
    GEORGE F. HORTON v. THE UNITED STATES.
    [No. 34703.
    Decided June 12, 1922.]
    
      On the Proofs.
    
    
      Contract, implied; nonaoceptmce of bid. — Where after filing his bid plaintiff was requested by the project manager not to wait for acceptance of his hid but to proceed with preparations for performance of his contract, and he thereupon purchases and assembles materials for the erection of the buildings, after which his bid is rejected, there is no implied contract on the part of the Government to pay him the difference between the cost price and salvage value of such materials in his hands.
    
      Same; dredging performed. — -Where the plaintiff does certain dredging in front of the proposed buildings which results in a benefit to the United States, there is an implied promise to pay him the reasonable value of the same.
    
      2’he Reporter's statement of the case:
    
      Mr. H. Rosier Dulany for the plaintiff. Dulany & Shepard and Mr. Sewall Myér were on the briefs.
    
      Mr. Alexander Id. McCormick, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant.
    The following are the facts of the case as found by the court:
    I. The plaintiff, George F. Horton, was at the time herein mentioned a citizen of the United States, resident in Houston, Texas, and engaged in the general contracting business under the name of Horton & Horton.
    II. Prior to September 16, 1918, the plaintiff had bid on dredging and bulkhead work for the Navy Department at Galveston, Texas, at the site of the proposed sea-plane hangars. The plaintiff had been awarded the contract under the departmental specification and contract number 3393, and was at work on the above date.
    The plaintiff had been engaged in several pieces of work for the defendant during the war period, and it was usual and customary for him to proceed with the work before the execution of a written contract. For all the work so done, except that involved in this suit, payments were made by the defendant.
    
      III. On or about September 16,1918, defendant published a specification designated as No. 3432, for the construction of “ Three-timber sea-plane hangars, pavement and beach at the naval air station, Galveston, Texas, appropriation No. 9205, aviation, May, 1918, allotment: 9205-1-2,” and called for proposals to construct the same. In response plaintiff offered to construct and complete said work at a stipulated price of approximately $600,000.
    IV. The plaintiff was the only bidder on the work. The only representative of the defendant who had authority to approve the bid and award the contract was the Chief of the Bureau of Yards and Docks, who never accepted the plaintiff’s proposal or awarded the contract to the plaintiff. One of his subordinates in the bureau on November 9, 1918, informed the plaintiff’s Washington representative that the contract had been awarded to the plaintiff, and an inter-bureau letter of the same date to this effect, written in the construction division of the bureau, was by mistake signed by the. head of said division of the bureau, without authority from the chief of the bureau. No formal notice by the Chief of the Bureau of Yards and Docks or by any of his subordinates in the bureau was ever given to the plaintiff that said contract had been awarded to him.
    Y. The project manager in charge of the work urged the plaintiff to proceed with the work as rapidly as possible.
    It was necessary to secure clearance of the project through the War Industries Board before award of the contract could be made. The specifications and bid of the plaintiff were submitted to the said board, and after negotiations relating to the omission of steel doors the project was finally cleared by that board upon the specifications and bid of plaintiff.
    In view of the emergency existing at the time, and as was customary Avith this and other contractors, prior to the execution of a formal contract, the plaintiff proceeded as urged to purchase and assemble materials for the hangars. He made contracts for materials, parts of which were delivered at the site of the hangars at Galveston, and other parts of which, mostly, construction steel, were delivered at plaintiff’s shop at Houston, Texas, for the further machining and preparation for use in the hangars. He commenced the work at the site of the hangars.
    All material delivered at the site of the works was inspected and passed by the public works officer, the duly accredited representative of the Bureau of Yards and Docks at Galveston. All work performed in the preparation of the site and erection of materials was done under the orders and direction of and inspected by the public works officer.
    From time to-time in the progress of the work, questions arose at Galveston, that were referred to the Bureau of Yards and Docks at Washington by its local representative at Galveston. Horton’s representative at Washington kept the defendant’s officers advised as to the progress of the work at Galveston, and plaintiff’s representative was urged from time to time by representatives of the Bureau of Yards and Docks to speed up the work.
    The defendant’s public works officer made progress and other reports with regard to the work to the Bureau of Yards and Docks at Washington.
    VI. About a month previous to signing of the armistice (November 11th, 1918), the Bureau of Yards and Docks ordered the plaintiff to construct 41 portable units as a temporary station as an extra to specifications 3432. In compliance with the order, the plaintiff proceeded with the construction of the temporary station, and the plaintiff was paid for all work done thereon.
    VII. At the time of the ai’mistice, the plaintiff was proceeding with the work under specifications 3432, with the full knowledge and approval of the Bureau of Yards and Docks, and at that time he notified all his subcontractors for materials to hold up until he could find out more about the Government’s wishes with regard to the work.
    On November 13, 1918, plaintiff received the following note addressed to his superintendent on the work:
    
      “ Public Wokks Office, U. S. Naval Aik StatioN,
    “ Goilveston, Texas, November 13,1515. “ Memorandum to. Mr. E. A. Podd.
    “The following telegram was received from Washington, D. C.:
    “ ‘ Stop all construction work temporary training station Galveston pending further instructions. Work on contract three three nine three and three four three two to be proceeded with vigorously. 17612. Budocks.’
    “In compliance with the telegram, therefore, all work on the temporary station is authorized to stop, but the work on the permanent station will be pushed with vigor, as it appears that the large station will not be affected by the signing of the armistice.
    “ Respectfully,
    ;L. B. Hyde.’
    “Budocks” was the code signature for the Bureau of Yards and Docks.
    Upon receipt of the above notice, plaintiff advised his material men by wire to hasten delivery of materials and proceeded vigorously with the work under specifications 3432, in accordance with his instructions.
    VIII. On November 23, 1918, no formal contract having been entered into for the work under specifications 3432, plaintiff was advised by telegram from the Bureau of Yards and Docks that all bids on specifications 3432 had been rejected. Immediately upon receipt of this notice the plaintiff canceled by wire all contracts for materials for the hangars. Certain materials, however, had already been received by the plaintiff or were in transit. Part of the materials delivered to the plaintiff was stored upon the site of the work at Galveston and part remained at his yard or shop in Galveston, where considerable work had been done upon them by the plaintiff.
    Upon plaintiff’s request, after it finally became apparent that he would not be given the contract, plaintiff was given permission by the Bureau of Yards and Docks to remove to Houston, for use by him elsewhere, some of the materials he had theretofore assembled at the site of the proposed work; and at the same time, because of poor storage facilities and protection at the site of the work and deterioration of the materials, the remainder of said materials and the plaintiff’s equipment there at said site were, at the direction of the public works officer there in charge for the Government, also shipped to the plaintiff at Houston.
    IX. After the plaintiff had been notified that all bids for the work were rejected, he was asked by the defendant to furnish a list of materials on hand purchased for the work required under specifications 3432. He was advised that these materials would be included in new specifications to be issued by the defendant for the hangars covered by specifications 3432, as materials that would be furnished the successful bidder by the defendant. In compliance with the request a list of materials acquired by Horton under specifications 3432 was furnished to the defendant. Subsequently in specifications No. 3884, prepared and issued by the defendant for hangars at Galveston in lieu of specifications No. 3432 upon which bids had been ultimately rejected, the defendant advertised that it would furnish the successful bidder certain materials which were the same as the materials listed by the plaintiff as purchased by him and not used under said specifications 3432, the intention of the bureau being to use these materials in case a proposed settlement should be effected between the plaintiff and the bureau for taking them over by the Government. Bids upon specifications 3864 were received and rejected, and the project was finally abandoned and the materials purchased by Horton & Horton never used for the hangars. They were left with Horton & Horton.
    X. The Bureau of Yards and Docks thereafter ordered the public works officer at Galveston to report under contract 3393 as to the material acquired by the contractor under specifications 3432, upon the theory that the contract 3432 had never been formally executed and that payment would be made for work and materials done and acquired under 3432 as an extra under 3393. A prompt report with an itemized list of all materials on hand was made by the public works officer with recommendation by him as to an equitable settlement for the materials. It was reported by the public works officer that if the Government kept the materials Horton & Horton would be entitled to $39,831.14. This amount, based upon the actual expenditures of Horton & Horton, did not include any allowance to Horton & Horton as remuneration for services, but did include 10 per cent, or $2,577.76, profit paid to the subcontractor for steel by Horton & Horton. In the event that Horton & Horton retained the materials, after making due allowance for the salvage value therefor, the public works officer recommended that Horton & Horton be paid $22,259.30. These figures were based on the actual cost to Horton and no allowance was made therein as remuneration for services rendered.
    XI. At about the same time a board of three officers of the Navy was appointed by the Bureau of Yards and Docks to ascertain and report to the bureau under contract 3393 the cost of materials delivered by Horton & Horton in connection with seaplane hangars under specifications No. 3432. This board of three officers made a report in which they state the total cost of the Avork done and materials furnished to be $37,253.38 or $2,577.76 less than the total amount found by the public Avorks officer to be due. The difference between the two findings is the amount of profit allowed the subcontractor (and actually paid by Horton & Horton), for steel by the public works officer. The board recommended that Horton & Horton be permitted to retain the material, as the Government had no use for it, and that the contractor upon that basis, was entitled to $21,648.64, which amount included an item of 10 per cent profit to Horton & Horton on balance due them, but did not include as an expense to Horton a profit of 10 per cent to the subcontractor on the amount actually expended in fabrication of steel for the hangars. The report of the board Avas disapproved by the Chief of the Bureau of Yards and Docks on the ground that no contract had been signed for the work for Avhich the materials were furnished. The defendant left the material with the plaintiff. Horton & Horton have never been paid for any part of the work done and materials purchased by it, as set forth in the two reports above referred to.
    XII. The cost to Horton & Horton of the materials furnished and labor done under specifications 3432 was $39,831.14. The difference between that actual cost to Horton & Horton of the materials and work and the salvage value of the materials purchased by Horton & Horton was $21,648.64.
    
      XIII. The cost to the plaintiff of the materials purchased for use under said specifications 3432 was, together with the freight and other charges and expenses incident to their delivery, $37,542.80. No part of this material was accepted or used by the defendant nor did it receive any benefit therefrom or from the freight charges and expenses incurred incident to its delivery.
    XIV. The plaintiff did work of dredging a dike fronting the beach where the hangars were to be located to facilitate laying the beach in a dry condition, and in doing this work the plaintiff expended the sum of $2,287.34, and this sum is the value of the benefit that the Government received from this work of dredging.
   Graham, Judge,

delivered the opinion of the court:

This is a claim by the plaintiff for the value of certain materials purchased, labor done, and expenses incurred, in connection with the proposed construction of three hangars at Galveston, Tex., upon which he had made a bid but for which he was never awarded a contract. No contract was ever executed between the parties in writing, as required by law. The representative of the Government with authority to let this contract, and to approve it as prepared, was the Chief of the Bureau of Yards and Docks. Under him were several subordinate divisions of this bureau, each of which performed certain duties, subject to his approval. There was also employed in connection with the work an engineer-known as the project manager, whose duty it was to watch the progress of the work after the contract had been let. The plaintiff never received any formal notification by the Chief of the Bureau of Yards and Docks or any of his subordinates that his proposal had been accepted and the contract awarded. After filing his bid the plaintiff was requested by the said project manager not to wait for the acceptance of his proposal, but to proceed with preparations for the erection of the hangars, and he thereupon-placed orders for certain materials, a part of which was shipped and delivered at the site where the hangars were to be built, and part was delivered to the plaintiff’s shops at Houston, Tex., for certain work to be done thereon before being shipped to tbe site of the construction of the hangars. Upon these latter materials, certain labor was performed and upon all certain payments of freight were made. The plaintiff also did some dredging along the beach at the site of the hangars.

The plaintiff’s bid was dated September 30, 1918, and a short time after the armistice, November 11, 1918, the plaintiff was notified that his bid was rejected. Thereafter the material delivered there remained at the site of the work at Galveston, some of it in an unprotected condition. The plaintiff was given permission by the Bureau of Yards and Docks to remove to Houston, for use by him elsewhere, some of the materials he had theretofore assembled at the site of the proposed work; and at the same time, because of poor-storage facilities and protection at the site of the work, and deterioration of the materials, the remainder of said materials and the plaintiff’s equipment there at said site were, at the direction of the public works officer there in charge for the Government, also shipped to the plaintiff at Houston. All of the said materials have since continued in the possession of the plaintiff. There were certain negotiations between the plaintiff and the defendant in regard to the Government taking over these materials and making a settlement with the plaintiff, but these negotiations failed, and thereupon the plaintiff brought this suit.

It is to be borne in mind that this was a proposed contract for the erection of three hangars and not a contract to supply to the Government materials for their erection. The materials which the plaintiff purchased were purchased for his own use in this proposed erection and not the Government’s use. As delivered upon the site of the work at Galveston and at his shops at Houston, they were materials of the plaintiff and did not and could not become the property of the Government unless the Government had taken them over and accepted them as its property or used them as such. All of the expenditures of the plaintiff were made on his own account in preparation for the work of erecting these hangars.

It will also be noted that this is, as appears from the petition, a suit not to recover the value of the materials furnished to or used by the Government, or for labor done and expenses incurred, from which the Government, received benefit. It is a suit to recover the difference between the cost of said materials to the plaintiff and the salvage valué thereof in his hands. On its face it would seem to be a suit for damages for breach of contract and not on a quantum meruit for the value of materials supplied under an implied contract, which latter seems to be the ground of the relief sought here. However this may be, the plaintiff had no legal contract with the Government. He is visited with knowledge of the law and the requirements that contracts be in writing and properly executed. The plaintiff proceeded to order and place these materials at the site' and in his shop and to incur expenses for labor and freight charges at his peril. His only possible ground of recovery is on an implied contract for the value of materials furnished, accepted or used; and labor done and expenses incurred, from which the Government received benefit. The value found by the court of the materials purchased, labor performed, and outlays made by the plaintiff, was $39,831.14. Of this sum, $37,543.80 represents the materials purchased, labor performed, and outlays made, which were not accepted by the Government and from which it received no benefit, and for this amount the plaintiff can not recover.

Under the numerous decisions of the courts, to the extent that the Government received the benefit of this labor and accepted these supplies from the plaintiff, the Government is liable under an implied contract. Clark v. United States, 95 U. S. 539; South Boston Iron Co. v. United States, 118 U. S. 37.

The invalidity of a contract is immaterial after it has been performed or partially performed. When a lawful transfer of property is executed it does not matter whether the terms of the execution were void or valid while ex-ecutory, and therefore can not be revoked or the terms changed. A promise to make a gift does not bind, but the gift can not be taken back, and the transfer in pursuance of mutual promises is not made less effectual by those promises or by the fact that money was received in exchange. A contract may be void as such, but it expresses the terms on which the parties respectively paid their money and delivered their goods. Savage v. United States, 92 U. S. 382; St. Louis Hay & Grain Co. v. United States, 191 U. S. 159.

The plaintiff, however, did certain work of dredging from which the Government received benefit, the value of which was $2,287.34, and for this amount he should be allowed recovery. Judgment for the plaintiff in the sum of $2,287.84. And it is so ordered.

Hat, Judge; Dowkex, Judge; Booth, Judge; and Camf-belh, Chief Justice, concur.  