
    LOUIS LEAVITT v. THE UNITED STATES
    [No. E-91.
    Decided June 8, 1925]
    
      On the Proofs
    
    
      Contract; purchase for resale; unlawful acts of Government; rescission of contract. — Where plaintiff! purchases an immense quantity of perishable goods from the United States, and the Government through a number of unfair and illegal acts prevents plaintiff from enjoying the fruits of his purchase until the goods liave deteriorated so as to become unsalable except at a loss, and rescinds plaintiffs contract, tbe plaintiff is entitled to recover the necessary and reasonable costs and expenses of the transaction.
    
      The Reporter's statement of the case:
    
      Mr. Frank Davis, jr., for the plaintiff. Mr. Joseph P. Tumulty was on the briefs.
    
      Mr. Heber H. Rice, with, whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The following are the facts as found by the court:
    I. Plaintiff is now and was during the period hereinafter mentioned a citizen of the United States, residing in the city and county of New York, State of New York.
    II. This action is brought pursuant to the act of Congress approved January 10, 1925, entitled “An act fox the relief of Louis Leavitt,” a true copy of which is as follows:
    “(Private — No. 105 — 68th Congress)
    “(S. 88)
    “An act for the relief of Louis Leavitt
    
      * Be it enacted'by the Senate and House of Representatives of the United States of America in Congress assembled, That Louis Leavitt, of Brooklyn, New York, is hereby authorized to bring suit against the United States to recover damages for any loss or losses which he may have suffered through action by governmental agencies, acting under authority of the Government, had in connection with the purchase by Louis Leavitt of surplus goods of the War Department and which were referred to in the opinion of the Attorney General, dated December 23, 1921. Jurisdiction is hereby conferred upon the Court of Claims of the United States to hear, consider, and determine such action upon its merits and according to the law which governs the principles of liability that prevail between private parties, but only so far as is herein indicated, and in accordance with the practice pertaining to such action between private parties, and to enter decree or judgment against the United States for the amount of such damages as may be found due to said Louis Leavitt, if any: Provided, hoioever, That such right to sue, as is hereby granted, shall not apply to any interest, nor to any claim for damages resulting from any criminal prosecution of the said Louis Leavitt on a charge of violating the penal laws of the United States: Provided, That such action shall be brought and commenced within four months from the date that this act becomes effective.
    “ Seo. 2. That upon final determination of such cause if a decree or judgment is rendered against the United States, there is hereby appropriated, out of any money in the Treasury not otherwise appropriated, a sum sufficient to pay final judgment, which shall be paid to said Louis Leavitt or his duly authorized attorneys of record by the Secretary of the Treasury upon the presentation of a duly authenticated copy of such final decree or judgment.
    “Approved, January 10, 1925.”
    Plaintiff is the Louis Leavitt named in said act.
    III. By circular dated May 10, 1919 (S. P. D. No. 14¿>4, Sub., a true copy of which is attached to the petition as Exhibit 2), the Government, acting through the War Department, advertised for sale and invited bids on 2,493,836 pounds of “ Bacon, issue, in crates, f. o. b. Army Warehouse, Baltimore, Md.” Said circular contained, among others, the following statement:
    “ 4. Inspection may be made upon application to the zone supply office. Attention Surplus Property Officer, Coca Cola Bldg., Baltimore, Md. * * *.”
    The Government fixed minimum price was 22140 per pound. No bids up to this price were received, and all bids submitted were rejected on May 26,-1919. Plaintiff was not one of the original bidders. Thereupon a sale of said bacon was negotiated with plaintiff at a price of 28%0 per pound; and, in accordance with said negotiations, plaintiff submitted in due form and in accordance with said advertisement a bid for said amount of bacon, namely, 2,493,836 pounds (more or less), at the price of 28%0 per pound, amounting to a total price of $713,860.56 (approximately). (A true copy of said bid is attached to the petition as Exhibit 3.) The Government form on which the bid was submitted contained, among others, the following instructions:
    “All bids to be f. o. b. at location named in schedule.”
    “Purchaser must make payment in full before property is delivered.”
    Said bid specified as for delivery “ when notified within thirty days,” and plaintiff also stated on said bid:
    
      “ I herewith tender my check for $60,000. Will pay for whatever we take and leave that $60,000 as a deposit on the balance.”
    Said check for $60,000 was duly delivered to the Government with said bid.
    The bid so submitted by plaintiff was duly accepted by the Government and the said amount of bacon awarded to him on June 10, 1919, as evidenced by letter of acceptance of that date (a true copy of which is attached to the petition as Exhibit 4). Said letter of acceptance, among others, contained the following specifications:
    “ Certified check for $60,000 has been deposited and will be applied upon final shipment to this amount.”
    “To be shipped by f. o. b. cars where stored to - when notified within 30 days by bidder.”
    IV. At the time of making said bid by plaintiff and its acceptance by the Government, the Government was informed by plaintiff and knew that plaintiff was buying said hacon in order to resell the same; and plaintiff understood that the Government was the owner of said bacon and had full right to sell the same absolutely to plaintiff. The price paid by plaintiff for said bacon was much higher than any prices which the Government had been able to obtain for bacon of like quality. In July after said sale said fixed minimum price for said Government bacon throughout the United States was raised to 340 per pound; and from July 3 to September 24, 1919, the Government sold issue bacon at prices ranging from 300 to 360 per pound. After September 26, 1919, the said fixed minimum price was 240 till September 29, 1919, and thereafter 200.
    V. In addition to said $60,000 originally deposited plaintiff was required to and did pay to the Government on account of said bacon, on the dates specified, -the following sums, namely:
    July 12, 1919_ §8, 700. 00
    July 22, 1919_ 50, 000. 00
    August 8, 1919_ 50,000.00
    August 19, 1919_ 200, 000. 00
    August 19, 1919_•_ 276,312.96
    and, in addition, the amount of $53,391.60 was paid directly to the Government by Paul Klopstock, to whom plaintiff sold, on July 2, 1919, 148,310 pounds of bacon, making a total payment to the Government by plaintiff of $698,404.56.
    VI. After the final payment by plaintiff aforesaid plaintiff requested the Government to ship one carload of -bacon daily, consigned to him at certain warehouses designated by him in Brooklyn, New York. Shipments of said bacon were made as follows, consigned to plaintiff at said warehouses :
    
      
    
    
      making a total of 2,086,312 pounds of bacon actually shipped by the Government to plaintiff or on his account. The total amount due for said bacon, at 28%$ per pound, ivas $597,-206.81, being $101,197.75 less than the amount plaintiff was required to and did pay. Of this $101,197.75 overpayment the Government afterward returned to plaintiff $100,245.11, leaving a balance of $952.64 still held by the Government. This overpayment resulted because the Government withdrew from the bacon sold to plaintiff the difference between the amount sold and the amount actually shipped to him. The bacon so withdrawn was sold by the Government to various municipalities during the months of August and September, 1919, at prices ranging from 3O'/; to 360 per pound. Plaintiff was not advised of this. Plaintiff was notified by letter dated November 6, 1919, that shipments ivere completed on the sale to him, whereupon plaintiff requested the Government to make refund for the undelivered bacon. The refund was made by letter dated February 25, 1920.
    The bacon purchased by plaintiff was strip bacon in crates, known as “ extra clears ” and “ bellies,” and also designated by the Government as issue bacon. It was not of a character generally regarded as commercial bacon and was worth less than canned bacon. The bacon was specially packed or cured for Army use, so as to stand exposure for a long time, and therefore does not correspond exactly to any commercial bacon. The normal Army issue bacon is what is called a five-year pack — that is, packed so it will presumably keep for five years. The particular bacon sold to plaintiff was specially packed or cured and was of a kind fcnoAvn as a two-year pack, which presumably keeps for two years. The Government had a large quantity of both kinds of bacon on hand. The lot sold to plaintiff was the only issue bacon in crates at the Army warehouses in Baltimore, Maryland.
    At the time of the sale of said bacon to plaintiff the Government had on hand a very large quantity of bacon in excess of its needs, amounting to 200,000,000 pounds or more, at various points throughout the United States, which it began to dispose of as surplus property in May, 1919. The sale to plaintiff was the first lot declared surplus and disposed of in this sales campaign, other lots being declared surplus and disposed of from time to time thereafter. No notice was given to the public of the Government’s holding and plans to dispose of this surplus bacon, and, at the time of the sale to plaintiff, plaintiff had no knowledge thereof.
    VII. Within a week after purchasing said bacon, plaintiff began a campaign to dispose of the same, advertising bacon for sale in large quantities, negotiating with municipalities for sale of bacon to them to be resold to citizens; negotiating for sales to department stores, exporters, and others. Plaintiff, late in June or early in July, made a sample sale of a carload of bacon to E. H. Macy & Co.; this bacon was shipped within thirty days by the Government and was rejected by Macy & Co. when received on account of delay in furnishing inspection certificate and bill of lading. He also sold two cars to F. T. Hodges; the second car was rejected by the purchasers on account of delay by the Government in delivering the same.
    Plaintiff, pursuant to his campaign to dispose of said bacon, sold in the summer and fall of 1919 (in addition to the 148,310 pounds sold to Paul Klopstock) 42,697 pounds to F. G. Hodges, 115 pounds to Sol Eichman, 3,000 pounds to E. F. Kelly, 210 pounds to E. G. Gray & Co., and 16,784 pounds to Blue Eibbon Products Company, making a total of 211,116 pounds of’ bacon actually received and sold by him under said purchase for the total price of $73,778.11; the purchase price of said bacon from the Government at 28% <j> per pound was $60,431.95. The balance of said bacon, shipped by the Government to said warehouses in Brooklyn, New York, remained in said warehouses until finally disposed of as hereinafter set out.
    Plaintiff, as hereinbefore stated, sold 148,310 pounds of bacon as a sample sale to Paul Klopstock, of New York City, at a price of 36^ per pound subject to inspection, at the same time giving to said Klopstock an option to purchase an additional 500,000 pounds or more at the same price. Mr. Klopstock, with experts on bacon, went to the Army warehouse at Baltimore, where said bacon was stored. The 148,310 pounds of bacon sold to him by plaintiff proved satisfactory, and he took and paid the Government directly for the same, in accordance with his arrangement with plaintiff. Said Klopstock advised the Government officials that he was in the market for further quantities of bacon and had a contract with plaintiff for an additional half million pounds.
    Said Government officials advised him that they would supply him any bacon he wanted for less money than he was paying plaintiff; that they would sell him bacon in tins for per pound, and he therefore purchased 500,000 pounds of bacon from the Government at that price. Mr. Klop-stock went to Baltimore with the intention of buying plaintiff’s bacon under his said option and would have bought said additional 500,000 pounds or more had it not been that his attention was called to the fact, by Government officials in charge at Baltimore of the sale of said bacon, that they would sell him bacon in tins at a less price. Klopstock afterwards bought 8,000,000 pounds, more or less, of such bacon from the Government.
    The Government also at this time, in pursuance of its sales campaign, advertised for sale a large amount of bacon it then had on hand and sold the same to domestic customers and consumers.
    VIII. Plaintiff, in the late summer and early fall of 1919, also was negotiating sales for said bacon in the foreign market and had practically closed large sales in such market, when upon learning on or after October 27, 1919, that said bacon had been libeled and plaintiff indicted by the Government, as hereinafter set out, all such negotiations were dropped by prospective purchasers. On October 10, 1919, the Government, acting through the Department of Justice, caused two indictments to be brought against plaintiff in the District Court of the United States of America for the Eastern District of New York for an alleged violation of the act of August 10, 1917, entitled “An act to provide further for the national security and defense by encouraging the production, conserving the supplies and controlling the distribution of food products and fuels ” — on the alleged ground that he was hoarding the bacon which the Government had sold him. Under these indictments the plaintiff was on October 2Ytli arrested, arraigned, and required to give bond. Prior to this date no notice of these indictments was given to plaintiff or the public. These indictments were by the United States District Court for said Eastern District of New York dismissed on demurrer on the 10th day of January, 1920. On the 7th day of November, 1919, a like indictment was brought against him by the Government in the same district, in the same court, and for the same reason, and was on the 24th day of March, 1920, dismissed on demurrer. On the 10th day of' December, 1919, the Government, acting through the Department of Justice, caused a like indictment to be brought against plaintiff in the same court for the same district, which indictment was on motion of the Government on the 28th day of February, 1920, dismissed. On the 4th day of February, 1920. the Government, acting through the Department of Justice, caused another like indictment to be brought against plaintiff in said court of said district. Upon this indictment plaintiff stood trial and was duly acquitted by a jury on February 16, 1920.
    On October 27th, 1919, the date on which plaintiff was arrested under the first of said indictments, the Government, acting through the Department of Justice, in libel proceedings instituted by the United States attorney in the United States District Court, Eastern District of New York, libeled all the bacon then in said warehouses in Brooklyn and which had been delivered to said warehouses. On October 21, 1919, prior to the time plaintiff had any knowledge of said indictments, plaintiff requested the Government to ship the remaining bacon from Baltimore to said warehouses at the rate of one car per day. After the date of said libel 424,930 pounds of bacon were shipped by the Government to said warehouses in Brooklyn, as shown in Finding YI, and the bacon so subsequently shipped was treated as though constituting a part of the bacon theretofore libeled and was in possession of the United States marshal for said district and not of plaintiff until the dismissal of said libel.
    IX. From the date of said libel proceedings and arrest of plaintiff on October 27, 1919, it was impossible for him to get any customer, foreign or domestic, to negotiate with him for tbe sale of said bacon, and pending negotiations were dropped by prospective purchasers; and after the libel of the same by the Government he was deprived of possession of said bacon and all rights incident thereto, and had no dominion whatever over the same until after his acquittal by jury on February 16, 1920, when the court on March 1, 1920, entered an order discontinuing the libel proceedings and ordering the marshal to release the said bacon, which order became effective about March 29, 1920.
    X. Shortly after the institution of said libel proceedings by the Government plaintiff, through his attorney and at the suggestion of the court, offered and tried to stipulate with the Government that the bacon libeled be sold by the United States marshal under the supervision of the War Department, and the fund realized therefrom substituted for the bacon, to await the final termination of the action, thus to avoid the loss that would necessarily occur by deterioration of the bacon or otherwise, if it was kept in storage for a long time. Plaintiff ivas willing at that time to enter into such stipulation, but the same was never made. The following correspondence took place between plaintiff’s attorneys and the district attorney in regard to the same:
    NOVEMBER 19, 1919.
    Hon. Le Roy W. Ross,
    
      United States District Attorney for the Eastern
    
    District, Post-office Building, Brooklyn, N. T.
    
    Re: United States v. Leavitt
    Deae SiR: At the time when the answer was filed in the seizure proceeding against the bacon your assistant, Mr. Harwood, attended with me before Mr. Justice Chatfield, and the latter suggested that á stipulation ought to be arrived at in relation to the sale of the bacon by the United States marshal under the supervision of the War authorities. I stated that I would consent to such a stipulation, and I certainly understood Mr. Harwood to say the same thing. After we left Judge Chatfield Mr. Harwood stated that he would take the matter up with you as to the form of the stipulation and would let me hear from him. Up to the present time I have heard nothing. It does seem to me that an arrangement ought to be made for the sale of that bacon, and T would very much like to have you send me the form of stipulation that you desire, so as to expedite the disposition of the bacon.
    Very truly yours,
    Max D. SteueR.
    MDS/AR
    LWR/FLK
    NOVEMBER 29, 1919.
    Re United'States v. 13,318 Cases of Bacon
    Max D. Steuer, Esq.,
    
      4% Broadway, New York, N. Y.
    
    Sir: I acknowledge receipt of your letter of November 19th in re stipulation for sale of above-mentioned bacon.
    I would have answered this letter before except for the reason that immediately upon the receipt thereof I entered-into communication with the Food Administrator to determine, if possible, whether it would be practicable to sell this bacon and I have only now received an official report.
    This office, of course, has no objection to the sale of this bacon, our only condition being that it be sold in such a manner that it will immediately reach the public and will not again go into the hands of speculators or persons who will withhold it from the market.
    I believe that the only way in which this bacon can be sold so that it will reach the public as quickly as possible will be by an absolutely open auction sale, and I will enter into a stipulation with you at any time, subject, of course, to the approval of the court, providing for an immediate sale of this bacon by auction, the proceeds of such sale to be either distributed or held as the court may direct.
    Respectfully,
    Leroy W. Ross,
    
      Ü. S. Attorney.
    
    December 2, 1919.
    Hon. Leroy W. Ross,
    
      United States Attorney,
    
      Eastern District of New York,
    
      Federal Building, Brooklyn, N. Y.
    
    Re United States v. 13,318 Cases of Bacon
    Sir: My letter to you of the 19th ultimo was written because of the failure of your office to submit a stipulation in keeping with the suggestion made by Mr. Justice Chatfield to Mr. Harwood, your assistant, and myself. ' The understanding arrived at was that your office would proceed imme-cliately to ascertain whether proper arrangement could be made thru one of the Federal .Departments for the disposition of this bacon at a price such that it would protect Mr. Leavitt for the amount expended by him in the purchase of this bacon from the Government. In the interim between that suggestion and when you called me up on the 28th ultimo, the Government itself had reduced the price of the bacon it was selling, as you informed me, to 20$ a pound, thereby making it impossible, as you yourself stated, to make a sale that would keep Mr. Leavitt whole. Instead of drafting a stipulation'that would have done justice to the Government and to the defendant at a time when that has become, impossible, you write a letter in which, among other things, you say:
    “ This office, of course, has no objection to the sale of this bacon, our only condition being that it be sold in such a manner that it will immediately reach the public and will not again go into the hands of speculators or persons who-will withhold it from the market.”
    I regard that such a statement as that was carefully formulated and framed in the hope that it would get to a jury. Your assumption that this bacon has ever gotten into the hands of speculators or persons who will withhold it from the market is utterly unwarranted. The facts overwhelmingly prove the contrary. Nobody knows better than you just how Mr. Leavitt acquired this bacon. He bought it from the Government of the United States and paid an appropriate price for it. He made every endeavor to sell it, and couldn’t because the Government itself became his rival and sold bacon at a price such that it was impossible for him to make himself whole. You were present when I begged the court to make an order directing that the facts be set forth in the indictment to the end that justice may be done defendant without further legal procedure, and the determination of that question has not yet been made. I resent your writing me letters incorporating the statement that this bacon got into the hands of speculators or persons who will withhold it from the market. I have seen the documents evidencing the purchase, and the checks which show that the money was paid to the Government, and that the Government got it. I have heard the witnesses tell of the efforts that were made to dispose of the bacon. Some of them are the same witnesses who told you about it. Under such circumstances, I hold the language in your communication to be inexcusable.
    Respectfully,
    Max D. Steuek.
    MDS/AR
    
      NI. The bacon was released from the custody of the United States marshal by the dismissal of the libel proceedings on or about March 29, 1920. Plaintiff was advised by counsel that he should make claim against the Government for his loss and also that in the meantime it was his duty to use his best efforts to dispose of said bacon at the best price obtainable, in order to lessen the loss so far as possible. When the libel suit was commenced there was an active market for bacon in Europe; when it was dismissed there was practically no European market. Beginning immediately after the release of said bacon and continuing until the end of the year 1920 plaintiff made continued and active efforts to dispose of said bacon in both Europe and the United States, but without success. About September, 1920, pursuant to negotiatioiis for a sale of said bacon which were to be consummated if the same proved satisfactory to the purchaser, plaintiff’s agents submitted samples of said bacon to the representative of the New York Globe in charge of its food purchases; said purchase-was declined for the reason that said representatives on inspection found said samples to be stale and extremely salty. In December, 1920, plaintiff, through his representatives, had negotiated a sale of such bacon to the Polish Government, conditioned on said bacon proving satisfactory on inspection and on satisfactory financial arrangements being made; on inspection of said bacon by representatives of the Polish Government the purchase Avas declined on the ground that said bacon was unfit for food.
    In the spring of 1920, shortly after the dismissal of said libel proceedings, plaintiff, through representatives, took up with officials of thq Department of Justice in Washington the matter of the Government paying for the losses that would have to be sustained on the bacon, and requesting permission to sue the Government for said loss as damages. The officials of the Department of Justice informed plaintiff’s representatives that such permission Avould not be given by the Attorney General and advised them that plaintiff should take up the matter with the War Department. Thereafter, from time to time, during the summer and fall of 1920, plaintiff personally and by representatives took up orally his claim for loss 'with various officials of the War Department. In December, 1920, or January, 1921, he obtained an interview with the Quartermaster General of the Army and was by him advised to file a formal claim with the Contracts and Advisory Branch of the Quartermaster General’s Office and a hearing would be granted on said claim.
    A formal application for the cancellation of the said sale and return by the Government to plaintiff of the amount paid by him, together with certain costs and expenses necessarily incurred in connection with said purchase, was filed by plaintiff with the said Contracts and Advisory Branch of the Quartermaster General’s office on April IB, 1921.
    XII. The -wholesale market price of' commercial bacon from August 30, 1919, to March 27, 1920, ivas as follows; the middle column is the class of commercial bacon nearest to that sold to plaintiff:
    
      
    
    XIII. The amount of money actually paid by plaintiff to the Government for said bacon was $698,404.56, from which should be deducted the amount of $53,554.84, received by plaintiff as proceeds of the sale of said bacon when finally disposed of, the amount of $100,245.11 being the partial return by the Government on account of bacon which it withdrew from the sale,'the amount of $60,431.95 being the amount paid the Government by plaintiff, at 28%0 per pound, for bacon sold by plaintiff to domestic consumers prior to the libel of said bacon by the Government, leaving a balance in the hands of the Government, of money actually paid by the plaintiff to the Government for said bacon, of $484,172.66, which amount the Government still retains. The said amount of $60,431.95 represents the price of 28%«* per pouhd paid to the Government upon the 211,116 pounds of bacon sold by plaintiff to domestic consumers, from whom plaintiff received for same the sum of $73,778.11. (Sec Finding VII.) The difference of $13,343.16 between the cost to plaintiff and the selling price by him should not bo deducted from plaintiff’s claim for loss.
    Plaintiff also incurred necessary expenses in connection with the purchase, negotiations, and sale of said bacon, as follows:
    Insurance thereon, $37,450.46; storage, transportation, and proper protection thereof, $58,954.77; in all, the sum of $96,405.23; plaintiff also incurred and paid necessary expenses in connection with the purchase, negotiations, and sale of said bacon, amounting to $26,965.68, made up of the following items: Attorney fee for defense of libel suit. $2,500; judgment in suit for commission on sale to F. I’. Hodges (sale rejected by purchaser on account of delay of Government in delivering bacon), $422.06; and.attorney fee in defending said suit, $250; expenses of agent negotiating for sales in Europe and United States between April 26. 1920, and December 22, 1920, $2,825; expenses of broker negotiating sales to rejiresentatives of foreign governments in the United States from August 20, 1920, to January, 1922, $5,203.07; expenses of plaintiff negotiating for sales in Europe in summer and fall of 1920, $7,848.20; additional storage for February, 1922, $175; cable messages, stamps, and sundries from June 10, 1919, to January, 1922, $2,500; advertising, in April and May, 1920, $582.35; auditing in spring of 1921, $500; salaries of bookkeepers and office man at $20 per week for four years from June 10, 1919, to June 10, 1923, $4,160; making a total expenditure for said necessary expenses of $123,'370.91, which, added to said $484,-172.66 still retained by the Government, makes a total loss to plaintiff, in connection with the purchase, negotiations, and sale of said bacon as aforesaid, of $607,543.57; if plaintiff is chargeable for profit on sales made by him, set out in Finding VII and in the first paragraph of this finding, then from this amount should be subtracted the sum of $13,346.16, leaving said total loss $594,197.41, in the manner as set out above. This sum does not include any interest nor any expense incurred by plaintiff in defense of the criminal action brought by the Government against him.
    XIV. A hearing was duly held upon the formal claim (referred to in last paragraph of Finding XI) by the Contracts and Advisory branch, Administrative Division, of the office of the Quartermaster General; evidence was taken and a report made by the chief of said advisory branch that the claim of plaintiff be allowed, except certain items, and if the quartermaster concurred in the view of the advisory branch, that the papers be forwarded to the Secretary of War for his approval and the case remanded with directions to fix the amount due to plaintiff. A copy of this finding of the said advisory branch is attached to the petition, marked “Exhibit 7.”
    The matter was by the Secretary of War in due course referred to the Attorney General for an opinion as to his power to rescind said sale and reimburse the plaintiff the money he had paid the Government, and which the Government still retained, and for his costs and expenses incident thereto. The opinion of the Attorney General was duly rendered on December 23, 1921; it appears in volume 33 of the Opinions of the Attorney General of the United States, page 69, and a copy is attached to the petition as “ Exhibit 1.” This is the opinion of the Attorney General referred to in the act of Congress set forth in Finding II hereof.
    Following the opinion of the Attorney General, the Secretary of War caused a hearing on the claim to be held under the direction of the Acting Judge Advocate General of the* Army to ascertain the reasonable charges for transportation, storage, insurance, and protéction of property as proper items allowable under the opinion of the Attorney General. This hearing was duly held by Lieutenant Colonel G. L. McKeeby, of the Judge Advocate General’s Department, a copy of which report is attached to the petition, marked “Exhibit 8.”
    While the last hearing above referred to was being held, and before the report was received, the Secretary of War also asked the opinion of the Comptroller General as to whether there were any funds available in the hands of the Secretary of War to reimburse Mr. Leavitt in accordance with the opinion of the Attorney General, and on January 21, 1922, the Comptroller General advised the Secretary of War that there was no such fund.
    Thereupon the Secretary of War wrote to plaintiff the following letter:
    WAR DEPARTMENT,
    
      Washington, Januem'y %6,19%%.
    
    Mr. Louis Leavitt,
    
      New York City.
    
    My Dear Mr. Leavitt : Find inclosed herewith a copy of the decision of the Comptroller General of January 21, 1922, addressed to me, in which he advises me that there are no funds under my control that could be used in carrying out the.opinion of the Attorney General of December 23, 1921, in the matter of the rescission of your contract of purchase of some 1,800,000 pounds of bacon.
    In view of this decision of the Comptroller General, I find myself without power to act in the premises further than to request that you immediately sell, at the best prices obtainable, the bacon now in your possession, without prejudice to the rights and remedies of either party to that contract, and without prejudice to the view that the acts already done by the Government amount in law to a rescission of the contract. This in order that the great expense of caring for this bacon may be terminated at the earliest practicable date. Should you so desire, I,will instruct the Quartermaster General to cooperate in fixing the identity of the bacon and the prices realized, and in making any suggestions he may have to increase the net proceeds of said sale.
    I uñderstand that you are going to ask for congressional relief; and should my opinion be asked by Congress, my present disposition would be to join with the Department of Justice in recommending relief.
    Yours very truly,
    John W. Weeks,
    
      The Secretary of War.
    
    
      In accordance with said letter, on February 9, 1922, the bacon was sold under the supervision of the Quartermaster General at the highest prue that could be obtained for the same, which was $53,554.84, which was paid to plaintiff, the sale being made to a rendering company, and the bacon at that time being rancid and unfit for sale or use as food.
    Thereafter, there being no fund out of which the amount as ascertained by the Secretary of War, pursuant to the opinion of the Attorney General, could be paid by the Secretary of War, the claim was filed by the Secretary of War with the Bureau of the Budget, Treasury Department, and on May 6, 1922, the Director of the Bureau of the Budget, Hon. Charles G. Dawes, transmitted to the President, with recommendation for his approval, an estimate of an appropriation to plaintiff in the sum of six hundred and twenty thousand six hundred and twenty-three dollars and thirty-three cents ($620,623.33), to reimburse him in accordance with the finding of the Attorney General, which report was concurred in by the President and transmitted by him to the Speaker of the House of Representatives. A copy of the report of the Director of the Budget above referred to and the letter transmitting the same and approval thereof by the President is attached to the petition, marked “ Exhibit 9.” The action of Congress upon this recommendation is the bill passed for the relief of plaintiff, a copy of which is set forth in the petition.
    The court decided that plaintiff was-entitled to recover.
   Booth, Judge,

delivered the opinion of the court:

A few months after the signing of the armistice the Government had on hand over 200,000,000 pounds of Army bacon. Some j>ortion of this enormous supply was what is known in the trade as five-year pack, and the remainder as two-year pack, indicating the time limit for safe consumption. Confronted thus with the problem of disposing of a vast quantity of surplus bacon, and desiring to save the Government harmless to the greatest possible extent, the Surplus Property Division of the War Department, in pursuance of law, on May 10, 1919, advertised for bids to purchase 2,493,386 pounds of this bacon. The advertisement specified the terms and conditions of the sale and fixed a minimum price of 22% cents per pound. There was no favorable response to the advertisement, and the proposed sale thereunder failed. Subsequently, the plaintiff, who was not a bidder theretofore, entered into negotiations with the.officers in charge, and on June 10, 1919, purchased for 28% cents per pound the 2,493,386 pounds of bacon previously advertised for sale. He met the obligations of his contract to the letter. The plaintiff began immediately a campaign to resell the purchased bacon. A short time subsequent to the sale he sold 211,116 pounds of the same, and to one of his customers had given an option to purchase 500,000 pounds more. This particular customer, on a visit to the warehouse in Baltimore to inspect the bacon upon which he had an option of purchase and with whom the plaintiff was then in a course of direct dealing, was knowingly and intentionally tolled away from his connections with the plaintiff by officers of the Government, who offered him bacon at a less price, succeeding in selling to him from time to time 800,000 pounds, more or less, of bacon, thereby precluding the plaintiff from disposing of the 500,000 pounds the prospective purchaser had gone to inspect. In the ordinary marts of trade acute competition might possibly characterize this transaction as within the zone of fairness. On the part of the Government, the legitimate custodian of property it had sold to the plaintiff, and knowing the purpose and intent of the plaintiff in making this large purchase, the transaction is impressive as one which might with great propriety have been omitted. The plaintiff at this very moment was assiduously engaged in seeking a market for his bacon, both at home and abroad. The hazardousness of his undertaking was manifest; the bacon purchased was' of the two-year-pack variety. The Government was selling bacon in large quantities. The surplus supply was sufficient to demoralize the market, and every contemporaneous incident was direct notification to the plaintiff to expeditiously dispose of his purchase or lose his profits.

On October 10, 1919, four months to the day after his purchase in good faith of this very substantial quantity of food supply, the plaintiff, without warning or previous notice of any character whatever, was indicted, by a Federal grand jury for the eastern district of New York for an alleged violation of the Lever Act, the act of August 10, 1917, 40 Stat. 276. The plaintiff was arrested, arraigned, and compelled to give bond upon a charge of hoarding the very bacon the Government had sold him, and for which the Government had received payment. This indictment was dismissed on demurrer January 10, 1920. In the meantime, however, the astute district attorney had procured another indictment of the plaintiff in the same court and for precisely the same cause on November 7, 1919. The second attempt met the same fate as its predecessor on March 24, 1920. Not content with these two abortive attempts at criminal prosecution, and displaying a persistence of extremely doubtful propriety, the plaintiff was for the third time indicted under the same statute on December 10, 1919, and thereafter, on February 28, 1920, this indictment was dismissed on motion of the Government. Three indictments had been returned against the plaintiff, and in each instance the prosecution of the plaintiff had ignominiously failed. Two decisions of a Federal court that under the statute a case had not been made out, and a voluntary dismissal as to the third, would in the usual course of criminal procedure be of itself sufficient to convince an ordinary prosecutor that his resources had been exhausted. Not so in this instance, however, 'for the plaintiff finally went to trial on a fourth indictment returned on February 4, 1920, and was promptly acquitted by a jury on February 16, 1920. It is true that under the special jurisdictional act we may not award the plaintiff damages resulting from the criminal proceedings. We set the facts forth in the findings and comment upon them because they form the fundamental basis and the alleged justification for the supplementary proceedings which resulted so disastrously to the plaintiff in this case. Contemporaneously wfith the criminal prosecution of the plaintiff the Government under section 7 of the Lever Act in the same Federal court libeled the plaintiff’s bacon then in warehouses in Brooklyn, N. Y., and by process of law absolutely forestalled the possibility of his selling a single pound of the same from October 27, 1919, until 29th day of March, 1920, when the same was formally released, the libel having-been voluntarily dismissed on March 1, 1920.

During this period of suspense the plaintiff endeavored in good faith to procure a stipulation from the Government authorizing the sale of the bacon and impounding the proceeds to await the decision of the court. Obviously this was of prime necessity to the plaintiff, for the bacon market was declining rapidly and his supply deteriorating in quality. The attempt failed because of the obstinacy of the district attorney. The Lever Act was a war emergency measure. It has been before the Supreme Court and we need not indulge in a discussion of the decisions. What the legislation intended to and did accomplish is a matter of public notoriety. By what process of reasoning it was applied to the sale, under a statute passed subsequent to the close of hostilities by the Government to a citizen of over two million pounds of surplus food supply, is most difficult to conjecture. In this instance we are confronted with an anomalous situation. The Government lawfully sells to a purchaser a sufficient quantity of supplies to make him a hoarder under the Lever Act, accepts his payments for the purchase, and then proceeds to prosecute him for the violation of a law to which its own conduct makes it a contributor, and, what is of more significance, is the admitted fact that the Government was engaged in doing the precise thing the plaintiff was doing. The Government was holding' at minimum prices a huge supply of bacon, refusing bids at a less figure, exerting every resource and resorting to every known business principle to prevent the decline of the market value of bacon, so that in the end the possibility of a great loss might not befall the United States. Manifestly the conduct of the affairs of the defendant was as clearly within the letter of the Lever Act as any conduct of the plaintiff appearing from the record herein. As said in the defendant’s brief: “As a general proposition, when the Government or individual sells or contracts to sell property to another, it is wrong for the seller to interfere with the buyer’s right to fully use or dispose of such property.”

It i,s true the defendant’s counsel labors diligently to escape the consequences of this statement, seeking to avert its application by a general assertion that the rule of law extends no “unbridled license to use it in a manner which becomes a nuisance to the seller or otherwise injures him. * * * If the buyer uses it in an unlawful way or in a way deemed to be unlawful or to the injury of the .seller, the buyer may be prosecuted civilly or criminally.” In view of the stipulated findings and the unimpeachable record in this case recourse to this defense, granting arguendo its ai’ailability, is nothing short of startling. The entire criminal and civil resources of the Government were exerted to the limit in an effort to fasten some measure of guilt or misconduct upon this plaintiff, and the effort signally failed. The head of the very department which instituted all proceedings against the plaintiff, in an opinion which it will tax the ingenuity of defendant’s counsel to combat, admitted the error of plaintiff’s prosecution, and in effect attests the fact of the utter lack of probabb cause to do what was done. The defendant’s argument reduced to a finality erects a contention to the effect that this plaintiff was culpable, within the reach of both the criminal and civil provisions of the Lever Act, because he did not sell over two million pounds of bacon within four months after its purchase. A sufficient answer appears in the findings. The Government itself within this limit of dime deprived him of one customer for 500,000 pounds, and, as previously observed, was his most formidable competitor. We have gone over the record in this case with infinite care and have .searched in vain for even a slight pretext upon the part of the Government for first selling the plaintiff a large supply of perishable food supplies and then unjustly intervening to prevent the disposition of the same for a period of time sufficient to render the purchase practically valueless.

The war, as to all practical purposes, was over. Surplus Supplies of every kind and character, in vast quantities and amounts, were being disposed of by the various departments of the Government to citizens, firms, and corporations. There is scarcely a single instance imaginable (at least our docket attests the fact) where the very identical procedure might not have been adopted in every case of sale of surplus supplies. No one would be quite so stupid as to imagine the plaintiff was buying the bacon he did buy for his own consumption, or conclude for a moment that the purchase of the plaintiff, large as it may seem, was of sufficient proportions to corner the bacon market. The littb over two million pounds held by the plaintiff was comparatively insignificant, when, as this court and the public well know, the Government was the plaintiff’s most formidable competitor, engaged in selling millions of pounds of tlm very same commodity at the same time. Of course he entered upon the enterprise as a business venture, a speculation, a legitimate attempt to make money. The Government knew this, and it would indeed present a situation not often encountered if the law would sanction the sale of Government property, lawfully conducted, and then allow the seller to seize the very property sold and forestall the purchaser from reaping the benefit of his contract. The transaction was foreign to either the letter or spirit of the Lever Act. In Voves v. United States, 249 Fed. 191, the court said:

“ Is our Government of the superhuman type that releases the ruler from the obligations of honesty and fairness that are imposed upon the citizens ? ”

However, we need not extend the discussion of this phase of the case. The facts clearly show that the contract of sale was rescinded by the Secretary of War following a very exhaustive and elucidating opinion of the Attorney General, advising the Secretary of his right under the law to do so. Therefore, under both the general and elementary principles of contractual rights, as well as what was done in this particular instance, the plaintiff is entitled to recover. The defendant must not overlook the fact that the special act confers jurisdiction to determine liability “that prevails between private parties.”

The plaintiff’s attorney in his brief sets forth a section of the uniform sales act which concisely states the law applicable to a sale of goods by private individuals. We repeat it:

“An implied warranty that the buyer shall have and enjoy quiet possession of the goods as against any lawful claim.s existing at the time of the sale.”

A defense predicated upon the cases of Wilson v. United States, 11 C. Cls. 513; Deming's case, 1 C. Cls. 190; or Jones and Brown's ease, 1 C. Cls. 383, is not available here. Wh.at the Attorney General said in his opinion is apropos, notwithstanding it preceded the enactment of the jurisdictional statute:

“The Government being under definite contractual obligations to Leavitt, placed itself in the anomalous position of taking his money with one hand while with the other it actively and effectively prevented him from enjoying the fruits of his bargain. Such action, if attempted by an individual, could not receive judicial sanction, and for the Government to do it without making amends because it has the power is not compatible with sovereign honor or that measure of justice which the Government expects and exacts from its citizens. Clearly this, in effect, would constitute a failure of consideration moving from the Government for the money it received and retains. In itself such action would be in legal effect a rescission of the contract. The principles governing the relations of individuals in respect to their contracts are equally applicable where the United States is a party. The following cases are examples: United States v. Smith, 94 U. S. 214; United States v. Mueller, 113 U. S. 153; United States v. Barlow, 184 U. S. 123; Purcell Envelope Co. v. United States, 47 C. Cls. 1.”

A case in point is Deatz v. United States, 38 C. Cls. 355.

Following the dismissal of the libel proceedings the plaintiff, acting under the advice and in conjunction with the War Department, made repeated efforts to sell the bacon involved. In each instance failure attended the effort, because the bacon had so deteriorated in quality as to be unfit for consumption. The plaintiff conferred with the Department of Justice later on respecting his claim for losses, and asking the aid of the department in a suit against the Government. The department referred the plaintiff to the War Department; and, finally, after some delay in reaching the proper tribunal of the War Department, a hearing on his claim for a rescission of the contract and payment of damages was hacl before the Contracts and Advisory Branch of the Quartermaster General’s Office, evidence was taken, and a report favoring the rescission of the contract and allowing the claim was duly filed. This record, together with the .report, finally reached the Secretary of War, and after a careful investigation by the Secretary the same ivas referred to the Attorney General, requesting the opinion of the chic I law officer of the Government as to the Secretary’s lawful right to rescind the contract and make the plaintiff whole. The Attorney General (33 Opinions, 69) advised the Secretary that it was within his power and authority to rescind the contract and "adjust the plaintiff’s losses. The Secretary of War, on the receipt of the opinion of the Attorney General, caused a hearing to be held by the Acting Judge Advocate General of the Artny to ascertain the extent of plaintiff’s loss. During the pendency of this hearing the Secretary of War asked the Comptroller of the Treasury if any appropriation was available out of which he might pay the plaintiff’s losses. The comptroller advised him that there was not; whereupon the Secretary of War wrote the plaintiff the letter set out in Finding XIV. As the final act, the bacon was sold under the supervision of the Quartermaster General of the Army for $53,564.84, being only its market value for rendering and not food purposes. The Secretary of War, finding himself unable to pay the plaintiff’s claim because of lack of available funds, filed the claim with the Bureau of the Budget, along with the opinion of the Attorney General, and including his own favorable findings. The Director of the Budget transmitted to the President his recommendation of an appropriation for payment in the sum of $620,623.33. The President approved the recommendation and transmitted his approval to Congress. Congress did not make the appropriation, sending the claim to this court for adjudication instead.

The Government has in its possession over six hundred thousand dollars of the plaintiff’s money, and has held it since 1920, for which he has received in exchange a small sum in excess of two hundred thousand dollars. We have heretofore alluded to the fact that plaintiff met his contractual obligations to the latter. Not only this, but while his bacon was impounded, in the possession of the United States marshal, the officers of the War Department shipped to the Brooklyn warehouse 424,930 pounds of bacon sold the plaintiff, and this identical bacon was subsequently treated by the Government as part of the bacon libeled in the first instance, and for which the plaintiff paid, a most remarkable event in view of the status quo. Under the stipulated findings the failure of consideration is so marked and emphatic we need no more than refer thereto. It is decidedly unique to find the Department of Justice challenging as a defense to this case the accuracy of the opinion of the Attorney General. Without denying the right, it may not escape attention that ordinarily the legal opinion of the highest law officer of the Department of Justice, given in pursuance of his duties, especially when fortified by favorable approval from all to which the claim found its way, is accorded the distinction of finality in so far as the department itself is concerned. Suffice it to say that, in so far as here involved, the court find it unnecessary to review the same from the standpoint of accuracy and soundness. We are quite willing to adopt it.

The plaintiff is entitled to recover the following amounts, viz:

Paid by plaintiff to Government for bacon_.$01)8,404. 56
Insurance on bacon while in storage_ 37,450. 46
Storage, transportation, and protection_ 58, 954. 77
Attorney fee in defense of libel suit-.,_ 2, 500. 00
Judgment against plaintiff in suit for commission_ 422. 06
Attorney fee in connection with said suit_ 250. 00
Agent’s expenses in Europe and United States_ 2, 825. 00
Brokers’ expenses in negotiating foreign sales_ 5. 203. 07
Plaintiffs’ expenses in negotiating foreign sales_ 7,848. 20
Additional storage_ 175. 00
Cables, stamps, and sundries_ 2, 500. 00
Advertising- 582. 35
Auditing- 500. 00
Bookkeeper and officeman salaries_ 4,' 160. 00
821, 775. 47

As against the above items, the defendant is entitled to the following credits:

Salvage of bacon-$53, 554. 84
Returned by defendant for bacon, withheld_ 100, 245.11
Purchase value of bacon sold by plaintiff_ 60, 431. 95
214. 231. 90

Leaving a balance due the plaintiff of $607,543.57. See in this connection United States v. Spearin, 248 U. S. 132; United States v. Behan, 110 U. S. 338; United States v. Peck, 102 U. S. 64; Houser v. United States, 39 C. Cls. 508; Clark v. Morgan Co. National Bank, 196 Fed. 709.

Judgment in favor of plaintiff for $607,543.57. It is so ordered.

Hay, Judge; DowNey, Judge; and Campbell, Chief Justice, concur.

GRAham, Judge, did not'bear and took no part in the decision of this case,  