
    JOHN C. GUY v. THE UNITED STATES.
    [No. 14748.
    Decided December 2, 1889.]
    
      On the Proofs.
    
    A quartermaster telegraphs that he has authorized a wagon-master to take-all the oats the claimant will sell at 6 cents per pound and requests an answer. The claimant answers “ We can let you have 70,000 pounds at the rate you name.” The wagon-master takes only 28,000 pounds. The claimant holds the oats three months and without notice sells them at a loss.
    I.Receiving a portion of the goods which form the subject of a contract and giving the vendor empty sacks to hold the remainder will not constitute a delivery of the mass.
    II.Where an executory contract exists and the purchaser refuses to receive the goods, the vendor may retain them or within "a reasonable time sell them on the purchaser’s account. But if he elects to sell' he must do so within a reasonable time and with notice to the other party.
    III.If at the time of the breach of contract the goods are worth in the market the full contract price, the vendor can not hold them until the price falls and then charge the other party with the loss.
    
      The Reporters’ statement of the case:
    The following are the facts as found by the coart:
    I. On the 23d day of May, A. D. 1881, Paul McCormick, party of the second part, entered into a written contract in the usual form of army supply contracts with the United States, through Lieut. Col. William Myers, Deputy United States Quartermaster-General, party of the first part, to supply and deliver at the military station of Port Custer, Mont., 1,600,000-pounds of oats, between July 1,1881, and June 30,1882, at $3.25 for each 100 pounds. Said contract, among other provisions, contained the following clause:
    
      “The oats to be delivered under this contract shall be of .good merchantable quality, tree from dirt or other foreign matter,'and securely sacked in new double gunny sacks or American “A” seamless sacks, each (sack) to contain no greater quantity than 100 pounds, or otherwise it will be rejected. Inspection of the oats on behalf of the United States shall be made as provided in General Order Fo. 87, dated Headquarters Department of Dakota, October 31, 1873.
    “In case of failure of the said party of the second part to comply with the stipulations of this contract according to the true intent and meaning thereof, then the party of the first part shall have the power to supply the deficiency by purchase or otherwise, and the said party of the second part shall pay the difference in cost, and any money due said pat ty of the second part may be used and applied to such payment.”
    In December, 1881, the contractor having announced thathe •could deliver no more grain that winter, the chief quartermaster, Myers, .notified the post quartermaster at Fort Ouster as follows:
    “The department commander decided that the grain required at jour post to be supplied under terms of contract, when in default, to buy in open market and charge excess in cost over contract to contractor.”
    II. On the 7th of January, 1882, the quartermaster at Fort Ouster telegraphed as follows to the claimant at Btchetah, about 40 miles distant:
    “Custer, 1-7,1882.
    -“To J. 0. Guy,
    
      “Ftchetah:
    
    “(Operator Jerry’s Landing please forward by mail if no quicker method offers.) Understand you have oats to sell at six cents per pound. Have authorized Wagon-master Sweet-man to take all you will sell. Please answer at once.
    “Pearson, Q. ill.”
    Some time of the day of January 8 the claimant mailed to said quartermaster the following letter, which by due course of post reached Ouster the next day, January 9:
    “Etciietah, M. T.,
    “ Jati’y 8th, 1882.
    
      Quartermaster, TI. S. A., Ft. Ouster, Mont.:
    
    “Dear Sir: Yours by wire came to hand to-day1. The telegraph operator being out, we are compelled to answer you by letter. We can let you have from 70,000 to 100,000 pounds of oats at the rate you agree to pay, and they will be ready at any time you wish them.
    “Yours, respectfully,
    “John O. Guy & Sons.”
    
      On the 6th of January, the day before the sending of said telegram by Pearson, the quartermaster, he had dispatched one Sweetman, a Government wagon-master at Port Ouster, with teams to go to the claimant at Etchetah and load up with oats all the teams, and to allow not to exceed 6 cents a pound therefor. The wagon-master arrived at Guy’s at about 4 o’clock in the afternoon of the 8th of the same month with eleven teams, capable of taking about 51,150 pounds of oats. He informed Guy that Pearson had sent him to load up with oats, and had told him to pay 6 cents a pound and no more, and that he would load up the oats the next morning. He then took 600 pounds of Guy’s oats and fed to his teams. About 10 o’clock of the same evening (January 8) a courier arrived from Port Custer with an order from Pearson directing the wagon-master, Sweetman, to proceed to Port Keogh and there load with grain. The next morning (January 9) Sweetman showed the order to Guy, took 2,200 pounds more of oats sufficient to feed his teams with on the way, and proceeded to Fort Keogh unloaded. The claimant thereupon proceeded to Ouster and there met'Pearson and the commandant of the post, Colonel Hatch. In a conversation which there took place Colonel Hatch told the claimant that he thought they would need his grain, for the reason that he did not think they could keep supplied from a post so distant as Port Keogh, but he did not promise to take any from the claimant. Pearson told Colonel Hatch afterward that the claimant wanted him (Pearson) to give him (Guy) some sacks; that he (Pearson) had a large number of sacks for which he was not accountable to the Government, and would like to give them to him because of the regret he felt because Guy was disappointed, and Colonel Hatch told Pearson he might do so. Pearson thereafter gave the claimant about 1,000 such sacks, which the officers had on hand and for which they were not accountable to the Government, to be taken by Guy at an intermediate place named, where he (Guy) subsequently sent for them. The claimant took the sacks and hied them with the oats he had at, his own residence, and other oats at the farm of one. Mouat.
    III. (Jn the8th of January, 18S2, when Pearson’s telegram was answered by Guy, the latter had on hand about 70,000 pounds of oats. About that time, but how soon thereafter does not appear, the claimant made an arrangement with one Mouat, whose farm was some 4 miles distant, for the purchase of his (Mouat’s) oats, about 35,000 pounds, at $4.40 a hundred, which were to he received from Mouat when the Government received them from Guy. If the Government did not receive them from the claimant he was not to receive them from Mouat, and was not to pay for them until the Government paid. In a settlement of matters between Guy and Mouat some months afterwards, in a manner not fully explained, Mouat was allowed by Guy from $50 to $100, together with the bags received from Guy,, and filled with the oats, on account of the oats arrangement.
    IY. No further communication took place between the parties named in relation to the oats during the next three months, and the claimant, without giving previous notice to the defendants’ officers, proceeded to sell the oats at private sale in small lots from time to time to other parties, at prices from 3 to 2§ cents a pound, the market priceshaving declined to that extent in the mean time. No demand was ever made by the claimant upon any officers of the Government to take away the oats.
    Some time in the latter part of April, 1882, the claimant wrote a letter to one Leighton, stating his case with a view of making claim against the Government for damages. Leigh-ton forwarded the letter to the chief quartermaster, who referred it to said Pearson April 21,1882. This was the first notice given by the claimant to Pearson in relation to the matter, after the transactions in the January previous as above set forth.
    Y. The market value of oats on the 9th of January, 1882, at the claimant’s place of residence was 6 cents a pound, but it began in the latter part of said January to fall in market price, and continued to fall to 3 and 2f cents a pound.
    
      Mr. William B. King for the claimant.
    
      Mr. William J. Kannells (with whom was Mr. Assistant Attorney-General Cotton) for the defendants.
   Biohardson, Ch. J.,

delivered the opinion of the court: This action is founded on an alleged contract between the parties arising upon the following facts:

One Pearson, the post quartermaster at Fort Ouster, Montana Territory, was instructed by the chief quartermaster to buy grain in open market for the use of Ms post, and to charge to a contractor who was in default the excess of cost over the contract price.

Pearson thereupon dispatched, January 6, 1882, a wagon-master with teams under instructions to go to the residence of the claimant, about 40 miles distant, and buy oats of him at 6 cents a pound. January 7 Pearson telegraphed to the claimant as follows:

“Custer, 1-7, 1882.
“To J. C. Guy,
“Mchetah:
* * Understand you have oats to sell at six cents per pound. Have authorized Wagon-master Sweetman to take all you will sell. Please answer at once.
“Pearson, Q. M.”

The claimant sent by mail January 8 the following reply, which, in the ordinary course of the mail, reached Pearson January 9:

“Etchetah, M. T.,
Jan’y 8th, 1882.
Quartermaster, U. 8. A., Ft. Ouster, Mont.:
“Dear Sir: Yours by wire came to hand to-day. The telegraph operator being out, we are compelled to answer you by letter. We can let you have from 70,000 to 100,000 pounds of oats at the rate you agree to pay, and they will be ready at any time you wish them.
“Yours, respectfully,
“John C. Guy & Sons.”

In the evening of the day on which the letter was mailed a messenger from Pearson at Custer reached the wagon-master at Guy’s residence with an order to proceed to Fort Keogh and load his teams there. The wagon-master fed his horses from Guy’s oats that night, and the next morning, taking enough more oats to feed them on his way, in all 2,800 pounds, he proceeded to Fort Keogh, as ordered, with his teams unloaded.

On the latter day, January 9, the claimant went to Fort Custer, saw Pearson and Colonel Hatch, the commandant of the post, and in a conversation together he was told by Colonel Hatch that the latter thought they would need the grain for the reason that he did not think they could keep supplied from a post so distant as Fort Keogh, but he did not promise to take any from the claimant. At the request of Guy and on account of his disappointment, Pearson, by direction of Colonel Hatch, agreed to give the former a lot of sacks which the officers had on hand and for which they were not accountable to the Government, to be taken by Guy at an intermediate place named. The sacks were afterward taken by the claimant and used for sacking his oats.

At the time of these transactions the claimant had on hand at his residence about 70,000 jiounds of oats, and then, or soon afterwards, he made an arrangement with a neighbor, one Mouat, for the purchase of 30,000 pounds of oats, at $4.00 per 100 pounds, to be received and paid for when the Government took them from Guy and paid for them, and not until then.

After these transactions between the parties, in the latter part of January the market price of oats began to fall, and continued to fall to 3 and 2-f cents a pound.

Without making any demand upon the defendants’ officers to take away the oats, and without any previous notice to them, the claimant three months thereafter proceeded to sell, and did sell at private sale all his oats in lots from time to time, at a loss of from 3 cents to 3J cents a pound, and in a settlement of matters with Mouat the latter was in some way allowed from $50 to $100, and the sacks with which his oats were filled, on account of the transaction between them as to the oats which they expected the Government to take.

In the last part of April, 1882, the claimant for the first time gave notice to the defendants of a claitn for damages.

The argument of the claimant is that there was a sale and delivery of the whole quantity of 100,000 pounds by reason of the telegram of January 7, the reply by letter of January 8, and the taking by the wagon-master of 2,800 pounds of oats at the claimant’s granary on the evening of the 8th and the morning of the 9th of January with which to feed his horses, or if that were not a sufficient delivery in law then that a delivery was legally perfected by the subsequent giving of the sacks by the defendants’ officers to the claimant and his filling them with the oats in question.

In our opinion these acts did not constitute a delivery of the whole, but only of the quantity actually taken by the wagon-master. (Elgee Cotton Cases, 22 Wall., 186-192. See also note to case of Thompson v. Gray, 1 Wheaton, 75.)

The claimant further contends that if there was no sufficient delivery to change the title of the property to the defendants, so that the oats were held at the risk of the latter, there was a valid executory contract by which the defendant agreed to purchase the 100,000 pounds at 6 cents a pound, and that not having performed that agreement they are liable to the claimant in damages to be measured by the loss sustained in the subsequent sale on their account.

On the other hand, the defendants contend that the telegram of January 7 to the claimant was not a proposal to buy bats outright, but was only an inquiry as to whether or not the claimant had oats to sell at 6 cents a pound, with notice that a wagon-master had been dispatched with instructions to take, that is, to buy, what the claimant had, and that all the telegram implied was that the defendants would buy only such a quantity of oats as the wagon-master should actually take upon his arrival.

They further contend that as the provisions of Revised Statutes, section 3744, were not complied with there was no valid contract between the parties. (South Boston Iron Company, 18 C. Cls. R., 165, affirmed on appeal, 118 U. S. Li., 37.) That section provides that—

“ It shall be the duty of the Secretary of War, the Secretary of the Ravy, and the Secretary of the Interior to cause and require every contract made by them severally on behalf of the Government, or by their officers under them appointed to make such contracts, to be reduced to writing and signed by the contracting parties with their names at the end thereof.”

The claimant argues and insists that this section does not apply to contracts for purchases made on account of the failure of a previous contractor to furnish and deliver supplies according to his agreement, when the differences between the cost of the purchases, if less than the first contract price, is to be charged to the contractor, and is no loss to the Government.

These questions are not free from difficulty, and we express no opinion upon them, because, according to our view, the case may be disposed of upon another ground.

Conceding that there was a valid contract created by the telegram and letter in reply, as contended by the claimant, the breach on the part of the defendants, if any, was when the wagou-m aster refused to take the oats under the instruction of the defendants’ officers.

The claimant then had the right and he was bound within a reasonable time to sell the oats on the defendants’ account. Had he proceeded to do so there would have been no loss, as the market price had not then fallen. But the claimant, apparently acting upon the encouragement orally given to him,, that the defendants might take the oats at some future time, delayed three months, when without notice he proceeded to-make sale of the oats at private sale in small lots from time to time without giving notice to the defendants’ officers of any intention to sell for account of defendants for breach of contract.

When a contractor agrees to purchase goods and fails to-accept them, and they remain with the vendor, the measure of damages is the difference between the market value at the-time of making the contract and the breach, if the vendor retains the goods. If the vendor elects to sell the goods on account of the contractor for breach of contract he must do-so within a reasonable time, first giving notice to the contractor that he may take such action thereon as he deems-best. (Chitty on Contracts, 7th ed., p. 594.)

The claimant was not justified in holding the oats three months and then selling them at private sale without notice to the defendants, except at his own risk. By his own conduct he made this election to retain the oats as his own and to hold them on his own acconnt. At that time the value was the same as the contract price, and the claimant suffered no damages.

For the 2,800 pounds of oats which the wagon-master actually took, the claimant is entitled to judgment for their value at the prices agreed, $168; and he will have judgment for that sum.

DATis, J., was absent when this ease was tried and took no-part in the decision.  