United States v. Speed - 75 U.S. 77 (1868)
U.S. Supreme Court
United States v. Speed, 75 U.S. 8 Wall. 77 77 (1868)
United States v. Speed
75 U.S. (8 Wall.) 77
1. The War Department, by its proper officers, may make a valid contract for the slaughtering, curing, and packing of pork, when that is the most expedient mode of securing army supplies of that kind.
2. Such a contract, when for a definite amount of such work, is valid, though it contains no provision for its termination by the Commissary General at his option.
3. The Act of March 2, 1861, requiring such contracts to be advertised, authorizes the officer in charge of the matter to dispense with advertising when the exigencies of the service require it, and it is settled that the validity of a contract under such circumstances does not depend on the degree of skill or wisdom with which the discretion thus conferred is exercised.
4. Where the obligation of one party to a contract requires of him the expenditure of a large sum in preparation to perform and a continuous readiness to perform, the law implies a corresponding obligation on the other party to do what is necessary to enable the first to comply with his agreement,
5. Where the plaintiff agreed to pack a definite number of hogs for defendant and made all his preparations to do so, and was ready to do so, but the defendant refused to furnish the hogs to be packed, the measure of damages is the difference between the cost of doing the work and the price agreed to be paid for it, making reasonable deductions for the less time engaged and for release from the care, trouble, risk, and responsibility attending its full execution.
By an act of 14 April, 1818, [Footnote 1] "the Commissary General and his assistants shall perform such duties in purchasing and issuing of rations as the President shall direct," "supplies for the army (unless in particular and urgent cases the Secretary of War should otherwise direct) shall be purchased by contract, on public notice," &c., "which contract shall be made under such regulations as the Secretary of War may direct." One of the regulations prescribed by the Secretary of War, and which made Rule No. 1179 in the Army Regulations of 1863, is thus:
"Contracts for subsistence stores shall be made after due public
notice, and on the lowest proposals received from a responsible person who produces the required article. These agreements shall expressly provide for their termination at such time as the Commissary General may direct."
By an Act of March 2, 1861, [Footnote 2] it is provided, that
"All purchases and contracts for supplies or services in any of the departments of the government, except for personal services, when the public exigencies do not require the immediate delivery of the article or articles, or performance of the service, shall be made by advertising a sufficient time previously for proposals respecting the same. When immediate delivery or performance is required by the public exigency, the articles or service may be procured by open purchase or contract at the places, and in the manner in which such articles are usually bought and sold, or such services engaged between individuals."
These statutes and regulations being in force, the Secretary of War, through the Commissary General, authorized Major Simonds, at Louisville, in October, 1864, and during the late rebellion, to buy hogs and enter into contracts for slaughtering and packing them to furnish pork for the army.
On the 27th of October, Simonds, for the United States, and Speed made a contract by which the live hogs, the cooperage, salt, and other necessary materials were to be delivered to Speed by the United States, and he was to do the work of slaughtering and packing. The contract was agreed to be subject to the approval of the Commissary General of Subsistence.
No advertisements for bids or proposals was put out before making the contract, nor did the contract contain a provision that it should terminate at such times as the Commissary General should direct.
After the contract was made, Simonds wrote -- as the facts were found under the rules, by the Court of Claims, to be -- to the Commissary General informing him substantially of its terms, but no copy of it nor the contract itself was presented
to the Commissary General for formal approval. The Commissary General thereupon wrote to Simonds expressing his satisfaction at the progress made and adding: "The whole subject of pork packing at Louisville is placed subject to your direction under the advice of Colonel Kilburn."
The claimant incurred large expenditures in the preparation for fulfilling his contract. He also kept, during the whole season, the full complement of hands necessary to have slaughtered the whole 50,000 hogs within the customary season. During the season there were furnished to the claimant 16,107 hogs, but owing to the high price of hogs, Simonds, with the approval of the Commissary General, gave up the enterprise and refused to furnish the remainder of the 50,000 hogs.
Upon these facts, the Court of Claims held,
1st. That the Secretary of War, through the Commissary General, might authorize such a contract to be made without a resort to the advertisement and bids proposed.
2d. That the letter of the Commissary General was a virtual approval of the contract.
3d. That the contract was an engagement on the part of the United States to furnish 50,000 hogs to the claimant to slaughter and pack at the stipulated price, and that their failure in part to perform the same entitled the plaintiff to recover damages.
4th. That the true measure of damages was the difference between the cost of doing the work and what the claimant was to receive for it, making reasonable deductions for the less time engaged and for release from the care, trouble, risk, and responsibility attending a full execution of the contract.
The court awarded damages accordingly to the claimant, and the United States appealed.