Action brought by appellee, the Purcell Envelope Company, which we shall designate as the Envelope Company, against the United States for damages for breach of an express contract. The Court of Claims rendered judgment for the Envelope Company for the sum of $185,331.76. The United States appeals.
The findings of the court are quite voluminous, but it is only necessary to quote from them to the following effect: The Post Office Department, through the Postmaster General James A. Gary, invited by advertisement bids, "for furnishing stamped envelopes and newspaper wrappers in such quantities as may be called for by the department during a period of four years, beginning on the first day of October, 1898." In pursuance of the invitation the Envelope Company submitted a bid in the manner and time specified in the advertisements of the Department.
The bid of the Envelope Company was accepted, and the following order entered: ". . . 2nd. That the contract for furnishing the envelopes called for by the advertisement and specifications referred to be awarded to the Purcell Envelope Co., of Holyoke, Mass., as the lowest bidder for the Government standard of paper, at the following prices a thousand, namely: .. ." The Department, before issuing the order, investigated the financial responsibility of the Envelope Company and considered it satisfactory.
April 21, 1898, the Department sent to the Envelope Company a "contract in quadruplicate" to be executed "at once" and returned to the Department. It was promptly returned as requested, signed by the president of the Envelope Company, with the Fidelity & Deposit Company of Maryland as surety in the sum of $200,000.
July 22, 1898, the Department, through Postmaster General Smith, the immediate successor of Postmaster General Gary, the latter having gone out of office, revoked and canceled the contract and declared it to be null and void. Prior to doing so the Postmaster General instituted an investigation through one of his proper officers into the business and financial standing of the Envelope Company and the report thereunder was unfavorable to the company.
On or about July 22, 1898, the Envelope Company, having received information that the Postmaster General designed readvertising for proposals, sought by a bill filed in the Supreme Court of the District of Columbia to enjoin his action. The bill was dismissed August 15, 1898. The court, however, was of opinion that a contract had been executed but that the Envelope Company had an efficient remedy at law.
The total cost to the Envelope Company for materials and the manufacture and delivery of the envelopes and wrappers in accordance with the terms of its contract would have been $2,275,224.46. Deducting that sum from the contract price leaves a difference of $185,331.76, which represents the profit the company would have made if it had been allowed to perform its contract. For that sum judgment was entered.
It will be observed from the recitation of the above facts that the case presents the propositions — First, was there a completed contract between the Envelope Company and the United States through its Postmaster General, and, second, if there was such contract, what is the measure of damages?
For an affirmative answer to the first proposition the Envelope Company relies on Garfielde v. United States, 93 U.S. 242, and on that case the Court of Claims rested its decision and considered that the case was supported by other cases which were cited.
The case may be considered as the anticipation of this — its prototype. It passed upon a transaction of the Post Office Department and decided that a proposal in accordance with an advertisement by that department and the acceptance by it of the proposal "created a contract of the same force and effect as if a formal contract had been written out and signed by the parties." And for this, it was said, many authorities were cited but it was considered so sound as to make unnecessary review of or comment upon them.
The record furnished no Justification of such action. There is no charge of default against the Envelope Company, no charge of inability to perform its contract, except in a particular which we shall hereafter mention. There is, it is true, a finding that Postmaster General Smith caused an investigation to be made of the financial standing of the Envelope Company and that the report thereunder was unfavorable to it. This is made a great deal of, and the fact that the contract was not signed nor the bond of the Envelope Company approved.
It makes no difference that the contract was not formally signed or the bond formally approved, as counsel for the Government contends they should have been, both by the terms of the contract and by a statute of the United States (28 Stat. 279). Their formal execution, as we have seen, was not essential to the consummation of the contract. That was accomplished, as was decided in the
The Court of Claims decided that the measure of damages was the difference between the cost to the Envelope Company of materials and the manufacture and delivery of the envelopes and wrappers in accordance with the terms of its contract and what it would have made if it had been allowed to perform the contract. For this the court cited and relied upon Roehm v. Horst, 178 U.S. 1. It is there decided that the positive refusal to perform a contract is a breach of it, though the time for performance has not arrived, and that liability for the breach at once occurs. And it is further decided that the measure of damages is the difference between the contract price and the cost of performance. The case was replete in its review of prior cases. We may refer, however, to United States v. Speed, 8 Wall. 77, 85; United States v. Behan, 110 U.S. 338; Hinckley v. Pittsburgh Steel Co., 121 U.S. 264.
The Government does not attack the ruling but contends that it was not properly applied by the Court of Claims. The contention is rested on the following finding: "Claimant, contemplating making the envelopes under it said contract on the Wickham envelope machines, entered into negotiations with Horace J. Wickham whereby he promised
The Government says of the Wickham machine that it made the envelope in one operation and that there is nothing to show that the Court of Claims "as an incident to the cost of performance of the contract, considered the cost of the Wickham machines to appellee, although evidence of the same was submitted to it." And further, "if the court did find this item, and did consider it in arriving at the judgment, appellant is entitled to know this." Again, the Government contends that "so far as the findings are concerned it does not appear that the court allowed a reasonable deduction from the amount of the judgment by reason of appellee's release from care, trouble, risk, and responsibility attending the performance of the contract."
To the contentions there may be offset the decision of the Court of Claims. The court in its opinion expressly declares that the findings showed that the Envelope Company had fulfilled all the requirements of the Postmaster General and was ready and willing to furnish the envelopes and wrappers and recognized, we may assume, as grounds to be considered the elements the Government urges, so far as the court deemed them relevant or as having any probative strength, and its appreciation of them was obtained after protracted litigation involving two complete trials. We are not, therefore, disposed, on assertions so elusive or disputable of estimation as those of the Government, to reverse or modify the judgment.
There are other contentions of the Government which we may pass without comment except one which it submits upon a supplemental brief. It is addressed to the rule of damages adopted by the Court of Claims and urges that it was erroneous, based on the theory, as it is asserted,
On January 13th the Government made a motion to remand the case to the Court of Claims for additional findings. It was denied, but the right reserved to make such order if we should be so advised. Our attention is directed to the motion, which it is submitted should be considered on the merits. Again considering the motion and the case as it has been developed by argument of counsel, we think the motion should not be granted. The judgment of the Court of Claims is
MR. JUSTICE McREYNOLDS took no part in the consideration and decision of this case.