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SMOOT'S CASE.

December 1, 1872

SMOOT'S CASE.


APPEAL and cross-appeal from the Court of Claims; the case being thus: On the 5th of February, 1864, Smoot entered into two contracts with the War Department through Eakin, quartermaster; one to deliver within forty days 2500 cavalry horses at St. Louis, and the other to deliver within fifty days 2000 like horses at Chicago, at the government stables in each place; of certain qualifications set forth in the contracts, and subject to the inspection provided for in one article of the contract, which was as follows:'It is agreed that the horses, upon being delivered, shall be examined and inspected without unnecessary delay, by a person or persons appointed by the United States, and after such inspector shall have certified that they are in all respects as contracted for, and fully equal to the specifications aforesaid, they shall be received and become the property of the United States; and all such horses as may be condemned and rejected by said inspectors, shall be removed from the government stables within one day after the contractor shall have been notified of said rejection.' Payment for the horses was to be made on completion of the contract, should Congress have made an appropriation for that purpose; otherwise as soon thereafter as funds might be appropriated. During the existence of the contracts Smoot was possessed of means and credit to comply with the stipulations on his part, and he and his agents went to Chicago and other parts of the West to make, and did make, all necessary arrangements to carry them out, except the actual procuring of the horses. At the time the contracts were entered into, and long prior thereto, the mode of inspection of horses purchased by the government had been for horses to be presented and immediately examined in the presence of the owner, and if satisfactory, they were accepted, and if unsatisfactory, they were rejected and returned to the owner without delay, expense, or blemish. By an order, however, dated on the same day as these contracts, but not promulgated in Chicago or St. Louis until the 1st of March, or known to the defendant till then, the government ordered another and different mode of inspection from what had been the practice and custom of the government theretofore. This new order ran thus: 'Each horse shall be placed in the inspection yard twenty-four hours before inspection, after which time, every person, except the inspector and his assistants, are to leave the yard, not to re-enter it or handle the horses until the inspection and branding has been completed. 'All horses presented that are manifestly an attempt at fraud on the government because of any incurable disease or any distemper whatever, shall be branded on the left shoulder with the letter R. 'Horses that are rejected for being under age, in poor condition, or temporarily injured by transportation or otherwise, shall be lightly branded on the front hoof, near the coronet, with the letter R, not to exceed three-quarters of an inch. 'Any horse once rejected, that is presented to the government without notice of that fact, shall be considered and deemed fraud upon the government, and branded on the left shoulder as fraud. 'When horses are doubtful before branding, they may be kept three or four days under guard, at the expense of the contractor, and then disposed of by branding or otherwise, as the inspector may determine. 'No mares will be accepted.' At the time the contracts were entered into, and for a long time prior thereto, the usual course of business in filling contracts of this kind, had been for the contractor to buy his horses subject to government inspection, and one effect of the order of the new rules of inspection was to create a change in this course of business, and, therefore, no horses could be purchased by contracts subject to the new inspection. Another effect was to impose upon the contractors considerable risk, in consequence of the horses being injured by kicks and bruises; by contagious diseases; by loss of identity, in putting the animals with other parcels of horses, so that in the event of rejection the same animals could not be returned; by the expense of keeping the animals during the four days; by injury which might occur to them from being branded by hot iron; the branding of a rejected horse in the manner prescribed by the new order greatly lessening his market value. Upon ascertaining the effect produced by the new order of inspection, Smoot caused application to be made at the office of the bureau of cavalry, in Washington, for a modification of it, and repeatedly offered to go on and fill and contracts if the objectionable features of the order should be removed. The chief of the bureau was then absent. The next officer in rank referred the matter to the chief, who was expected to be in Chicago soon to decide the matter there. The chief of the cavalry did soon after arrive in Chicago, and the matter was presented to him by several other contractors who were in the same position as Smoot, but the chief decided not to revoke or modify the order. Neither Smoot nor his agent saw the chief of the cavalry in Chicago, but his decision was communicated to Smoot. Smoot was able and willing to perform his contract by delivering the horses within the time prescribed by it, subject to the inspection prescribed by the contract, but was unwilling to deliver any horses subject to the inspection required by the new order. He did not possess any horses in Chicago, nor tender any to the government at that place, nor apply there to the chief of the cavalry bureau to waive the inspection ordered; but he possessed ample time and means for procuring horses, and he regarded the order as a renunciation by the government of its agreement. So far in regard to the horses deliverable at Chicago. The same facts existed as to the contract for St. Louis as to the contract for Chicago, except that the new order was not enforced at St. Louis as against contracts dated prior to its promulgation. Of this fact, however, Smoot had no knowledge, but believed that the order was enforced there, as well as in Chicago. He did not ask the inspecting officers in St. Louis anything about the matter, and did not attempt to transport horses to St. Louis, in accordance with his contract. Smoot not fulfilling his contract was arrested by the government, under an act of Congress passed in the exigencies of the rebellion,*fn1 fined $10,000, and put into Fort Delaware for a wilful neglect of duty. He was afterwards, however, on an examination of the case by the Judge Advocate General released. The Court of Claims having found a case essentially as above, and that the fair profits which Smoot would have made on the 2000 horses to be delivered at Chicago, if he had been allowed to perform his contract according to its terms, would have been $10 a horse, gave him on that contract $20,000. On the St. Louis contract, the court decided in favor of the government. In the Chicago contract the government appealed; in the St. Louis one, Smoot.

The opinion of the court was delivered by: Mr. Justice Miller delivered the opinion of the court.

Mr. B. F. Butler, for the claimant, Smoot:

The findings in this case are so far different from those in United States v. Wormer,*fn2 as to warrant us bringing it before the court for consideration.

1st. In regard to the contract for Chicago; the appeal by the United States. The question is whether the new order of the government, so onerous and impracticable of execution as to have rendered the performance of the contract impossible by Smoot, is, in law, a breach of the contract on the part of the government, so as to render the United States liable for such damages as may be proved to be sustained by the contractor; damages which the court below have found to be $20,000.

There needs neither citation of authorities nor argument to prove, if one party to a contract, by his own act, interposes and enforces onerous conditions upon the manner of the performance of a contract not contemplated by the other party thereto at its inception, and refuses to permit its performance unless those conditions are complied with, that a breach of the contract is thus made by the party so refusing, and he is liable to the party capable and willing to perform on his part, not only for all that he has lost in attempting to perform, but for all the fair profits he would have made in its performance.

Neither the government nor an individual can be permitted to alter any essential element of a contract after it has been entered into a fortiori, when, as in the case at bar, the conditions so imposed render the performance of the contract impossible.

In Wormer's case but two facts were found bearing on this point: first, the contract; second, the order of inspection; and the court was asked, as a matter of law, to infer, as did the court below, that the regulations of the inspection were 'unreasonable.' This clearly was a matter of fact, and not of law. The order of inspection could not be known to the court to be unreasonable as a matter of fact. The case was silent on that subject. It did not appear in that case even that, by the new order, there had been any substantial change from the former custom and practice of the government in the inspection of horses, or that the changes, if any had been made, bore onerously on the contractors.

Now, in this present case, the order of inspection was found to be impracticable of execution, so that at St. Louis it was not enforced. It was relaxed as to the only other contractor who did perform his contracts.

2d. As to the contract for St. Louis; or the appeal by Smoot. This stands upon a precisely similar contract in all material provisions as the other. The distinguishing fact, upon which it would seem that the court below must have found against Smoot, was, that he did not apply at St. Louis for a modification of the order of inspection, nor buy and transport to St. Louis any horses in fulfilment of the contract. The only question of law, if the court sustain our views in the case of the contract at Chicago, which can arise here, is whether, under the facts stated, Smoot was bound to tender horses at St. Louis, or apply there for the disobedience of the order of inspection. The case shows that the order was suspended by the subordinate officers there as to another contractor; but it also shows that Smoot applied to the War Department for its relaxation, and was referred to the chief of the cavalry bureau at Chicago for his answer, and there learned that it would not be modified or relaxed. And no reason, in fact or law, is found why it should be suspended at St. Louis if not in Chicago. Was Smoot, then, bound to apply at St. Louis in expectation that the order would be there disobeyed? This was an order from the War Department, solemnly promulgated for the direction of the whole government in this regard. He had applied to that department, been referred to the chief officer of the proper bureau for his answer, and had received it. Could he then, in law, be compelled to apply at St. Louis for a suspension of the order by the subordinates there? Had he not a right to suppose that the order, being a general one, would be generally enforced where no reason appeared for the exception?

If, then, he was not obliged to apply for a modification of the order at St. Louis, would the law compel him to put himself to great expense to attempt the impossibility of performing his contract there?

Mr. G. H. Williams, Attorney-General, Mr. C. H. Hill, and Mr. W. McMichael, Assistant Attorneys-General, for the United States, argued that the case was not distinguishable from United States v. Wormer; which might have been decided on the ground that there was no tender, nor any evidence even that Wormer had any horses; a position which certainly disposed of Smoot's claims in both cases here.*fn3

Reply. Of what use was an actual tender? If A. contract to build a brick house for B., and B., when A. is getting ready to build it, gives him notice that he will not have any such house on his ground, nor any house but a stone one, is A. bound to cart bricks to B.'s land and insist on putting up the brick house? In the present case the refusal to modify the government order was a sufficient refusal. After this refusal, why was Smoot bound to put himself to the trouble and expense of driving 2000 horses from all parts of the West to the city of Chicago, only to be there turned away, ad vana lex neminem cogit?

Mr. Smoot claims of the United States a large sum of money for the profits which he might have made out of two contracts with Quartermaster Eakin, for delivering cavalry horses for the use of the army–two thousand five hundred at St. Louis and two thousand at Chicago. It is neither alleged nor proved that he ever tendered a horse at either place, or attempted otherwise to perform his contract, or that he was ready to do so, or that he owned any horses, or had expended a dollar in preparing to fulfil his contract. The proposition on which the claimant rests his right to these speculative profits is not on account of anything he had done, or offered to do towards performance, or any actual loss suffered, but that after the contract was made, the cavalry bureau of the War Department adopted and published rules governing the inspection of horses purchased for that service, differing from those in use at the time the contract was made. It is not asserted that these rules required a higher or more difficult standard of quality in the horses, but that the mode in which that standard was to be ascertained was so changed as to impose a greater hardship, or burden, upon the contractor. Nor is it claimed that these new regulations were adopted with special reference to their application to Smoot's contracts. They were a new regulation of the business of inspection of a general character. The contracts sued on, which are identical, except in the number of horses and the place of delivery, provided for an inspection. But it is argued that the new regulations were not only a departure from those in use when the contracts were made, and imposed an additional burden on the contractor, but that conceding the right of the bureau to make proper and reasonable regulations for inspection, these were unreasonable and improper. The two points of difference in the new and the old mode of inspection most earnestly pressed in the argument are:

1. That by the new regulations the horses offered must remain at the expense of the contractor twenty-four hours in the inspection yard, into which no other person than the inspector and his assistants shall be ...


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