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.
Page 82 U. S. 37
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:
Page 82 U. S. 38
"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. "
Page 82 U. S. 39
"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
Page 82 U. S. 40
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.
Page 82 U. S. 41
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.
Page 82 U. S. 43
MR. JUSTICE MILLER delivered the opinion of the Court.
Mr. Smoot claims of the United States a large sum of
Page 82 U. S. 44
money for the profits which he might have made out of two
contracts with Quartermaster Eakin for delivering cavalry horses
for the use of the army -- two thousand five hundred at St. Louis
and two thousand at Chicago. It is neither alleged nor proved that
he ever tendered a horse at either place or attempted otherwise to
perform his contract, or that he was ready to do so, or that he
owned any horses, or had expended a dollar in preparing to fulfill
his contract. The proposition on which the claimant rests his right
to these speculative profits is not on account of anything he had
done or offered to do towards performance, or any actual loss
suffered, but that after the contract was made, the cavalry bureau
of the War Department adopted and published rules governing the
inspection of horses purchased for that service, differing from
those in use at the time the contract was made. It is not asserted
that these rules required a higher or more difficult standard of
quality in the horses, but that the mode in which that standard was
to be ascertained was so changed as to impose a greater hardship or
burden upon the contractor. Nor is it claimed that these new
regulations were adopted with special reference to their
application to Smoot's contracts. They were a new regulation of the
business of inspection of a general character. The contracts sued
on, which are identical except in the number of horses and the
place of delivery, provided for an inspection. But it is argued
that the new regulations were not only a departure from those in
use when the contracts were made, and imposed an additional burden
on the contractor, but that, conceding the right of the bureau to
make proper and reasonable regulations for inspection, these were
unreasonable and improper. The two points of difference in the new
and the old mode of inspection most earnestly pressed in the
argument are:
1. That by the new regulations, the horses offered must remain
at the expense of the contractor twenty-four hours in the
inspection yard, into which no other person than the inspector and
his assistants shall be permitted to enter until the inspection is
completed.
Page 82 U. S. 45
2. That all horses presented for inspection that are manifestly
an attempt at fraud on the government because of incurable disease
or any purposely concealed defect whatever shall be branded on the
left shoulder with the letter R.
The argument founded on these rules is presented under two
propositions:
1. That the adoption of them by the cavalry bureau rendered it
impossible for the contractor to perform his contract, because no
owner of horses would sell to him subject to have them branded as a
fraud by inspectors of whom he knew nothing, and who might be
incompetent or oppressive.
2. That the application of these rules to horses tendered under
claimant's contract absolved him from the obligation of
performance, or tender, or offer to perform, and left him at full
liberty to sue for the profits which he had done nothing to earn
beyond making the contract.
There is in a large class of cases coming before us from the
Court of Claims a constant and ever-recurring attempt to apply to
contracts made by the government, and to give to its action under
such contracts, a construction and an effect quite different from
those which courts of justice are accustomed to apply to contracts
between individuals. There arises in the mind of parties and
counsel interested for the individual against the United States a
sense of the power and resources of this great government,
prompting appeals to its magnanimity and generosity, to abstract
ideas of equity, coloring even the closest legal argument. These
are addressed in vain to this Court. Their proper theater is the
halls of Congress, for that branch of the government has limited
the jurisdiction of the Court of Claims to cases arising out of
contracts express or implied -- contracts to which the United
States is a party in the same sense in which an individual might
be, and to which the ordinary principles of contracts must and
should apply.
It would be very dangerous indeed to the best interests of the
government -- it would probably lead to the speedy abolition of the
Court of Claims itself -- if, adopting the views so eloquently
urged by counsel, that court or this should
Page 82 U. S. 46
depart from the plain rule laid down above, and render decrees
on the crude notions of the judges of what is or would be morally
right between the government and the individual.
In illustration of this course of observation, the proposition
that the regulation concerning branding the horses fraudulently
presented for inspection made it impossible for the contractor to
perform his contract may be well cited.
As between individuals, the impossibility which releases a man
from the obligation to perform his contract must be a real
impossibility, and not a mere inconvenience. And while such an
impossibility may release the party from liability to suit for
nonperformance, it does not stand for performance so as to enable
the party to sue and recover as if he had performed.
The argument on this branch of the subject in the case before us
loses sight of these principles.
There was no impossibility. It is a mere inconvenience. If the
contractor has the money and purchases his horses before he offers
them for inspection, there is presented no obstruction whatever, by
the rules of inspection, in obtaining the required number of
horses. It is only because he desires to transfer the risk and loss
of rejection from himself to the parties of whom he purchases that
he has difficulty. The government made no agreement with him to
protect him in this way. His ability to buy horses that would pass
inspection was a part of the responsibility that he assumed, and
which it was by no means impossible to perform, if he had the money
and was ready to pay when he bought the horses of their original
owners. Certainly no such circumstance as this would be set up for
a moment in an ordinary suit between individuals as an
impossibility which released the party from his contract.
But suppose the contract had been between private parties and an
epidemic had prostrated every horse in the country with disease for
the forty days allowed to buy and deliver sound horses by this
contract. Will anyone assert that this would authorize the
contractor to sue for the profits he could
Page 82 U. S. 47
have made, if no epidemic had occurred, though he neither then
nor afterwards bought or delivered or tendered a horse? While such
a public misfortune might possibly (we do not say it would) have
been a defense to a suit against him for nonperformance, it could
be the foundation of no claim on his part to recover as if he had
performed.
Perhaps no class of contracts has been more frequently the
subject of judicial consideration than those for the future
delivery of personal chattels. Such a contract is this. A contract
in which the delivery is a condition precedent to payment, for the
provision is that the delivery is to be at Chicago and St. Louis,
and the payment made afterwards at Washington, and the time of
payment is expressly made dependent upon appropriations made or to
be made by Congress.
In approaching the inquiry into the effect which the action of
the bureau of cavalry, in adopting these new rules for inspection,
had upon the rights of the parties to this contract, let us
endeavor to free ourselves from the consideration that the
government was one party to the contract and that it was for a
large number of horses, for we hold it to be clear that the
principles which must govern the inquiry are the same as if the
contract were between individuals, and the number of horses one or
a dozen instead of four thousand. The increased difficulty arising
from the number to be delivered in a given time was voluntarily
assumed by the contractor, and he had the right, during the forty
or fifty days allowed him, to deliver any number, smaller or
greater, at one time.
We are also to remember that the question to be considered is
not whether the action of the cavalry bureau would have been a
defense if the claimant had been sued for a failure to perform his
part of the contract, but whether it was sufficient to authorize
him to abandon the contract himself, and as a plaintiff recover
against the other party the profits which he would have made if it
had been fully performed.
With these views before us, the regulations adopted can only
have the effect claimed upon one or two grounds --
Page 82 U. S. 48
namely as a notification by the government that it refused to
receive the horses according to the terms of the contract, by which
refusal the other party was released from his obligation to tender,
or that the government had disabled itself from complying, and
therefore the other party was not bound to tender. The most recent
work, and a very able one, on "The law of sales of personal
property" lays down the rule on this subject as follows:
"A mere assertion that the party will be unable or will refuse
to perform his contract is not sufficient; it must be a distinct
and unequivocal absolute refusal to perform the promise, and must
be treated and acted upon as such by the party to whom the promise
was made, for if he afterwards continue to urge or demand a
compliance with the contract, it is plain that he does not
understand it to be at an end. [
Footnote 2]"
The English cases cited abundantly sustain the proposition.
Avery v. Bowden, in the Court of Exchequer, [
Footnote 3] affirmed in the Exchequer
Chamber, [
Footnote 4] is very
much in point. It was an action arising out of a charter party, one
of the covenants in which was that the vessel should be at Odessa
and lay there forty running days, within which time the shipper was
to furnish her cargo unless war should be sooner declared between
Russia and Great Britain. The vessel came to Odessa on the 11th
March, and sailed away in ballast on the 17th April. It was proved
that at four different times during this period, the officers of
the ship applied to the agent of the charterer for cargo, who said,
"We have none for you," and at last said, "I have no cargo for you;
you had better go away."
On this testimony, a verdict was taken for the plaintiff, the
shipowner, subject to the judgment of the court on the law of the
case. The judges, both in the Exchequer Court and in the Exchequer
Chamber, were unanimous in the opinion that this conduct of the
agent did not relieve the plaintiff from the obligation to remain
the forty days, and that on that count he could not recover.
In the case of
Phillpotts v. Evans, [
Footnote 5] the defendant, who had
Page 82 U. S. 49
agreed to receive and pay for wheat, notified the plaintiff,
before the time of delivery, that he would not receive it. The
plaintiff tendered the wheat at the proper time, and the only
question raised was, whether the measure of damages should be
governed by the price of wheat at the time of the notice or at the
time of the tender. Baron Park said:
"I think no action would have lain for the breach of the
contract at the time of the notice, but that plaintiff was bound to
wait until the time of delivery to see whether the defendant would
then receive it. The defendant might have chosen to taken it and
would have been guilty of no breach of contract. His contract was
not broken by his previous declaration that he would not
accept."
And though some of the judges in the subsequent case of
Hochsteer v. De La Tour [
Footnote 6] disapprove very properly of the extreme ground
taken by Baron Park, they all agree that the refusal to accept on
the part of the defendant in such case must be absolute and
unequivocal, and must have been acted on by the plaintiff.
In the case before us, there was no such refusal. The officers
of the government required of the plaintiff at all times the
delivery of the horses of the kind and quality which he had agreed
to deliver. And so far from refusing to accept or intending to
release the plaintiff from his obligation to deliver, it is found
as a fact in the case that he was arrested and imprisoned by the
military authorities for refusing to deliver the horses.
Nor can it be maintained that those regulations disabled the
government from performing its contract. They were just as ready to
accept and as able to pay for the horses, notwithstanding the
regulation. It may be said that the regulation tied the hands of
the government officers so that they could only accept horses
inspected under it, and that to such inspection the plaintiff was
not bound to submit. But to this proposition the remark of Baron
Park is peculiarly applicable. The government was not bound to
apply to
Page 82 U. S. 50
horses furnished under a previous contract these subsequent
regulations. They were general in their terms, and were not adopted
with a special view to these contracts. And the declarations of
certain officers that they would be governed by them bound nobody.
The correctness of this view is strikingly illustrated in this
case, for the Court of Claims finds that the officers receiving
cavalry horses at St. Louis did receive horses on all contracts
made previous to the adoption of the new regulations under the old
mode of inspection, and did not apply to them the objectionable
rules, and for that reason they reject Smoot's claim as to the
contract to deliver at St. Louis.
We think it was equally his duty to have tendered horses at
Chicago, and if the new regulations would have relieved him at all
from that duty, it would have been after he had made a tender, and
objected to the application of the new rule of inspection, and the
proper officer had refused to receive the horses without subjecting
them to those rules. Until then, he could not justly claim that the
government had violated its contract.
In Mr. Smoot's case, he never had any declaration made to him or
his agent from anyone in charge of the execution of those contracts
on the part of the government, that the rule would be applied to
him or his contract. He accepted and acted upon declarations made
to other parties and not to himself.
We do not, however, believe that this would have varied the
matter. It would have been no great hardship for him to have so far
attempted compliance with his contract as to have tendered twenty
or fifty horses under it, and tested the action which the
government officers would take when he was thus attempting to
fulfill his contract and objecting to the application of the new
rule. Then the officers of the government would have been legally
called on to determine whether they would apply them or not. Until
that time they were under no obligation and had no right to commit
themselves or others irrevocably on that subject.
On these grounds we think that the claimant had no right
Page 82 U. S. 51
to recover on either of the contracts sued on. It follows that
the judgment of the Court of Claims in favor of Smoot on the
Chicago contract is reversed and the case remanded for judgment in
favor of the United States, and the judgment of that court on the
St. Louis contract, the subject of the appeal by Smoot, is
Affirmed.
[
Footnote 1]
Act of July 17, 1862.
[
Footnote 2]
Benjamin on Sales 424.
[
Footnote 3]
5 Ellis and Blackburn 714.
[
Footnote 4]
6
id. 953.
[
Footnote 5]
5 Meeson and Welsby 475.
[
Footnote 6]
2 Ellis & Blackburn 678.
NOTE
At the same time was adjudged -- it having been previously
argued by Mr. C. H. Hill Assistant Attorney General, for the United
States, and by Mr. James Hughes,
contra -- the case of
the
UNITED STATES v. SPICER,
"the facts of which were very similar to those of Smoot's case,
above reported. Judgment had been given below in favor of Spicer.
The court now announced that the principles set forth in Smoot's
case, which they had just decided, must govern Spicer's case also.
The judgment in it was accordingly reversed, with directions to the
Court of Claims to render judgment"
In favor of the United States.
