
    STRONG AND DONAHUE’S CASE. Samuel Strong et al. v. The United States.
    
      On the Proofs.
    
    
      .In October-, 186(5, the Quartermaster General advertises for proposals to furnish iron head-blocks for the national cemeteries. The claimants are the loivest bidders. The Quartermaster General reports to the Secretary of War that they are not iron-founders, and recommends that they be required to name their subcontractors and furnish additional sureties. The claimants do so, and the Quartermaster General recommends that the contract be awarded to them. The Secretary takes no action whatever on the recommendation. In December, 1868, the claimants demand of the Secretary of War the execution of a contract in accordance with their bid, and the Secretary again takes no action. The claimants thereupon bring their suit for the profits they might have made. It appears that, by the- terms of the advertisement, the government reserved “tlie right to reject all bids, if unsatisfactory, and to delay the award, not later than the 1st January, 1867,” and that at the time of the advertisement and proposals there was no law authorizing such a contract, and no appropriation adequate to its fulfilment.
    
    I. The Act 2d March, 1861, (12 Stat. L., pp. 214, 220,) prohibits a government contract being made “unless the same be authorized by law, or be under an 
      
      appropriation adequate to its fulfilment.” Tlie Ael 17th July, 1860, (10 Stat. L., p. 596,) authorizes the President “to purchase cemetery grounds and cause them to he securely inclosed.” Aud the Act 28th July, 1866, (14 Stat. L., p. 310,) approximates $500,000 “ to establish national cemeteries.and to purchase sties for the same.” These latter statutes do not authorize a contract for $360,000 worth of iron head-bloclcs to be used in the national cemeteries, and a contract for that amount is void under the former act.
    II. Where the Quartermaster General advertises for xn'oposals to furnish iron head-bloclcs, reserving- to the government “ the right to reject all bids if unsatisfactory, and to delay the award notlater than the 1st of January, 1887,” and the claimants put in the lowest bid therefor, and the Secretary of War neither accepts nor rejects the bid, either before or after-the 1st January, 1887, nor awards the contract to any person, although the Quartermaster General recommends the accex>tance of the claimants’ proposals, no contract exists, nor do the claimants have a cause of action against the government.
    
      Mr. Ira Karris & Mr. J. J. Weed for tbe claimants:
    The claimants, by their original petition in this court, seek to recover damages for the violatiou of a contract, which thej!claim to have made with an authorized agent of the United States, to furnish “ cast-iron head-blocks” for the soldiers’ graves in national cemeteries. They claim, by reason of the violation of the said contract on the part of the United States, the sum of #150,993 33.
    lsí. The Quartermaster General toas authorized to invite proposals to furnish said cast-iron head-bloclcs, and upon such proposals to malee a contract therefor with the lowest responsible bidder.
    
    By the Act March 3, 1861, the authority of the Secretary of War, or of any subordinate of the War Department, was limited b5r the following prohibitions: 1st. That tlie contract should be authorized by law; or, 2d. That there shall be an appropriation adequate to its fulfillment. (12 Stat. L., p. 220, § 10.)
    The last of the above conditions to the existence of the right to bind the government by contract exists here. . There was an “ appropriation” adequate to the fulfillment of the contract, even if it was not authorized independent of that.
    The national cemeteries were authorized and established by the eighteenth section of the Act July 17,1862, which is as follows:
    
      u That the President of the United States shall have power, whenever in his opinion it shall be expedient, to purchase cemetery grounds, and cause them to be securely inclosed, to be used as a national cemetery, for the soldiers who shall die in the service of the country.’’ (12 Stat. L., p. 596.)
    The act of Congress, providing for the civil expenses of the government, approved July 28, 1866,.made further provisions-for these cemeteries so established, in the following appropriation, to wit: “ To establish national cemeteries, and to purchase sites for the same, at such points as the President of the United States may deem proper, and for the care of the same, fifty thousand dollars.” (14 Stat. L., p. 310.)
    The act of Congress, approved Februcmg 22, 1867, contained still further and more specific x>rovisions in relation to the care and arrangement of these cemeteries, as follows:
    The first section provides, “ that in the arrangement of the-national cemeteries established for the burial of deceased soldiers and sailors, the Secretary of War is hereby directed to have the same inclosed with a good and substantial stone or iron fence: and to cause each grave to be marked, with a small head stone or bloclc, with the number of the grave inscribed thereon, corresponding with the number opposite the name of the party in a register of burials, to be kex>t at each cemetery and at the office of the Quartermaster General, which shall set forth the name, rank,- company, regiment, and date of death of the officer or soldier; or, if unknown, it shall be so re-' corded.”
    P>y the seventh section of said act, it was provided, “ That the sum of seven hundred and fifty thousand dollars is hereby appropriated to carry out the purxioses of this act, out of any moneys in the Treasury not otherwise api>ropriated.” (14 Stat. L., lip. 399-401, §§ 1-7.)
    The authority of the Secretary of War to make contracts for furnishing said cast-iron head-blocks is derived from these statutes, and his duty is likewise inrposed by them.
    
      2d. The acts of the Quartermaster General in inviting proposals for said contract were the acts of the Secretary of War, and as such are conclusive upon the United States.
    
    
      . In contemx>lation of law, all the duties devolved upon the War Department are discharged by the Secretary of that department. But in the discharge of the duties assigned to that department, certain officers are assigned to the discharge of specific duties. Thus, duties pertaining to the subsistence of the army are assigned to officers of the Commissary Department, and duties assigned to the Quartermaster Department, to the officers of that department. Yet, in contemplation of law, all the duties assigned to these departments are discharged and performed by the Secretary of War.
    This court has recognized these principles in the case of Moore & Boiee v. The United States, (1 C. of Ols. 11., 90,) in which it was held that the Secretary of War could not annul a contract made with the Quartermaster General.
    In the case of Alters v. The United States, (2 0. Ols. E., 375,) this court held that a purchase of property needed for the military service, made by a depot quartermaster, was not subject to the supervision or approval of the quartermaster of the district.
    
      3d. The acts of the Quartermaster General upon the proposal or hid submitted by the claimants amount in lato to an acceptance of the claimants’ bid, and such acceptance by that officer constituted a ■contract binding upon the United States.
    
    The acts from which such contract results are: 1st. The advertisements for proposals under which the claimants submitted their bid ; 2d. The official declaration that the claimants were the lowest bidders for furnishing said cast-iron head-blocks; 3d. The official notification to the claimants that they will be required to give bonds in the sum of $240,000 for the faithful performance of the contract; 4th. The official declaration that the securities offered by the claimants to secure the fulfilment of said contract were sufficient; 5th. The official recommendation of the Quartermaster Genéral, “ that a contract and bond be prepared for signature, and that the parties be advised, that tipon the execution in due form of said contract and bond, the work will be awarded to themP
    
    These acts were an acceptance of claimants’ bid, and constitute a contract, although the formal writing by which the contract would be evidenced was not signed either by the claimants or the Quartermaster General. The acceptance of the proposal constituted the contract, and could have been enforced specifically by the government. The following authorities fully sustain these propositions: Moore <D Boiee v. The United States, (1 O. Ols. E., ’90;) Charles R. Adams v. The United States, (1 O. Ols. E., 192.)
    
      
      ith. The ref used of the Secretary of War and the Quartermaster General to allow the claimants to furnish said cast-iron head-blocks, under their proposals for the same, was a violation of the contract resulting from the acceptance of the claimants’ bid. ' (Moore & Boice v. The United States, 1 C. Cls. B., 90; Floyd & Speed v. Same, 2 C. Gis. B., 429.)
    
      oth. The measure of damages the claimants are entitled to receive for such violation of said contract, is the clear net profit they would have made if they had been allowed to proceed ivith the execution of the contract.
    
    This proposition is fully recognized by the case of The Philadelphia, Wilmington, and Baltimore Bail-road Company v. Howard, (13 Howard B., 344.)
    In this court the same principle has been recognized and affirmed in the case of Moore & Boiee v. The United States, (1 C. Gis. B., 90:)
    “ That the measure of damages for such violation is the clear net profits the claimants would have realized if they had been permitted to perform the contract, or the difference between what it would have cost them to perform- the service and the amount they were to receive for it.”
    These principles are also discussed and affirmed in the following cases: Adams v. The■ United States, 1 O. Cls. B., 106; Floyd & Speedy. The United States, 2 Ibid., 441; United .States' v. Speed, 8 Wallace B., 77, So; Masterton v. The Mayor of Brooklyn, 7 Hill, 62 ; Story v. Few York and Harlem B. B. ■Go., 1 Selden, 85.
    
      Mr. Assistant Attorney General Talbot for the defendants:
    In this' case the claimants allege that the Quartermaster G-eueral (October 31, 1866) issued a certain advertisement for furnishing cast-iron head-blocks for national cemeteries ; that, ■thereupon, they made a proposal, in writing, conforming to the requirements of said advertisement, to furnish said head-blocks; that, upon opening the several proposals made in response to said advertisement, these claimants were, by the Quartermaster General, found to be the lowest bidders for the contract for which the proposals were invited; 'that they were, by the ■Quartermaster General, subsequently informed that they were such lowest bidders, and that the contract had been awarded to them, and were requested to furnish sureties for the faithful performance of the contract on their part: that the claimants subsequently submitted to that officer the names of the persons who were to become such sureties, and were informed that the sureties thus offered were satisfactory to the Quartermaster General, and that a contract and bond would be duly prepared by him for the signature of the petitioners and their sureties.
    They further allege that, immediately after being informed, as before stated, they commenced making arrangements for the fulfilment of their contract, entered into correspondence and commenced negotiating with different iron manufacturing establishments to supply said head-blocks for them, and that they have at all times been ready and willing to furnish said head-blocks, and have repeatedly demanded of the Quartermaster General “a more formal contract ;p and have demanded that the Quartermaster General should allow them to proceed with the fulfilment of “said-contract;” who has hitherto wholly neglected and refused so to do.
    They represent, also, that they could have performed said contract, on their part, at a clear profit of $150,993 33, for which sum they claim judgment in this suit.
    They further represent that, <! since the awarding of said contract to them,” Edward 0. Ingersoll has acquired, and still owns, an interest therein, namely, the one-half interest before owned by the petitioner Donohue.
    To this case the defence is as follows:
    I. No contract is shown to have been, executed on the part of the United States.
    
      (a.) The case alleged here is, at best, for the claimants, not one of a breach by the United States of a contract, but one of a breach of an agreement to enter into a contract, for which breach the only damage recoverable would be expenses incurred in making his proposals and tendering the contract for execution. Such expenses are neither alleged nor proved. (See Rule XNXIN of this court.)
    II. An interest in the alleged contract, to the extent of one-ha-lf thereof, having been acquired since the awarding-thereof, by one Edward C. Ingersoll, said contract, if it had any previous validity, was annulled, so far as the United States are concerned, by such transfer. (Act July 17,1862,, §14; 12 Stat. L., 596.)
   Drake, Ok. J.,

delivered the opinion of tbe court:

This is an action to recover damages for an alleged breach of contract, based on the following facts:

On the 31st day of October, 1868, the Quartermaster General of the United States Army published an advertisement, of which the material parts are as follows:

1. “ Sealed proposals will be received at the office of the Quartermaster General, Washington, D. C., until November 30, 1866, for furnishing cast-iron head-blocks for national cemeteries, delivered in quantities about as follows, viz.” (Here follows in the advertisement a long list of cemeteries, with the number of head-blocks deliverable at each, and specifications of their dimensions, &c.)

5. “Bach bid must be accompanied by good and sufficient-guarantee, of at least two responsible parties, that the contract, if awarded, will be faithfully and promptly executed.

6. The government reserves to' itself the right to reject all bids if unsatisfactory, and to delay the award not later than the 1st of January, 1867.”

The claimants put in a bid under said advertisement, which, upon the opening of all the bids, was found to be the lowest.

Their bid was accompanied with the guarantee of Harriet Donohue and Charles H. Anderson, “ that if the contract for furnishing head-blocks to the government be awarded to Messrs. 'Samuel Strong and William J. Donohue, they will carry out the same in good faith.”

On the 14th of December, 1866, the Quartermaster General communicated by letter to the Secretary of War the fact that the claimants were the lowest bidders for the whole of said head-blocks, and in said letter wrote as follows :

“AsMessrs. Strong & Donohue are not known tobe practical iron-founders, and as the.persons they offer as sureties are not known to this department as men of well-known and established means and responsibility, should it be decided to accept their bid, I recommend that they be required to name, for approval of the War Department, the parties who have engaged to furnish the material and to do the work, and that they be required to furnish security, by a bond signed by persons well known as fully able to meet its obligation, in an amount equal to two-thirds of the estimated amount of the contract — say $240,000 — conditioned that the amount of the bond shall be paid and forfeited to tbe United States if tbe contract is not fulfilled to tbe letter, and also tbat those sureties shall join in tbe execution and signature of tbe contract as parties thereto.”

On tbe 20th of December, 1800, tbe claimants notified tbe Quartermaster G-eneral by letter tbat they were then prepared to enter into contract for tbe said bead-blocks ; tbat John G, Treadwell and Storm -V. Boyd, of Albany, New York, would enter into tbe contract; and offering as sureties three persons, who, they said, would qualify for tbe sums set opposite their respective names, amounting in tbe aggregate to $240,000.

On tbe same day tbe Quartermaster General inclosed tbe letter of claimants to tbe Secretary of War, saying tbat if. tbe list of sureties should prove satisfactory, be was of opinion tbat it would be safe and proper to award tbe contract to tbe claimants, Messrs. Treadwell and Boyd uniting with them in the execution of tbe contract, and tbe sureties named uniting in tbe execution of tbe bond of security in tbe amount of $240,000. lie further stated tbat Messrs. Treadwell and Boyd bad called upon him, and be believed them to -be persons of competent experience and skill, as iron-founders, to execute tbe work; which met tbe objection of bis report submitting tbe bids — tbat tbe bidders themselves did not appear to be practical iron-founders; and be therefore recommended tbat a contract and bond be prepared for signature, and tbat tbe parties be advised tbat, upon the execution, in due form, of said contract and bond, tbe work should be awarded to them.

No action declarative of acceptance or rejection of tbe claimants’ bid was taken by tbe War Department, nor was any other bid for tbe work accepted.

In December, 1808, tbe claimants memorialized the Secretary of War for tbe execution of a contract in accordance with their bid, and for his order to proceed with the work; which being-refused, they brought this suit, claiming (with nice accuracy of calculation) $150,993 33 as damages, which sum they allege would have been their “clear profit” upon tbe work if they bad been allowed to do it.

Such, in its material facts, is the case as presented by tbe claimants themselves, no evidence having- been offered in behalf of tbe defendants. Upon those facts, we have no hesitation in arriving- at tbe conclusion, upon tbe following grounds, tbat tbe claimants have no right of action.

Iii the first place, not only was tliere in I860 no law authorizing the Quartermaster General or the Secretary of War to enter into a contract for the expenditure of money for cast-iron head-blocks for the national cemeteries, bat there was in the Act 2cl March, 1801, (111 Stat. L., 214, 220,) express law to the contrary, in the following words:.

“ No contract or purchase shall hereafter be made, unless the same be authorized by law, or be under an appropriation adequate to its fulfilment, except in the War and Navy Departments, for clothing, subsistence, forage, fuel, quarters, or transportation, which, however, shall not exceed the necessities of the current year.”

To obviate the force of this clear prohibition the claimants’ brief relies upon the eighteenth section of the Act 17 ih July, 1802, (12 Stat. L., 596,) which declares—

“ That the President of the United States shall have power, whenever in his opinion it shall be expedient, to purchase cemetery grounds, and cause them to be securely inclosed, to be used as a national cemetery for the soldiers who shall die in the service of the country.”

This confers no authority in regard to national cemeteries, except to purchase the grounds and cause them to be'securely inclosed, and is wholly inapplicable to this case.

To the same end, and with special reference to the prohibition of the making of any contract not authorized by law, “ unless under an appropriation adequate to its fulfilment,” we are cited to the Act 28th July, 1SCG, (14 Stat. L., 310,) wherein is an appropriation of $50,000 “to establish national cemeteries, and to purchase sites for the same, at such points as the President of the United States may deem proper, and for the care of the sameand this is claimed by claimants’ counsel as “ adequate to the fulfilment of the contract.” Aside from the restriction of this appropriation, by its terms, to the “purchase” and “care” of sites for national cemeteries, (which could hardly be considered as including head-blocks for the graves,) it is not easy to see by what arithmetical process $50,000 would be “adequate to the fulfilment of a contract” requiring, on the basis of the claimants’ bid, au expenditure of $360,000.

In further effort to escape the effect of the prohibition in the Act 2cl March, 1861, the uAct to establish and to protect national cemeteries,” February 22, -1867, (14 Stat. L., 39!),) is cited, in wbicb is an appropriation of $750,000, “to carry out tbe purposes of this act;” tbe first section of wbicb is in tbe following’ words:

“That in tbe arrangement of tbe national cemeteries established for tbe burial of deceased soldiers and sailors, tbe Secretary of War is hereby directed to have tbe same inclosed with a good and substantial stone or iron fence,- and to cause each grave to he marked with a small head stone or hloelc, with tbe number of tbe grave inscribed thereon, corresponding with tbe number opposite tbe name of tbe party in a register of burials to be kept at each cemetery and at tbe office of tbe Quartermaster General, wbicb shall set forth tbe name, rank, company, regiment, and date of death of tbe officer or soldier; or, if unknown, it shall be so recorded.”

This act, passed in February, 1867, is claimed to have conferred power upon tbe Secretary of War to enter into the con-tract with tbe claimants, for tbe breach of wbicb they demand •damages in this action, and wbicb they insist upon their right to have bad executed between them and the War Department in December, 1866, when there was no lawful authority for its execution, and they were bound to know that there was none. Even admitting that after its passage there was authority in that department to make a contract for bead-blocks for tbe national cemeteries, that could in no sense relate back and ■confer a right upon these claimants to tbe execution of tbe contract for wbicb they bid in tbe previous November; for until tbe Secretary of War was authorized by law to make such .a contract, be bad no power to invite proposals therefor. His power in that respect came into existence with tbe act of February 22,1867, and tbe proposals issued by tbe Quartermaster General in tbe previous October were without authority of law. Tbe claimants, therefore, are in tbe position of demanding damages for tbe refusal to award them a contract w-hicli was not only unauthorized by any law, but prohibited by express law, and wbicb before they bid, as well as after, they were bound to know was both unauthorized and prohibited.

Tbe foregoing views are necessarily fatal to tbe claimants’ ■case, and would justify our not noticing any other point in it; but there are two others wbicb, as they are in tbe record, may properly be referred to.

It is insisted by claimants’ counsel, that tbe mere fact of tbe Quartermaster General’s report to the Secretary of War that they were the lowest bidders, not only entitles them to the contract, but was in itself a contract on the part of the United States with them for the head-blocks bid for. •

If this were so, why should they have demanded the contract of the War Department, as they did? If the contract was already formed by the fact of the Quartermaster General’s report, why did they not proceed immediately to do the work Í Why,, after inaction for two years, did they invoke the- Secretary of War to order the contract to be executed and the work to proceed ? These questions cannot be answered.

The fact is, that in law there was no contract until it should be aioardeil to a particular person. In the Quartermaster General’s proposals there was no engagement to award the contract to the lowest bidder; on the contrary, the declaration was therein made that “the government reserves to itself the right to reject all bids if unsatisfactory.”1

The xiroposals required each bid to be accompanied by the guarantee of at least two responsible parties “that the contract, if awarded, will be faithfully and promptly executed and the government reserved to itself “the right to delay the award not later than the 1st of January, 1867.” Thus, there was to be an award of the contract — a judicial assignment of it to such one of the bidders as the officer of the government charged with the award might decide to have made a satisfactory bid, which he was willing to accept as the basis of the contract. It is not contended, nor could it be, that there was any award of the contract in this case; nor was there any obligation to award it to any one. The whole matter rested in the discretion of the Secretary of War, and he did not exercise that discretion in favor of the claimants; and that was the end of the matter.

It is, however, urged that because no rejection of claimants’ bid was declared in terms, it was accepted, and the contract thereby formecl, and that they are therefore entitled to damages for its non-fulfilment. This view assumes the necessity, in order to constitute a rejection of a bid, of announcing-in express language its rejection; ah assumption which cannot be sustained. The acceptance of a bid must be announced, so' as to notify the bidder to enter into the required contract; but the rejection of a bid need not be; the absence of announcement of its acceptance, witbin the time designated therefor, is its rejection; and the rejection, whether pronounced or silent, is conclusive evidence that the bid was “ unsatisfactory.v

' In every view the case is against the claimants, and their petition is therefore dismissed.  