MR. JUSTICE BUTLER delivered the opinion of the Court.
This is a suit brought under § 9 of the Act of Congress, approved October 6, 1917, known as the "Trading with the Enemy Act," c. 106, 40 Stat. 411, 419. The plaintiff below, Frederick Y. Robertson, is a citizen of the United States, and sued as assignee of the Mammoth Copper Mining Company, a Maine corporation, hereinafter called the "seller." The defendants are the Alien Property Custodian, the Treasurer of the United States and five citizens of Germany, enemies of the United States, as defined by the act, copartners doing business under the name of Beer, Sondheimer & Company, and hereinafter called the "buyers." The purpose of the suit is to establish a "debt" plaintiff claims to be owing from the enemy defendants on account of damages alleged to have resulted
The contract provided: "The product covered by this contract is the total production of zinc crude ore shipped by the seller from its properties in Shasta County, California. The buyer is not obligated to accept any of the product running less than thirty-three (33%) per cent. metallic zinc. Should the seller produce a zinc product running less than thirty-three (33%) per cent. metallic zinc, the buyer reserves the option to purchase same under the terms of this contract. If the buyer should not elect to accept such product, the seller has the privilege of disposing of it elsewhere. This contract shall run for a period of one year from the date of first shipment made after the completion of the picking plant which the seller contemplates building, but in no event shall the life of the contract exceed eighteen (18) months from the date of its execution." Places of delivery were provided for, and the seller agreed to bear freight charges to Bartlesville, Oklahoma, or their equivalent. Shipments were to be made in as nearly as possible equal weekly quantities. The prices were $19 per ton for ore containing 40 per cent. metallic zinc, based on a spelter price of $5 per cwt. at St. Louis, to be increased $1 per ton for each unit of one per per cent. over, and to be decreased correspondingly for each unit below, 40 per cent.; and also to be increased or decreased five cents per ton for each cent the market price of spelter at St. Louis rose above or fell below $5 per cwt. And it was provided that, "Whenever the production or shipment of ore by the seller or the receipt or treatment of the ore by the buyer is prevented or delayed . . . by . . . any cause . . . which may be properly termed `Vis Major' . . . this agreement shall be suspended during such delay or prevention; the seller, if so prevented or delayed in producing or
The District Court gave judgment in favor of the seller for $259,597.21 with costs. On appeal by the Custodian and Treasurer, and a cross appeal by the plaintiff (Judicial Code, § 128), the Circuit Court of Appeals affirmed the decree, except that the amount of interest allowed by the trial court was increased. 286 Fed. 503. The Custodian and Treasurer have appealed to this court. Judicial Code, § 241. They contend that plaintiff's claim was not a "debt" within the meaning of § 9 of the act; that the alleged contract was lacking in mutuality and void for want of consideration; that the seller broke the contract by refusing to make shipments "in as near as possible equal weekly quantities "; that the contract was not enforceable because made in violation of an earlier contract for the sale of the same ore; that no more than nominal damages should have been awarded; and that the lower court erred in allowing interest. The plaintiff has appealed and contends that the lower courts erred in giving the buyers credit for the amount by which the freight charges on the ore resold were less than they would have been if the ore had been shipped under the contract. The enemy defendants did not appear in the case; and it has been stipulated that the decree will not be enforced against them personally.
1. Is plaintiff's claim a "debt" within the meaning of § 9 of the act?
At the time of the passage of the act, a large amount of property was owned and much business was carried on by alien enemies and their allies in this country. Congress determined that their property should be taken over and that trade with them should cease. The purpose was to weaken enemy countries by depriving their supporters of power to give aid. But the seizure of the money and property of enemies and their allies would tend to hinder and might embarrass or ruin those having business transactions with them. By the taking, the property seized would be put out of reach of persons claiming it and beyond the power of creditors to attach it for debt. The purpose of § 9 was to prevent or lessen losses and inconvenience liable to result to non-enemy persons. This provision is highly remedial and should be liberally construed to effect the purposes of Congress and to give remedy in all cases intended to be covered. United States v. Anderson, 9 Wall. 56, 65, 66; United States v. Padelford, 9 Wall. 531, 538. The just purpose of the section is not to be defeated by a narrow interpretation or by unnecessarily restricting the meaning of the word within technical limitations. United States v. Freeman, 3 How. 556, 565; Danciger v. Cooley, 248 U.S. 319, 326; French v. Weeks, 259 U.S. 326, 328.
Appellants contend that "debt", as used in § 9, is limited to its common law meaning. Undoubtedly, Congress intended to include causes of action which at common law were enforceable in an action of debt, such as those arising
The meaning of the word "debt" as used in many statutes is not restricted to demands enforceable in actions of debt. Lord Coke, referring to the Statute of Merton (A.D. 1235) said (II Institutes, 89): "Debitum signifieth not only debt, for which an action of debt doth lie, but here in this ancient act of parliament, it signifieth generally any duty to be yielded or paid . . ." Chief Justice Shaw, referring to a statute making members of a corporation liable for its "debts", said (Mill Dam Foundery v. Hovey, 21 Pick. 417, 455): "For, though a question was made, whether such a claim for unliquidated damages is a debt, within the meaning of the statute, we do not think it admits of a reasonable doubt, that all such claims for damages were intended to be included in the term `debt.'" A cause of action for damages for breach of contract is a debt within the meaning of the Bankruptcy Act, and of laws relating to attachments, to receiverships, to stockholders' liability for corporate debts, to probate, to set-offs, to fraudulent conveyances, and to limitation of actions.
We think it immaterial whether plaintiff's cause of action is one for which an action of debt might be maintained. It would be unreasonable and contrary to the intention of Congress to exclude claims like that here in question, and we hold them to be included.
2. Was there a lack of mutuality and want of consideration?
Appellants contend that the parties failed to make a contract, and assert the seller promised only such ore as
The intention of the parties is to be gathered, not from the single sentence above quoted, but from the whole instrument read in the light of the circumstances existing at the time of negotiations leading up to its execution. The buyers had a large business in the smelting of zinc ore in the United States. The seller had been engaged for a long time in the mining of copper ore from the Mammoth Mine. Early in 1914, there was discovered in that mine a large body of zinc ore, containing about 40,000 tons. The sellers desired to dispose of, and the buyers wanted, zinc ore. While there had been no regular weekly or monthly production or shipments prior to the signing of the writing, the seller had made a number of shipments to the buyers. The work of developing the ore body in preparation for production was in progress. The mine was already equipped and capable of producing ore. The writing shows that the completion of a picking plant was contemplated. The year covered was to commence on the date of the first shipment after its completion. When
The parties intended to make a contract, — one to sell, and the other to buy, zinc ore. By plain statements and manifest implications, the seller was bound for a definite time not otherwise to dispose of its ore; the buyers were given an option on the lower grade ore; the seller was bound at all times, when not prevented or delayed by some cause beyond its control, to mine and to ship to the buyers the total production of zinc ore of the specified grade; and the buyers were bound to take and pay for all such ore when not prevented or delayed by causes beyond their control as specified in the contract. The quantities of ore to be mined and shipped were not limited to those to be produced by the equipment and methods employed at the time of the execution of the contract. The proposed picking plant was to be added, and increased output was expected and bargained for.
The opinion of the manager of the seller as to its legal obligations under the contract, as reflected by his statements in correspondence after the execution of the instrument, is not entitled to any weight in determining whether a valid contract was made. The writing did not give the seller the option to ship or to refrain from shipping as it saw fit, or leave the quantity to be delivered to its choice. There was no want of consideration or lack of mutuality.
3. Appellants contend that the seller failed to make shipments in as nearly as possible equal weekly quantities, as provided in the contract, and that the buyers thereby were released from performance.
The contract was signed September 29, 1914, but the first shipment was not until November 28. Between the last mentioned date and March 11, the seller made 28 shipments, which were accepted and paid for. There was
Later, the prices of spelter rose enormously, but the market prices of ore declined until buyers could obtain it on their own terms. The war had created a great demand for zinc. The ores produced in Japan, Spain, Mexico, and Australia were cut off from their former markets in Germany and were shipped into this country in quantities far in excess of the capacity of the smelters. February 23, when the spelter prices were over $8.00 per cwt., making the price of ore more than $34 per ton, the buyers tried to get the seller to consent to reduction of the contract prices. But no change was made. Increased tonnages were shipped after completion of the picking plant, March 5. March 17, the buyers sent a telegram to the seller, calling attention to the shipment of 50 tons daily from March 6 to March 9, and stating that the monthly average from the beginning had been about 200 tons, and added, "In view of abnormal conditions we will only accept tonnages reasonably equal to the average monthly amount
The District Court found that the seller attempted in good faith to carry out its part of the contract until it was stopped; that the claim that the seller broke the contract was without merit; that no objection to the deliveries was made on the ground of inequality, and that the breach was waived as to all ore accepted; that the buyers' refusal to accept the ore tendered in March was based solely on the vis major clause; and that there was no evidence that the seller did not ship in as nearly equal weekly quantities as possible. And the Circuit Court of Appeals found that the Mammoth Company carried out its promises under the terms of the contract. No reason has been shown why the findings of the lower courts should be disturbed. Washington Securities Co. v. United States, 234 U.S. 76, 78. Our own examination of the evidence satisfies us that there is no merit in appellants' contention that there was a breach of the contract by the seller.
4. Appellants contend that the contract sued on was not enforceable because made in violation of an earlier agreement, dated June 10, 1914, selling the same ore.
The Mammoth Mining Company, operating in Kennett, California, and the United States Smelting Company, operating in Salt Lake City, Utah, were subsidiaries of the United States Smelting, Refining & Mining Company. The executive officers and boards of directors of the subsidiary companies and of the parent company were substantially identical, but each subsidiary had a
6. The District Court allowed interest from July 3, 1919; the Circuit Court of Appeals from June 29, 1916. Appellants object on the ground that this is a suit against the United States, and interest is not allowable against it;
While the suit, as held in Banco Mexicano v. Deutsche Bank, 263 U.S. 591, 603 (affirming 289 Fed. 924), is one against the United States, the claim was not against it. No debt was alleged to be owing from it to the plaintiff. The rule of sovereign immunity from liability for interest (Judicial Code, § 177; National Volunteer Home v. Parrish, 229 U.S. 494; United States v. North American Co., 253 U.S. 330, 336; Seaboard Air Line Ry. Co. v. United States, 261 U.S. 299, 304) does not apply.
Compensation is a fundamental principle of damages, whether the action is in contract or in tort. Wicker v. Hoppock, 6 Wall 94, 99. One who fails to perform his contract is justly bound to make good all damages that accrue naturally from the breach; and the other party is entitled to be put in as good a position pecuniarily as he would have been by performance of the contract. Curtis v. Innerarity, 6 How. 146, 154. One who has had the use of money owing to another justly may be required to pay interest from the time the payment should have been
In this case, at least as early as June 29, 1916, the date of demand, the seller was entitled to have from the buyers the difference between the sum which it would have received prior to that date, if the buyers had kept their contract, and the amount it received on resale. Payment in 1924 or later of that sum is not full compensation. Cf. Seaboard Air Line Ry. Co. v. United States, supra, 306. All damages had accrued prior to the demand. There was nothing dependent on any future event. The elements necessary to a calculation of the amount the seller was then entitled to have to make it whole, — namely, the quantities of ore produced, its metallic content, the prices to be paid by the buyers under the contract, and the amount realized on resale, — were known or ascertainable. Our entrance into the war was long subsequent to June 29, 1916, the date of the demand. General representatives, who had long been in charge of the business in this country of Beer, Sondheimer & Company, remained here until after that event. At all times until it was taken over under the act, they had money and property of that firm more than sufficient to make good the seller's damages. It would be unjust and inconsistent with the remedial purposes of § 9 to hold that the seized enemy property cannot
7. The seller agreed to deliver the ore free on board cars at the buyers' smelting works at Bartlesville, Oklahoma, or at such other works as the buyers might designate, and any difference of freight charges between the point of shipment and other smelting works so designated as against those to Bartlesville should be for the account of the buyers. The ore which was rejected by the buyers and resold was shipped to Altoona, Kansas. The freight rates were graduated on the basis of "actual value" of the ore shipped and were the same from Kennett, California, to Altoona as to Bartlesville. The rates on the shipments to Bartlesville were based on the prices fixed by the contract in suit; and those on shipments made to Altoona on the resale prices. The charges for the transportation of ore resold were $42,201.50 less than they would have been if based on prices fixed by the original contract. The master reported that if the ore had been shipped under the contract the carrier, for the lack of any other available standard, would have based its rates on the contract prices. And he excluded from the amount fixed as damages the excess over the charges actually paid. His report was adopted by the trial court, and its decision was affirmed by the Circuit Court of Appeals. The plaintiff