U.S. Supreme Court
Merriam v. United States, 107 U.S. 437 (1883)
Merriam v. United States
Decided April 9, 1883
107 U.S. 437
1. In construing contracts, a court may look not only to their terms, but to their subject matter and the surrounding circumstances, and avail itself of the same light which at the time of making diem the parties possessed.
2. Under the contract sued on in this case, infra, p. 107 U. S. 439, the United States was not bound to receive a greater quantity of oats than that which is therein specifically mentioned.
Merriam brought suit in the Court of Claims against the United States to recover damages for their breach of a contract by which he agreed to sell and deliver, and they to receive and pay for, a quantity of oats. His petition was dismissed, and he appealed.
That court found the following facts:
The Chief Quartermaster of the Military Department of Dakota published an advertisement, the parts of which and of the circular therein referred to, so far as they are material to this case are as follows:
"CHIEF QUARTERMASTER'S OFFICE"
"ST. PAUL, MINN., March 1st, 1877"
"Sealed proposals in triplicate, subject to the usual conditions, will be received at this office . . . until 12 o'clock noon, on the twenty-sixth day of April at which time they will be opened in the presence of bidders, . . . for furnishing and delivering of wood, coal, grain, hay, and straw, required during the fiscal year commencing July 1, 1877, and ending June 30, 1878 at the following
posts and stations, viz., (here follows a list of the posts and stations for which the supplies were required)."
"Separate bids should be made for each post and for each class of supplies. . . . The government reserves the right to reject any and all bids. In bidding for grain, bidders will state the rate per 100 pounds and not per bushel."
"Blank proposals and printed circulars stating the kind and estimated quantities required at each post and giving full instructions as to the manner of bidding, conditions to be observed by bidders, and terms of contract and payment, will be furnished on application,"
The circular referred to contained these clauses:
"The following are the estimated quantities of supplies that will be required at each post, but the government reserves the right to increase or diminish the same at any time during the continuance of the contract and to require deliveries to be made at such times and in such quantities as the public service may demand: Fort Abraham Lincoln, D.T., 2,404,000 pounds oats; Fort Buford, D.T., 256,000 pounds oats; Cheyenne Agency, D.T., 131,000 pounds oats; Camp Hancock, D.T., 5,400 pounds oats; Lower Brule Agency, D.T., 34,300 pounds oats; Fort Randall, D.T., 233,000 pounds oats; Fort Rice, D.T., 1,000,000 pounds oats; Standing Rock Agency, D.T., 255,000 pounds oats; Fort Stevenson, D.T., 96,000 pounds oats; Fort Sully, D.T., 50,000 pounds oats."
"Proposals are invited for the furnishing and delivering of grain for Forts Abraham Lincoln, Buford, Randall, Rice, &c., &c., either at Sioux City, Yankton, Bismarck, or Fort Abraham Lincoln."
In accordance with the advertisement, one Hall proposed to furnish 4,000,000 pounds of oats, to be delivered at Bismarck, for $2.25 cents per 100 pounds, and the appellant proposed to furnish at the same place, 1,600,000 pounds of oats at $2.23 7/16 cents per 100 pounds, a like quantity at $2.28 1/8, another like quantity at $2.31, and another like quantity at $2.37, making the entire quantity which he bid to furnish and deliver 6,400,000.
On May 18, 1877, an award was made to the appellant for furnishing and delivering at Bismarck 1,000,000 pounds of oats at $2.23 7/16 per 100 pounds. On June 27, an award was made chanroblesvirtualawlibrarychanroblesvirtualawlibrary
to Hall for furnishing and delivering at Bismarck 2,620,000 pounds of oats at $2.25 per 100 pounds, and on the same day a further award was made to the appellant for furnishing and delivering at the same place 600,000 pounds of oats at $2.23 7/16 per hundred pounds.
On June 29, 1877, the contract on which the action was brought was executed by the appellant and by the quartermaster in behalf of the United States. It was made on a printed blank furnished by the quartermaster. The first article of agreement was as follows:
"ARTICLE 1. That the said John L. Merriam, his heirs, assigns, administrators, and executors, shall supply or cause to be supplied and delivered to the Quartermaster's Department at the military station of Bismarck, D.T., six hundred thousand pounds, more or less, of oats at two dollars and twenty-three and seven-sixteenths cents ($2.23 7/16) per hundred pounds; the oats to be of good merchantable quality, free from dirt or other foreign matter, and to be delivered in good new burlap sacks, each sack to contain no greater quantity than 128 pounds, or such other quantity, more or less, as may be required from time to time for the wants of said station, between the first day of July, 1877, and the thirty-first day of December, 1877, in such quantities and at such times as the receiving officer may require, provided that this contract is approved by the commanding generals of the Department of Dakota, and of the military division of the Missouri; otherwise not until such approval is obtained."
In accordance with the award to him dated May 18, 1877, the appellant had previously entered into another contract with the quartermaster acting on behalf of the United States, bearing date May 15, 1877, for the delivery of 1,000,000 pounds of oats, which was identical in terms with the above-mentioned contract of June, 29, 1877, except that the words
"or such other quantity, more or less, as may be required from time to time for the wants of said station, between the first day of July, 1877, and the thirty-first day of December, 1877, in such quantities and at such times as the receiving officer may require,"
found in Article I, were omitted.
Two other contracts, dated June 29, 1877, were made between said quartermaster and said Hall in accordance with his chanroblesvirtualawlibrarychanroblesvirtualawlibrary
said bid, one for the delivery of 665,000 pounds of oats and the other for the delivery of 1,955,000 pounds, each at $2.25 per one hundred pounds, and in other respects the two contracts were identical in form with those of the appellant, the one first above mentioned having the same words omitted which were omitted from the appellant's contract of May 15, 1877, and the other containing them.
There were delivered at Bismarck, as under the two contracts of Hall, by parties other than the appellant, 3,116,616 pounds of oats, between July 1, 1877, and December 31, 1877.
The claimant, after the execution of his said contracts respectively, commenced delivering oats thereunder, and by July 12, 1877, had delivered more thaaimant, after the execution of his said contracts respectively, commenced delivering oats thereunder, and by July 12, 1877, had delivered more thaaimant, after the execution of his said contracts respectively, commenced delivering oats thereunder, and by July 12, 1877, had delivered more than 1,600,000 pounds specifically mentioned in the two contracts, the excess having been received by the acting assistant quartermaster at Bismarck by mistake, and he was paid in full for all that he had delivered.
Subsequently he offered to deliver nine carloads of oats, but they were refused.
Neither the receiving officer nor any other officer of the defendants required the appellant to supply for the wants of said station any other quantity of oats than that specifically mentioned in the contract sued on, and the appellant did not ask to be informed whether or not any other quantity would be required, and although he repeatedly offered the several carloads of oats above mentioned to the acting assistant quartermaster, and requested him to take them in order to clear up all he had at Bismarck, and get the railroad company's cars unloaded, he never demanded it as a right under his contract.
Within the time mentioned in his contract, the appellant had the means to deliver oats to the full extent of the quantity delivered under Hall's contract his contract to the full extent of the quantity delivered under Hall's contract by other parties, in addition to that which was received from him had he been required and permitted so to do, and was ready and willing to make such delivery, although he gave the defendant's officers no notice to that effect, and made no other offers than that above set forth.
The appellant suffered some loss by reason of the nonreceipt by the defendants of the several carloads of oats above mentioned, and by being obliged to sell the same to other parties, and some loss of profits which he would have made if he had chanroblesvirtualawlibrarychanroblesvirtualawlibrary
delivered at the contract price oats to the extent of the quantity received by the defendants under said Hall's contracts, in addition to the quantity which he did deliver, and for which he was paid.