1. The United States, when sued as a contractor, cannot be held
liable for an obstruction to the performance of the particular
contract resulting from its public and general acts as a sovereign.
P.
267 U. S.
460.
2. So
held where the government, having sold silk to
the claimant, did not ship it promptly, owing to an embargo placed
on freight shipments of silk by the United States Railroad
Administration, so that the claimant lost his opportunity to resell
at a profit.
58 Ct.Cls. 189 affirmed.
Page 267 U. S. 459
Appeal from a judgment of the Court of Claims dismissing the
petition upon demurrer.
MR. JUSTICE SANFORD delivered the opinion of the Court.
This action was brought by Horowitz under the Tucker Act
* to recover
damages for the alleged breach of a contract relating to the
purchase of silk from the Ordnance Department. The petition was
dismissed on demurrer for failure to state a cause of action. 58
Ct.Cls. 189.
The petition alleges in substance these facts: on December 20,
1919, the claimant, a resident of New York, submitted a bid for
certain Habutai silk offered for sale by the New York Ordnance
Salvage Board. At that time, the "Chief of the Textile Division of
New York City" agreed, "on behalf of such Board," that the claimant
would be given an opportunity to resell the silk before completing
the payment of the purchase price, and that the "departments of the
government having jurisdiction in matters of this kind" would ship
the silk, which was then in Washington, within a day or two after
shipping instructions were given. On December 22, he was notified
by the Board that the sale of the silk to him had been "approved,"
and he thereupon paid part of the purchase price. On January 30,
1920, he sold the silk to a silk company in New York. On February
16, he paid the balance of the purchase price, and wrote the Board
to
Page 267 U. S. 460
ship the silk at once, by freight, to the silk company. Two days
later, he was notified by the Board that it had received the
shipping instructions and had ordered the silk to be shipped.
Thereafter the price of silk declined greatly in the New York
market, until March 4. On that date the
"claimant learned . . . that the silk was still in Washington,
and had not been shipped because the government through one of its
agencies, the U.S. Railroad Administration, had, prior to March 1,
1920, placed an embargo on shipments of silk by freight, and the
shipment of Habutai silk for claimant had been held up."
Afterwards, the government shipped the silk to the consignee by
express. It arrived in New York "on or about March 12." The
consignee then refused to accept delivery on account of the fall in
prices. And,
"by reason of the government's breach of the contract and
agreement in placing an embargo, and failing to ship the silk
either by express or freight prior to March 4, 1920, the price of
silk having declined, the claimant was forced to sell the said silk
for $10,811.84 less than the price the consignee had agreed to pay
for same had it been delivered in time."
The petition alleges that the claimant is entitled to recover
from the United States the said sum of $10,811.84, "for and on
account of the violation of the said agreement," and prays judgment
therefor.
We assume, without determining, that the petition shows a valid
contract with the Salvage Board for the sale of the silk and its
prompt shipment after the receipt of shipping instructions. The
sole breach of this contract which is alleged is the failure to
ship the silk prior to March 4, 1920. This, according to the
averment of the petition, was caused by an embargo placed by the
Railroad Administration on shipments of silk by freight. Neither
the validity of this embargo nor its effect in delaying the
shipment is challenged by the petition.
Page 267 U. S. 461
It has long been held by the Court of Claims that the United
States, when sued as a contractor, cannot be held liable for an
obstruction to the performance of the particular contract resulting
from its public and general acts as a sovereign.
Deming v.
United States, 1 Ct.Cls.190, 191;
Jones v. United
States, 1 Ct.Cls. 383, 384;
Wilson v. United States,
11 Ct.Cls. 513, 520. In the
Jones case,
supra,
the court said:
"The two characters which the government possesses as a
contractor and as a sovereign cannot be thus fused, nor can the
United States, while sued in the one character, be made liable in
damages for their acts done in the other. Whatever acts the
government may do, be they legislative or executive, so long as
they be public and general, cannot be deemed specially to alter,
modify, obstruct or violate the particular contracts into which it
enters with private persons. . . . In this court, the United States
appear simply as contractors, and they are to be held liable only
within the same limits that any other defendant would be in any
other court. Though their sovereign acts performed for the general
good may work injury to some private contractors, such parties gain
nothing by having the United States as their defendants."
It was upon this ground that the demurrer in the present case
was sustained by the Court of Claims. We think this was correct,
and the judgment is
Affirmed.
* Act March 3, 1887, 24 Stat. 505, c. 359; Judicial Code, ยง
145.