Am. Smelting & Refin. Co. v. United States, 259 U.S. 75 (1922)

This is a claim for $512,515.50, being the price of 20,500,620 pounds of copper at twenty-six cents a pound less payments received at twenty-three and a half, cents. The petition was dismissed by the Court of Claims on demurrer. The facts alleged are as follows. The Government had some correspondence with the United Metals Selling Company ending in an order or proposal for 30,000 metric tons of copper for the French Government to be delivered on or before June 1, 1918. To this the Company replied on March 26, 1918, that the Copper Producers Committee had divided the handling of copper and had given the export business to the American Smelting & Refining -Company. The letter requested that the order be changed to apply to the last named company and concluded “ they tell us that it will quite fit in with their operations to handle this present order along p. 77with the other shipments.” Thereupon, on March 28, 1918, a letter was written by the Ordnance Department to the American Smelting & Refining Company, “ to advise you that the Procurement Division is prepared to procure from you 30,000 metric tons (66,138,000 pounds) of copper at a price of 23^c. per pound net, f. o. b. New York basis. Deliveries are to be completed on or before June 1, 1918 ”; shipping instructions to be taken up with the Supply Division, Ordnance Department; with further particulars not material and ending, “Your acceptance of this letter is requested pending issuance of formal contract which will go forward in a few days.” The representative of the claimant seems to have delayed an answer in the hope of adjusting one or two details but on April 11, wrote“ We have your favor March 28th . . . and take pleasure in accepting your letter as above pending issuance of formal contract which we hope to receive in the near future.” The copper except the 20,500,620 pounds, was delivered before July 2, 1918, has been paid for and no question is raised about it. But it was practically impossible to deliver this last amount until after that date and no shipping orders for it were received until a later time. It was delivered finally and the claim for the advanced price is based upon the facts and arguments that we shall state.

At the time when the order was accepted the Price-Fixing Committee of the War Industries Board, an agency of the Council of National Defence, had fixed the price of copper at 23^ cents per pound f. o. b. New York, under the Act of August 29, 1916, c. 418, § 2, 39 Stat. 619, 649, and the authority of the President. On July 2, 1918, the price was advanced to 26 cents per pound. The National Defence Act of June 3, 1916, c. 134, § 120, 39 Stat. 166, 213, had authorized the President in time of war “ in addition to the present authorized methods of purchase or procurement, to place an order” for material required; p. 78made compliance with such orders obligatory under a penalty, and gave them precedence. The compensation paid was to be fair and just. The position of the claimant is that, although the language of contract was used, it was yielding to the requirements of the statute and is entitled to the fair price that the statute promised. The fair price, it contends, for copper delivered after the change of July 2, is twenty-six cents, because the delay is alleged to have been due to the failure of the Government to send shipping orders and to the fact that further deliveries were made impossible for the time by the Government’s appropriating all the copper available to other uses. It also argues that .there was no valid contract, since the agreement was not made by advertising and was not within the exception when the public exigencies require immediate delivery. Rev. Stats., § 3709. , We may lay the latter objection on one side. There can be no question that the war created a public exigency and it would be going far to deny that the contract was for a delivery as immediate as was practicable for the subject-matter. Moreover the statutory requirements were for the protection of the United States, not of the seller. United States v. New York & Porto Rico S. S. Co., 239 U. S. 88. Of course the expressed contemplation of a more formal document did not prevent the letters from having the effect that otherwise they would have had. The only serious argument is the supposed duress. But that can not prevail. It may be true that the claimant was yielding to the statute in a general way and did not discriminate between what it was required to yield and what it could reserve. But if it had desired to stand upon its legal rights it should have saved the question of the price. It did not do so, but on the contrary so far as appears was willing to contract and was content in the main with what was offered. As was pointed out by the Court of Claims, the acceptance was sent because p. 79the claimant was advised by the Government that no payment could be made until the claimant had accepted in writing the Government’s proposal, whereas no acceptance was necessary if the order was a compulsory requisition. We are of opinion that the claimant must stand upon the letters of March 28 and April 11.

It is inherently improbable that Congress can have intended to prohibit these transshipments when it framed the Prohibition Act. These transshipments are not our commerce; our interference with them is an interference with the commerce of other nations; and we have every reason to assume that this interference will be resented and might well lead to action by foreign countries which would seriously affect American exports. • If the Prohibition Act be construed as prohibiting transshipments of the kind here involved, it is unconstitutional. It cannot be sustained under the commerce clause. Trade-Mark Cases, 100 U. S. 82, 96. A statute enacted pursuant to a constitutional amendment which p. 87authorizes Congress to enact laws for the enforcement of the rights secured by such amendment, is void if it is broader than the amendment which it is designed to enforce. [United States v. Reese, 92 U. S. 214; Karem v. United States, 121 Fed. 250. A construction prohibiting these transshipments ought, therefore, to be avoided.

These cases raise the question whether the Constitution and the Volstead Act prohibit the transportation of intoxicating liquors from a foreign port through some part of the United States to another foreign port. The first is a bill by a corporation of Canada against the Collector of Customs and the Collector of Internal Revenue for the Eastern District of Michigan to prevent their carrying out the orders of the Treasury Department to stop the plaintiffs from shipping whiskey intended as a beverage from Canada by way of Detroit in bond through the United States to Mexico, Central or South America. The irreparable injury that will be done to the plaintiff’s business is fully shown, and the decision depends on the single question stated above. An injunction was granted by the District Court. 275 Fed. 373. The second case is to prevent similar interference with the transshipment of whiskey from one British ship to another in the harbor of New York. Upon a consideration of the same general questions an injunction was refused by the District p. 88Court for the Southern District of New York, October 21, 1921.

On the other side is the Eighteenth Amendment forbidding “ the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all p. 89territory subject to the jurisdiction thereof for beverage purposes.” There is also the National Prohibition Act of October 28, 1919, c. 85, Title II, § 3, 41 Stat. 305, 308, which provides that, except as therein authorized, after the Eighteenth Amendment goes into effect no person shall manufacture, sell, barter, transport, import, export, deliver, furnish or possess any intoxicating liquor. All the provisions of the act are to be liberally construed to the end that the use of intoxicating liquor as a beverage may be prevented.

“ The Eighteenth Amendment,” is the declaration, “ meant a great revolution in the policy of this country ” and did not timidly confine itself “ to the use of intoxicants in this country.” There is appeal in the declaration. It presents the attractive spectacle of a people too animated for reform to hesitate to. make it as broad as the universe of humanity. One feels almost ashamed to utter a doubt of such a noble and moral cosmopolitanism, but the facts of the world must be adduced and what they dictate. They are the best answer to magnified p. 95sentiment. And the sentiment is magnified. The Amendment and the Volstead Act were not intended to direct the practices of the world. Such comprehensive purpose resides only in assertion and conjecture and rejects the admonitory restraint of § 3005, the treaty with Great Britain and the non-interfering deference that nations pay to the practices of one another.