Hume v. United States

Claimant filed his petition against the United States in the court of claims, averring that on the 9th day of August, 1883, he entered into a contract in writing with the acting secretary of the interior department for the furnishing of certain articles, constituting items in his proposal numbered 2, 9, 19, 32, 42, 56, 71, 77, 78, 79, 89, 90, 91, 97, 102, and 103, to the government hospital for the insane near Washington, at rates specified therein; that he had furnished merchandise amounting to the sum of $5,695.89, according to the prices established by the terms of the contract, and had been paid only the sum of $1,663.89, and that there was still due and owing to him the sum of $4,032, which he was entitled to recover, with interest from the 1st day of July, 1884; and that the accounting officers of the interior department had refused and neglected to pay such balance of $4,032, because, as they alleged, the price charged for item 97 in claimant's proposal was excessive, 'notwithstanding the charge therefor was based upon the amount stated in said proposal, and accepted by said defendant's officers and agents, and by them incorporated in said contract as aforesaid.' To this petition a special plea was filed February 12, 1886, on behalf of the United States, to the effect that claimant had agreed to furnish shucks to the government hospital at the rate of 60 cents per hundred weight, and entered into a written contract, to recover damages for the breach of which this suit was instituted, whereby he agreed to furnish (inter alia) shucks at the rate of 60 cents per pound; that this was a clerical error, the real contract being that shucks were to be furnished by claimant to said hospital at 60 cents per hundred weight; that, notwithstanding this, 'claimant attempts to practice a fraud against the United States in attempting to establish an allowance of the claim as made by him, and by his effort to obtain a judgment in this court upon such written contract, as if such mistake and cler cal error had not been made, and for the amount due for the shucks furnished, as expressed by mistake in said written contract.' To this special plea claimant replied, by his attorney, denying that he agreed to furnish shucks at the rate of 60 cents per hundred weight, and averring that he bid for shucks 'at the rate of sixty cents per pound, in accordance with the printed schedule furnished him by the United States upon which to make out his bid; that the said price was the price at which he intended to bid, and that there was no mistake on his part in making out the bid; * * * that the said contract contained fifteen other items of goods, which were furnished as ordered, and some items furnished in much larger quantities than the estimated quantity contained on the printed schedule; that upon some of the items the claimant lost money; upon others there was a very small profit; and that upon the whole contract, adjusted at contract rates, the claimant will not receive more than a fair and reasonable profit. Claimant denies emphatically any attempt to practice a fraud on the United States, and avers that the whole transaction was in absolute good faith, in the ordinary course of business; that there was no inducement or promise made in regard to the matter, except the written proposal of the claimant and the written contract.'

Evidence was adduced on behalf of the United States tending to show that shucks at the time of the contract were worth from three-fifths of a cent to one cent and three-quarters per pound; that it was the custom of the government to buy shucks by the hundred weight; and that the mistake in question had occurred by reason of the word 'pounds' in the printed form not having been struck out, and 'hundred weight' inserted,-all of which evidence was objected to on behalf of the claimant.

The court of claims filed its findings of fact and conclusion of law on the 3d of May, 1886. The first finding sets forth the advertisement of the secretary of the interior for proposals for furnishing supplies to the government hospital for the insane for the fiscal year ending June 30, 1884, stating, among other things: 'Proposals must be made in duplicate on the forms furnished by the department.' 'Bids will be considered on each item separately. Schedules containing blank forms for bidding, items, and approximate estimates of amounts will be furnished on application.' A description of what the quality of many of the articles, not including shucks, must be, is given at length in the advertisement. The second finding contains the bids of the claimant on forms furnished by the department, the schedule attached to his proposal enumerating some 107 articles, on all but 12 of which claimant made bids. This schedule, under the head of estimated quantity, enumerates the articles by pound, dozen, gross, bushel, box, ton, barrel, bale, gallon, case, quart, and sack, and the bids are carried out per pound, per dozen, per gallon, etc. The third finding gives the contract, by the terms of which the claimant agrees to furnish the items in the proposal, numbered as in the petition, and the acting secretary of the interior agrees to pay or cause to be paid on behalf of the United States the prices specified in the proposal and contract, 'for all the articles delivered and accepted,' the right being reserved to order a greater or less quantity of each. The fourth and fifth findings and conclusion of law are as follows: '(4) He (claimant) furnished under said contract all the articles included under items Nos. 2, 9, 19, 32, 42, 56, 71, 78, 79, 89, 90, 91, 102, 103, and has been paid therefor according to the contract. He also furnished in two or three lots, in the latter part of the year 1883, 6,720 pounds shucks under item No. 97, with memorandum-bills accompanying the delivery thereof, with the price carried out, at 60 cents per pound, the whole aggregating $4,032. For the shucks he has not been paid. (5) At the time said contract was made shucks were of the market value of from $12 to $35 a ton, acco ding to quality, and whether they were hackled or unhackled; and those furnished by the claimant were of the market value of $35 a ton, or 1 3/4 cents per pound, aggregating, for all that were delivered, $117.60. Conclusion of Law. Upon the foregoing findings of fact the court decides, as a conclusion of law, that the claimant is entitled to recover $117.60 and no more.'

The opinion of the court was delivered by RICHARDSON, C. J., (21 Ct. Cl. 328,) who, after stating the facts and pointing out that the claimant was the only bidder for shucks, says: 'At the time the contract was made shucks were worth from $12 to $35 a ton, or from 6 mills to 1 3/4 cents a pound, while the claimant was to receive nearly forty times as much as the highest value.

'That an agreement to pay $1,200 a ton for shucks, actually worth not more than $35 a ton, is a grossly unconscionable bargain, defined in Bouvier's Law Dictionary to be 'a contract which no man in his senses, not under delusion, would make, on the one hand, and which no fair and honest man would accept on the other,' nobody can doubt. Such a contract, whether founded on fraud, accident, mistake, folly, or ignorance, is void at common law. It is not necessary to invoke the aid of a court of equity to reform it. Courts of law will always refuse to enforce such a bargain, as against the public policy of honesty, fair dealing, and good morals.' After citing Story, Eq. Jur. § 188; James v. Morgan, 1 Lev. 111; Baxter v. Wales, 12 Mass. 365; and Leland v. Stone, 10 Mass. 459,-the opinion thus concludes: 'These citations are sufficient to show that in suits upon unconscionable agreements the courts of law will take the matter in their own control, and will, without the intervention of courts of equity, protect the parties against their enforcement. If it be so in suits on contracts between private parties who act by and for themselves, how much more is it so in suits on agreements by the United States, acting always through public officers, who are mere agents, required to act in good faith to wards their principal according to the laws of the land, as everybody dealing with them are bound to know. There is no finding by the court of actual fraud by any of the persons engaged in making the contract now under consideration. The unconscionable price inserted for shucks was no doubt a mere accident, perhaps from an idea that it was the price per hundred pounds instead of per pound, as printed in the proposals and contract, and from neglect to change the printed words accordingly, which, if it had been done, would have fixed the price at $12 a ton, the very price which the findings show to have been the lowest value of shucks of any kind at that time. But, however it may have happened, we hold, as was held in the case of Leland v. Stone, from which we have quoted the words of the court, that a contract may be held unconscionable without proof of actual fraud at its inception if its enforcement would be unconscionable. It would be a fraud upon the United States to enforce such a contract as the one now in suit, and it never can be done through the court of claims.' Judgment was accordingly rendered in favor of the claimant for $117.60, and both parties appealed.

Robert Christy and John C. Fay, for claimant.

Asst. Atty. Gen. Maury, for the United States.

Mr. Chief Justice FULLER, after stating the facts as above, delivered the opinion of the court.