
    HARRIS BROTHERS CO. v. THE UNITED STATES
    [No. C-714.
    Decided January 18, 1926]
    
      On the Proofs
    
    
      Sale; proposal and hid; misrepresentation. — Where an Army officer, having authority to do so, invites bids on moldy -hams, in the proposal makes an unqualified but incomplete statement as to their condition, does not invite inspection or inform the bidders that goods are sold “ as is,” and the plaintiff’s bid is accepted and the goods sold to it, the plaintiff was not bound to inspect the goods, had a right to rely on the representation as made to it, and if materially misled thereby is entitled to recover the difference between the amount paid and the salvage value.
    
      The Reporter's statement of the case:
    
      Mr. J ames W. Good for the plaintiff. Messrs. Walter E. Beebe and Francis L. Harris were on the briefs.
    
      Mr. Roseoe R. Koch, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    
      The court made special findings of fact, as follows:
    I. On Wednesday, May 21, 1919, the Surplus Property Division of the War Department of the United States sent out a circular telegram to the surplus property officers at Chicago, Baltimore, New Orleans, New York, Boston, Philadelphia, and Atlanta, directing them to offer for sale and to invite bids to be made by prospective purchasers for 42 carloads of hams then in storage at the Army supply base, Norfolk, Ya. This telegram was in words and figures as follows:
    “ Offer immediately to trade in your zone forty-one cars sugar-cured hams in boxes and one car sugar-cured hams in salt in half barrels. Total, 1,486,904 pounds. All located Norfolk, Ya., in hands of port storage officer. Quick action necessary, so instruct bidders wire their bids Surplus Property Division, Munitions Buildings, before noon Monday, May 26th. All bids must be f. o. b. Norfolk, payment before shipment. Report of inspector states hams are at present sweet and sound, but surfaces are affected by mold, and that if reconditioned at once would be no loss from trimming, as mold in its present condition can be removed by thoroughly washing and cleaning. Hams packed by Dold, Cudahy, Swift, Armour, Wilson, and Morris.”
    II. On May 22, 1919, a circular letter was sent to the provision and packing-house establishments in Chicago by the zone supply officer, as follows:
    “ 1. You are invited in accordance with this letter submit bids on the following sugar hams, f. o. b. Norfolk, Va.: 41 cars sugar hams in boxes; 1 car sugar-cured hams, in salt, in half barrels; total, 1,487,905 lbs.
    “2. All these cars of hams are located at Norfolk, Ya., in the hands of port storage officers.
    “ 3. If you are interested in this list you are requested to wire your bid so as to reach the Surplus Property Division, Munitions Bldg., Washington, D. C., on or before 12 o’clock noon, Monday, May 25. All bids must be f. o. b. Norfolk, payment before shipment.
    “ 4. Report of inspector states hams are at present sweet and sound, but surfaces are affected by mold, and that if reconditioned at once would be no loss from trimming, as mold in its present condition can be removed by thoroughly washing and cleansing. Hams packed by Dold, Cudahy, Swift, Armour, Wilson, and Morris.”
    
      III. On May 23, 1919, a circular letter was sent to the provision and packing-house establishments in Chicago by the zone supply officer as follows:
    “ 1. Eeference to circular letter mailed you under date of May 22d, 1919, relative to the sale of Government-owned sugar-cured hams.
    “2. Following shows the correct weights of hams manufactured by the different packers:
    7 cars, 231,183 lbs., Armour & Co.
    7 cars, 349,937 lbs., Swift & Co.
    8 cars, 252,613 lbs., Cudahy Packing Co.
    18 cars, 574,609 lbs., Wilson & Co.
    2 cars, 50,701 lbs., Oscar Mayer & Co.
    Total, 42 cars, 1,459,043 lbs.
    “3. This is submitted for your information and guidance.”
    IV. Fifteen bids were submitted, which were all rejected. Harris Bros. Co. was one of the bidders and bid for the entire quantity. On May 28, 1919, a circular telegram was sent to each of the 15 bidders, including Harris Bros. Co., as follows:
    “All bids on 42 cars at Norfolk rejected, being too low for consideration. Now offering same subject to prior sale and you are invited to submit your best bid within 48 hours. This office is authorized to close at once on receipt of satisfactory bid.
    “ Clemeot Eogers Surplus BirkeNsteiN.”
    In response to this telegram five previous bidders submitted new and higher bids. Harris Bros. Co.’s bid was submitted on May 27, 1919, for the entire quantity of hams at 20 cents a pound. On May 31, 1919, a representative of Harris Bros. Co. was verbally notified that its bid had been accepted.
    V. On the 2d day of June, 1919, a written notification of the acceptance by the Government of its bid was sent to Harris Bros. Co. at Chicago.
    
      The written acceptance was as follows:
    Sale No. 1013.
    War DEPARTMENT,
    Surplus Property Division,
    Contracting Oeeioer,
    Washington, D. <7., June 1919.
    
    Correspondence in connection herewith, should refer to S. P. D. No. 1740 Sub.
    Letter of Acceptance of Bid for Surplus Property
    To: Harris Bros. Co.
    Address: Chicago, Ill.
    In accordance with your proposal dated and subject to all conditions and requirements thereof and to all advertisements, circulars, specifications, and samples pertaining hereto, award is hereby made you for purchasing the following articles at the prices and at the time, place, and manner herein specified:
    Material or article: Ham.
    Quantity: 1,486,904.
    Unit: Pound.
    Unit price: $0.20.
    Total price: $297,380.80.
    Located at Norfolk, Va. To be shipped by freight f. o. b. cars where stored to Chicago.
    Formal contract will (not) be required. On (date).
    Make payment (cash or certified check) to port storage officer, Norfolk, Va., who will issue delivery order on receipt thereof.
    (Additional specifications may be written across face or reverse hereof.)
    Please acknowledge receipt.
    John deP. Douw,
    
      Contracting Officer, Major, Q. M. C.
    
    See instructions on reverse side, which are made part of this agreement.
    1. If formal contract is required, same will be prepared and forwarded to bidder for execution as soon as possible.
    2. Payment must be made before possession can be given.
    3. No assignment of this contract will be made without the written consent of the United States.
    4. No Member of or Delegate to Congress, or Resident Commissioner, is or shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom; but this article shall not apply to this contract in so far as it may be within the operation or exceptions of section 136 of the act of Congress approved March 4th, 1909.
    5. Alterations or additional clauses:
    Certified check for $25,000 received. To be applied against payment on last $25,000 worth shipped. All shipments to be made with sight draft attached. The entire amount is to be paid for and removed within thirty days from the date hereof.
    VI. During the months of January and February, 1919, approximately 1,500,000 pounds of these hams were shipped for storage at the Army warehouse near Norfolk, Va. The hams were packed, after being wrapped in paper and burlap, in boxes of 1-inch wood about 2 feet in length and 12 to 14 inches in height. These boxes weighed about 100 pounds and were stored in long, one-storied brick buildings. They were packed to the height of 10 or 12 feet, with passageways between the stacks. The buildings housing these hams were ventilated but not refrigerated, but were exposed to the direct .rays of the sun and occupied low-lying ground close to water.
    Samples of these hams were inspected weekly following their arrival, and during the first week in May, 1919, were found to have developed a surface mold. After this formation was noted inspection of samples of the hams was made daily until May 15, 1919, when the inspector ceased his daily inspections and reported by letter the next day to his executive officer as follows:
    Shelbt G. Fell,
    
      Executive Officer, Army Supply Base, Norfolk, Va.
    
    1. Beferring to previous conversations in reference to hams and bacon stored at present at this base.
    2. I have this day made sample inspection of said product and found same to be sweet, but due to atmospheric conditions at this station quite a number of' hams are covered with mold.
    3. For your information, under existing conditions this mold which is a fungus plant growth will grow very rapidly and in a short time penetrate the seams of ham which wiil necessitate the trimming of same, and will cause a loss to the Army on this product, whereas if disposed of immediately they may be cleaned by wiping with a cloth.
    
      4. For your further information there is at present 1,487,-904 lbs. of ham, and 3,518,132 lbs. of bacon, and as there has been no movement to float this product at an early date and as most of this stock has been on hand over 4 months, which is the time limit under the existing contract of the Army whereby the contractor guarantees its keeping.
    5. Permit of my recommending that immediate step be taken to dispose of same in order to avoid unnecessary loss.
    AlONZO CONNELLY,
    
      In Charge Subsistence Inspections,
    
      Army Supply Base, Nor folie, Va.
    
    This letter resulted in the sending of two other inspectors to the warehouse and an examination by them on May 18, 1919, and their report which is as follows:
    Memorandum 430-163 (Subs-I).
    From: Mr. I. C. Franklin, in charge cold-storage section, domestic operations division. Dr. W. O. Troné, in charge inspection branch subsistence division.
    To: Director of storage, attention Colonel Williams.
    Subject: Inspection of hams — bacon, Army base, Norfolk,
    Va.
    1. This is to advise that a visit was made to warehouses Nos. 2, 3, and 4, Army base, Norfolk, Virginia, on May 18, 1919, where a thorough examination was made of the condition of 36 cars of issue bacon in crates, 41 cars of sugar-cured hams in boxes, and 1 car of sugar-cured hams packed in salt in half barrels.
    2. The condition of this meat was as follows:
    (5) The sugar-cured, hams are at present sweet and sound, but the surfaces are affected by the extensive growth of molds of various varieties. It is our opinion that if the hams were reconditioned at once there would be no.loss caused by trimming, as this mold in its present condition can be removed by the hams being thoroughly washed and cleaned.
    (c) The sugar-cured hams packed in salt in half barrels are sweet and sound, but are slightly affected on the surfaces by mold growth.
    3: In order that this meat may be handled with the least possible loss, the following recommendations are submitted:
    (b) That the sugar-cured hams packed in boxes or crates be forwarded at once to packing plants where same shall be reconditioned by having all of the mold thoroughly removed by cleaning and washing, after which the same shall be re-smoked. After the hams have been reconditioned it is recommended that they be then disposed of as surplus property.
    (c) That the sugar-cured hams packed in salt in half barrels be transferred to camps or posts at once and disposed of to troops immediately, or that the same be sold without delay as surplus property.
    4. The above inspection was made jointly and this report is submitted for your information and action.
    I. C. FraNKliN,
    
      In Charge Cold Storage Section,
    
      Domestic Operations Division.
    
    W. O. TroNE,
    
      In Charge Inspection Branch,
    
      Subsistence Division.
    
    YU. Plaintiff is a corporation, with its principal place of business in Chicago, Ill.
    VIII. The notification set forth in Finding V was received at the office in Chicago about June 4 or 5, 1919, and on June 8 plaintiff’s treasurer left Chicago to make financial arrangements in New York. He continued on to Washington and Norfolk, arriving at the latter place the evening of June 10, 1919. On June 11 local banking arrangements were made to take care of the shipments contemplated from the Army base, about 15 miles away. Arrangements were also made for housing the' hams in cold storage at Norfolk and Richmond.
    IX. Plaintiff’s treasurer and one Grauman, whom plaintiff had hired to negotiate the sale of these hams, went to the Army base where the hams were stored on the same day (June 11), interviewed the officer in charge, and were informed that orders releasing the hams for shipment had not been received. Plaintiff’s representative telephoned another of plaintiff’s representatives at Washington of this fact. On June 12 or 13 orders allowing the hams to. be released were received at the Army base.
    X. A rechecking of the weight of the hams resulted in the parties agreeing on 1,403,314 as the number of pounds, for which the plaintiff paid the United States the sum of $280,614.90. Shipments from the base to Norfolk and Richmond were made from June 14, 1919, to July 3, 1919. Upon the same day upon which each shipment of hams arrived at Norfolk and Richmond from the Army base they were placed in cold storage.
    At the time the United States delivered the hams to the plaintiff at the Army base the plaintiff had no knowledge of the condition of the hams.
    XT. On August 9 plaintiff’s representative received the following letter:
    August 9, 1919.
    Mr. J. L. Grauman,
    
      Murphy’s Hotel, Richmond, Virginia.
    
    Dear Sir: With reference to the lot of hams held in storage in the Merchant’s Cold Storage, Richmond, Virginia, and said to be controlled by you, we beg to advise you that a further inspection of this product leads us to think that in their present shape these hams are not fit for sale for human consumption.
    You are therefore definitely advised that under authority of the Virginia law this lot of hams is hereby seized, and you are notified not to ship or otherwise dispose of them without further authority from this office.
    Yours very truly,
    Benj. L.. Purcell, Conmvissioner.
    
    Under date of August 15 the Government inspector made the following report:
    RiohmoNd, Va., August 15,1919.
    
    Chief Bureau of Animal Industry,
    
      Washington, D. C.
    
    Sir : Referring further to the hams at the Merchant’s Cold Storage, the subject of our letter of August 6, you are advised that we have inspected five boxes of each of the thirty-six lots of this product and find about 15 per cent unsound in whole or in part. All of the hams inspected were heavily covered with mold, some with a dry mold and some with a wet mold. This condition has seriously affected these hams,, and the best of them have a slight moldy or musty taste. We have applied the cooking and eating test to some of the best of this product, and while we are able to eat it without any ill effect it is not appetizing, and a small quantity oi it proved sufficient to the four members of this force who made the test.
    Mr. J. L. Grauman, who represents the owners, will confer with you relative to the disposition of these hams.
    Respectfully,
    
      Inspector in Charge, Meat Inspector.
    
    
      A-nrl under the same date the plaintiff’s representative received the following letter:
    BichmoNd, Aug. 15, 1919.
    
    Mr. J. L. Grauman,
    
      Richmond, Va.
    
    Dear Sir : In reply to your inquiry in, reference to a lot of hams stored in the Merchant’s Cold Storage & Warehouse Co., Richmond, Va., and said to be controlled by you, as the representative of Harris Bros., Chicago, Ill., the owners, 1 beg to advise you that these hams have been seized in the name of the State of Virginia on a showing that the product was not fit in its present condition for sale for human consumption.
    If you desire to have these hams shipped to some point outside the State for reconditioning under the supervision of the Federal Government, it will be entirely agreeable to this office, and we will release any portion of these hams which you desire to transport in this manner.
    In order that you may make a proper report of any such shipment to the Federal Government, it will be necessary for you to furnish us with a copy of the b/1 or paid freight bill covering the shipment, together with a statement of the markings on labels, if any, which are shown on the packages or attached to the cars.
    Yours truly,
    Benj. L. Purcell, Gommissioner.
    
    On August 21 plaintiff wrote the following:
    Harris Brothers Company,
    
      Chicago, III., August 21, 1919.
    
    Chief Bureau of Animal Industry,
    
      Washington, D. G.
    
    Dear Sir : Confirming conversation with Dr. Steddom under even date, please be advised that we respectfully request permission to ship immediately 6 cars of hams and one car per day thereafter until the entire quantity of hams has been shipped from their point of present storage, which is the Merchant’s Cold Storage & Warehouse Company at Richmond, Virginia, to the Siillivan Packing Company, of Detroit, Michigan, which establishment is operating under Federal meat inspection.
    There is approximately one and one-half million pounds of ham now in cold storage, which ham was purchased from the War Department, U. S. Army.
    The ham is cased, burlapped, and wrapped.
    
      The hams are in a moldy condition and we desire to ship them to the Sullivan Packing Company, of Detroit, for reconditioning, as the facilities in Virginia are not sufficient to rapidly put these hams in condition so that they may be promptly sold.
    Attached hereto is a copy of a letter received from the Commonwealth of Virginia approving the shipment of hams out of the State of Virginia.
    It is our desire to market these hams as rapidly as possible and our contract with the Sullivan Packing Company provides for as rapid a reconditioning as possible.
    Yours very truly,
    Harris Brothers Company.
    And in reply received the following:
    August 21, 1919.
    Harris Brothers Company,
    
      Chicago, Illinois.
    
    GeNtlemeN: Referring to your letter of August 21, you are advised that permission is herewith granted to ship approximately 1,500,000 pounds of hams now in cold storage in the Merchant’s Cold Storage Warehouse, Richmond, Virginia, to establishment 580, Sullivan Packing Company, Detroit, Michigan. These hams are to be loaded under the supervision of bureau inspectors at Richmond who will seal the cars with bureau seals. The hams are then to be transferred to the establishment, above mentioned, in Detroit, where they are to be subjected to reinspection by bureau employees and handled in the most expeditious manner possible under bureau supervision and regulations.
    Very truly yours,
    J. R. Mohler, Chief of Bureau.
    
    XII. Plaintiff thereupon sent 693,218 pounds of ham to the Sullivan Packing Corporation, at Detroit, Mich., for reconditioning. On arrival and inspection at' this plant these hams were condemned by Government inspectors as being-unfit for human consumption, and were converted into tank-age and sold as such.
    The rest of the hams were not shipped to Detroit, as it was decided that they would be inspected at Richmond. Government inspectors made inspection at Richmond of 641,218 pounds of ham from the 30th of September till the 15th of October, and on October 16 condemned them as unfit for human consumption, and they were converted into tankage and sold as such.
    XIII. Plaintiff’s hams to the amount of 1,312,812 pounds in all were condemned for human consumption and were converted into tankage. Others of the hams had been sold by plaintiff before the seizure made by the.State of Virginia, and, with some exceptions, appear to have been accepted by the purchasers. Of the hams so sold by the plaintiff before the seizure by the State of Virginia there was one carload packed in salt in half barrels or kegs, which was packed differently from the remainder of the hams, and which was found to be sweet and sound.
    XIV. Plaintiff’s representatives made no inspection of the hams prior to delivery. The Government representatives at the Army base offered every assistance and facility to prospective bidders who desired to inspect the hams before the sale thereof.
    Captain Clement, who was chief of the subsistence branch, Surplus Property Division of the War Department, and who had supervision of taking bids and mailing contracts for the sale of surplus subsistence supplies of the War Department, stated to the plaintiff that the hams, for the sale of which he was negotiating with the plaintiff, were in good condition; that their only defect was a surface mold, which could be removed by a vinegar bath; and that with this condition removed they would be worth 35 cents a pound.
    XV.- The average maximum and minimum temperature and total rainfall for the months of January to August, 1919, at Norfolk was as follows:
    
      
    
    The exposure of the hams to this range of temperature and humidity, together with their age, caused the condition of mold. On May 18, 1919, this mold had not penetrated, and on that date the hams could have been reconditioned and used commercially.
    This moldy condition became quickly aggravated under the conditions, and by May 25 the mold was black and slimy and had penetrated in the seams to such an extent that the great bulk of the hams could not have been reconditioned as such, but could only have been put to use commercially as sausage after the moldy parts had been cut away.
    By June 2 this mold had further penetrated, so that on that date most of the hams were not sweet and sound and had a commercial use only for tankage.
    The effect of cold storage to which these hams were subjected after their delivery to the plaintiff was to maintain them in the same condition which they were in at the time when they were placed in cold storage.
    XYI. The first cars for the loading of these hams were furnished by the United States to the plaintiff on June 14, 1919.
    Delay in the attempt to recondition the hams after their possession by the plaintiff was caused by apparent lack of facilities in various reconditioning plants for handling such a large order.
    XVII.—
    Plaintiff’s loss from tlie purchase of the hams was_$280, 674. 90
    Less salvage_‘_ 57,123.13
    Total loss- 223, 551. 77
    A counterclaim has been alleged by the defendant against the plaintiff, and in connection therewith the parties stipulated the facts to be as follows:
    1. On the 8th day of January, 1920, a contract in writing was executed and entered into by the United States of America, by Lieut. Col. William Couper, Quartermaster Corps, United States Army, contracting officer, and Harris Bros. Co., of New York, a corporation existing under the laws of the State of Delaware. A copy of this contract, together with certain supplemental -contracts • and other papers relevant thereto, have been filed in this case by the defendant as its Exhibit No. 13 and are made a part hereof by reference.
    2. In and by said contract the United States sold to the said Harris Bros. Co., of New York, certain Government-owned property at Camp Merritt, N. J., which is set forth and listed in certain specifications dated November 25, 1919, a copy of which is attached to said contract and is part of defendant’s Exhibit No. 13, by reference hereinabove made a part of this stipulation.
    3. Article IY of said contract provides as follows:
    
      “ The purchaser further covenants and agrees to indemnify, reimburse, and pay the Government any and all amounts which the Government shall be adjudged liable for, or which may be recovered against the Government in all suits at law or in equity, arising out of land and/or property damage claims made by owners of land or property within the confines of the site of Camp Merritt, or at the option of the Government, but upon the specific approval of each claim by the Chief of the Construction Division or his authorized representative such payments shall be made direct to the claimants by the purchaser.”
    4. Article Y of said contract provides as follows:
    “ The purchaser will pay all the land and property damage claims as provided by the last preceding article, and in the event the sum total of the said land and property damage claims as determined under this article is less than four hundred thirty-five thousand one hundred twenty-nine dollars and fifty cents ($435,129.50), then in addition to the payments hereinbefore provided the purchaser will pay to the Government a sum of money equal to the difference between the total of said land and property damage claims and four hundred thirty-five thousand one hundred twenty-nine dollars and fifty cents ($435,129.50). Said sum to be paid as follows: On December 31, 1920, and semiannually thereafter, an accounting of the claims paid and unpaid shall be made.”
    5. Pursuant to the requirements of Article Y of said contract, a statement of account between the parties was made up and rendered as of December 31, 1924, which showed a net amount due to the United States under the terms of the contract as of December 31, 1924, of $128,582.50.
    Against the amount shown and agreed to be due the Harris Bros. Co., of New York, is entitled to a credit of $12,000 for shortages in the delivery of certain materials and property covered by said contract, making a net amount of $116,-582.50, with interest from December 31, 1924, due from Harris Bros. Co. to the United States in connection with the contract above referred to.
    6. On or about December 31, 1921, Harris Bros. Co., of New York, which was a subsidiary of the Harris Bros. Co., claimant in this case, went into liquidation and sold all of its assets to the parent corporation, Harris Bros. Co., the claimant, and the said parent corporation by proper corporate action assumed all of the outstanding liabilities of the said Harris Bros. Co., of New York.
    
      7. It is therefore stipulated and agreed that the claimant owes the United States the sum of $116,582.50, with interest as aforesaid; and it is further stipulated and agreed that the Court of Claims shall regard the counterclaim of the defendant as proved and established in said amount, and shall allow the same, either as a set-off against any amount which the court may determine and decree is due the claimant by the United States on its primary claim; or, in the event of the dismissal of the claimant’s petition in said primary claim, the court shall entér judgment in favor of the United States and against the claimant herein for the amount above stated.
    8. It is specifically understood and agreed, however, that nothing herein contained shall affect a certain controversy existing between the United States, Harris Bros. Co., and the North Jersey Utilization & Sewage Disposal Plant (Inc.), which controversy is undetermined.
    And it is further stipulated and agreed that at no time shall either the . United States or the claimant regard the disposition of the counterclaim in this case by this stipulation as an adjudication of the rights and obligations of either in regard to the controversy mentioned in this paragraph.
    XVIII. The plaintiff received the following notification from the Government:
    
      Notification of disallowance
    Claim No. 745925 OH-913
    Treasury Department,
    Opeioe of Auditor for the War Department,
    
      Washington, D. C., Aug. 30, 19W.
    
    Harris Brothers Company,
    
      35th and Iron Sts., Chicago, Illinois.
    
    ‘Your claim for refund of the sum of $254,168.02 for loss alleged to have been sustained by it in the purchase of certain hams for the Surplus Property Division, War Department, in June, 1919, has been examined and disallowed by certificate No. 745925, dated Aug. 27, 1920, for the following-named reasons, viz:
    The War Department reports that these funds have been deposited in the Treasury of the United States to the credit of miscellaneous receipts.
    The money having been covered into the Treasury of the United States as miscellaneous receipts it can not be drawn from the Treasury in the absence of a specific appropriation by Congress for that purpose.
    See Com. Dec. 30, 1920, on App. No. 31509. Said claim is therefore disallowed..
    Bespectfully,.
    J. L. Baity, Auditor.
    
    NW-906. By C.
    The court decided that plaintiff was entitled to recover $223,551.77, less the sum of $116,582.50 with interest thereon from December 31, 1924, to date of judgment.
   Hay, Judge,

delivered the opinion of the court:

The essential facts in this case are that in May, 1919, the United States had at the Army base, Norfolk, Va., about 1,500,000 pounds of hams which had been shipped to that base for storage during the months of January and February of 1919. These hams were packed in wooden boxes about 2 feet in length and 12 to 14 inches in height, and before being placed in the boxes were wrapped in paper and burlap. These boxes weighed about 100 pounds each and were stored in long, one-storied brick buildings. They were packed in stacks to the height of 10 or 12 feet, with passageways between the stacks. The buildings in which these hams were stored were ventilated but not refrigerated, and were exposed to the direct rays of the sun and were built on low-lying land near to water.

On May 15, 1919, the inspector of the- Government advised the executive officer at the Army base, Norfolk, Va., that he had made a sample inspection of the aforesaid hams and had found the same to be sweet, but that due to atmospheric conditions at that station quite a number of the hams were covered with mold, and that the mold would grow very rapidly and in a short time penetrate the seams of the ham, and that if disposed of immediately they might be cleaned by wiping with a cloth. The inspector further stated that no movement to float this product had been had, and that most of this stock had been on hand over four months, and recommended that immediate steps be taken to dispose of the hams. On May 18, 1919, the United States sent two inspectors to the warehouse, and on that day they made an inspection of said hams and reported to the War Department that the sugar-cured hams were at that time sweet and sound, but that the surfaces were affected by an extensive growth of molds of various kinds. They stated it was their opinion that if the hams were reconditioned at once there would be no loss by trimming, as the mold in its present condition could be removed by the hams being thoroughly washed and cleaned. They further recommended that the sugar-cured hams packed in boxes be forwarded at once to packing plants, for reconditioning, and after the reconditioning that the hams should be disposed of as surplus property.

On May 21, 1919, the Surplus Property Division of the War Department sent out a circular telegram to the surplus property officers at different cities directing them to invite bids for 24 carloads of hams then in storage at the Army base, Norfolk, Va. This telegram is set out in full in Finding I, and among other, things contains the following: “Report of inspector states hams are at present sweet and sound but surfaces are affected by mold and that if reconditioned at once would be no loss from trimming, as mold in its present condition can be removed by thoroughly washing and cleaning.”

This telegram was followed by a circular letter dated May 22, 1919, which is set out in full in Finding II, and which letter repeats in the same words the condition in which the hams were, as was stated in the circular telegram. In both the telegram and letter there is no limitation in the statement of the Government as to the condition of the hams; bidders are not invited to inspect the hams before buying, and no requirement is made that purchasers must take the hams “ as is.”

In response to the circulars 15 bids were submitted, which were all rejected. Bidders were, then by telegram dated May 26, 1919, invited to submit their highest bid in 48 hours. The plaintiff on May 27, 1919, submitted its bid for the entire quantity of hams at 20 cents a pound. On May 31, 1919, the plaintiff was verbally notified that its bid had been accepted, and June 2, 1919, a written notification of the acceptance was sent to the plaintiff, which was received by it on June 4, 1919. This acceptance is set out in full in Finding V. The circulars are made a part of the contract.

On June 11, 1919, the plaintiff went to the Army base where the hams were stored and was informed that no orders had been received for the release of the hams for shipment. On June 13 orders allowing the hams to be released were received. The weight of the hams was rechecked and the parties agreed on 1,403,374 as the number of pounds. Shipments from the base to Norfolk and Bichmond were made from June 14 to July 3, 1919, and on the same day on which each shipment of hams arrived at Norfolk or Bichmond they were placed in cold storage. The effect of cold storage to which these hams were subjected after their delivery to the plaintiff was to maintain them in the same condition in which they were at the time they were placed in .cold storage.

On August 9,1919, the hams which were in cold storage in Bichmond, Va., were seized by the State of Virginia as not being fit for sale for human consumption. The plaintiff applied to the United States Department of Agriculture for leave to ship immediately six carloads of hams and one car per day thereafter until the entire quantity of hams was shipped from the place of storage to the Sullivan Packing Co. of Detroit. On August 21, 1919, leave was given by the Department of Agriculture to ship the hams from Richmond to Detroit. Plaintiff sent 693,216 pounds of ham to Detroit. On their arrival and inspection at the plant of the Sullivan Packing Co. these hams were condemned by inspectors of the Department of Agriculture of the United States as being unfit for human consumption, and were then converted into tankage and sold as such. The rest of the hams were then inspected at Richmond, Va., and inspectors of the Department of Agriculture condemned 641,216 pounds of them as unfit for human consumption, and they were converted into tankage and sold as such.

The average maximum and minimum temperature and rainfall to which the hams were exposed from January to August, 1919, is set out in the findings. The exposure of the hams to this range of temperature and humidity, together with their age, caused the condition of mold. By May 25, 1919, the mold was black and slimy and had penetrated in the seams to such an extent that the great bulk of the hams could not be reconditioned.

The plaintiff exercised diligence in handling the hams after they were delivered to it. They were at once placed in cold storage, the effect of which was to maintain them in the same condition in which they were at the time they were placed in cold storage. Steps were at once taken to have them reconditioned, but that was found to be impossible.

The plaintiff paid to the United States for the hams the sum of $280,674.90; it salvaged the sum of $57,123.13, and lost in all in this transaction the sum of $223,551.77. It is agreed that the plaintiff owes the United States the sum of $116,582.50 with interest from- December 31, 1924, on another transaction between the parties.

It thus appears from the facts found that the plaintiff, through no fault on its part, came into possession of approximately a half million pounds of unfit hams; that the Government received $280,000 for them; that they were shortly after coming into its possession condemned by the Government as being unfit for human consumption and had to be sold for tankage; that the plaintiff has lost by this transaction at least $260,000; that when the plaintiff filed its claim for a refund of this rponey with the War Department its claim was rejected solely upon the ground that the plaintiff’s money had been deposited in the Treasury of the United States and that having been so deposited it could not be drawn therefrom in the absence of a specific- appropriation by Congress. Now, the United States undertakes to retain this money in its Treasury while not denying the main facts above recited. Common honesty demands that the plaintiff shall be paid for the loss which it has incurred through its reliance upon representations made to it by officers of the Government, and upon which it had the right to rely, unless the law invoked by the defendant is so imperative in its character as to preclude all right of recovery by the plaintiff.

Moreover, the plaintiff did not receive what the Government undertook to deliver to it. The plaintiff did not get hams, sound and sweet, but grease, which was sold for tank-age. In such a case it is only honest that the Government should return the money which it has received for something which it never delivered to the plaintiff. Leavitt v. United States, 60 C. Cls. 952.

The contention turns upon the language used in the circular telegram and in the circular letter of May 21 and May 22, 1919, respectively. The Government contends that the language used was merely a description of the hams, which put the buyers upon notice and devolved upon them the duty of inspection, and failing to do so they assumed the risk that the article they were buying was merchantable, and if any loss has been suffered the Government can not be held liable. The doctrine of eaveat emptor is invoked. And the argument is made that the plaintiff has forfeited its rights by its own laches and negligence.

The plaintiff asserts that the language used in the circulars constituted material representations having the effect of a warranty, and that the statements in said circulars were representations that the hams offered for sale were in fact actually as stated in the circulars; that it had the right to rely upon these representations as to the condition of the hams, that these representations were made by officers of the United States acting within the scope of their authority, and that it was not obliged to.inspect tjie hams; that the only-purpose of such inspection in face of the statement made in the circulars would have been for the purpose of .showing that these statements were false, and such an inspection for such a purpose it was not obliged to make.

The statements as to the condition of the hams was without qualification or limitation. Bidders were not invited to make an inspection; they were not informed that they must take goods “ as is ”; they were told the hams were sweet and sound, but surfaces are affected by mold and that if reconditioned at once would be no loss from trimming, as mold in its present condition can be removed by thoroughly washing and cleaning.” They were not told what the officers knew from the report of Government inspectors, that the hams “ are affected by the extensive growth of molds of various varieties.”

It appears from the facts found that there was made by the United States a representation of the condition of the hams which was not true, and that the plaintiff was misled by it. The officer making the statements which we are considering was authorized to make them, and the plaintiff had the right to rely on any representations made by him which pertained to .the condition of the goods offered for sale. The plaintiff was told that the hams were sweet and sound, but surfaces were affected by mold, and that if reconditioned at once there would be no loss from trimming, as mold in its then present condition could be removed by thoroughly washing and cleaning. That was a positive statement of the character of the goods which were offered for sale, and the plaintiff had a right to rely on it, for it was so worded as to create and justify the belief that it was intended to enter into the contract which was afterwards made, and, in fact, the circulars were made part of the contract afterwards entered into between the parties. It was a representation which amounted to a warranty, particularly in this case, as the defendant knew and spoke with authority as to the character and condition of the hams, while to the plaintiff their character and condition were unknown. The duty to inspect the hams was not imposed upon the plaintiff. When the statement of the Government left in no doubt the fact stated by it, no inspection by the plaintiff was required. If the Government wished to leave the matter open to the independent investigation of the plaintiff, it might easily have omitted from its circulars the statement as to the character and condition of the hams. In its positive assertion of their character and condition it made a representation upon which the plaintiff had a right to rely without an inspection to prove its falsity. United States v. Atlantic Dredging Company, 253 U. S. 1; Atlantic Dredging Company v. United States, 53 C. Cls. 490; United States v. Stage Company, 199 U. S. 414; Hollerbach v. United States, 233 U. S. 165; United States v. L. P. & J. A. Smith, 256 U. S. 11.

The Government lays stress upon what it calls the negligence of the plaintiff in failing to recondition the hams immediately upon their delivery. But we think that the evidence discloses that the plaintiff used due diligence in attempting to have the hams reconditioned. Moreover, no amount of diligence could have availed, as the hams were unfit for human consumption when they were delivered to the plaintiff.

It is contended by counsel for the Government that in any event the plaintiff can not recover, since, the contract was not “ reduced to writing and signed by the contracting parties with their names at the end thereof,” as required by Revised Statutes, section 3744. But it is settled that the invalidity of a contract because of a noncompliance with the above section is immaterial after the contract has been performed. United States v. Andrews &. Co., 207 U. S. 229. The contract in suit has been performed by the delivery of the goods and the payment of the money.

We are of opinion that the plaintiff is entitled to recover the amount found to be due in the conclusion of law, and judgment will therefore be entered for the plaintiff in the sum of $99,644.

It is so ordered.

Graham, Judge; Downey, Judge; Booth, Judge; and Campbell, Chief Justice, concur.  