
    JOHN DOBSON v. THE UNITED STATES.
    [No. 18318.
    Decided June 29, 1896.]
    
      On the Proofs.
    
    The contract is for the sale by sample of blankets to the Indian Office, subject to inspection by inspectors appointed by the Commissioner. Some are taken at a valuation fixed by the inspectors for less than the contract price. Some are rejected, and the additional cost of those purchased charged to the contractor. On the trial the claimant attacks the T>ona fidea of the inspection. The decision of the court rests entirely upon the construction of the contract.
    I. Where a contract provides that, in case of failure to deliver within the prescribed time, the defendants may buy in the market, the. provision is in the nature of a forfeiture clause, and if waived can not be reasserted.
    
      II.Where a contract provides that if the blankets do not pass inspection the defendants may require the contractor to deliver “within fire days after suchrejection proper goods in the place of those rejected,” they can not, without notice of any kind, purchase goods in the market and charge the difference in price to the contractor.
    III. Where a contract provides that if tho quality of the goods offered he “inferior to the standard of the sample, and the necessities of the service he such as to compel” the Commissioner to accept the goods offered, “then the same, may he received subject to the inspection and test of a competent inspector to determine the percentage of value less than the sample, and a deduction tvjice greater than the difference in value shall he made," the power can he exercised by the defendants only when the necessities of the service he such as to compel them to accept the inferior article. If no such necessity he shown, the contract gives them no arbitrary right to take the goods at a reduced price, and the contractor retains the right to tender other goods within five days, if notified.
    IV. Where blankets are torn and destroyed by the defendants’ inspectors, and there is no provision in the contract throwing the loss upon the contractor, and it does not appear that in the custom of the trade such destruction is regarded as inevitable to a proper test, the loss must he borne by the defendants.
    
      The Reporters’ statement of the case:
    The following are the provisions of the contract so far as involved in the decision of the court and the facts established by the evidence:
    “Article 5. That it is agreed by and between the parties hereto that in case of any failure of the party of the second part to deliver the articles named in the annexed schedule when called upon to do so, the party of the first part, or his authorized agent or agents, shall have the right to purchase, or cause to be purchased, the same in open market, or otherwise, and to charge the difference in price or prices, if any, to the party of the second part; and it is also agreed that all goods or supplies offered for acceptance under this agreement shall be inspected by the samples thereof submitted with the proposals, by persons properly designated for that purpose by the party of the first part, and at such place as he may designate; and if, on such inspection, any of the said goods or supplies shall fail to conform to or equal said samples, the same shall be rejected, and the party of the first part shall have authority to require of the said party of the second part the delivery, within five days after such.rejection, of proper goods or supplies in the place of those rejected. In case said party of the second part shall fail to deliver such proper goods or supplies within the said period of five days, then the said party of the first part shall have the right to purchase, or cause to be purchased, in open market, or otherwise, such goods or supplies as may be required to supply the deficiency. And the party of the second part, and his sureties, shall be held accountable, under the bond which may be given for the faithful performance of this agreement, for any excess iu the cost of the goods or supplies so purchased over and above the cost of the same at the price or prices designated in the schedule hereunto annexed: Provided, That in the case of any article to be furnished under this contract, if the quality of that offered shall be inferior to the standard of the sample •upon which the contract was awarded, and the necessities of the service be such as to compel the party of the first part, or his agents, to accept the article or articles offered, then the same may be received subject to the inspection and test of a 'competent inspector, to be designated by the party of the first part, to determine the percentage of value less than the sample aforesaid, and upon whose findings payment shall be made at a percentage of deduction twice greater than the difference in value between the articles so furnished and the price herein .agreed to be paid.”
    I. June 30, 1888, plaintiff entered into a contract with the Commissioner of Indian Affairs. The contract is annexed to the petition herein.
    II. Defendants, August 2,1888, made requisition on plaintiff for the delivery of the blankets provided for in said contract, and soon thereafter plaintiff began to deliver them. Of the number so delivered some were accepted and others rejected, on the ground that they were not equal to the sample. The number so rejected is not shown by the record. Defendants .finally purchased in open market 2,382 pairs of blankets to •replace those rejected. Controversy having arisen between plaintiff and defendants concerning the correctness of the inspection, the date of the expiration of said contract was .extended from time to time. September 21,1888, the Commissioner of Indian Affairs sent to plaintiff the following telegram:
    “Office of Indian Affairs,
    “ September 21, 1888.
    
    “John Dobson,
    
      “217 Chestnut Street, Philadelphia, Pa.:
    
    “Superintendent Wilbon reports that only 2,000 blankets have so far been delivered under your contract. Complete deliveries must be made by October 1, or purchase will be 'made in open market at your expense.
    “A. B. Upshaw,
    
      “Acting Commissioner.”
    
      Further controversy over the inspection arose, by reason of which all of the blankets required by the contract were not delivered by October 1, 1888, and on November 5, 1888, the Commissioner of Indian Affairs sent to plaintiff the following telegram:
    “Oeeice oe Indian Aebaibs,
    “ Washington November 5, 1888.
    
    “John Dobson,
    
      u217 Chestnut Street, Philadelphia, Pa.:
    
    “I have decided not to have blankets inspected at your mills, but must insist that you deliver at warehouse in New York, not later than the 15th instant, all the blankets due under the contract, and not less than 1,000 per day. If delivery is not completed on that day, will make purchase in open market at your expense. Answer.
    “John H. Obeb.lt,
    “ Commissioners
    
    To this telegram plaintiff replied as follows:
    “ Philadelphia, Pa., November 5,1888.
    
    “John H. Obeblt,
    “ Commissioner of Indian Affairs, Washington, D. C.:
    
    “ I am prepared to commence delivery of blankets to warehouse, New York, in compliance with your dispatch.
    “John Dobson.”
    The blankets were all finally delivered November 16,1888.
    The inspection was not completed until December 20,1888.
    Upon the completion of the inspection all the blankets then in the warehouse were accepted except 176 bales, which were 5£ per cent inferior to the sample, and which were accepted at a discount from the contract price of 10J per cent, amounting to $3,036.10, and 54 bales which were inferior to sample, and were returned to plaintiff December 26,1888. Instead of the 54 bales of blankets thus returned to plaintiff, defendants purchased, December 26,1888, in open market, an equal number, as nearly of the same quality as possible, at a cost of $2,100.95 in excess of the contract price, which was the reasonable market price at the time of the purchase.
    Plaintiff could, if he had been allowed, have furnished from his own mill blankets in the place of the 54 bales so rejected within five days from December 26, 1888.
    III. The contract price of the blankets furnished by plaintiff and accepted by defendants was $52,408.47, of which he has been paid $47,271.42, and there has been withheld from payment $3,036.10, discount on 176 bales which were accepted, but were inferior to sample, and $2,100.95, wbicli was tbe cost in excess of contract prices of 54 bales purchased in open market. Total amount withheld, $5,137.05.
    IV.In the course of the inspection of the blankets delivered by plaintiff by the inspectors on the part of the United States-(under article 5 of the agreement) a large number of blankets-were torn, mutilated, and rendered worthless by the inspectors.. Such tearing and mutilation was not, however, maliciously done, but was an incident to the means of inspection employed. It does not appear that the. destruction of blankets is a necessary or inevitable result of comparing the goods with the sample, nor that the loss in such cases is borne by the vendor in the custom of the trade.
    The number, kind, and value of the blankets so torn and returned to plaintiff is as follows:
    On 184 pairs of Blankets, 3 point, indigo blue, 60 by 72 inches, 8 pounds, at $3.60 per pair. $662.40
    194 pairs of blankets, 2-J point, indigo blue, 54 by 66 inches, 6 pounds, at $2.70 per pair. 523. 80
    1-J pairs blankets, 2 point, indigo blue, 42 by 56 inches, 5J pounds, at $2.36£ per pair..*.. 3.54
    Total. 1,189.74
    V. The profits which plaintiff would have made on the 54 rejected bales if the same had been accepted by the Government, and on 54 bales of acceptable blankets furnished on account of the rejected bales, if he had been allowed to furnish, other blankets for those rejected, is $404.19.
    Said sum of $404.19 was not paid to the claimants.
    VI. No assignment or transfer of the claim herein sued upon,, or of any part thereof or interest therein, has been made by the petitioner; that he is the sole and lawful owner thereof.
    VII. No action has been taken on this claim by the Congress of the United States, or by any of the Executive Departments of the Government, other than the refusal on the part of the-Interior and Treasury Departments to pay the same.
    
      Mr. John O. Chaney for the claimant.
    
      Mr. Samuel A. Putman (with whom was Mr. Assistant Attorney-General Podge) for the defendants.
   Uott, J.,

delivered tbe opinion of tbe court:

Tbis is a case of sale by sample. Tbe question whether tbe goods equalled tbe sample was to be determined by inspection.

The contract assured to tbe defendants certain rights. 1. Tbe Commissioner of Indian Affairs was to select and appoint these inspectors. 2. If tbe goods did not pass inspection, tbe Commissioner might reject them. 3. If the contractor failed to deliver goods “ when called upon to do so,” tbe Commissioner might purchase in open market. 4. If goods submitted for inspection should be rejected, the Commissioner might require tbe contractor “within five days after such rejection” to deliver “proper goods or supplies in tbe place of those rejected;” and in case of bis failing to do so “ within tbe said period of five days, then” tbe Commissioner might purchase “such goods or sujiplies as may be required to supply the deficiency.” 5. “If tbe quality” of the goods offered should be “inferior to the standard of tbe sample upon which tbe contract was awarded and the necessities of the service he stick as to compel” the Commissioner to accept tbe goods offered, “then the same may be received subject to tbe inspection and test of a competent inspector ” “to determine tbe percentage of value less than tbe sample,” and a “ deduction twice greater than tbe difference in value” between the goods furnished and tbe price agreed upon should be made.

Tbe contractor was only assured of two rights, viz: That be should receive a stipulated price for tbe goods furnished, and that in tbe case of a failure of tbe goods tendered to pass inspection be might supply other goods “in tbe place of those rejected,” with a reservation in favor of the ^defendants that they might require that tbis be done “within five days after such rejection.”

It seems manifest that there are some things for which tbe claimant should recover.

1. Fifty-four bales of blankets were rejected for not passing tbe inspection of a majority of tbe inspectors and a portion of them by all of tbe inspectors. The Commissioner of Indian Affairs, without requiring tbe contractor to deliver “within five days after such rejection proper goods in tbe place of those rejected,” and without notice of any kind, purchased goods in the open market and charged tbe difference in price, $2,100.95, to tbe contractor. Tbe reason of tbe Commissioner for so doing was tbafc the claimant had failed to deliver the goods within the time provided in the contract, and the Commissioner had notified him that u complete deliveries must be made by October 1st, or piurchases will be made in open market at yonr expense.’’

It is manifest that the Commissioner confounded the provision in the contract which authorized him to bay in the market, if the contractor should fail to deliver within the prescribed time, with the provision which authorized him to require ■the contractor to furnish proper goods within five days in the place of goods which should not pass inspection. The two, however, were distinct. If the contractor failed to deliver, the Commissioner was authorized to buy in the market without notice. But if the Commissioner waived that right and allowed the contractor to proceed, and inspected the goods which he tendered, the contractor was entitled to a reasonable time to supply others, unless the Commissioner gave notice that he must do so within five days. No such notice was given. The first provision was in the nature of a- forfeiture clause, and if waived could not be reasserted. For the excess of price paid and charged to the contractor he should recover.

2. One hundred and seventy-six bales of blankets were rated by the inspectors as inferior to the sample, but fit for the service. Their inferiority was rated by the inspectors at per cent inferior to the sample.” The Commissioner retained them at a deduction from the contract price of 10£ pier cent, amount-in g to $3,036.10. This was done without notice to the contractor and without affording him an opportunity to supply the proper goods. The contract gave to the defendants no such arbitrary right; that is to say, the right of accepting goods and reducing the contract price at their option. This power could be exercised only if “ the necessities of the service he such as to compel the party of the first part, or his agents, to accept the article or articles offered.” No such necessity is shown or alleged, and it is manifest that no such necessity existed. A period of much more than five days elapsed between the rejection of the inspectors and the action of the Department. During that interval the contractor might have furnished proper goods. The action of the Department was based exclusively upon the report of the Board of Indian Commissioners sitting in the city of New York. There is not a suggestion in the report that the necessities of the service were such as to compel them, to accept these blankets.

3. In the course of inspection blankets of the value of $1,189.74 at contract rates were torn and destroyed by the inspectors.' The tearing and destruction seem to have been indiscriminate. Blankets from bales that were rejected were torn and destroyed; blankets from bales that were accepted were torn and destroyed; and finally the sample blanket itself was torn and destroyed, and by the same methods that were applied to the others. The contract prescribed no form or method of inspection, and contained no provision relating to the destruction of goods by the defendants’ agents, the inspectors; and there is no evidence in the case to show that in the ordinary transactions of men buying and selling blankets, by sample such destruction and waste is regarded as inevitable to a proper test. The Commissioner of Indian Affairs directed that the blankets destroyed from the accepted bales should be a loss borne by the defendants, but this apparently was not done. That 2 per cent of the goods tendered should be destroyed by the purchaser in comparing them with the sample is a result which no court should uphold in the absence of provisions in the contract authorizing such a proceeding, or the clearest evidence of such a custom in the trade.

On the trial the claimant attacked the inspection, endeavoring to maintaiu that the inspectors acted in bad faith and with intent to injure him. That position is not sustained by the evidence. The claimant can not, therefore, recover for the profits which he might have made if he had been allowed to furnish the rejected goods. The defendants had a right to reject goods which did not pass inspection; they had nota, right to buy goods in the open market and charge the contractor with the difference in price without giving him an opportunity to supply the deficiency.

The judgment of the court is that the claimant recover of the defendants the sum of $6,326.79.  