
    LAMPORT MANUFACTURING SUPPLY CO. v. THE UNITED STATES
    [No. C-1209.
    Decided May 28, 1928]
    
      On the Proofs
    
    
      Sale of surplus property; shortage m delivery; recovery of purchase price. — 'Where the purchaser pays the full amount of its bid, and the vendor delivers a portion of the goods sold but is unable to deliver the balance, the purchaser is entitled to be reimbursed the purchase price on the shortage.
    
      Same; counterclaims; rescission of sale and- retention of liquidated damages; remedy for breach. — By rescinding a sale the vendor elects to keep the goods as his own and his remedy, if any, is to sue for the difference between the market price at the time and place of delivery and the contract price. Where the bidder pays as liquidated damages for possible breach an agreed sum, and the vendor upon failure to take the goods rescinds the contract and retains the said sum, the vendor can not recover a loss sustained through resale.
    
      Same; authority of public offiaer; assumption of validity. — The courts will assume that an Officer, in the performance of an official act, not only took all necessary preliminary steps but acted within the circumference of his authority. There is a presumption in favor of the legality of his official act which must be overcome by satisfactory proof that the officer exceeded his powers.
    
      The Reporter’s statement of the case:
    
      Mr. William D. Harris for the plaintiff. Messrs. Frank; Davis, jr., and Robert T. Scott, and Palmer, Davis <& Scott were on the Brief.
    
      Mr. Percy M. Cox, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows;
    I. Plaintiff is and was during the period hereinafter mentioned a corporation organized and doing business under the laws of the State of New York, with its principal office and place of business in the city of New York; and is and has been engaged in the business of buying, selling, and converting cotton goods and other goods and merchandise for export and domestic trades.
    II. On the 10th day of March, 1920, it purchased from the War Department of the United States, office of the Quartermaster General, Director of Purchase and Storage Surplus Property Division, Washington, D. C., 436,520 pounds of candles at the price of per pound, making the total price $39,286.80. Said purchase was evidenced by a written letter of acceptance of bid for surplus property, dated March 10, 1920, signed by Walter C. Plunkett, first lieutenant, Quartermaster Corps, contracting officer, surplus property division, office of the Quartermaster General, Director of Purchase and Storage, and constitutes the contract under which said candles were sold by the United States and purchased by plaintiff. A true copy of said contract is attached to the petition as Exhibit A and made a part hereof by reference.
    III. Pursuant to the terms of said contract, plaintiff paid to the zone supply officer at New York, New York, the full amount of the purchase price of said candles, namely, $39,286.80.
    IV. Thereafter, upon the request of plaintiff, 100,080 pounds of candles were delivered to it, leaving a balance due and which had been paid for of 336,440 pounds.
    V. The said surplus property division of the War Department failed to deliver the balance of said candles, namely, 336,440 pounds, and on April 18, 1921, plaintiff was advised by S. J. D. Marshall, captain, Quartermaster Corps, chief of the sales branch of the quartermaster supply office, New York general intermediate depot, that the undelivered balance of 336,440 pounds of candles had been canceled and that he had been directed to issue credit to plaintiff for $30,279.60, due over and above the shipments made.
    VI. Since said date, namely, April 18,. 1921, plaintiff has repeatedly demanded payment to it of the said sum of $30,279.60 so due to it from the United States, represented by the surplus property division of the War Department, but the United States has failed and refused and neglected to pay the same and still so neglects and refuses.
    
      VII. No other action has been had on said claim in Congress or by any of the departments; no person other than plaintiff is the owner of said claim or interested therein; no assignment or transfer of said claim, or any part thereof or interest therein has been made; plaintiff has at all times borne true faith and allegiance to the Government of the United States and has not in any way voluntarily aided, abetted, or given encouragement to rebellion against the said Government.
    
      First counterclaim
    
    VIII. The surplus property division of the Quartermaster Corps, War Department, prior to the bidding date of July 19, 1920, advertised for sale certain surplus war supplies. Among other items offered for consideration to prospective bidders were the following:
    Item No. T-2858. 87,413 YaRds OsNAbtjrg, BkowN—
    26 inches, 7 ounces, 44x28. Made by Bancroft & Co. Stored at Philadelphia. Minimum bid considered, 1,200 yards. SPD 17,979.
    Item No. T-2859. 208,958 YaRds OsNabtjrg, BrowN—
    27 inches, 7 ounces, 44x26. Made by Bancroft & Co. Stored at Philadelphia. Minimum bid considered, 1,000 yards. SPD 17,972.
    The advertisement set out the following terms of sale:
    “ Inspection. — Goods are sold f. o. b. storage point. Samples of practically all articles are displayed at depot offices and at the Surplus Property Division, Munitions Building, Washington, D. C.
    “ Negotiations. — No special form is required for the submission of a bid. Bids may be made by letter or telegram.
    “A 10 per cent deposit must accompany all bids. Such bidders as may desire to do a continuous business with the surplus property division, a term guaranty in the sum of not less than $25,000 may be deposited with the surplus property division at Washington, D. C., or with the depot officers; such term guaranty is to be so worded as to bind the bidder to full compliance with the conditions of any sale ■with regard to which he may submit proposals — that is, proposals on any property offered for sale by the surplus property division during the lifetime of the guaranty. A term guaranty will not relieve the bidder from the forwarding of bis certified check for 10 per cent of the amount of his purchase within 10 days from notification of award.
    “ Delivery.- — The articles offered are for spot delivery. Purchasers will be permitted to leave stocks which they may acquire in Government storage for a period of 80 days after receipt of notification. Goods so held will be held subject to purchaser’s risk.”
    IX. In response to said advertisement the plaintiff • submitted two bids for item No. T-2858, one for 25,000 yards •at $.1155, and the other for 25,000 yards at $.1705. It also submitted two bids for item No. T-2859, one for 50,000 yards at $.1755 and the other for 50,000 yards at $.1705.
    X. Under date of August 18, 1920, the defendant accepted all four of these bids. The letters of acceptance contained the following clauses, among others:
    “ Deposit.- — ’Deposit of 10 per cent of the amount of this purchase must be delivered to the designated depot officer before this letter of acceptance is effective or valid, and this amount is deposited by the purchaser with the understanding that the same is given as a guarantee of fulfillment of agreement to accept these goods within the time, at the place, and in the manner herein specified; and upon fulfillment of the contract said amount to apply, if so desired by the purchaser, as part payment for the last quantity ordered delivered or will be returned after fulfillment of contract.
    “ Timne for payment. — Full payment for all goods awarded by this letter must be made before delivery and within 30 days from date of this letter unless otherwise specifically stipulated.”
    These bids and acceptances involve a total yardage of 150,000, a,t a combined cost of $25,950.00.
    On the date of said acceptances the plaintiff paid to the defendant $2,595.00, being 10% of the amount of the bid.
    Likewise, on August 18,1920, the plaintiff sent its certified check for $1,705.00 in the payment of 10,000 yards of item No. T-2858, and on September 3, 1920, acknowledged receipt of bill of lading evidencing shipment in that amount.
    XI. The plaintiff failed and neglected to make payment of the balance of said agreed price on the four lots of osna-burg. During the months of October, November, and December of 1920, and January, 1921, the defendant made ire-quent demand for the payment of this balance and the acceptance of the remainder of the yardage.
    The defendant rescinded the said four sales, and under date of March 25, 1921, so notified the plaintiff, stating that a forfeiture had been directed “ of all moneys paid by you on these sales over and above value of shipments taken out to be applied against loss, if any, on resale.” The 10% deposit was thereafter held and retained by the defendant.
    XII. On April 22,1921, the defendant informed the plaintiff that it was offering for sale for the plaintiff’s account the osnaburg which the plaintiff had failed to make payments for, and that such sale was by sealed bid closing May 3, 1921. It enclosed in said letter the offer list, calling attention to items 46 and 50 thereof. These items were as follows:
    
      
    
    Among the conditions of this sale appeared the following:
    
      “Sealed proposals for not less than 500 yards, or any multiple thereof, or for the entire lot of any of the surplus Government materials listed below, will be received in this office until 1 p. m., May 3,1921, at which time and place they will be opened in the presence of attending bidders.
    “ Deposits.- — When the total amount of a bid is $250.00 or less, payment in full, in cash, certified check, or money order must be made at the time of submitting the bid. Bids of over $250.00 must be accompanied by 10% of the amount of the bid in cash, certified check, or money order.
    
      “Payments.- — In the acceptance of bids of $250 or less the deposit mentioned above will apply as payment-. On accepted bids of over $250.00 the deposit mentioned above will apply as a part payment and the balance (90%) must be paid in cash, certified check, money order, or bankers’ letter of credit. Letters of credit must be such that a draft may be drawn against the same for the full amount thereof at 30, 60, or 90 days from the date of executing the sale. The quartermaster supply officer will determine the time of credit allowed.
    
      
      “Delivery must be taken within 30 days from the date of executing the sale, or the Government reserves the right to remove material from Government storage and place same in a public-owned warehouse at the expense and risk of the purchaser. No goods will be delivered until the entire amount of the sale has been paid. If it is not feasible or possible to make delivery from advertised point of storage, the Government reserves the right to make delivery f. o. b. cars at any other point of storage within the territorial limits of the United States, making freight differential between advertised point and point of actual delivery.
    “ Inspection of these materials at point of storage is invited. No bid will be accepted subject to inspection, nor will any claim be considered subsequent to sale if the goods do not come up to the expectations of the purchaser. On the purchase of all dyed ducks the Government reserves the right to deliver material with a variation of one ounce per linear yard in weight and one inch in width, this owing to the fact that duck is likely to be listed according to construction in the gray. The above variation is allowed for stretch in length and resultant contraction in width during the process of dyeing.
    “ Claims must be filed with the eastern surplus property control officer within 30 days from the receipt of the goods by the purchaser. No claims will be entertained on goods sold ‘ as is ’ and ‘ where is ’ except on shortage in delivery.”
    XIII. Fifteen thousand (15,000) yards of osnaburg, item No. 50, were sold for $895.35, 10,000 yards for $558.00, 109,990% yards of osnaburg, item No. 46, for $5,576.52, and 23,348 yards of osnaburg, item No. 50, for $1,315.06, or a total of 158,338% yards, for $8,344.93, as a result of this sale. Acceptances of these bids were made on May 13, 16, 21, and 21, 1921, respectively.
    XIV. Osnaburg weighing 7 ounces is a different cloth than osnaburg weighing 6.62 ounces. The latter is of four or five per cent less value than the former.
    27-inch osnaburg weighing 7 ounces is a different cloth than 26% to 27 inch osnaburg weighing 6.20 ounces. The latter is of 12% to 15 per cent less value than the former.
    Other things being equal, the more stringent terms of the latter sale would tend to reduce materially the number of bidders and the amount of their bids.
    
      
      Second counterclaim,
    
    XV. Likewise the surplus property division of the Quartermaster Corps of the War Department prior to the bidding date of March 15, 1920, advertised for sale further surplus war supplies. Among other items offered for consideration to prospective bidders was the following:
    Item No. T-1910. 195,081 YapvDs Duck, Haw Selvage, Gray—
    37No. 9, 36 x 30. Manufactured by the Passaic Cotton Mills. Stored at Schenectady, N. Y. Minimum bid considered 500 yards. SPD No. 14480.
    The advertisement set out the following terms of sale:
    
      “Inspection. — Goods are sold ‘as is at storage point. Samples of practically all articles are displayed at zone supply offices and at the Surplus Property Division, Munitions Building, Washington, D. C.
    “ Delivery. — The articles offered are for spot delivery. Purchasers will be permitted to leave stocks which they may acquire in Government storage for a period of 30 days after receipt of notification. Goods so held will' be subject to purchasers’ risk.”
    Plaintiff’s representative examined samples of the duck advertised for sale, which it subsequently bought, and found it to have a blue line.
    XVI. In response to said advertisement the plaintiff submitted its bid for the entire amount, to wit, 195,081 yards at an average price of $0.42875, or a total of $83,631.76. Under date of March 30, 1920, the defendant accepted plaintiff’s bid, letter of acceptance containing the same clauses, among others, as are set forth in Finding X above.
    On that date the plaintiff paid to the defendant the sum of $8,363.18, being 10% of the amount of the bid. On May 18, 1920, the plaintiff sent a certified check for $10,887.50, being a- payment for 25,000 yards of said duck at $0.4355 per yard. On August 9, 1920, the plaintiff sent a certified check to the defendant for $4,405 in payment of 10,000 yards of said duck. In September 20, 1920, it likewise sent a certified check for $22,596.50 in payment of 53,000 yards, 50,000 at $0.4255 and 3,000 at $0.4405. On September 24, 1920, it sent a certified check for $10,762.50 in payment of 25,000 yards of said duck, and on September 30, 1920, it sent its check for $2,202.50 in payment of 5,000 yards of said duck. The total was 118,000 yards at a combined price of $50,854.00. Shipments to the amount of 117,967% yards were made by the defendant on these orders.
    XVII. Plaintiff failed and neglected to make payment for the balance of said agreed price. On December 30, 1920, the defendant made demand on the plaintiff for payment of the balance and acceptance of the remainder of the yardage. This demand was repeated January 28, 1921, and on March 5, 1921, the plaintiff was advised that unless payment was made the sale would be canceled and the deposit “ retained to apply toward loss to the Government on resale of these supplies.” This warning was repeated March 9 and March 14.
    Under date of April 5, 1921, defendant rescinded the said sale, declared the deposit forfeited, and so notified the plaintiff May 6, 1921. The deposit was thereafter held and retained by the defendant.
    XVIII. Under date of Api’il 22, 1921, the plaintiff received a notification from the defendant that it was offering for sale the duck which was the subject of plaintiff’s contract in an amount of 117,967% yards, and that sealed bids would be closed May 3, 1921. Plaintiff was further informed that “ any loss sustained in the resale will be charged to you.” The goods listed for sale were described in official textile list #5 in the following manner:
    
      
    
    On or about May 23, 1921, defendant sold 19,000 yards of the cloth described in item 77 above for the sum of $3,815.60.
    Without further special notice to the plaintiff the defendant, under date of June 7, 1921, issued its textile sealed proposal #7, in which it listed the following for sale, the bidding date to be July 5,1921:
    
      
      
    
    As a result of bidding tbereon the duck described as item No. 15 above was sold as of July 19-23,1921, in the following-quantities and amounts:
    1,000 yards at .1701_ $170.10
    1,000 yards at .1651_¡_ 165.10
    5,000 yards at .18_ 900. 00
    5,000 yards at .17_i_ 850. 00
    45,975 yards at .1641_>_¡_ 7, 544. 50
    57,975 9,629. 70
    The terms of these sales of duck were the same as those set forth in Findings X and XII above.
    XIX. “ Blue Line ” is a colored thread, woven in the warp, about % of an inch along the selvage of the duck. It is used generally as a guide, and because of this fact its presence renders the duck more valuable. The phrase “ duck, raw selvage, gray,” would indicate a duck that was woven on a wide loom, split in the middle, leaving the fiber sticking out, and having a blue line woven therein. The statement that it was manufactured in the Passaic Cotton Mills would further indicate the presence of a blue line, as this was considered to be a high-class duck mill. If duck were described as “ no blue line,” it would indicate that the same was made in some mill other than a recognized high-class duck mill and that the duck was not a first-class piece. There is usually a difference of between 15 and 40 per cent in the value of duck having blue line and that having no blue line.
    
      Third counterclaim
    
    XX. Prior to the bidding date of April 19, 1920, the surplus property division, Quartermaster Corps, War Department, advertised for sale certain surplus war materials, among which items offered for' consideration was the following :
    
      Item No. T-2319. 90,821 Yards Duck: Gray—
    23 inches, #4, 32x20. Manufacturer unknown. Stored at Schenectady, N. Y. Minimum bid considered, 500 yards. SPD No. 15352.
    The advertisement set out the same terms of sale as in the previous original sale of the duck, as set forth in Finding XV above. In response to said advertisement the plaintiff made the following bids:
    10,000 yards at_. $0. 3015
    10,000 yards at_. .2985
    10,000 yards at_. . 2915
    10,000 yards at_. .2885
    10,000 yards at_. .2815
    10,000 yards at_. . 2785
    10,000 yards at_. .2715
    10,000 yards at_. .2685
    10,827 yards at_. .2615
    Plaintiff’s representative examined samples of the duck advertised for sale, which it subsequently bought, and found that said samples had a blue line.
    XXI. Under date of May 17, 1920, the defendant sent its letter of acceptance to the plaintiff, in which it accepted .plaintiff’s bid in an amount of 60,000 yards, at a total price of $22,800.00. Plaintiff forwarded its check in the sum of $2,280, being 10% of the amount of said bill. Said acceptance contained the same terms of sale as heretofore set forth in previous acceptances.
    XXII. On June 29 plaintiff sent a certified check for $380.00 in payment of 10,000 yards of said duck; on July 15, $1,140.00 in payment of 3,000 yards; July 28, $380.00 in payment of 1,000 yards; August 5, 1920, $760.00 in payment of 2,000 yards; on August 12, $2,280 in payment of 6,000 yards; on August 13, $1,140 in payment of 3,000 yards; on August 19, $76.00 for 200 yards; and on October 13, $1,900.00 for 5,000 yards, making a total in all of 30,200 yards at a combined price of $8,056.00.
    Shipments to the amount of 21,124 yards were made by the defendant on these orders.
    XXIII. Plaintiff failed to make payment of the balance of said bids as accepted. Under date of December 30, 1920, the defendant called attention to the plaintiff’s failure to consummate said sale and on January 25, 1921, demanded the balance due under said agreement. The request was repeated January 28, 1921, and on March 5, 1921, the plaintiff was informed unless payment was made same would be canceled and deposit “ retained to apply toward loss to the Government on resale of these supplies.” On March 9 plaintiff was given until March 31, 1921, to complete payment, and was notified that on failure thereof the sale would be canceled. This warning was repeated on March 14, 1921, and on April 22, 1921, the plaintiff was informed that the remainder of said duck (as the letter set forth), “ 21,124 yards,” would be offered for sale for its account under sealed bid closing May 3, 1921, and any loss sustained on resale would be charged to it.
    Under date of April 5, 1921, defendant rescinded the said sale, declared the deposit forfeited, and so notified the plaintiff May 6, 1921. Thereafter the defendant held and retained the said deposit.
    XXIY. The goods listed for sale were described in the official textile list #5 as follows:
    
      
    
    Sales made of said duck were under the same terms as set forth in Finding XII and were in the following amount:
    1,200 yards, at .25_$300
    XXV. Without further special notice to the plaintiff the defendant advertised for bids to be closed on July 5, 1921, duck listed in the official textile list #7 described as follows:
    
      
    
    Sales made of said duck were under substantially the same terms as in Finding XII and were in the following amounts:
    
      500 yards at .1421_ $71. 05
    500 yards at .1245_ 62. 25
    36, 701 yards at .1205_ 4, 422. 47
    
    37, 701 4, 555. 77
    The plaintiff was the purchaser of the larger amount at this sale.
    XXVI. The same observations relative to the presence or absence of “blue line,” appearing in Finding XIX above, apply in like manner to the above item of sale.
    
      Fourth counterclaim
    
    XXVII. Likewise, prior to date of April 19,1920, the day for the closing of bids, the defendant offered to prospective bidders certain surplus war materials, among which items was the following:
    Item No. T-2355. 72,240 Yards MoleskiN, O. D.—
    52 inches, 17 ounces. Manufacturer unknown. Stored at Schenectady. Minimum bid considered, 500 yards. SPD No. 15351.
    The terms of said sale were the same as set forth in Finding XV above.
    XXVIII. Pursuant to said advertisement the plaintiff made its bid, which bid was accepted on May 7, 1920, in the following quantities and at the following prices:
    5, 000 yards at .8035_$4,017. 50
    5,000 yards at .8015_ 4, 007. 50
    5,000 yards at .7985_ 3,992. 50
    5,000 yards at .7935_ 3,967.50
    20, 000 15, 985.00
    The letter of acceptance contained the same terms as heretofore set forth, and in accordance therewith the plaintiff sent its check for $1,598.50, being 10% of the amount of the bid. On June 4, 1920, the plaintiff sent its certified check for $8,025.00 in payment of 10,000 yards of said goods. It received in due course on this order 9,999 yards of moleskin.
    XXIX. The plaintiff failed or neglected to pay for the balance of said moleskin, and on December 30, 1920, the defendant called its attention to that fact. On January 25, 1921, the defendant made further demand to forward the balances due, and on January 28 it repeated its request. On March 5, 1921, the defendant advised the plaintiff that unless the articles were paid for by March 31, 1921, the sale would be canceled and “the deposit retained and applied toward loss to the Government on resale of these supplies.” On March 9 the warning was repeated, and again on March 14, 1921. On April 22, 1921, the plaintiff was advised that 10,001 yards of said moleskin, the subject of said sale, were then being offered for sale for plaintiff’s account, bidding to be closed May 3, 1921, and that any loss sustained on the resale would be charged to the plaintiff.
    Under date of April 5, 1921, defendant rescinded the sale, declared the deposit forfeited, and so notified -the plaintiff May 6, 1921. Thereafter the said deposit was held and retained by the defendant.
    XXX. The terms of sale were as set forth in Finding XII and the property was in the official textile list #5, described as follows:
    
      
    
    ■ XXXI. All bids under the foregoing advertisement were rejected. On June 3, 1921, the defendant sold moleskin, “ O. D. 52,” 17-oz., in the following amount, at a fixed price, by agreement with the buyer:
    6,226 yards at .22_$1,369.72
    Without further special notice to the plaintiff the defendant advertised for bidders, the bidding to close July 5, 1921, on the following item, as set forth in official list #7:
    
      
    
    The terms of this sale were as set forth in Finding XII. XXXII. The bids at this sale of July 5, among which was one entered by the plaintiff, do not appear to have been accepted, but a letter of acceptance, dated November 21,1922, appears showing an auction sale November 10, 1922, of moleskin under the following description and amounts:
    MoleskiN, O. D., 52", TT-oz., unused. SPD No. 15371.
    4,179 yards at .45-$1,880.55
    The terms of the above sale were as follows:
    “ Terms. — Twenty per cent of the bid must be paid in cash or certified check at the time and place of sale; balance within ten days from date of the sale, in cash, certified check, or letter of credit otherwise the Government reserves the right to forfeit the deposit as liquidated damages and the bidder shall lose all right or interest in the property.
    
      “Inspection. — Samples of all property listed for sale in this catalogue will be open for inspection in the auction room beginning Friday, November 3, 1922, and daily thereafter (Sunday excepted) to date of sale, between the hours of 9 a. m. and 3 p. m., during which time prospective buyers will have an opportunity to inspect said property.
    “ In addition to the inspection of samples, guides will be furnished at the point of storage of the property to direct prospective buyers to the actual location of the property.
    “ No inspection of the property will be permitted during the sale.
    “ Failure on the part of any purchaser to inspect any property will not be considered as ground for any claim for adjustment or rescission.
    “All property listed in this catalogue at said auction will be sold ‘ as is ’ and ‘ where is ’ without warranty or guaranty as to quality, character, condition, size, weight, or kind, or that the same is in condition or fit to be used for the purpose for which it was originally intended, and no claims for any allowances upon any of the grounds aforesaid will be considered after the property is knocked down to a bidder by the auctioneer.
    “ Government officials not authorized to make warramJyy as to goods ofered for sale. — No representative of the Government is authorized to make any statement or representation as to quality, character, condition, size, weight, or kind of any property offered at this sale, and any representation or statement made by any representative of the Government concerning any such property will not be binding on the Government or considered as grounds for any claim for adjustment or rescission of any sale.
    
      “Note. — All articles listed in this catalogue will be sold as is ’ and where is,’ f. o. b. car or trucks, place of storage, unless otherwise stated. Samples of same on display are believed to be representative and descriptions accurate. However, inspection is urged prior to sale, as no claims will be entertained should the articles vary from the samples or not come up to the expectations of the purchaser as to condition, quality, color, size, weight, width, construction, shape, or for any other reason. No claims or refunds will be entertained on account of any ‘ swells ’ or ‘ leaks ’ or damage to cans, packages, or containers, resulting from ‘ leaks ’ or from any other cause.”
    XXXIII. There is a difference in value of 12 to 15% between 16-oz. moleskin and 17-oz. moleskin in favor of the latter.
    
      Fifth oownterclaim
    
    XXXIY. Likewise, prior to the bidding date of April 19, 1920, the defendant offered to prospective bidders certain surplus war materials, among which was the following:
    Item No. T-2354. 8,801 Yaeds MoleskiN, O. D.—
    51% inches, 16 ounces. Manufacturer unknown. Stored at Schenectady. Minimum bid considered, 500 yards. SPD No. 15311.
    The terms of said sale were the same as set forth above in Finding XY.
    XXXY. Pursuant to said advertisement the plaintiff made its bid, which bid was accepted on May I, 1920, for the total amount at $0.7815 per yard, or $6,877.98.
    The letter of acceptance was as before, and in accordance therewith the plaintiff sent its check for $687.80, or 10% of the bid.
    On June 4, 1920, the plaintiff sent its check for $3,126.00 in payment of 4,000 yards of these goods. In due course it received 4,000% yards.
    XXXYI. The plaintiff failed or neglected to pay for the balance of said moleskin, and on December 30, 1920, the defendant called attention to this fact. On January 25, 1921, the defendant made further demand to forward the balance due, and on January 28 the request was repeated.
    On March 5, 1921, the defendant advised the plaintiff that unless the articles were paid for by March 31, 1921, the sale would be canceled and “ the deposit retained and applied toward loss to the Government on resale of these supplies.” On March 9 the warning was repeated and again on March 14, 1921.
    On March 23, 1921, plaintiff received a letter from defendant in which it was stated that plaintiff owed a balance of $1.95 on the shipment set forth in Finding XXXV. Plaintiff thereupon paid this amount.
    On April 22, 1921, the plaintiff was advised that 4,002% yards of moleskin, the subject of said sale, were then being-offered for plaintiff’s account, bidding to be closed May 3, 1921, and that any loss sustained on the x-esale would be charged to the plaintiff.
    Under date of April 5, 1921, the defendant rescinded the said sale, declared the 10 per cent deposit forfeited, and on May 6, 1921, notified the plaintiff to that effect. Thereafter defendant held and retained the said deposit.
    XXXVII. The terms of sale were the same as set forth in Finding XII, and the property was described in the official textile list #5 as follows:
    
      
    
    XXXVIII. The bids received in response to said advertisement were not accepted, and the defendant without further special notice to the plaintiff again advertised for bids on 4,191 yards of said moleskin to be in on July 5, 1921, under the same terms as in Finding XII. The goods as set forth in item 29 of the official textile list #7 were described as shown in Finding XXXVII. The bids resulting from said advertisement, one of which was by the plaintiff, weré not accepted. There appears, however, under date of November 21,1922, an acceptance of a bid made at an auction sale held November 10, 1922, at which the following described article was sold in the following quantity and at the following price:
    Moleskin, O. D., 5%", 10 oz., unused. SPD No. E-15311.
    4,791 yards, at .41 %_$1, 988. 27
    
      The terms of said sale were as set forth in Finding XXXII.
    XXXTX. There is a difference in value of about 45% between 10 and 16 oz. moleskin in favor of the latter.
    
      Sixth cownterclami
    
    XL. Advertisement for the sale of surplus property, bids to close April 19, 1920, was made by the defendant, among which items offered for sale, as described in the official textile list #28, was the following:
    Item No. T-2856. 15,846 Yards MoleskiN, O. D.—
    51/52 inches, 17 ounces. Manufactured by Warner Bros. Stored at Schenectady. Minimum bid considered, 500 yards. SPD No. 15370.
    The terms of sale were as set forth in Finding XY.
    XLI. Pursuant thereto, the plaintiff made its bids, which were accepted May 7, 1920, in the following amounts and at the following prices:
    5, 000 yards at .8315_$2, 494. 50
    3,000 yards at .8215- 2,464. 50
    3,000 yards at .8115_ -2,434.50
    6, 846 yards at .8015_ 5, 487. 07
    15, 846 12, 880. 57
    Plaintiff advanced its check in the sum of $1,288.06, being 10% of the bid, and requested a two-yard sample of these goods, which was sent in due course.
    XLII. The plaintiff failed or neglected to pay for said moleskin, and on November 26, 1920, the sale was canceled by the defendant.
    It does not appear by competent evidence that the defendant made any demand on plaintiff for the fulfillment of the contract.
    The amount of the deposit was forfeited, and defendant held and retained the same.
    XLIII. The defendant advertised for bids, to close May 3, 1921, on the following, as described in textile list #5:
    
      
    
    
      In response to bids thereon it sold the following amount on June 15, 1921:
    1,000 yards, at .19_$190. 00
    The terms were the same as set forth in Finding XII.
    It al'so sold by a fixed price agreement:
    Moleskin, O. D., 51/52", 16 oz., 80x52.
    10,000 yards, at .20_$2, 000.00
    The defendant further advertised for bids to close July 5, 1921, 4,837 yards of moleskin which it described in item No. 27 of official textile list #7 in the same manner as set forth in textile list #5 above and in response to bids thereon sold:
    4,837 yards, at .20_$967. 40
    The terms of sale were the same as in Finding XII.
    The finding in XXXIII as to difference in value applies equally to the above moleskin.
    
      Seventh coimterelaim
    
    XLIY. The defendant likewise advertised for sale, the bidding date to close June 7, 1920, certain surplus war materials, among which in the official textile list #26 was the following:
    Item No. T-2679. 152,532 Yards Twill, Gray—
    35", 2.72 yd. 120x72. Manufacturers unknown. Stored at Boston. Minimum bid considered, 500 yards. SPD No. 15376.
    The conditions of sale were the same as those set forth in Finding VIII.
    XLV. The plaintiff submitted its bids, which were accepted in the usual form on June 25, 1920, for the following amounts:
    Sale No.
    25606 50,000 yards, at .3155_$15, 775.00
    25608 50,000 yards, at .3055_ 15,275.00
    25609 49,532 yards, at .3030_ 15, 008.20
    149,532 46, 058. 20
    The plaintiff sent its three checks in combined amount of $4,605.82, being ten per cent of the amount of the bids.
    
      The plaintiff also sent its check on June 24, 1920, for $3,155.00 for 10,000 yards of the twill in sale No. 25606. In acknowledging receipt thereof the defendant made demand for the balance of the $15,775.00 bid on this particular yardage.
    The plaintiff also requested a five-yard sample of the other two yardages. Three sample yards of twill in sale No. 25608 and a five-yard sample of twill under sale No. 25609 were shipped to plaintiff, and on July 7, 1920, the defendant made demand for the amount bid on these two sales.
    Plaintiff’s order of 10,000 yards under sale No. 25606 was filled to an amount of 9,26714 yards and shipped July 21, 1920, after repeated demand by the plaintiff.
    On Jifiy 26, 1920, the defendant made demand for payment of the balance of sale No. 25606. To this demand plaintiff replied asking for a thirty-day extension, which extension was granted until August 29.
    On September 13, 1920, the defendant again made demand for balance on the sale, and the plaintiff replied asking for thirty more days’ extension.
    Meanwhile on August 3 the balance of sale No. 25608 and on August 4 of sale No. 25609 was demanded of plaintiff. These demands were, respectively, repeated August 30 and September 2. Under date of September 15 plaintiff asked for thirty days’ additional time on sale No. 25609.
    On the same date defendant again demanded payment of sale No. 25608. This was repeated October 4. To this latter demand plaintiff replied asking for thirty days’ additional time.
    On October 16, 1920, the defendant applied an amount of $3.34 due plaintiff on another sale to the amount claimed to be owing on sale No. 25608.
    On October 20 defendant again made demand for consummation of all three sales. The plaintiff’s request for thirty days’ extension of time on sale No. 25608 was on November 4 granted by defendant.
    Demand for payment on sales Nos. 25606 and 25609 was repeated November 22 and on December 8 for sale No. 25608. These were repeated December 11 as to Nos. 25606 and 25609.
    
      On or about January 20, 1921, the defendant canceled the said three sales, declared the deposit forfeited, and thereafter held and retained the same.
    XLVI. Under date of February 1, 1921, the defendant issued its advertisement for bids to close March 1, 1921, on the following twill, as described in Circular Proposal No. N. E. 11:
    Item No. 21. 148,246 Yards Twill (Albert), Gray—
    35", 2172. Minimum bid considered, 500 yards. SPD No. 15376.
    The terms of sale were as follows:
    • “At least ten per cent (10%) of the entire amount of the bid in the form of a certified check, cash, assigned registered Liberty bond, or unregistered Liberty bond shall accompany bid as a guarantee to fulfillment. Checks must be certified and made payable to finance officer, Boston. Purchaser must make payment in full before supplies or material are delivered and must remove same within 30 days.
    “No alterations or modifications of the terms of purchase will be permitted.
    “ Inspection of supplies or materials is invited.
    “All material will be sold ‘ as is,’ and under no consideration will a refund or adjustment be made on account of supplies not coming up to the standard of expectation.”
    XLVII. As a result of said advertisement the defendant, on March 9,1921, accepted the following bid:
    143,246 yards, at .13%_$19, 338.21
    XLVIII. The description of the twill in the textile list #26 (as set forth in Finding XLIV) indicated what is known as a four-leaf twill, a cloth having sturdy wearing qualities.
    “Albert ” twill is a special twill made of softer yarns and not possessing the wearing qualities of other twill. There is not so much of a demand for Albert twill as for the four-leaf twill.
    
      Eighth, oomterdlcDim'
    
    XLIX. On April 29, 1921, the plaintiff purchased from the defendant 138,910 yards of duck, for which it agreed to pay the bid price of $71,168.63. The terms of sale as set forth in the surplus textile list #22, being the advertisement sent out by the defendant, were as set forth in Finding XV. The duck was therein described as follows:
    Item No. T-2212. 651,210 Yards Duck—
    12.4 oz., B. L., O. D. 45-inch; 18.9 oz. per linear yard. 47x27. Manufacturer unknown. Stored at Jeffer-sonville, Indiana. Minimum bid considered, 500 yards. SPD No. 14047.
    The plaintiff made a 10% deposit, but failed to make payment of balance, and the sale was on October 7, 1920, canceled. On October 11, however the plaintiff sent its check for the balance due and the sale was reopened. The plaintiff withdrew 2,000 yards of said duck, found that it comprised “ seconds,” and on October 27, 1920, requested the defendant to make an allowance of 10% on the purchase price. The defendant’s inspector made inspection of the lot withdrawn by plaintiff and reported that he found certain of the rolls to be ripped from one to three yards at the beginning of each piece and that certain of the bales contained one “ raw selvage.” The depot quartermaster at the point of storage reported that the remaining duck in plaintiff’s consignment contained from two to two and one-half per cent seconds, which was indicated by “manufacturer’s allowance string appearing on selvage, also most of the bales bear shippers’ tags showing the quantity of seconds in each bale.”
    L. On December 27, 1920, the local board of sales control considered the claim, authorized a cancellation of the previous sale, and the issuance of another acceptance at an allowance of 5%.
    On January 3, 1921, the second acceptance at the original bid, less $3,558.43, being 5%, was made by the defendant, the plaintiff agreeing to release all further claim arising out of said sale.
    On February 1, 1921, the local sales board reconsidered this claim, and in accordance with its orders the third acceptance was issued February 10, 1921, for the original bid, less 10%, or $7,116.86.
    On February 18, 1921, the plaintiff made request for a complete cancellation of the contract. This was denied, and the plaintiff on March. 2, 1921, signed the acceptances and requested payment of the refund. Befund of $7,116.86 was made on March 29, 1921, from the “ Special deposit account of the disbursing office,” maintained, in whole or in part, from proceeds of sales.
    • On October 15, 1923, demand was made by the defendant for a return of the amount refunded, which the plaintiff, on October 18, 1923, refused.
    There is no proof of want of authority upon the part of the officials making this refund to act.
    
      Ninth counterclaim
    
    LI. On April 29, 1920, the plaintiff purchased from the defendant 80,000 yards of duck, for which it agreed to pay the bid price of $53,320.00. The terms of sale as set forth . in the surplus textile list #22, being the advertisement sent out by the defendant, were as set forth in Finding XV. The duck was therein described as follows:
    Item No. T-2214. 117,595 Yaeds Duck—
    12.4 oz. B. L., O. D. 59% inch; 25 oz. per linear yard; 49 x 30. Manufactured by J. Spence Turner Co. Stored at Jeffersonville, Ind. Minimum bid considered, 500 yards.
    Plaintiff made a deposit of $5,332.00, being 10% of the amount of the bid, and accepted shipment of 7,005 yards on or about August 12-14, 1920. It does not appear whether or not the plaintiff subsequently removed the remaining yardage.
    The plaintiff failed to make payment of the balance of the bid, and on October 7, 1920, the sale was canceled by the defendant.
    By reference to the allegation of the counterclaim and the admissions in the answer thereto it appears that the plaintiff paid to the defendant the full sum bid — to wit, $53,320.00 — but the date of such payment does not appear'.
    However, it appears that the local board of sales, under date of November 24, 1920, approved the action of the surplus property control officer in reinstating the said sale.
    LII. Under date of October 27, 1920, the plaintiff’s representative communicated with the defendant, as follows:
    
      
      Sales No. 194-68
    
    Dear CaptaiN Diemer: I have been instructed by the Lamport Manufacturers Supply Co., 507 Broadway, New York City, to present for your consideration and action a claim with relation to merchandise sold under the above sales number. This related to SPD No. 14946, item 2214, from Textile List #22 — Duck, O. D., 12.4, 59% inch, blue line, 80,000 yards, purchased at an average price of $0.6665. Merchandise at the time of sale was located at J eff ersonville, Ind., and is now entirely paid for by the purchaser.
    The Lamport people have received 5,000 yards of same, and examination discloses the fact that the merchandise is in reality 29%-inch material, due to the fact that it contains three blue lines down the center, and disposition of same will incur loss for this reason. I am inclosing sample taken from the delivery, which, besides showing the blue lines in question, indicates inferior merchandise (seconds), evidenced by the manufacturer’s allowance string at selvage. The circular of Textile List No. 22 makes no mention of the blue center lines, and though a blue line is mentioned, the purchaser is justified in his conclusion that such reference is to selvage only.
    I therefore request that the letters of acceptance covering this sale of 80,000 yards be canceled and in their place new ones issued to. cover duck, O. D., 12.4, 29% inch, 160,000 yards at 32 cents per yard, less 10% for one raw selvage which will result, and a further 5% for a splitting charge; net new billing price at $0,272 per yard. This will involve a refund of $9,800.00. Market price to-day of 29%-inch 12.4 is between 31 and 32 cents.
    As 75,000 yards of this shipment is still in Jeffersonville, examination can be readily made, and if you desire to inspect the 5,000 yards upon which the above claim is based, the merchandise may be seen at the office of the Lamport Manufacturers Supply Co. in New York City.
    I do pot care to press the claim of seconds with relation to this entire quantity, as I do not believe the entire yardage is so, the 5,000-yard lot appearing to be about 20% inferior merchandise.
    I ask that you kindly advise me in due course what action you take with relation to this matter.
    Very truly yours,
    J. C. SkiNNEr,
    By Wm. B. M. Miller.
    Captain J. E. Diemer,
    
      Contracting Officer, Surplus Property Dimisión,
    
    
      Munitions Building, Washington, D. O.
    
    
      An investigation by the defendant resulted in the local board of sales control, on December 28, authorizing the cancellation of the sale as originally made and the “ making of a new award to claimant covering the material at the price bid less 5% on account of splitting charges, and an additional 5% on account of raw selvage that will result.”
    LIII. On receipt of information of the board action the plaintiff reiterated its original request and made the further request that if this was not allowed that the sale in its entirety be canceled:
    The board reconsidered the claim, and on January 10, 1921, awarded an additional 5% on account of raw selvage.
    On January 28, 1921, plaintiff again requested a cancellation of the sale, and the board reconsidered, on February 1 adhered to its previous decision, and instructed plaintiff to remove the goods.
    A new letter of acceptance of the original bid, less the 5% and 10% allowances made, was issued under date of February 10, 1921, and on March 2, 1921, the plaintiff returned the same signed and requested that the amount refunded be returned. In accordance therewith defendant sent its check for $7,731.40 on March 29, 1921, making payment from proceeds of sales.
    The new letter of acceptance contained the following:
    “With acceptance of this Form 13 the purchaser agrees to release all further claims arising out of this sale.”
    There is no satisfactory proof of want of authority upon the part of the officials making this adjustment to act.
    
      Tenth comterdlam
    
    LIY. Advertisement for the sale of surplus property, bids to close April 19, 1920, was made by the defendant, among which items so offered for sale, as described in the official textile list #23, was the following:
    Item T-2357. 5,531 Yards MoleskiN, O. D.—
    56 inches, 17 ounces. Manufacturer unknown. Stored at Atlanta. Minimum bid considered, 500 yards. SPD No. 15552.
    The terms of sale were as set forth in Finding XY.
    
      LY. The plaintiff made its bid for the entire amount at $0.8615, which, on May 7, 1920, was accepted. The consideration was $4,764.96 and the plaintiff sent its check for 10% of the amount bid, or $476.50. It requested the shipment of a tAvo-yard sample, which was sent immediately.
    The plaintiff made no further payments, and on December 14, 1920, defendant made demand for the same. No response being made, the sale was canceled by the defendant July 18, 1921.
    It appears by a letter of acceptance, dated November 15, 1921, that 5,531 yards of “ Moleskin, O. D. New,” were sold by the defendant at $0.27%, or $1,534.85. The sale was by auction. The terms of sale or the description of the goods in the advertisement of sale do not appear.
    The 10% deposit was by the defendant declared forfeited, and defendant thereafter held and retained the same.
    
      Eleventh counterclaim
    
    LYI. Under date of September 8, 1919, the defendant accepted plaintiff’s bid of $31,000.00 for 100,000 yards of duck, described in the advertisement of sale as.follows:
    
      
    
    The acceptance described the goods as follows:
    “ Ducir, S. L. 35", 1.90. 60 x 60. Unknown. Lot #24, Boston.”
    Among other terms of the sale were the following:
    “ 6. Sale without recourse as to quality or grade.
    “ 10. Textile can be seen and inspected five days prior to sale on application to zone supply office, 461 Eighth Avenue, New York City.”
    LVII. Plaintiff sent its check for the full amount of the bid on October 1, 1919, and requested shipment be made. Shipment to the amount of 100,031 yards was made.
    
      On November 13,1919, plaintiff sent the following:
    To: Zone Supply Office, Surplus Property Division, New York City.
    Subject: SPD No. 1931 C. E., and 1925 C. E.
    1. Sale was made to us from lot No. 24, 100,000 yards. It was guaranteed to us that these goods are fast selvage goods counting at least 60x60. Instead we have received all with the exception of 3 bales which are Bliss-Fabian make, raw selvage, and counting much below 60x60.
    2. We are entitled to an allowance on this lot of at least 40 per yard.
    3. We find on close examination that these are all Bliss-Fabian make Bates manufacturing goods, which count 56x52 instead of 60x60, as they were guaranteed.
    4. We ask you to please give this matter your early attention, and oblige.
    Yours very tnfiy,
    The Lamport M. S. Co.
    AML/LT
    After an investigation of the facts by defendant’s representative the surplus property officer on December 9, 1919, authorized an allowance of 10%. Thereafter the sum of $3,100.96 was paid by defendant to the plaintiff from proceeds of sales.
    There is no satisfactory proof of want of authority upon the part of the officials making this adjustment to act.
    
      Twelfth cownterclaim
    
    LVIII. On or about July 22, 1921, the plaintiff contracted to buy a certain yardage of sheeting for $1,913.01, took delivery thereof, and paid the defendant $7,273.07 on or about July 23-28, 1921. The terms of the acceptance were as hithefeto set forth in Finding X.
    The plaintiff has failed to make payment of the balance due, to wit, $700.00.
    
      Thirteenth and fowrteentfi counterclaims
    
    LIX. By “ negotiation ” and a letter of acceptance dated May 23, 1921, the plaintiff purchased from the defendant 223,419 yards of duck, at various prices, totaling $35,933.41.
    
      The letter of acceptance set out the description, amount, and values as follows:
    
      
    
    The terms of the acceptance were as set forth in Finding X, and in addition thereto the following appears:
    “ ‘As is and where is,’ Material must be removed within thirty days from date of this award or same will be placed in public storage at purchaser’s risk and expense.”
    LX. On June 21,1921, plaintiff sent its check for $3,398.25, covering two SPD No. 16012 and 16376, amounting to 14,775 yards, and requested delivery. On July 15, 1921, it sent its check for $1,400 in payment of 10,000 yards of duck SPD Nos. 14916 and 14917, and check for $875 in payment of (as the letter stated) 5,000 yards of the duck under SPD No. 2431CE and requested shipment.
    On July 1 shipment of 14,776 yards of SPD No,4 16012 and 16376 was made, and on July 30 shipment of 9,967 yards of SPD Nos. 14916 and 14917 and 5,015% yards of SPD No. '2431CE was made.
    On September 10, 1921, the local board of sales control extended the sale time to October 1, 1921.
    Plaintiff’s check for $23,821.79 was sent to defendant September 30, 1921.
    On October 14, 1921, 25,001 yards of SPD Nos. 14916 and 14917 were shipped to the plaintiff, and on November 5, 7, 8, 1921, 58,643 yards in one lot and 20,029 in another lot of the same were sent.
    November 23, 1921, 25,029% yards of SPD No. 2431CE and December 5,1921, 64,829 yards of the same were shipped.
    LXI. Under date of February 17, 1922, a public voucher was issued to the plaintiff, in which the following statement of account- is made:
    
      
      
    
    LXII. Sales Nos. 25606-8-9, above set forth, are the ones which are the subject of counterclaim! number seven. The evidence does not disclose the reason for the transfer of the funds above to tjie credit of the instant sale, the authorization therefor, or the effect, if any, on the facts developed from the evidence relative to the seventh counterclaim.
    On March 10, 1922, the defendant sent its check to plaintiff for $19.08.
    It does no,t satisfactorily appear from the proof that the said sum of $19.08 was improperly or illegally paid by the defendant.
    
      Fifteenth eownterclcdm
    
    LXIII. The evidence introduced by the defendant is neither competent nor sufficient to support the allegations of the fifteenth counterclaim.
    LXIV. It does not satisfactorily appear that the goods claimed to be resold were the identical goods which were the subject of original sale to the plaintiff, nor that the prices realized on the alleged resales were the market values of the property at the time and place of delivery.
    LXV. The understanding between the parties in the case of each of the foregoing counterclaims was that the 10 per cent deposit was in the nature of liquidated damages to be retained by the defendant for failure, if any, by the plaintiff to comply with its contract.
    LXVI. The defendant did not use reasonable diligence, care, and judgment in the alleged resales of the property.
    
      The court decided that plaintiff was entitled to recover $30,279.60, less $700 due the Government under counterclaim 32, leaving a balance of $29,579.60. Remainder of counterclaims dismissed.
   Graham, Judge,

delivered the opinion of the court:

The plaintiff is suing to recover a sum which is admittedly due it. Its claim grows out of a sale to it of surplus war property, for which it paid the full amount of its bid. A small portion of the material was delivered to it, and, thereafter, the defendant, finding that it was unable to deliver the balance, notified plaintiff that the contract was canceled and that a credit had been given it for the undelivered portion of the goods at the purchase price. Plaintiff repeatedly requested the payment of this credit, but it was refused. Thereupon it sued in this court. It was entitled at least to a refund of this balance of the purchase money. Shanhouse v. United States, 61 C. Cls. 840; Brody v. United States, 64 C. Cls. 538, decided February 20, 1928; and Hummel, trustee, v. United States, 58 C. Cls. 489, 494.

In defense defendant has interposed fifteen counterclaims, involving unsettled and contested matters in each case, as it claims, between it and the plaintiff. Each counterclaim grows out of a sale or attempted sale of surplus war material. It is to be noted that each one is in itself a lawsuit.

The purchase involved in the plaintiff’s claim was made on March 10,1920, and the rescission of the sale was on April 18, 1921. The sales in 12 of the counterclaims were made between August 30, 1920, and June 25, 1921, one in July, 1921, and one in September, 1919. The plaintiff’s petition was filed on November 21, 1923; the defendant’s counterclaim on April 29, 1926. It will be seen that the greater number of these claims were over three years old at the time of the filing of plaintiff’s petition, and over five years old at the time of the filing of the counterclaim, and had been allowed to sleep in the department without any action being-taken against the plaintiff or any effort being made by action to collect them prior to this suit.

Nearly all of these alleged sales were effected through the-medium of advertisements, submission of bids, and acceptance thereof.

In each case the bidder, the plaintiff in this case,, was required before acceptance to deposit 10% of the purchase price with the defendant as “ liquidated damages ” in case of failure to carry out the contract of sale. As a net result of the deposits in some of these cases the Government collected and retained the equivalent of about $21,000.

A number of suits have been heard in this court involving a great variety of material and growing out of sales of surplus war supplies. These materials were stored at different points in the United States as the utilization of them required. Some of the supplies were perishable, some inadequately stored and protected, and nearly all were depreciating in value with the passing of time. They could not be used by the Government in time of peace. Congress therefore authorized their sale by passing the act of July 9, 1918, 40 Stat. 850, giving the President full power to dispose of all surplus material upon such terms as he deemed expedient, and, as we held in the case of Levy & Brothers v. United States, 63 C. Cls. 126, he was thus authorized to make these sales through the head of any executive department, to make regulations controlling them and naming terms and conditions, and to provide for adjustments of claims arising out of the sales when the circumstances warranted it.

Later, on July 11, 1919, 41 Stat. 104, c. 8, Congress authorized the Secretary of War to sell any surplus supplies upon such terms “ as may be deemed best.”

By virtue of these acts, and under authority of the President, the Secretary of War created the office of director of sales. Thereafter there was created a sales organization, known as the surplus property division, which operated as a branch of the Quartermaster Corps, and through this organization the quartermaster supply officer in charge of the surplus property was authorized to create local boards of sales control. Through these boards the sales of the property were made in different localities.

Any careful person of ordinary judgment having control of the sale of this property, and knowing its variety and the conditions under which it was stored, would anticipate that in the great number of sales to be made there would necessarily be irregularities, mistakes, and disputes in connection with the deliveries of this scattered and diversified mass of material, and also that it would be necessary, on account of its perishable character and imperfect storage, to dispose of it as rapidly, and with as few complications, as possible.

To secure as speedy a disposal of the material as possible it was wisely provided in each of these sales that the purchaser, upon acceptance of the bid, should deposit 10% of the amount of his bid as liquidated damages and to guarantee performance. By liquidated damages is meant a certain sum agreed upon by the parties in advance which shall be paid or retained in lieu and satisfaction of any claim for damages which may arise out of a breach of the contract by the purchaser and a failure to take and pay for all or any part of the material. This provision for liquidated damages would enable the Government, on the failure of the purchaser to comply with his bid and to take and pay for the goods, to appropriate the 10% as liquidated damages for bReach and promptly sell the material, .instead of retaining it and waiting for the possible fulfillment of the contract or a suit for damages.

We hold and the court has found that the payment of 10% was in the nature of liquidated damages.

It was necessary, too, that authority should be given in cases where there were discrepancies in the identity, quantity, or deliveries of the goods sold to make reasonable adjustments and settlements covering the defaults, in order that the sales might be closed and the goods disposed of. The orders and Regulations issued by the President and the Secretary of War' under authority of the acts above cited confirm the foregoing views.

The counterclaims here are fifteen in number. In seven of them, on the failure of the plaintiff to pay for and take the goods after the payment of the 10% as liquidated damages, the defendant rescinded the contracts, Retained the 10%, and thereafter conducted alleged resales of the goods as the property of the plaintiff. In three of the counterclaims there were discrepancies and defaults in the delivery of the goods, and settlements were made by the authorized agents of the defendant, under which refunds in small amounts weTe made to the plaintiff. In one counterclaim there is no proof of any kind. In two there was a payment of $19.08 to plaintiff, the details of this settlement not being given; but so far as appears, the settlement was made by authorized representatives of the defendant. In one counterclaim a small balance is shown to be due by plaintiff to defendant. The refunds were made from the proceeds of the sales.

While counterclaims ar'e allowed to be interposed in suits of this character, the proof of them by the defendant must be full and satisfactory — that is to say, the defendant in the case of each counterclaim must prove its case. In the case of the alleged resales, it must prove that title passed to the plaintiff under the original sale, as it was supposedly acting as agent for plaintiff when it made the alleged resales; also, that the goods resold were the identical goods originally sold to the plaintiff; that it exercised Reasonable diligence, care, and judgment in making the alleged resales; and, in the cases of refunds, among other things, that the officers making the refunds were without authority to do so.

It is elementary that it is the policy of the courts to encourage settlements and, wherever it is possible, to uphold them in order to discourage litigation.

The courts will assume that an officer, in the performance of an official act, not only took all necessary preliminary steps required but acted within the circumference of his authority. There is a presumption in favor of the legality of his official act (United States v. Coe, 170 U. S. 681, 691), which must be overcome by satisfactory- proof that the officer exceeded his powers (Fouvergne v. United States, 18 How. 410), and the court has found that there is not satisfactory proof of want of authority upon the part of the officers making the refunds in this case.

It is well settled that in a case against a vendee for not taking and paying for property, the vendor has the choice ordinarily of one of three methods to indemnify himself: “(1) He may store or retain the property for the vendee and sue him for the entire purchase price; (2) he may sell the property, acting as the agent for this purpose of the vendee, and recover the difference between the contract price and the price obtained on such resale; or (3) he may keep-the property as his own and recover the difference between the market price at the time and place of delivery and the contract price.” Williston on Sales, vol. 2, sec. 555, p. 1385.

This statement of the l'aw has been often quoted with approval.

In seven of the counterclaims defendant rescinded the contract and retained the 10% of the purchase price paid as liquidated damages. The rescission of the contract, and retention of the 10% as liquidated damages would prevent defendant’s recovery. See Hickey v. United States, No. H-8, this day decided (post, p. 729). In this case the Government in argument and brief urged this view of the law. But, more .than this, by the rescission of the sale the vendor elected to keep the property as its own, and its remedy, under these circumstances, was to sue for the difference between the market price at the time and place of delivery and the coiitract- price. The court has found that there is no evidence of the market price.

Having rescinded the contract and made the property its own, it necessarily follows that a resale of the property was the resale of its own property and not the plaintiff’s, and any loss was its loss. But even assuming that it was the property of the plaintiff, and that the resale was made at-the latter’s risk and expense, it has been found that there was no satisfactory proof the property alleged to have been resold was the identical property originally sold the plaintiff, and that- the defendant in making the alleged resales did not exercise reasonable diligence, care, and judgment. We hold, therefore, that counterclaims 1, 2, 3, 4, 5, 6, 7, and 10, where the sales were rescinded, 10% retained, and resales alleged to have been made, can not be sustained and must be dismissed.

As to counterclaims 8, 9, and 11, which involve settlements and refunds, the defendant claimed that the officers making the refunds were without authority to do so. Aside from the disposition of the court to uphold settlements, and the presumption that the officer making the settlements performed his duty, the court has found that there is no proof of the absence of the necessary authority. These counterclaims, therefore, can not be allowed and must be dismissed.

As to counterclaims 13 and 14, under which by a settlement $19.08 was paid to the plaintiff, there is no proof that this was improperly and illegally done.

As to counterclaim 15, there is no proof.

As to counterclaim 12, there is due by the plaintiff to the defendant the sum of $700, which should be deducted from the amount of plaintiff’s claim in this case, and the plaintiff given a judgment for the balance. It is so ordered.

GREEN, Judge; Moss, Judge; and Booth, Chief Justice, concur.  