St. Louis Hay & Grain Co. v. United States, 191 U.S. 159 (1903)

*ST. LOUIS HAY & GRAIN COMPANY,

Appt., v.

UNITED STATES.

(See S. C. Reporter’s ed. 159-164.)

Contracts — right to maintain a quantum valehat of one performing a contract in¬ valid because not in writing — what consti¬ tutes a breach of.

United States is Invalid, under U. S. Rev.

Stat. § 3744, because it had not been reduced to writing and signed by the contracting parties, does not entitle the contractor, after furnishing the hay and receiving the contract price, to maintain a quantum valehat on the ground that the value of the hay had in¬ creased from the time of the contract to the time of delivery.

191 U. S,

St. Louis Hat & Gbain Co. v. United States.

161

United States, under an advertisement pro¬ viding that awards made under accepted hids will provide that the quantities awarded may be increased or decreased at the option of the United States, not exceeding 20 per cent, and that, if the troops of the United States should he wholly or in part withdrawn, the award shall become inoperative to the ex¬ tent of such reduction, and that deliveries shall begin in five days from the date of the award, and proceed at daily rates of at least one sixtieth of amount, or in such quanti¬ ties and at such times afterwards as may be designated by the chief quartermaster, — is not broken by a suspension for some time of orders for hay after the withdrawal of troops, and a continuation of orders for a period of ten months after the award, al¬ though the market value of hay is much greater during the later than the earlier part of such period.

[No. 41.]

Argued October 30 and November 2, 1903.

Decided November 16, 1903.

APPEAL from the Court of Claims to re¬ view a judgment dismissing a petition for damages for the breach by the United States of a contract made with it by the claimant. Affirmed.

See same case below, 37 Ct. Cl. 281.

The facts are stated in the opinion. Messrs. William E. Harvey and George A. King argued the cause, and, with Mr. William B. King, filed a brief for appellant:

The claimant is entitled to recover the value of the hay at the time and place of delivery.

Clark v. United States, 95 U. S. 539, 24 L. ed. 518.

The special contract was void for all pur¬ poses.

Filor v. United States, 9 Wall. 45, 19 L. ed. 549; Williams v. Bemis, 108 Mass. 91, 11 Am. Rep. 318.

To sustain the defense of accord and sat¬ isfaction there .must be both an accord and a satisfaction; that is, there must be an agreement — express or implied — to receive a certain sum in satisfaction of a claim, coupled with payment of that sum.

Memphis v. Brown, 20 Wall. 289, 22 L. ed. 264; Cumber v. Wayne, 1 Smith Lead Cas. 7th Am. ed. 595; Flockton v. Ball, 14 Q. B. 380, 16 Q. B. 1039.

This case is governed by the principles as¬ serted in the decision in Piatt v. United States, 22 Wall. 496, 22 L. ed. 858.

The question is whether the payment was in fact made and accepted in satisfaction.

Baird v. United States, 96 U. S. 430, 24 1,. ed. 703 ; Fire Ins. Asso. v. Wickham, 141 U. S. 577, 35 L. ed. 866, 12 Sup. Ct. Rep. 84; Chicago & N. W. R. Go. v. United States, 104 U. S. 686, 26 L. ed. 893; Swift & C. d 191 U. S.

B. Co. v. United States, 105 U. S. 691, 26 L. ed. 1108, 111 U. S. 22, 28 L. ed. 341, 4 Sup. Ct. Rep. 244; Cape Ann Granite Co. v. United States, 20 Ct. Cl. 1.

Time was of the essence of the contract.

Iliprcell v. Knight, 1 Younge & C. Exch. 401; Coon v. Spaulding, 47 Mich. 163, 10 N. W. 183; Cameron v. Wells, 30 Vt. 633; Bly- denburgh v. Welsh, Baldw. 331, Fed. Cas. No. 1,583; Carter v. Phillips, 144 Mass. 100, 10 N. E. 500.

In the case of a government contract there is a special ground for insisting upon a con¬ struction which is in accordance with good faith, and which seeks no unconscionable ad¬ vantage of the other party.

Scott v. United States, 12 Wall. 443, 20 L. ed. 438; Hume v. United States, 132 U. S. 406, 33 L. ed. 393, 10 Sup. Ct. Rep. 134.

Assistant Attorney General Pradt argued the cause and filed a brief for appellee:

The agreement not being in writing and signed by the parties, as required by U. S. Rev. Stat. § 3744 (U. S. Comp. Stat. 1901, p. 2510), was not a valid contract upon which an action can be brought for damages caused by the defendant’s breach.

Clark v. United States, 95 U. S. 539, 24 L. ed. 518.

It is true that where services have been rendered, or goods delivered, under a con¬ tract within the statute of frauds, an action may be maintained on the quantum meruit as upon an implied contract, but only where the defendant is in default.

Galvin v. Prentice, 45 N. Y. 164, 6 Am. Rep. 58; Day v. New York C. R. Co. 51 N. Y. 583 ; King v. Brown, 2 Hill, 487 ; Cough¬ lin v. Knowles, 7 Met. 61, 39 Am. Dec. 759.

The statute of frauds has no application to an executed agreement.

Stone v. Dennison, 13 Pick. 1, 23 Am. Dec. 654 ; King v. Welcome, 5 Gray, 44 ; Gillespie v. Battle, 15 Ala. 276; Williams v. Bemis, 108 Mass. 91, 11 Am. Rep. 318; Remington v. Palmer, 62 N. Y. 31; Larsen v. Johnson, 78 Wis. 306, 47 N. W. 615; Haussman v. Burnham, 59 Conn. 133, 22 Atl. 1065; Mc- Cue v. Smith, 9 Minn. 258, 86 Am. Dec. 100, Gil. 237; Webster v. Le Compte, 74 Md. 258, 22 Atl. 232; Crane v. Gough, 4 Md. 333; Bibb v. Allen, 149 U. S. 497, 37 L. ed. 823, 13 Sup. Ct. Rep. 950.

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 al¬ leges a contract by the United States to buy 9,000,000 pounds of hay from the claimant at the rate of $.61| per hundred weight, a refusal by the government to take the hay at the rate of one sixtieth daily, as required

131

161-164

Supreme Court of the United States.

by the contract, according to the claimant’s interpretation, and a failure to accept 255,- 291 pounds out of the 9,000,000. The rest, it is admitted, was taken and paid for at contract rates. The claimant seeks compen¬ sation for an increased price paid by it, in¬ creased 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, seeming-

ly for *use in Camp George H. Thomas, Geor¬ gia, and that in connection with it the fol¬ lowing 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 de¬ creased at the option of the United States, not exceeding 20 per centum 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 Au¬ gust 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 wras obliged to sell for what it could get, and protested against the stop¬ page. 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 con¬ tract to-day;” and on June 24, 1899, wrote “We would like to know how soon you ex¬ pect us to put in the balance of the hay due 132

Oct. Term,

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 claim¬ ant ^delivered the hay, and received full pay-

ment for it under the contract, without pro¬ test 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 govern¬ ment not taking the hay at the rate of one sixtieth per day, and on June 28, and later, the quartermaster approved the claim. Al¬ though, no doubt, both parties supposed their agreement binding, the court of claims held, and it is not disputed, that the con¬ tract was within Rev. Stat. § 3744 (U.

S. Comp. Stat. 1901, p. 2510), 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 per¬ formed. Clark v. United States, 95 U. S.

539, 24 L. ed. 518 ; South Boston Iron Co. v. United States, 118 U. S. 37, 30 L. ed. 69, 6 Sup. Ct. Rep. 928. See Monroe v. United States, 184 U. S. 524, 46 L. ed. 670, 22 Sup.

Ct. Rep. 444. It is argued by the claimant on this ground that it is entitled to main¬ tain 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 per¬ formed. When a lawful transfer of prop¬ erty is executed, it does not matter whether the terms of the execution were void or valid while executory; the transfer cannot be re¬ voked 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 effec¬ tual by those promises or by the fact that money was received in exchange. The con¬ tract 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,

23 L. ed. 660. 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 sub¬ jected to a motive from which it had a right to be free, as, for instance, by fraud or du¬ ress. But there was nothing which the law could recognize as duress, and the sugges¬ tion that it was peculiarly the duty of the officers of the government to see that *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.

191 U. S.,

Missouri ex rel.

But it is said, that this is not the simple case of mutual performance of a void con¬ tract, but that the United States, although it has paid the price, has broken the con¬ tract 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 con¬ tract, the claimant could have sued on a quantum valebat. Clark v. United States, 95 U. S. 539, 542, 543, 24 L. ed. 518, 519; Bacon v. Parker, 137 Mass. 309, 310, 311. And it might be argued that the same result would follow if the United States, after pay¬ ing the price, were compelled to rely upon the invalidity of the contract in answer to a claim of damages for a breach. Accept¬ ance of payment by the vendor is not neces¬ sarily a waiver of such a claim. Garfield cC P. Coal Co. v. Fitchburg R. Go. 166 Mass. 119, 123, 44 N. E. 119. 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 con¬ tract price did not purport to be in full sat¬ isfaction 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.

r 1 651* STATE OF MISSOURI, at the Relation of 1 WILLIAM PRESTON HILL, Plff. in