S., 40) and cases there cited.
The specifications say that—
“ The bidder shall, within ten da3?s after being called upon to do so, execute a contract with at least two good and sufficient sureties. * * * Such sureties shall justify their responsibility by affidavit, showing that they severally own and possess property of the clear value in the aggregate of $400,000, over and above all debts and liabilities and all property by law exempt from execution, to be sworn to before a district or circuit judge of the United States, and to be approved by the Postmaster General. In the case of a guarantee company, the Postmaster General must be satisfied of its responsibility.” (R., 79.)
“ The contract will he executed in quadruplicate?'1 (R. 80.)
The proposal and specifications undoubtedly contemplated the execution and signing of a written contract after the ac •ceptance of the proposal. That this was the interpretation put upon the specifications in the Post Office Department is evidenced by the fact that the Third Assistant Postmaster General in his letter dated April 20, 1898, advising the Pur-' cell Envelope Co. that Postmaster General Gary had awarded that company the contract, said, “ as soon as it can be prepared a form of contract will be sent to you for formal •execution” (R., 63), and that on the following day, April •21, 1898, the formal contract was sent to the president of the Purcell Envelope Co. with instructions to execute it at once and return it to the Post Office Department. If the advertisement and proposal, a part of which were the specifications, contemplated the execution of a written contract after the acceptance of the bid, then there was no completed contract until it had been formally signed by both parties, and the courts have so held.
In an English case, Rossiter v. Miller (5 Law Reports, Ch. Div., 648), it was held that “ specific performance could not be decreed, for that on the true construction of the ■documents the signing of a form of contract was a condition precedent to the parties being bound.”
See also the case of Orossley v. May cock (18 Law Reports, Equity Cases, 180). This is another English. case, and the court held “that the acceptance was only conditional, and-that there was no final agreement of which specific performance could be enforced as against the purchasers.”
In this case the acceptance was as follows:
“ * * * which offer we accept and now hand you two copies of conditions of sale which we have signed. We will thank you to sign same and return one of the copies to us.”
The same question was before the Supreme Court of the State of Nevada (Morrill v. Teham,, ete., 10 Nev., 125), in which the above English case was cited with approval, and that court held that:
“ To render a proposed contract binding there must be an accession to its terms by both parties. A mere voluntary compliance with its conditions by one who had npb previously assented to it does not render the other liable on it.” (10-Nevada, 125, 137.)
The same question has been before various courts in this country and they have held the same as the English courts.
In a California case, Spinney v. Downing (41 Pacific Reporter, 797), the opinion of the court was delivered by Judge Van Fleet, and he treats this question very fully and his opinion is worthy of thorough consideration.
See also Johnson v. Fessler, 7 Watts, 48; Northam, v. Gordon, 46 Cal., 582; Donley v. Adams, 46 Pacific Reporter, 916; Worden v. Hammond, 37 Cal., 64; White v. Corliss, 46 N. Y., 467; Mactiers v. Frith, 6 John., 103; Vassar v. Camp, 11 N. Y., 441; Wait on Engineering and Architectural Jurisprudence, sec. 797.
The evidence is not sufficient nor competent to establish the fact that the Purcell Envelope Co. had a contract with Mr. Wickham for the supply of enough Wickham machines to equip its plant. The most vital part of the contract is omitted, to wit, the price of the machines. Not one of the parties to the alleged contract testify that a price was fixed. In fact, they testify that nothing was said about the price. To establish a contract of this kind the Purcell Envelope Co. should satisfactorily show by competent testimony that it had an agreement with Wickham for the purchase and supply of his machines at a certain agreed price, and unless this is done no contract is proven.

Opinion:
Atkinson,
delivered the opinion of the court:
This is an action for damages for the breach of an express contract by the defendants. The facts briefly stated are as follows:
On February 28, 1898, the Postmaster General issued and published an advertisement inviting sealed proposals for furnishing stamped envelopes and newspaper wrappers in such quantities as might be called for by the department during the period of four years, beginning the first day of October, 1898. Eleven proposals were submitted, and claimant's being the lowest in the aggregate, according to the department's formulas, was accepted, and on April 20, 1898, it was awarded the contract by James A. Gary, at that time Postmaster General. The next day (April 21) the Third Assistant Postmaster General mailed to claimant a contract in quadruplicate, requesting it to sign, execute, and return the same to the Post Office Department. This the claimant . did on the 22d of April (the day following its receipt), and accompanied the same with a bond as required in the penalty of $200,000 duly executed by the Fidelity & Deposit Co., of Baltimore, Md., for the faithful performance of the contract. Postmaster General Gary retired from office on the 21st day of April, 1898, without signing said contract and was on that day succeeded in office by Charles Emory Smith as Postmaster General. On April 27, claimant telegraphed the Post Office Department that it had made arrangements for the necessary drawings, and had contracted for the white and amber paper for the term of the contract period. Under date of that same day the Third Assistant Postmaster General replied by saying that the Postmaster General (Charles Emory Smith) had not signed the contract, but was holding the matter in abeyance, and requesting claimant to suspend all action under the department letter of April 21 until further orders. Thereafter, on July 22, 1898, Postmaster General Smith rescinded the order of his predecessor which awarded the contract to claimant, and on the 8th day of August, 1898, new proposals were called for by advertisement of the department, and on October 25, 1898, a new contract was let to the Plimpton Manufacturing Co. and the Morgan Envelope Co., covering the period for which claimant had contracted with the Government to furnish the envelopes and newspaper wrappers for the Post Office Department. The contract price which claimant avers it was to have received was $2,460,556.22, and the estimated cost of furnishing the same, as made by claimant, was $1,833,-650.57, -which indicates an anticipated profit of $626,905.65, and to recover said amount this suit was instituted.
When claimant learned that the Post Office Department contemplated annulling the award made to it by Postmaster General Gary for the supplying of the envelopes and newspaper wrappers, it brought a suit in July, 1898, in the Supreme Court of the District of Columbia to enjoin the department from taking such action (Washington Law Reporter, 1898, 515). The proceedings in said court are filed as an exhibit to claimant's amended petition herein.
One of the questions presented for determination upon which the case must turn, is whether the words in the advertisement of February 28,1898, " Sealed proposals are invited, and will be received at this [Post Office] department until 12 m. on Wednesday, the 30th of March, 1898, for furnishing stamped envelopes and newspaper wrappers in such quantities as may be called for by the-department for the period of four year's, beginning on the 1st day of October, 1898 " (Finding II), are a sufficient compliance with the statute to authorize a proposal for that service alone by the claimant and acceptance by the Postmaster General. This court has held, except in certain cases of emergency, that all contracts between individuals and the Government are void unless they are made upon advertisements for proposals previously published, and that a compliance with such statutes is a condition precedent, upon the performance of which only can a binding contract with the Government be made by its officers. It acts by its public officers, and their powers and duties are prescribed and limited by laws which they must follow.
The defendants maintain that, although the advertisement for proposals was duly and regularly made by the Post Office Department; that claimant was the lowest bidder; that its bid was accepted; that the Postmaster General prepared, or caused to be prepared, a contract which was forwarded to claimant for its signature and acknowledgment; that the contract was duly signed and acknowledged by claimant, and was promptly returned to the Post Office Department with an accompanying bond in the sum of $200,000, conditioned upon the faithful performance of the contract; yet, it is insisted by defendants that it was not a completed and binding contract until it was signed by the Postmaster General. Many authorities are cited to sustain this contention.
Claimant relies mainly upon the case of Garfield v. United States (93 U. S., 242), which in all of its important features is identical with the case at bar; and also upon the decision of the Supreme Court of the District of Columbia, in the case now in hearing, wherein claimant sued out an injunc tion to restrain the Postmaster General from letting the work covered by the contract herein involved to other parties. The court in its opinion in the injunction proceedings, inter alia, said:
" The defendant resists the granting of the injunction upon the grounds, first, that the complainant had no contract, and, second, that if it had, a court of equity has no jurisdiction to grant an injunction, there being, as he contends, an adequate remedy at law. As to the first ground of objection, it was held by the Supreme Court of the United States in the case of Garfield v. United States (93 U. S., 242), that the awarding of a contract to a party by the Postmaster General pursuant to an advertisement by him and a bid by the person to whom the award was made, constitutes a complete contract as fully as if the formal contract had been reduced to writing and signed by the parties. The grounds for holding that there is a contract in this case are much stronger than in the Garfield case. In that case nothing was done after the award by the department, while here the formal contract was furnished under the direction of the Postmaster General and sent to complainant with a request to sign and return it, which was promptly done. Not only this, but on the same day the contract was sent to complainant for its execution, another letter was written and sent it by the department in which instructions were given for the execution of some of the work to be done tinder the contract, and in express terms acknowledging the contract as existing between the parties at the time. Under these circumstances it is immaterial that the Postmaster General did not or has not signed the contract. On its return to the department, signed by the complainant, it became as binding upon the Government as if it had been signed by the Postmaster General."
The court, after referring to the jurisdiction of a court of equity and to the rule that the existence of an adequate remedy at law " is always a conclusive answer to an application for an injunction," held that "the only remedy of the complainant for damages for a breach of its contract would be a suit against the United States in the Court of Claims, . The facts in this regard show that the complainant can be, in contemplation of law, fully compensated in money for any damages it may sustain by a refusal on the part of the Postmaster General to perform the contract, and that such sum can be proved and recovered in the Court of Claims. There is no ground shown, therefore, authorizing the court to enjoin the defendant from violating the contract, and the injunction must be denied."
The Supreme Court decision in the Garfield case {supra) contains these words:
" The -Court of Claims holds that the proposal on the part of Garfield, and the acceptance of the proposal by the department, created a contract of the same force and effect as if a formal contract had been written out and signed by the parties. Many authorities are cited to sustain the proposition. We believe it to be sound, and that it should be so held in the present case." {Id., 244.)
The following decisions also have a direct bearing upon the case before us: Adams v. United States (1 C. Cls. R., 192); McCollom v. United States (17 C. Cls. R., 92); Schneider v. United States (19 C. Cls. R., 547); Proffit v. United States (42 C. Cls. R., 248); Chicago v. Greer (76 U. S., 726); Sanders's case (144 N. Y., 209).
The foregoing decisions, and many others along the same line which we do not deem necessary to review, all agree that the principal, if not the sole question involved in a case of this character, is whether there was a meeting of the minds of the parties in interest upon a distinct proposition, manifested by an overt act. If so, a contract was created — - was made between the parties to this suit; if otherwise, no contract was effectuated. Taking together the department's specifications, the advertisement for bids, the awarding of the contract, the preparation of the contract by the defendants, the signing of the same and its delivery by claimant, and the furnishing of the required bond, all show a concurrence of the minds of both of the parties to the contract, which therefore render it a contract as binding in law as if it had been signed by the Postmaster General.
It is further contended by counsel for the defendants that the advertisement and specifications required the successful bidder to furnish a bond of $200,000, which must be satisfactory to and approved by the Postmaster General, and that although such bond was furnished, it does not appear that it was thus approved. The language of the specifications upon this subject is as follows: " In the case of a guarantee company, the Postmaster General must be satisfied of its responsibility." It may be conceded that such satisfaction on the part of the Postmaster General was a necessary condition precedent to the completion of a binding contract. But how was such satisfaction to be manifested ? It would seem that it could be made known in no better and more effectual way than by silence upon that subject and refusing to sign the contract on other grounds. Any other interpretation of this provision would be palpably unjust to the contractor whose bid had been accepted, for if the guarantee company was unsatisfactory to the Postmaster General, notice of that fact should be given so a different guarantee company could be offered. But nowhere does it appear that either the character, quality, or sufficiency of the bonding company was eveb raised or considered by the Postmaster General or any of his subordinates, or that the contract was canceled for that reason. Hence the presumption necessarily follows that the contract was abrogated for some other reason than the insufficiency of the bond, or that fact would have been made known to the claimant, which was not at any time done. In other words, it is apparent that if there had been any objection to the bond, it would have been mentioned in the order of the Postmaster General dated July 22, 1898, rescinding claimant's contract. Said letter is quoted in full in Finding XIX.
Having decided that the contract, although not formally signed by the Postmaster General, was legal and binding, it follows that the order of that officer arbitrarily rescinding it was a breach thereof. The following recognized authorities are sufficient to show what constitutes breaches of contracts:
"A breach of contract may arise in any one of three ways, namely-: By renunciation of liability under the contract, by failure to perform the engagement, or by doing something which renders the performance impossible." (7 A. & E. Ency. of Law, 149, 150; Roehm v. Horst, 178 U. S., 1.)
" Where one party to an executory contract prevents the performance of it, or puts it out of his power to perform it, the other party may regard it as terminated and demand whatever damages he has sustained thereby." (Lowell v. St. Louis Mut. Life Ins. Co., 111 U. S., 264, 276; Garfield v. United States, 93 U. S., 242.)
" It is now a well-settled rule that if a person enters into a contract for services, to commence at a future day, and before that day arrives does an act inconsistent with the continuance of the contract, an action may be immediately brought by the other party." (Howard v. Daly, 61 N. Y., 302, on review of the authorities, English and American.)
" If one party to a contract has destroyed the subject matter, or disabled himself so as to make performance impossible, his act is equivalent to a breach of the contract, although the time for performance has not arrived, and also, if the contract provides for a certain series of acts, and only default is made in the performance of one of them accompanied by a refusal to perform the rest, the other party may not perform but treat the refosal as a breach of the entire contract and recover accordingly. The doctrine that there may be an anticipatory breach of an executory contract by an absolute refusal to perform it has become the settled law of England as applied to contracts for services, for marriage, and for tire manufacture and sale of goods." (Roehm v. Horst, supra.)
The findings show that claimant having fulfilled all the requirements of the Post Office Department and being ready and willing to furnish the envelopes and newspaper wrappers provided by the contract, it was, therefore, not within the power of the Postmaster General to revoke it without showing some failure on the part of claimant or some just or legal cause for such action.- It is well settled that " when the Government enters into a contract with an individual or corporation it divests itself of its sovereign character so far as concerns the particular transaction and takes that of an ordinary citizen; and it has no immunity which permits it to recede from the fulfillment of this obligation." (U. S. v. N. A. C. Co., 74 Fed. R., 145, 151; Southern Pacific Co. v. United States, 28 C. Cls. R., 77-105.)
" If it [the United States] comes down from its position of sovereignty and enters the domain of commerce, it submits itself to the laws that govern individuals there." (Cooke v. United States, 91 U. S., 398.)
It is not contended that claimant at any time consented to the annulment of the contract, or that the contract contains any provision authorizing the Postmaster General to annul it in the manner it was done. As a matter of fact, no reason whatever was given by that officer for abrogating the same. He did, however, in the equity suit brought by claimant in the Supreme Court of the District of Columbia {swpra) seek to justify his annulment of the contract on the ground that he had " concluded that the claimant was not a suitable or proper person or body politic to be intrusted with the carrying out of the said contract." The District of Columbia Supreme Court conclusively, and we think correctly, answered this allegation in these appropriate words:
" But there is no stipulation or provision in the contract authorizing the defendant to void or annul it on that ground. The contract does contain stipulations empowering the defendant to abrogate it if the complainant should make certain failures or defaults, or commit certain frauds in the execution thereof, but nothing that can be construed to give him power to annul it because he may have entertained the belief, however well founded, that the complainant is financially or otherwise unable or unfit to perform the work. By the terms of the contract he must wait some actual default or wrong in the performance of it before he has power to revoke it."
Such contention by defendants we decide could only be considered prior to the awarding of the contract, and if found to be justifiable would be proper grounds for refusing to award the contract; but if an error was made in letting the contract, neither Postmaster General Gary, who made it, nor his successor, Postmaster General Smith, who rescinded it, possessed the power under the law to arbitrarily annul it.
Inasmuch, therefore, as there was a breach of the contract by the defendants, claimant is entitled to recover damages therefor, the measure of which is the difference between the price fixed in the contract for the envelopes and newspaper-wrappers and the cost of furnishing them, "making a reasonable deduction for the less time engaged and for release from the care, trouble, and responsibility attending a full and complete execution of the contract." (United States v. Speed, 8 Wall., 77, 84.)
The principle involved in the case at bar is clearly and concisely expressed by the Supreme Court in the Case of Philadelphia, W. & B. Co. v. Howard (13 How., 512). At page 527 the court said:
" Actual damages clearly include the direct and actual loss which the plaintiff sustains. And in a case of a contract like this that loss is, among other things, the difference between the cost of doing the work and the price to be paid for it. This difference is the inducement and real consideration which causes the contractor to enter into the contract. For this he expends his time, exercises his skill, uses his capital, and assumes the risks which attend the en-terpise. And to deprive him of it when the other party has broken a contract and willfully put an end to it would be an injustice. There is no rule of law which requires us to inflict this injustice. Wherever profits are spoken of as the subject of damages, it will be found that something contingent upon future bargains or speculations or status of the market is referred to and not the difference between the agreed price of something and its ascertainable value or cost."
In the case of United States v. Behan (110 U. S., 338, 344), which involved the question of profits under breach of contract similar to the case we are considering, it was decided:
" The prima facie measure of damages for the breach of contract is the amount of the loss which the injured party has sustained thereby. If the breach consists in preventing performance of the contract, without fault of the other party, who is willing to perform it, the loss of the latter will consist of two distinct elements or grounds of damage, namely: First, what he has already expended toward performance, less the value of materials on hand; secondly, the profits that he would have realized by performing the whole contract. The second item, profits, can not always be recovered. They may be too remote and speculative in their character, and therefore incapable of that clear and direct proof which the law requires. But when, in the language of Ch. J. Nelson, in the case of Masterson v. Brooklyn (7 Hill, 69), they are the direct and immediate fruits of the contract and they are free from these objections, they are then part and-parcel of the contract itself, entering into and constituting a portion of its very elements; something speculated for, the right of the enjoyment of which is just as clear and plain as to the fulfillment of any other stipulation. If he [claimant] goes for profits, then the rule applies as laid down in SpeecPs case, and his profits will be measured by tlie difference between the cost of doing the work and what he was to receive for it."
In the case before us the contract was awarded by the Postmaster General to claimant; the contract was signed and returned to the Post Office Department by claimant with bond of $200,000 accompanying it; arrangements were made by claimant to procure the necessary materials to carry out its contract, and three months and two days after awarding the contract it was annulled by an executive order of the Postmaster General. This renunciation went to the whole of the contract and was absolute and unequivocal, which brings it within the above-quoted authorities, and therefore entitles claimant to reasonable damages in the way of profits under the contract it was prohibited from executing.
From what we have said above, our conclusion is that claimant is entitled to a judgment against the United States for the sum set forth in Finding XYI of $185,881.76, which is accordingly ordered.