
    Daniel Wormer v. The United States.
    
      On the Proofs.
    
    
      The claimant enters into a formal written contract with the defendants, lry one of their quartermasters at Washington, for the sale and, delivery of twelve hundred horses at St. Charles, I llinois, within thirty days. The contraelpromdes that the horses upon being delivered shall be examined and inspected without unnecessary delay, and implies that while undergoing inspection they shall be at the expense of the defendants, and that only such as are accepted shall be branded. Shortly after the execution of this contract, and before its performance, and while the claimant is ready mid able to perform, the defendants, by their Chief of the Cavalry Bureau, forbid their assistant quartermasters to receive horses under cmy contract, unless they be placed in the inspection yards at least twenty-four hours before inspection, to be fed at the expense of the contractors till they have been accepted, and those rejected to be branded. Within the time allowed by the contract, the claimant appeals to the Chief of the Cavalry Bureau to be allowed to fill his contract free from the modifications of the new inspection rule, and the latter refuses to allow it to be done. The claimant does not tender, nor does he oion, the horses at the time.
    
    I. When an executory contract is renounced hy the second party; before performance, the first party may not needlessly increase his damages for the breach.
    II. The object of the law of tender is to fix the fact — 1st, that the one party to a contract is ready and willing to perform; and Sd, that the other refuses to allow him to do so. When the latter expressly renounces his contract, he fixes the second fact in the strongest manner; and it only remains for the former to show that (so far as the other would let him) he was ready and willing to perform.
    III. When a contract for the sale of horses to the government provides that only such horses as are accepted shall be branded — that ux>on “ being delivered” “ they shall be examined and inspected without unnecessary delay ”■ — • and while undergoing inspection shall be at the expense of the defendants; and the defendants by an order of tbe Chief of the Cavalry Bureau refuse to receive the horses unless they be placed in the inspection yards, ai least twenty-four horns before insx>ection, to be fed at the expense of the contractor till accepted, (the rejected horses to be also branded,) the change is material and unauthorized, being not a vigilant inspection but a new contract, and a renunciation of the previous one.
    IV. The case of Spicer (1. C. Cls. R., p. 316) considered and overruled.
    V. The rule of damages, where the government has prevented the performance of a contract, is such damages as would put the contractor as nearly as possible in the same situation as he would have been in, if he had been allowed to perform according to his contract.
    
      
      Mr. Ira Harris (with whom was Mr. N. Totten J for tbe claimant:
    On tbe 26tb day of February, 1864, an agreement was executed between Daniel Wormer, tbe claimant, and Captain James A. Eldn, tbe Chief Quartermaster of tbe Cavalry Bureau, for and on bebalf of tbe United States, by wbicb Wormer agreed to “ have delivered” at tbe government stables in St. Charles, Illinois, by or before tbe 26th day of March following, twelve hundred cavalry horses of tbe description and quality specified.
    It was further agreed, that tbe horses upon being delivered should be examined and inspected ivithout unnecessary delay, and, after tbe inspector shall have certified that they are in all respects as eontraeted for and fully equal to the specifications, they shall be received and become tbe property of tbe United States.
    Horses condemned and rejected by tbe inspectors shall be removed within one day after tbe contractor shall have been notified of their rejection.
    The horses were to be inspected upon delivery and without unnecessary delay. But upon the mode of inspection the contract, is silent. In such a case the silence of the parties raises the presumption that they intended to be governed by the usual course of dealing in such cases. (2 Starkie, 453-4.)
    No usage or custom can be set up to control tire rules of law or contradict the agreement of the parties; but where there is nothing in the agreement to exclude the inference, the parties are presumed to contract in reference to the usage or custom which prevails in the particular trade or business to which the contract relates. The usage is admissible to ascertain the intention of the parties. (Wadsioorth v. Allcott, 6 N. Y., 72; Hinton v. Loche, 5 Hill, 439.)
    When a custom is so far established and so far known to the parties that it must be supposed that their contract was made in reference to it, then the rule is that it maíces apart of the contract. (2 Parsons, 53.)
    Every contract may reasonably be presumed to be made with reference to the existing state of things. Hence it is said that “the usage or habit of trade, or the conduct of an individual which is known to the person who deals with him, may be given in evidence to prove iohat was the contract between themP (Out-water v. Nelson, 20 Barb., 31; 2 Greenleaf Ev., § 251.)
    The general doctrine of all the cases on the subject is that when a person enters into a contract in a particular business, the legal effect of the contract is regulated by the usages of that business.
    
    In this case we only claim, that the government should be bound by its own usage — reasonable, convenient, for the benefit of both parties.
    “It has long been settled that in commercial transactions, extrinsic evidence of custom and usage is admissible to annex incidents to written contracts in matters with respect to which they are silent. The same rule has always been applied to contracts in other transactions of life, in which known usages have been established and prevailed. This has been done upon the principle of presumption that in such transactions the parties did not mean to express in writing the whole of the contract by which they intended to be bound, but a contract with reference co those known usages.” (Sutton v. Warren, 1 M. & W., 475; cited in 2 Parsons, 49, note z.)
    In many instances evidence of custom and usage is admissible, for the purpose of annexing incidents to the terms of a written instrument concerning which the statement itself is silent. The principle upon which such evidence is admissible seems to be a reasonable presumption that the parties did not express the whole of their intention, but meant to be guided by custom as to such particulars as are generally known to be annexed by custom and usage to similar dealings. (Starkie, 710.)
    A custom may be established by showing that it is ancient— so ancient that knowledge of it will be presumed — or, when the usage is recent, proving actual knowledge of its existence. (1 Cush., 182; see also Noble v. Kennotoay, Dougl., 510.)
    In our case the usage was the usage of the government itself. It cannot deny knowledge of its own usage. The usage was not repugnant to the contract itself. It was not against public policy. It had existed for three years. It warrants the presumption that the contract in question was made in reference to it. (Cooper v. Kane, 19 Wend., 386; Loring v. Gurney, 5 Pick., 15.)
    It was not necessary that the claimant should own or tender the horses. A recent English case is in point.
    The plaintiffs had agreed to deliver to the defendants 3,900 tons of railway chairs. They were to be delivered in certain quantities monthly, for which they were to receive payment one month after delivery; 1,787 tons were thus delivered, leaving 2,113 yet to be delivered. Then the engineer of the defendants “ directed the plaintiffs to make no more, as no more toonld be wanted.” (Curl v. Ambergate Railway Go., 6 Law and Eq., 230; cited in 2 Parsons, 188, note f.)
    
      On the trial, it was contended for the defendants that in order to satisfy the condition of the contract the plaintiffs ought to prove that the chairs loere made and ready for delivery, or that a tender had been made.
    
      Lord Campbell delivered the opinion of the court. He said: “We are of opinion that the jury were fully justified upon the evidence in finding that the plaintiffs were ready and willing to perform the contract, although they never made and tendered the chairs.
    “In common sense the meaning of such an averment of readiness and toillingness must be that the nou-completion of the contract toas not the fault of the plaintiffs — that they were disposed and able to .complete it, if it had not been renounced by the defendants.
    
    “What more can reasonably be required by the parties for whom the goods are to be manufactured?”
    And again he says: “ Upon the whole, we think we are justified, on principle and without trenching on any former decision, m holding that when there is an executory contract for the manufacturing and supply of goods from time to time, to be paid for after delivery, if the purchaser, having accepted and paid for a portion of the goods contracted for, gives notice to the vendor not to manufacture any more, as he has no occasion for them and will not accept and pay for them, the vendor having been desirotis and able to complete the contract, he may, without manufacturing and tendering the rest of the goods, maintain an action against the purchaser for breach of the contract; and that he is entitled to a verdict on pleas traversing allegations that he was ready and willing to perform the contract; that the defendant refused to accept the residue of the goods, and that he presented and discharged the plaintiffs from manufacturing and delivering them.”
    ■Where “the plaintiff had agreed to sell, and the defendant to buy, certain goods to be delivered at Belfast on arrival, it was held that a refusal to perform the contract by the defendant before the arrival of the goods was not of itself necessarily a 
      
      breach of it, but that such refusal, unretracted down to and inclusive of the time when the defendant was bound to receive the cargo, was evidence of a oontinwing refusal, and a waiver of the condition precedent of delivery, so as to render the defendant liable for the breach of contract. (Ripley v. McClure, 4 Exch., 345.)
    “In all cases whatever, a promisor will be discharged from all liability when the non-performance of his obligation is caused by the act or the fault of the other contracting party.” (2 Parsons, 188.)
    “ The performance of a condition shall be excused by an obstruction of the obligee or by any interruption of the performance by him.” (Com. Dig., Condition L., 6.)
    If a party to a contract who is entitled to the benefit of a condition upon the performance of which his responsibility is to arise, dispense with or by any act of his own prevent the performance, the opposite party is excused from proving a strict compliance with the condition. (Williomis v. Banlc of ü. S., 2 Peters, 101; Washington, J.)
    If one party give notice to the other that he will not fulfil, the other, if not himself in default, is discharged. (2 E. D. Smith, 86.)
    The damages should be such as will put the claimant in the same position, as nearly as possible, as he would have been in if he had been allowed to deliver the horses according to the contract. (6 L. & E., 230.)
    
      Mr. T. H. Talbot (with whom was the Assistant Attorney General) for the defendants:
    The facts of this case, taken in their regular order, are, that on the 5th day of February, 1864, Brigadier General J. H. Wilson, in charge of the Cavalry Bureau of the War Department, issued a circular containing instructions to inspectors of cavalry horses. Three weeks after the date of this circular, the claimant contracted with Lieutenant Colonel James A. Ekin, chief Quartermaster of the Cavalry Bureau, for twelve hundred ' cavalry horses, to be delivered within thirty days from the date of the contract, February 26, 1864. Finding, after the contract was executed, that he could not induce sub-contractors to sell him horses subject to inspection according to General Wilson’s instructions, tbe claimant concluded that he could not fulfil the contract, and therefore he made no attempt to do so. He now sues for the profit he might have made if he had undertaken to fulfil his contract and had succeeded in doing’ so.
    The circular of General Wilson bears date the 5th February, 1864, and the presumption is that it was promulgated on that day.
    But wherein did the defendants interfere with the claimant ant in the execution of his contract ?
    The horses were required to be kept twenty-four hours before inspection, but not, as is alleged, at the expense of the contractor.
    If horses were rejected for being under age, in poor condition, or temporarily injured by transportation or otherwise, they were to be u lightly branded on the front part of the fore hoof with the letter R, not to exceed in length three-fourths of an inchf and might, on notice, be again offered for inspection within a month.
    If horses were doubtful, they were to be “ kept three or four days under guard, at the expense of the contractor,” and then again inspected and disposed of as above, if rejected.
    That these regulations were just and right needs no further evidence than we have in this case, viz., that the contractors combined to withhold their horses until the necessities of the government compelled the revocation of the instructions.
    
    The claimant does not show, that he ever tendered a single horse for inspection. In fact he did not. Why? He says, because he could not purchase them from sub-contractors subject to the inspection required!
    
    He does not show that he ever owned a single horse$ and the testimony clearly shows that he never intended to make an absolute purchase of a ¡single horse with which to fulfil his contract. Everything but his own profits was to be at the risk of the sub-contractors. We submit:
    I. The inspection prescribed in General Wilson’s circular does not conflict with the terms of the contract. (Spicer v. The United States, 1 C. Gis. R., p. 316.)
    II. The vendor must be ready to perform his contract, even though the vendee is not. (Brown v. Berry et al., 14 N. H., 459.)
    HI. In order to recover upon a contract, the plaintiff must show that he fully complied with it. (Taylor v. Beclc, 13 Ill., 376.)
   Nott J.

delivered tbe opinion of tbe court.

This is an action brought to recover $15,000 damages suffered by reason of tbe defendants’ breach of their agreement to purchase of tbe claimant twelve hundred horses in 1864.

The argument of the distinguished counsel for the claimant, by its faithful and laborious analysis of the evidence, and by the array of learnedly chosen and well-cited cases which it presents, leaves little labor for the court in reaching the final determination of the case.

The rule which we think must govern this case is one designed for the protection of parties occupying the place of these defendants. It is that when an executory contract is renounced by the second party before performance, the first may not needlessly increase his damages for the breach. Thus, where work is to be done, or services rendered, or goods sold, and the party, who is to receive the same renounces his agreement before it has been performed, he who is to perform is not at liberty to proceed and make the contract price the measure of his damages. This was expressly held by this court in McKee’s Case, (1 C. Cls. R., p. 336,) with regard to services, where a government surveyor, after notice that the Commissioner of the Land Office had renounced his contract, completed the survey and sued for the contract price. It was held that he could not recover; and this court, quoting from the Supreme Court of New York, in Clark v. Marsiglia, (1 Denio R., p. 317,) said, “ the plaintiff had no right, by obstinately persisting in the work, to make the penalty upon the defendant greater than it would otherwise have been.”

Where the contract is for the sale of goods instead of the performance of services, the reason of the rule is equally apparent. If the plaintiff were permitted, after notice of the renunciation of the contract, to go on and buy the goods, and tender them, and hold the defendants for the contract price, it most assuredly would “make the penalty upon the defendant greater than it would otherwise have been.” The practical effect of such a license would be, that a claimant would buy the goods as a matter of form, and then, after tender, sell them again as an act of indemnification, and thereby needlessly throw upon the defendant the risk and loss and responsibility of the purchase and sale. Apart from such a license, the defendant would be liable simply for tbe claimant’s profits, and they might be nothing; with such a license the defendant would be further liable for the claimant’s losses, and for all the risks and expenses attendant the property after tender. The government, from the nature of things, is a defendant which is often obliged to renounce executory contracts, and therefore is a defendant peculiarly interested in having the principle recognized in McKee's. Case clearly and carefully maintained.

The object of the more familiar law of tender is merely to fix two facts:

1st. That the one party to a contract is ready and willing to perform.

2d. That the other refuses to allow him to do so.

When the latter expressly renounces his contract he fixes this second fact in the strongest possible manner, and it only remains for the former to show that he was (so far as the other would let him be) ready and willing to perform. In this case it appears that claimant expressly applied to the Chief of the Cavalry Bureau to accept Ms horses or allow them to be accepted under the original contract, and that that officer expressly refused. A tender then to the quartermaster would have been notMng more than an attempt to make a subordinate officer disobey his orders.

It is conceded in this case—

1st. That the defendants, by one of their quartermasters at Washington, entered into a formal written contract for the purchase of twelve hundred horses, deliverable at St. Charles, Illinois, within thirty days.

2d. That the defendants by their Chief of the Cavalry Bureau, shortly after the execution of this contract, and before its performance, forbade their assistant quartermasters to receive horses under any contracts unless the contractors should submit them to a certain inspection.

3d. That the defendants by their said Chief of the Cavalry Bureau positively refused to allow the claimant to proceed and deliver the horses he had agreed to furnish, unless he should submit them to this inspection; and they thus refused, before the claimant had purchased the horses, but while ample time remained for him to do so. There are, therefore, two questions of fact to be determined upon which the case depends:

1st. Did the new inspection required by the defendants in effect make a new contract, so that the refusal to receive the horses without it was, in effect, a renunciation of the existing agreement.

2d. If the defendants thus renounced their contract, then, at the time of the renunciation, had the claimant evinced an intent and ability to perform ?

1. As to the former question, it must be determined by comparing the contract with the order for the new inspection. The contract contemplated the branding of only such horses as should be accepted. The order required the further branding of those which might be rejected. The contract provided that the horses “upon being delivered” should be “examined and inspected without unnecessary delay;” the order required that they “should be placed in the inspection ya/rds at least twenty-four hours before inspecting them.” The contract implied that the horses while undergoing inspection should be at the expense of the defendants; the order specifically declares that horses will be fed at the expense of the contractors till they have been branded and accepted.”

Upon the effect to be attributed to these changes the court is divided. To the majority they appear material, and unauthorized by the pre-existing contract. The defendants had a perfect right to guard against fraud by vigilant inspection, but they had no right to mutilate or mark property which they did not accept. The contract contemplated horses being rejected, and for such cases provided specifically. The provision was that “ they should be removed from the government stables within one day after the contractor shall have been notified of said rejection.” There is nothing which implies that they should also be permanently disfigured and materially debased in value. It is suggested that none of the horses were necessarily to be rejected, and that no damage would necessarily be done to the claimant. But the claimant was not bound to try that experiment. The first horse which he would have presented for inspection would have been received only on the condition that the defendants might reject him, and if they should reject him that they might also permanently deface him. Delivering his horses for inspection on those conditions would have been at once claimed as an acquiescence in the terms of the order. If this difficulty could be overcome, there would remain the fact that the contract expressly provided “ that the horses upon being deliv ered should he examined and inspected,” while this order as expressly provided that they should not be examined and inspected upon being delivered, but should be “ placed in the inspection yard at least twenty-four hours before inspecting them.” A provision in a contract that property shall be immediately rejected or accepted on delivery certainly seems to us a material provision, and the change that it shall not be immediately rejected or accepted, but may be held by the vendees an indefinite length of time, certain only in its being at least twenty-four hours,” certainly seems to us a material alteration. Finally, if we were to assume that the right to hold an inspection gave to the defendants the right both to change the time of holding it, and to treat in a different manner than that prescribed by the contract the property rejected, there would still remain the objection that they had no right to transfer the expenses of the inspection from themselves to the claimant. Conceding for the moment that they had the right under the guise of inspection to do just wíiat the Chief of the Cavalry Bureau insisted should be done, it by no means follows that they also had the right to make the claimant pay for their new inspection. This change of expense was a change of price; assuredly when the Chief of the Cavalry Bureau tried to force that into a pre-existing contract, he tried to coerce the contractor into a material alteration of his pre-existing agreement. It was therefore not a vigilant inspection which the order required, but a new contract, working increased delay, greater expense, and largely augmented risk.

2. With regard to the question whether the claimant was willing and able to perform, it appears that the contract was executed at the city, of Washington on the 26th February, and that the horses were to be delivered at St. Charles, Illinois, on the 26th March, 1864. Almost immediately after its execution the claimant, a resident of New York, proceeded to Illinois. About the 8th March the Chief of the Cavalry Bureau arrived at Chicago, and the new inspection was ordered to be enforced. There were then a large supply of horses in the market which could be bought readily for cash. The claimant in person promptly' appealed to the Chief of the Cavalry Bureau to be allowed to fill his contract free from the modifications of the new inspection, and the latter peremptorily refused to allow it to be done. No question is made as to the claimant’s financial ability to procure horses, and it appears that lie bad held other contracts from the government. Therefore, taking into account all these circumstances, there can be little doubt but that the claimant was ready and willing to perform the contract which he had made, and that if the defendants’ officers had allowed him he would have done so.

Upon these facts, we think there is no doubt of the defendants’ liability. The case cited by the claimant’s counsel from 61. & Eq. R., p. 230, is exactly to the point, as is the rule of damages given to the jury. The case of Spicer, (1 C. Cls. R., p. 316,) is cited by the defendants’ counsel, and on looking into it we find that it is certainly identical with this. We are convinced that our decision there was erroneous; not in the general principles of law stated, but in the particular application to the facts admitted by the pleadings. Unfortunately, that case came before us on demurrer, and the attention of the court was diverted (without fault of counsel) to certain averments in the petition respecting the usage of inspections, and to a claim for damages growing out of the wrongful arrest of the claimant. The opinion of the court says of the claimant, “ he never attempted to perform,” and in this the court, as a matter of fact, erred.

In reaching this conclusion, we have thrown aside all the evidence offered by the claimant to show a usage in the manner of government horse inspections, and in the mode by which horse contractors procure their stock, and we rest our decision exclusively on the fact that the express terms of the order change the express terms of the contract.

Taking for the measure of damages the rule approved by Lord Campbell in Curl v. The Ambergate Railway Company, (6 L. & Eq. R., p. 230,) viz., such as would put the claimant as nearly as possible in the same situation as he would have been in if he had been allowed to deliver the horses, we find his damages to be seven dollars a horse on the six hundred horses for which $127 a horse was to have been paid, and eight dollars a horse on the remaining six hundred horses for which $128 a horse was to have been paid, making an aggregate of $9,000.

The judgment of the court is that the claimant recover of the defendants the sum of $9,000.

Casey, Cb. J.,

dissenting:

1 do not think that the new rules of inspection changed the terms of the contract. I am therefore in favor of adhering to the doctrine laid down in the Spicer Case. The very able argument of the claimant’s counsel has failed to convince me that we committed any error in ruling that case.

Peck, J.,

dissenting:

I do not think this claimant is entitled to a judgment. Pis allegations are not supported by the proof. He alleges in his petition that immediately after executing the contract he proceeded to collect the required number of horses of the proper description, and did collect and place them in stables at convenient points to be forwarded to St. Charles, and was ready and willing and offered' to deliver them at the government stables at St. Charles before the 26th day of March, 1864, and was ready and willing and offered to do all things required to be done on his part by the contract. There is not a scintilla of evidence in the record to show that he had bought a horse, or was in any way prepared to deliver one or more horses. The proof is, that there were plenty of horses for sale, and that if he had desired to do so he could have purchased them. His contract was to deliver the horses at St. Charles; he does not show that he was ever there with any horses to deliver.

The contract stipulated that the horses upon being delivered should'be examined and inspected, &c., by a person or persons appointed by the United States, and that after the inspector had certified that they were in all respects as contracted for and fully equal to the specifications, they should be received and become the property of the United States. One of the specifications was that they should be “free from all defects.” The horses were to be of certain ages, of certain height, bridle-wise, of good flesh, &c., &e. Had he offered horses for inspection of the quality and description stipulated for, which were rejected, he might then have cause for complaint. He tad no right to offer any horses but such as were described in his contract, and if he offered none but such, he had no reason to suppose that they would be rejected.

To secure horses that were “free from all defects,” and to protect themselves against imposition, the United States reserved the right to have them inspected by an inspector of their own choice, and in their own way, to which the claimant assented. It is now assumed by the claimant that, with regard to the inspection of the horses, the agents of the United States were about to do an unauthorized and improper act; this is not warranted.

The method of inspecting horses was different at different times and different places, as the proof of claimant shows, and if he desired to limit or control the inspection he should have provided for these things in his contract. As to inspection, he submitted himself to the orders and direction of the United States; and if he subsequently changed his mind, and was not willing to submit himself to those directions and orders, he should suffer the consequences.

Had he at any time offered horses under the contract which were not accepted, and the inspectors had attempted to brand or mart them improperly against his objection or protest, he might then have refused to offer more horses, and bring his action, for some remote, possible, or uncertain injury he feared he might sustain, but has not sustained, upon the assumption that the government was about to do him some wrong. Nothing of the kind having been attempted, I think he cannot recover.

Claimant alleges that, in consequence of the manner of inspection proposed by the defendant, which he says was contrary to the usages and customs of the trade in horses, and the known usage, custom, and practice of the government in buying horses, and not authorized by the contract, he refused to proceed, because it would involve him in ruinous losses. Without commenting particularly upon the proof in relation to this pretended custom or usage, I will comment upon what it is supposed to be, as gathered from the argument of the counsel. It was strenuously insisted that, because contractors with the United States often purchased horses of other parties upon the condition that they should be paid for by the contractors after they had passed inspection, the new method of inspection would or did prevent the further purchasing of horses in that way, the owners of them not being willing to submit their animals to the inspection required, with the hazard of not making a sale. If it be true that a custom or habit of trade between one of the contracting parties and those with whom he traffics can be engrafted upon a contract with a corporation like the United States, which camiot be supposed to have any knowledge of custom; and if the custom had been proved, this claimant might have some ground to stand upon. The claimant did not contract to gather up these horses for the United States as an agent or officer would, but he sold the horses outright, without any regard to a usage between himself and those with whom he might deal. All this he took upon himself without reservation. If there was usage or custom regulating the trade between himself and others about horses, he should have stipulated in his contract in such way as to protect himself. He cannot enforce a custom upon a party not dealing with those who act upon it. Probably we would all agree that, in so far as the usage or custom insisted upon at the argument as controlling this case is concerned, it would have but little weight. A usage or custom can never be set up in opposition to a plain and clearly expressed intention, which in this case it appears to me is manifested by the contract.

I adhere to the ruling in the case of Spicer. I do not see any error of law in the case as reported. If there was anything on the face of the petition, which would or should have led the court to override the demurrer, it is but reasonable to suppose that, for the purpose of that decision, the court was invited not to consider such averments, in order that the claimant might be advised in good time whether or not he would succeed in his action upon such allegations as he believed he could support by proof.

If the custom relied upon as affecting inspection, when found to exist, was not sufficient to maintain his action, the claimant was probably prepared to relinquish his claim, not supposing he could succeed without its support.  