1. Jurisdiction of the Court of Claims to hear and decide a
claim, existing under Jud.Code, § 145, was not affected by a
resolution of the Senate referring to that court for consideration
and report (Jud.Code, § 151) a bill for payment of the claim. P.
271 U. S.
2. The fact that a government contractor signed a settlement
after negotiations in which government officers threatened to break
the existing contract if the settlement were not accepted does not
of itself support a legal inference that the settlement was
procured by duress. Freund v. United States, 260 U. S.
, distinguished. P. 271 U. S.
3. A threat to break a contract does not constitute duress in
the absence of evidence of some probable consequences of it to
person or property for which the remedy afforded by the courts
would be inadequate. P. 271 U. S.
4. Mutual promises of the parties are adequate consideration
sustaining a compromise of a disputed contract. P. 271 U. S. 50
60 Ct.Cls. 712 affirmed.
Appeal from a judgment of the Court of Claims.
Page 271 U. S. 44
MR. JUSTICE STONE delivered the opinion of the Court.
On February 5, 1923, a bill (S. 4479) was introduced in the
Senate authorizing and directing the Secretary of the Treasury to
pay to 285 named persons, firms, and corporations, including the
"which entered into contracts with the United States of America
through the agency of the United States Ordinance Department, which
contracts were cancelled by said Ordinance Department, the several
sums set opposite their names."
By Senate Resolution of March 3, 1922, the bill, with
accompanying documents, was referred to the Court of Claims for
consideration and report. Judicial Code, § 151. Appellant filed its
petition in the Court of Claims, referring to the Senate bill and
resolution setting up a claim upon a contract of September 26,
1918, for the sale of cotton linters to the government. The Court
of Claims held, upon the facts found, that it had jurisdiction to
render a judgment under the provisions of chapter 7 of the Judicial
Code; that the plaintiff was not entitled to recover upon its
claim, and entered judgment dismissing the petition.
The case comes here on appeal. Judicial Code, § 242, before its
repeal by the Act of February 13, 1925.
The petition sets out a cause of action for failure of the
government to perform its contract of September 26, 1918, and, by
way of anticipation of a defense, alleges that a later contract of
December 31, 1918, between appellant and the government, purporting
to cancel the earlier contract, was procured by duress and was
without consideration. The jurisdiction to hear and determine
Page 271 U. S. 45
claim is conferred by Judicial Code, § 145, and was not enlarged
or otherwise affected by the Senate resolution.
The petitioner, a South Carolina corporation, was engaged in the
business of crushing cotton seed for the production of cotton seed
oil, cotton seed meal, and other cotton seed products, including
cotton linters, which are the short fibers adhering to cotton seed
after the removal of the staple cotton by ginning. During the late
war, cotton linters were used extensively in the manufacture of
explosives. After the entry of the United States into the war,
appellant, with all others engaged in the production of cotton seed
products, became subject to the direction and control of the War
Industries Board (Act May 20, 1918, c. 78, 40 Stat. 556), and of
the United States Food Administration (Act Aug. 10, 1917, c. 53, 40
Stat. 276), with respect to the production and distribution of
their product and the prices of both the raw material purchased and
the product sold by them. This control was an essential feature of
a plan to stabilize price and stimulate production.
Appellant, by its contract, which was similar in form and
content to those of the other manufacturers named in the Senate
resolution, agreed to sell to the government its estimated product
of cotton linters for the year ending July 31, 1918, approximately
2,250,000 pounds at 4.67 cents per pound. The contract contained a
clause authorizing the government to cancel it "in the event of the
termination of the present war," with the proviso that the seller
should continue to make deliveries for 30 days after the effective
date of the cancellation and that the government should save the
seller harmless from actual loss resulting from the
In November, 1918, after the Armistice, negotiations were begun
between the Cotton Products Section of the War Industries Board and
a committee representing appellant and other manufacturers, for the
Page 271 U. S. 46
and settlement of all obligations upon appellant's contract of
September 26th and all similar contracts. In the course of these
negotiations, it was contended by the representatives of the
government and denied by the committee that the termination of the
war had occurred, within the meaning of the cancellation clause.
The War Industries Board ceased to function on December 21, 1918,
and these negotiations were continued on behalf of the government
by representatives of the Ordinance Department. On December 30,
1918, officers of this department notified the committee that the
government would settle its obligations upon these contracts only
by accepting the linters then on hand and inspected, about 270,000
bales, and would take only a part of the linters produced between
January 1 and July 31, 1919, not to exceed 150,000 bales, the
amount taken to be prorated among the manufacturers. At the same
time, they notified the committee that, unless this proposal was
accepted within one hour from the time it was made, the government
would refuse to perform its contracts, and would refuse to accept
or pay for any linters, either on hand with the manufacturers or
afterwards produced by them, and that appellant and other
manufacturers could seek their remedy in the courts.
Within the hour, the committee, although protesting against the
government's interpretation of the contract and the position taken
by its representatives, notified them that the manufacturers would
accede to the proposed modification of their contracts. On the same
day, the Ordnance Department gave to appellant and other
manufacturers telegraphic notice of the cancellation of their
contracts, and on January 2, 1919, a form of contract, embodying
the verbal agreement reached between the officers of the Ordinance
Department and the committee, was submitted to the appellant and
the other manufacturers, accompanied by a copy of a letter of
Page 271 U. S. 47
Ordinance Department stating that linters would not be accepted
by the government from any producer who refused to execute the
contract. Appellant's counsel assisted in the preparation of this
letter. The form contract, dated December 31, 1919, was signed by
appellant; it contained recitals of the cancellation of the earlier
contract of September, 1918; that a dispute had arisen as to
whether the war had terminated and as to the measure of damages
provided by the cancellation clause in the earlier contract, and
stipulated that the new contract was in lieu of cancellation of the
earlier contract, and a modification of it.
The findings of the Court of Claims establish appellant's right
to recover under the earlier contract if it was not modified by the
later one. Appellant urges that the later contract does not bar
such recovery, because the coercive measures resorted to by
officers of the Ordinance Department, to induce its execution,
amount in law to duress, rendering the second contract invalid and
without force to modify the first. To support this position,
appellant relies on the serious consequences which the industry
would have suffered if the government had wholly refused to perform
its contracts. It asserts that 270,000 bales of linters already
inspected by the government were in the hands of manufacturers;
that a million tons of cotton seed, purchased at the uniform price
of $70 fixed by the government, were on hand; that the
manufacturers had made commitments for the purchase of $480,000
tons in the hands of farmers. It is contended that the government's
refusal to carry out the contracts would have resulted in the
failure of the scheme for the stabilization of the price of cotton
seed and its products, and in the collapse of the business
structure which had been reared upon the basis of the stabilized
price, and that great loss would have resulted to appellant and
Page 271 U. S. 48
A difficulty encountered by the appellant at the outset is that
this view is not supported by the findings made. On its own theory
of the case, appellant must prove the probable injury which it
would have suffered from the threatened refusal of the government
to carry out its contract, and that fear of that loss was the
effective cause of its executing the settlement contract. Any
inference that the business of manufacturing and distributing
cotton seed products would have been disastrously affected would
avail appellant nothing, because it does not appear what the
consequences to its own business and finances would have been.
The findings establish that, on December 30, 1918, there were in
the hands of manufacturers 270,000 bales of linters, but it does
not appear what proportion of them, if any, were in the hands of
appellant. There is no finding with respect to the amount of cotton
seed or cotton seed products in the hands of the manufacturers.
There is no finding with respect to the nature or extent of the
commitments of the manufacturers for the purchase of seed, or as to
the nature of extent of the loss which appellant would have
suffered if, on December 30, 1918, the government had refused to go
forward with its contract, or that the legal damages for such
breach of contract would not have been adequate to compensate for
its loss. There is no finding that appellant was induced to sign
the settlement contract by fear of the consequences of a refusal to
In applying to the facts of this case the principles which
control duress as a legal ground for avoidance of a contract, we
are limited to such conclusions of law as may be drawn from the
fact, found by the court below, that appellant signed the
settlement contract after negotiations in the course of which the
threat was made that the government would disregard the admitted
obligations of its contracts unless those entitled to the
Page 271 U. S. 49
them would yield to its demands. This threat was discreditable
to the officers who made it and injurious to the government, whose
high obligation to deal justly and according to law with those with
whom it had contracts might well have been their first concern. But
a threat to break a contract does not, in itself, constitute
duress. Before the coercive effect of the threatened action can be
inferred, there must be evidence of some probable consequences of
it to person or property for which the remedy afforded by the
courts is inadequate. Silliman v. United States,
101 U. S. 465
Rosenfeld v. Boston Mut. Life Ins. Co.,
222 Mass. 284;
Hackley v. Headley,
45 Mich. 569; Goebel v. Linn,
47 Mich. 489; Cable v. Foley,
45 Minn. 421; Wood v.
223 Mo. 537; Secor v. Clark,
350; Doyle v. Rector, etc., Trinity Church,
133 N.Y. 372;
Smithwick v. Whitley,
152 N.C. 369; Earle v.
27 R.I. 221. And see 84 U.
S. United States,
17 Wall. 67; United
States v. Child,
12 Wall. 232.
Freund v. United States, 260 U. S.
, Hunt v. United States, 257 U.
, and United States v. Smith,
256 U. S. 11
relied upon by appellant, present different considerations from
those involved here. All were cases in which government contractors
were called on to perform extra services, the representatives of
the government taking the position that the services demanded were
stipulated for by the contracts. In each it was held that the
services were not contemplated by the contract, and that the
contractor did not assent to the government's construction. There
was consequently no legal bar to the contractor's recovering the
fair value of the service rendered to the government, the
Postmaster General having authority to request the services and to
pay for them. See also United States v. Stage Co.,
199 U. S. 414
St. Louis S.W. Ry. v. United States, 262 U. S.
, 262 U. S. 76
Here, the appellant is confronted with the finding that it has
executed a formal
Page 271 U. S. 50
contract which bars its recovery unless it sustains the burden
of proving duress.
The objection that the contract by which the parties settled the
controversy between them was without consideration is without
weight. Savage Arms Corp. v. United States, 266 U.
MR. JUSTICE SUTHERLAND took no part in the case.