When a void but not illegal contract of sale has been performed
on both sides, the vendor cannot recover on a
quantum
valebat less the amount already paid.
The United States bought hay for a camp, providing that the
quantity bought be decreased at its option not exceeding twenty
percent, and if the troops should be wholly or in part withdrawn,
the contract should become inoperative to the extent of such
reduction, and that deliveries were to begin within five days and
proceed at daily rates of at least one sixtieth of the amount, or
in such quantities and in such times afterward as might be
designated by the quartermaster. The troops were withdrawn, orders
were delayed beyond sixty days, and a little less than the whole
amount was ordered. The claimant protested and claimed damages, but
accepted payment for the whole without reserving any rights at the
time.
Held that there was no breach of contract by the United
States even if it was still open to the claimants to demand damages
in case of a breach and if the setting up of the invalidity of the
contract by the United States in answer to the demand would have
opened the way to a
quantum valebat.
The facts are stated in the opinion of the Court.
Page 191 U. S. 161
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is an appeal from a judgment of the Court of Claims
dismissing the appellant's petition. 37 Ct.Cl. 281. The petition
alleges a contract by the United States to buy 9,000,000 pounds of
hay from the claimant at the rate of sixty-one and one-half cents
per hundred weight, a refusal by the government to take the hay at
the rate of one sixtieth daily, as required by the contract,
according to the claimant's interpretation, and a failure to accept
255,291 pounds out of the nine million. The rest, it is admitted,
was taken and paid for at contract rates. The claimant seeks
compensation for an increased price paid by it, increased cost of
transportation, and loss of anticipated profits caused by the
delay, all as damages for the breach of the contract or,
alternatively, the market value of the hay less the amount paid by
the United States. The answer is a general denial.
The Court of Claims finds that, during the late war with Spain,
an advertisement was published by a quartermaster for 9,000,000
pounds of hay, among other things, seemingly for
Page 191 U. S. 162
use in Camp George H. Thomas, Georgia, and that, in connection
with it, the following information was furnished:
"The foregoing are the estimated quantities which will be
required, but bids will be accepted in whole or in part . . . and
awards made under accepted bids will provide that the quantities
awarded may be increased or decreased at the option of the United
States, not exceeding twenty percentum thereof . . . , and further,
that, if the troops should be wholly or in part withdrawn, the
awards shall become inoperative to the extent of such reduction. .
. . Hay and straw. . . . Deliveries of the supplies to begin within
five days from date of award, and proceed at daily rates of at
least one sixtieth of amount, or in such quantities and at such
times afterwards as may be designated by the chief
quartermaster,"
etc. A bargain was made on these terms on July 12, 1898.
Shipments were made amounting, on August 27, 1898, to 4,685,949
pounds. On August 28, the quartermaster telegraphed to the claimant
not to ship any more hay until notified to do so. This suspension
of orders was due to the withdrawal of troops. The claimant then
had 100 carloads in transit, which it was obliged to sell for what
it could get, and protested against the stoppage. At different
dates between September 12 and May 18 following, the quartermaster
telegraphed orders for hay, which were filled. Hay meantime had
risen in value, and cost the claimant more than it would have cost
in the summer. Accordingly, the claimant asked to be relieved from
delivery, but the quartermaster refused, holding back money due to
the claimant as security to compel performance. The claimant went
on with deliveries, and in December was asking for orders "on our
contract;" on April 27, returned a voucher "covering hay on our
contract;" on May 27, sent a bill of lading and invoice "ordered
upon our contract today;" and on June 24, 1899, wrote "We would
like to know how soon you expect us to put in the balance of the
hay due upon the contract, as we are anxious to get it all cleaned
up." It would seem that no hay was ordered after June 13. The
claimant
Page 191 U. S. 163
delivered the hay and received full payment for it under the
contract without protest or attempt to reserve any rights at that
time. The last payment was made on July 24, 1899. On May 11, 1899,
however, the claimant wrote to the quartermaster claiming damages
on account of the government's not taking the hay at the rate of
one sixtieth per day, and on June 28 and later, the quartermaster
approved the claim. Although no doubt both parties supposed their
agreement binding, the Court of Claims held, and it is not
disputed, that the contract was within Rev.Stat. ยง 3744, and, not
having been "reduced to writing, and signed by the contracting
parties with their names at the end thereof," could not have been
sued upon if it had not been performed.
Clark v. United
States, 95 U. S. 539;
South Boston Iron Co. v. United States, 118 U. S.
37.
See Monroe v. United States, 184 U.
S. 524. It is argued by the claimant on this ground that
it is entitled to maintain a
quantum valebat.
On the facts stated, it is evident that the claimant has no
case. The invalidity of the contract is immaterial after it has
been performed. When a lawful transfer of property is executed, it
does not matter whether the terms of the execution were void or
valid while executory; the transfer cannot be revoked or the terms
changed. A promise to make a gift does not bind, but a gift cannot
be taken back, and a transfer in pursuance of mutual promises is
not made less effectual by those promises or by the fact that money
was received in exchange. The contract may be void as such, but it
expresses the terms on which the parties respectively paid their
money and delivered their goods.
See Savage v. United
States, 92 U. S. 382. The
proposition does not need to be argued or explained more at length.
Of course, different considerations would come in if the claimant
had been subjected to a motive from which it had a right to be
free, as, for instance, by fraud or duress. But there was nothing
which the law could recognize as duress, and the suggestion that it
was peculiarly the duty of the officers of the government to see
that
Page 191 U. S. 164
the contract was put in binding form is very far from making out
an analogy to fraud. The claimant was bound to know the law at its
peril. The agent of the United States made no representation, and
the claimant in no way purported to submit its judgment to his, if
that would have bettered its case.
But it is said that this is not the simple case of mutual
performance of a void contract, but that the United States,
although it has paid the price, has broken the contract in respect
of time. It may be said that, if the United States, instead of
paying for the hay, had set up the invalidity of the contract,
Bacon v. Parker, 137 Mass. 309, 310-311, the claimant
could have sued on a
quantum valebat. Clark v. United
States, 95 U. S. 539,
95 U. S.
542-543;
Vacon v. Parker, 137 Mass. 309,
310-311. And it might be argued that the same result would follow
if the United States, after paying the price, were compelled to
rely upon the invalidity of the contract in answer to a claim of
damages for a breach. Acceptance of payment by the vendor is not
necessarily a waiver of such a claim.
Garfield & Proctor
Coal Co. v. Fitchburg Railroad, 166 Mass. 119, 123. But we
need not consider the questions suggested, because we agree with
the Court of Claims that there was no breach. The right to diminish
the order, and to change the quantities and times, was reserved in
the fullest and most express terms, and especially with regard to
the event which happened, the withdrawal of the troops. Therefore,
if, in view of the protest and claim made by the claimant, we
should assume that the payment of the contract price did not
purport to be in full satisfaction of all claims under the
contract, which would be going very far and would be against the
findings, still there is no valid claim under it, because the
United States has done all that it undertook to do. It is true that
hay is an article varying greatly in price at different seasons of
the year, and that would have been a reason for holding time of the
essence, if the contract had fixed a time; but the contract left
the time open, as we have said, and the claimant must be held to
the bargain which it made, although it has been disappointed in
reasonable hopes.
Judgment affirmed.