United States v. Speed
APPEAL from the Court of Claims. The case was thus:
By an act of 14th April, 1818,  'the Commissary-General and his assistants shall perform such duties in purchasing and issuing of rations as the President shall direct;' 'supplies for the army (unless in particular and urgent cases the Secretary of War should otherwise direct) shall be purchased by contract, on public notice,' &c., 'which contract shall be made under such regulations as the Secretary of War may direct.' One of the regulations prescribed by the Secretary of War, and which made Rule No. 1179 in the Army Regulations of 1863, is thus:
'Contracts for subsistence stores shall be made after due public notice, and on the lowest proposals received from a responsible person who produces the required article. These agreements shall expressly provide for their termination at such time as the Commissary-General may direct.'
By an act of March 2, 1861,  it is provided, that
'All purchases and contracts for supplies or services in any of the departments of the government, except for personal services, when the public exigencies do not require the immediate delivery of the article or articles, or performance of the service, shall be made by advertising a sufficient time previously for proposals respecting the same. When immediate delivery or performance is required by the public exigency, the articles or service may be procured by open purchase or contract at the places, and in the manner in which such articles are usually bought and sold, or such services engaged between individuals.'
These statutes and regulations being in force, the Secretary of War, through the Commissary-General, authorized Major Simonds, at Louisville, in October, 1864, and during the late rebellion, to buy hogs and enter into contracts for slaughtering and packing them, to furnish pork for the army.
On the 27th of October, Simonds, for the United States, and Speed, made a contract, by which the live hogs, the cooperage, salt, and other necessary materials, were to be delivered to Speed by the United States, and he was to do the work of slaughtering and packing. The contract was agreed to be subject to the approval of the Commissary-General of Subsistence.
No advertisements for bids or proposals was put out before making the contract, nor did the contract contain a provision that it should terminate at such times as the Commissary-General should direct.
After the contract was made, Simonds wrote-as the facts were found under the rules, by the Court of Claims, to be-to the Commissary-General, informing him substantially of its terms; but no copy of it, nor the contract itself, was presented to the Commissary-General for formal approval. The Commissary-General thereupon wrote to Simonds, expressing his satisfaction at the progress made, and adding: 'The whole subject of pork-packing at Louisville is placed subject to your direction under the advice of Colonel Kilburn.'
The claimant incurred large expenditures in the preparation for fulfilling his contract. He also kept, during the whole season, the full complement of hands necessary to have slaughtered the whole 50,000 hogs within the customary season. During the season, there were furnished to the claimant 16,107 hogs; but owing to the high price of hogs, Simonds, with the approval of the Commissary-General, gave up the enterprise, and refused to furnish the remainder of the 50,000 hogs.
Upon these facts the Court of Claims held,
1st. That the Secretary of War, through the Commissary-General, might authorize such a contract to be made without a resort to the advertisement and bids proposed.
2d. That the letter of the Commissary-General was a virtual approval of the contract.
3d. That the contract was an engagement on the part of the United States to furnish 50,000 hogs to the claimant, to slaughter and pack at the stipulated price, and that their failure in part to perform the same entitled the plaintiff to recover damages.
4th. That the true measure of damages was the difference between the cost of doing the work and what the claimant was to receive for it, making reasonable deductions for the less time engaged, and for release from the care, trouble, risk, and responsibility attending a full execution of the contract.
The court awarded damages accordingly to the claimant, and the United States appealed.
Mr. Dickey, Assistant Attorney-General, for the appellant:
1. Where Congress has intended that the government shall embark in the business of manufacturing any of the materiel of war, it has made special provision by law for its doing so. It has established armories and navy-yards, and provided for the making of arms and the building of vessels; but no-where can be found any enactment authorizing any officer or class of officers to embark the government in the business of curing pork or bacon, or in the business of raising corn, or hogs, or cattle, or horses, or mules, or asses for the army.
2. The contract is not binding upon the United States, because it contains no provision 'for the termination' of the contract 'at such times as the Commissary-General may direct.'
This contract, containing no such provision, is a contract made in violation of the statute of 1818, and is not binding upon the United States.
3. If the want in this contract of the provision for its termination at such time as the Commissary-General shall direct, does not vitiate the contract, it must be held that the contract will be treated as containing the clause, inasmuch as the law requires that it should contain the clause. Porkpacking and curing bacon is not within the scope of the powers of the Secretary of War and of his subordinates, and if the contract is regarded as containing this provision, then there is an end of this case, for in that case it was no violation of the contract for Simonds, with the approbation of the Commissary-General, to terminate the contract at any time.
4. This contract is not binding upon the United States, because there was no advertisement for proposals before the contract was made, as required by the act of March 2, 1861. The Court of Claims do not find that any public exigency required 'the immediate delivery of the article, or performance of the service;' on the contrary, the very nature of the contract shows that immediate delivery or immediate performance was not contemplated.
5. Where a contract is made subject to the approval of the Commissary-General, it is not binding on the United States until it is so approved, after the commissary has full knowledge of all the provisions and defects of the contract. It is not sufficient that he be informed 'substantially of its terms,' as was the fact in this case. This does not show that the Commissary-General was informed that this contract contained no clause for its termination at the will of the Commissary-General; nor that the Commissary-General was informed that the contract was made privately without advertisement for proposals, as required by law and the regulations.
6. By the terms of the contract, the United States were not bound to furnish to the claimant any given number of hogs. The true construction of the contract is, that claimant agreed to slaughter the 'hogs presented' by the United States, for the price per hundred pounds specified, up to the number of 50,000 hogs.
7. Assuming the contract valid and binding upon the United States, and that it required the United States to furnish the full 50,000 hogs, and that it could not be terminated by the Commissary-General without the consent of the claimant, still the facts found do not show a statement of case enabling claimant to have an action for a breach of the contract by the United States. Though the 'claimant incurred large expenditures in the preparation for fulfilling his contract,' yet it does not appear that he completed the necessary preparation to fulfil his contract, or that he was ever ready at any time to slaughter a single hog. He kept, it is true, all 'the hands necessary,' but it required other things beside hands, and it does not appear that any one of these things was provided.
The covenants or undertakings in this contract are clearly mutual and dependent, and before claimant can recover for the breach alleged, he must show a readiness, a willingness, and an offer on his part to perform.
8. The rule for the measure of damages is not a correct rule as applied to the facts found. It does not appear that the claimant's hands were kept in idleness, or even unprofitably employed. For aught that appears, they and the other expensive preparations were in fact more profitably employed in slaughtering hogs for other parties, which work could not have been performed if the government contract had not been abandoned. In fact, the abandonment of the contract by the government may have been a source of profit to claimant rather than of loss.
Mr. C. F. Peck, contra.
Mr. Justice MILLER delivered the opinion of the court.
^1 3 Stat. at Large, 426, §§ 6, 7.
^2 12 Stat. at Large, 220.