Smoot's Case - 82 U.S. 36 (1872)
U.S. Supreme Court
Smoot's Case, 82 U.S. 15 Wall. 36 36 (1872)
82 U.S. (15 Wall.) 36
1. The Court calls attention to the efforts frequently made by contractors and by their counsel to construe contracts made with the government by appeals to its power, its magnanimity, and generosity.
2. Such appeals, it declares, can properly be presented to Congress alone, for the jurisdiction of the Court of Claims is of contracts, express or implied.
3. In the construction and enforcement of these contracts, the Court of Claims is bound to apply the ordinary principles which govern such contracts between individuals.
4. A. contracted with the bureau of cavalry during the late rebellion to furnish to it, within a time specified, a large number of cavalry horses, sound and of specified size, age &c. A. had no horses at this time, but meant to get them from other persons, their owners, who would send them through him for inspection &c., so that he might fulfill his contract. At the time of the contract, horses furnished under contracts to the department were, by its rules, to be examined and inspected without unnecessary delay, and if the animals were not satisfactory to the inspecting officer, the owner took them away in the same state that he brought them. Before the time that the horses in this case were deliverable, the bureau of cavalry adopted a regulation that horses presented for inspection should remain at the expense of the contractor one day in the inspection yard, and that horses presented for inspection which were a manifest fraud on the government should be branded with the letter R. Under this new rule, the owners of the horses would not furnish them to A. to be sent forward and inspected. Whereupon A., without delivering, buying, or tendering any horses to be inspected, under any rules, even the old, abandoned his contract and sued the government for what profits he might have made had the old rules remained and had he bought and delivered the horses under them. Held that he could recover nothing.
5. The adoption by the bureau of cavalry of the new regulation did not render it impossible for the contractor to purchase and deliver the number of horses which he had agreed to deliver.
6. Nor did the adoption of those rules, after the contract was made, authorize the contractor to abandon his contract and sue for the profits which he might have made, though he neither bought, nor delivered, nor tendered any horses, as he had agreed to do.
7. Such new rules did not disable the government from receiving and paying for the horses, nor was it a notification that the government would not have them.
8. A party binding himself to deliver personal property can only be relieved in this respect on the ground of clear refusal of the other party to receive or becoming disabled to perform his part of the contract.
On the 5th of February, 1864, Smoot entered into two contracts with the War Department through Eakin, quartermaster -- one to deliver within forty days 2,500 cavalry horses at St. Louis and the other to deliver within fifty days 2,000 like horses at Chicago, at the government stables in each place, of certain qualifications set forth in the contracts and subject to the inspection provided for in one article of the contract, which was as follows:
"It is agreed that the horses, upon being delivered, shall be examined and inspected without unnecessary delay by a person or persons appointed by the United States, and after such inspector shall have certified that they are in all respects as contracted for, and fully equal to the specifications aforesaid, they shall be received and become the property of the United States; and all such horses as may be condemned and rejected by said inspectors shall be removed from the government stables within one day after the contractor shall have been notified of said rejection."
Payment for the horses was to be made on completion of the contract, should Congress have made an appropriation for that purpose; otherwise as soon thereafter as funds might be appropriated.
During the existence of the contracts, Smoot was possessed of means and credit to comply with the stipulations on his part, and he and his agents went to Chicago and other parts of the West to make, and did make, all necessary arrangements to carry them out except the actual procuring of the horses.
At the time the contracts were entered into and long prior thereto, the mode of inspection of horses purchased by the government had been for horses to be presented and immediately examined in the presence of the owner, and if satisfactory, they were accepted, and if unsatisfactory, they were rejected and returned to the owner without delay, expense, or blemish.
By an order, however, dated on the same day as these contracts, but not promulgated in Chicago or St. Louis until the 1st of March or known to the defendant till then, the government ordered another and different mode of inspection from what had been the practice and custom of the government theretofore. This new order ran thus:
"Each horse shall be placed in the inspection yard twenty-four hours before inspection, after which time, every person, except the inspector and his assistants, are to leave the yard, not to reenter it or handle the horses until the inspection and branding has been completed. "
"All horses presented that are manifestly an attempt at fraud on the government because of any incurable disease or any distemper whatever shall be branded on the left shoulder with the letter R."
"Horses that are rejected for being under age, in poor condition, or temporarily injured by transportation or otherwise, shall be lightly branded on the front hoof, near the coronet, with the letter R, not to exceed three-quarters of an inch."
"Any horse once rejected that is presented to the government without notice of that fact shall be considered and deemed fraud upon the government, and branded on the left shoulder as fraud."
"When horses are doubtful before branding, they may be kept three or four days under guard, at the expense of the contractor, and then disposed of by branding or otherwise, as the inspector may determine."
"No mares will be accepted."
At the time the contracts were entered into and for a long time prior thereto, the usual course of business in filling contracts of this kind had been for the contractor to buy his horses subject to government inspection, and one effect of the order of the new rules of inspection was to create a change in this course of business, and therefore no horses could be purchased by contracts subject to the new inspection.
Another effect was to impose upon the contractors considerable risk in consequence of the horses' being injured by kicks and bruises; by contagious diseases; by loss of identity, in putting the animals with other parcels of horses, so that in the event of rejection the same animals could not be returned; by the expense of keeping the animals during the four days; by injury which might occur to them from being branded by hot iron; the branding of a rejected horse in the manner prescribed by the new order greatly lessening his market value.
Upon ascertaining the effect produced by the new order of inspection, Smoot caused application to be made at the office of the bureau of cavalry, in Washington, for a modification
of it, and repeatedly offered to go on and fill and contracts if the objectionable features of the order should be removed. The chief of the bureau was then absent. The next officer in rank referred the matter to the chief, who was expected to be in Chicago soon to decide the matter there. The chief of the cavalry did soon after arrive in Chicago, and the matter was presented to him by several other contractors who were in the same position as Smoot, but the chief decided not to revoke or modify the order. Neither Smoot nor his agent saw the chief of the cavalry in Chicago, but his decision was communicated to Smoot.
Smoot was able and willing to perform his contract by delivering the horses within the time prescribed by it, subject to the inspection prescribed by the contract, but was unwilling to deliver any horses subject to the inspection required by the new order. He did not possess any horses in Chicago, nor tender any to the government at that place, nor apply there to the chief of the cavalry bureau to waive the inspection ordered; but he possessed ample time and means for procuring horses, and he regarded the order as a renunciation by the government of its agreement.
So far in regard to the horses deliverable at Chicago.
The same facts existed as to the contract for St. Louis as to the contract for Chicago, except that the new order was not enforced at St. Louis as against contracts dated prior to its promulgation. Of this fact, however, Smoot had no knowledge, but believed that the order was enforced there, as well as in Chicago. He did not ask the inspecting officers in St. Louis anything about the matter, and did not attempt to transport horses to St. Louis in accordance with his contract.
Smoot, not fulfilling his contract, was arrested by the government under an act of Congress passed in the exigencies of the rebellion, [Footnote 1] fined $10,000, and put into Fort Delaware for a willful neglect of duty. He was afterwards, however, on an examination of the case by the Judge Advocate General, released.
The Court of Claims having found a case essentially as above, and that the fair profits which Smoot would have made on the 2,000 horses to be delivered at Chicago, if he had been allowed to perform his contract according to its terms, would have been $10 a horse, gave him on that contract $20,000.
On the St. Louis contract, the court decided in favor of the government. In the Chicago contract, the government appealed; in the St. Louis one, Smoot.