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Opinion of the Court

pack 50,000 hogs for the Government on a fixed price basis. The contract provided that the Government was to furnish the hogs, and after it furnished 16,177 hogs and paid for their slaughter, it failed to furnish any more. In affirming the judgment for the plaintiffs in the Court of Claims, the Supreme Court said:

Without entering into a discussion of the general doctrine of the implication of mutual covenants, we deem it sufficient to say that where, as in this case, the obligation of plaintiffs requires an expenditure of a large sum in preparation to enable them to perform it and a continuous readiness to perform, the law implies a duty in the other party to do whatever is necessary for him to do to enable plaintiffs to comply with their promise or covenant.

There is no question that the cancellation was a total breach of contract of the defendant as to the undelivered quantity of scrap. It is settled law that an unqualified and positive refusal to complete performance of a contract, though the performance is not yet due, may be treated as a complete breach and entitle the injured party to bring his action at once and be compensated therefor. Roehm v. Horst, 178 U. S. 1.

It further appears that the defendant is now estopped from asserting that the plaintiff is guilty of a breach of contract. During the life of the contract plaintiff never received any complaint from the defendant or its agents regarding the performance and even on October 3, 1941, the date the contract was cancelled, no comment was made as to the character of plaintiff's performance up to that date, nor was such performance suggested as the reason for cancellation.

Defendant first asserted that plaintiff had breached the contract after this case had been docketed and it was not until after the trial began that defendant attempted for the first time to rely on this so-called breach as a basis for its cancellation. The authorities for this proposition are well summarized in Chevrolet Motor Co. v. Gladding, 42 Fed. (2d) 440, Cert. den. 282 U. S. 872, wherein the Court said:

When a party to a contract elects to cancel it under one or more alternative provisions conferring such a

Opinion of the Court

113 C. Cls.

privilege, he should assign his cause and abide by it. He cannot assign one cause and cancel it, then, after being sued for wrongful cancellation, come into court and say he may have erred in respect of the cause assigned, but another cause does exist, and he is not liable. This court in Luckenbach Co. v. Grace, 267 F. 676, 679, said: "But the further and equally conclusive answer is found in the settled rule of law that one who breaches his contract for reasons specified at the time will not be permitted afterwards, when sued for damages, to set up other and different defenses." Wall Grocer Co. v. Jobbers' Overall Co., 264 F. 71; McCreary v. Strongman, 6 F. (2d) 441; Robb v. Crawford, 16 F. (2d) 339; Ohio Railway Co. v. McCarthy, 96 U. S. 258.

While the contract might have been terminated for various reasons before its performance was completed, the appellant eliminated these questions when it elected to cancel for the reason assigned, which the jury finds groundless.

As stated by Mr. Justice Brandeis in the case of Lynch v. United States, 292 U. S. 571, 579:

When the United States enters into contract relations, its rights and duties therein are governed generally by the law applicable to contracts between private individuals.

Under these circumstances, the measure of plaintiff's damages is the amount of profit it would have earned had the contract not been cancelled. Anvil Mining Company v. Humble, 153 U. S. 540; Roehm v. Horst, supra.

The plaintiff made a net profit averaging $0.92126 per ton on the 53,430 tons that it delivered under the contract. Of the remaining 26,570 tons to be delivered, all but 3,343 tons were either in the hands of the plaintiff or under purchase orders and available for performance of the contract at the time of cancellation. The cost to the plaintiff of this tonnage was the same as that which it had delivered. The plaintiff would have averaged the same net profit on this tonnage after deducting the direct expenses for shipment if delivery had been made. There is nothing speculative or uncertain about these prospective profits and the contract price for the undelivered scrap was the same as for the delivered scrap. The direct expense incident thereto would not have been

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Opinion of the Court

different from that used in computing profits on the delivered quantities. Plaintiff's prospective profits were obviously within the contemplation of the parties and are a mere matter of multiplication. The Office of Price Administration approved the price paid by the Government under this contract at $1.50 more per ton than plaintiff was permitted to pay its suppliers under Maximum Price Schedule 4. The defendant therefore knew and expected that plaintiff would receive a profit of $1.50 per ton under this contract, less any direct charges borne by the plaintiff in delivering the scrap to the ships.

It plainly appears with reference to the 3,343 tons not yet. purchased at the time of cancellation that plaintiff would have been able to procure and deliver them in the ordinary course of business. Therefore, the same prospective profit would have been realized on this tonnage had the contract not been cancelled. The cost of the scrap for plaintiff could not have been more than that already purchased because OPA Maximum Price Schedule No. 4 was in effect at that time, which schedule would not permit the plaintiff to buy scrap at higher prices than previously bought and delivered under this contract. Plaintiff never paid more than this regulation permitted and it is reasonable to assume that it would not have done so for this amount which it could easily and speedily have secured.

Plaintiff fulfilled its legal obligation to diminish its damages by cancelling without loss or liability purchase orders for 9,595 tons of scrap immediately upon defendant's cancellation. The remaining 13,632 tons which were on hand or on purchase order were diverted to the domestic market and a profit of $1,136.88 was realized thereon, for which credit was given.

Had plaintiff been permitted to complete its performance under this contract it would have realized a profit of $24,477.88, less the actual profit of $1,136.88, or $23,341.00, and for this plaintiff is entitled to judgment.

It is so ordered.

MADDEN, Judge; WHITAKER, Judge; LITTLETON, Judge; and JONES, Chief Judge, concur.

Reporter's Statement of the Case

113 C. Cls.

MOLE LAKE BAND, LAC DU FLAMBEAU BAND, LAC COURT O'REILLES BAND, BAD RIVER, OTHERWISE KNOWN AS THE LA POINTE BAND, RED CLIFF BAND, ST. CROIX BAND, COMPRISING BANDS OF LAKE SUPERIOR CHIPPEWA INDIANS OF WISCONSIN v. THE UNITED STATES AND FOND DU LAC BAND, GRAND PORTAGE BAND, AND NETT LAKE BAND, OTHERWISE KNOWN AS BOIS FORTE BAND, ALL BANDS OF LAKE SUPERIOR CHIPPEWA INDIANS OF MINNESOTA, INTERVENORS

[No. 45162 (II). Decided February 7, 1949]

School Land Claims

On the Proofs

Indian claims; Government not lacking in diligence in protecting rights and property of its wards.-Upon a separate amended petition (No. 45162-II) filed by leave of the court under the Jurisdictional Act of August 30, 1935 (49 Stat. 1049), where on the evidence adduced it is found that there was some trespassory cutting of timber on lands belonging to the plaintiff Indians but the extent of such cutting is not determined; it is held that there is no showing that the Government, as guardian of the Indians, failed to act diligently in protecting the rights of its wards and in its care of their property, and plaintiffs are not entitled to recover.

The Reporter's statement of the case:

Mr. J. M. Hoag for plaintiffs. Messrs. Verne R. Edwards, G. Arthur Johnson and Clarence G. Lindquist were on the briefs.

Mr. Clifford R. Stearns, with whom was Mr. Assistant Attorney General A. Devitt Vanech, for the defendant.

The court made special findings of fact as follows:

1. Plaintiffs' present claim was, among others, originally asserted in their petition filed April 1, 1940, pursuant to the authority granted by Act of Congress of August 30, 1935, 49

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Reporter's Statement of the Case

Stat. 1049. On February 21, 1945, a separate petition asserting the cause now before the court was filed by leave of the court. It covers what is called the "School Land" claim. 2. The Fond du Lac Band, Grand Portage Band, and Nett Lake Band, otherwise known as the Bois Forte Band, all bands of the Lake Superior Chippewa Indians of Minnesota. who are intervenors in the original case (No. 45162), have no interest in the present suit, No. 45162 (II).

3. On July 29, 1837 (7 Stat. 536), and October 4, 1842 (7 Stat. 591), treaties were made whereby plaintiffs and other members of the Chippewa Nation ceded to the United States large areas in Wisconsin and elsewhere.

By the treaty of July 29, 1837, the Chippewa Nation ceded to the United States a large tract of land in Wisconsin but reserved a right of occupancy to the ceded lands in the following terms:

ARTICLE 5. The privilege of hunting, fishing, and gathering the wild rice, upon the lands, the rivers, and the lakes included in the territory ceded, is guaranteed to the Indians, during the pleasure of the President of the United States.

By the treaty of October 4, 1842, the Chippewa Indians of the Mississippi and Lake Superior in the territory of Wisconsin ceded to the United States all the remaining land which they occupied in Wisconsin, with the right of occupancy reserved in the ceded lands in the following terms:

ARTICLE II. The Indians stipulate for the right of hunting on the ceded territory, with the other usual privileges of occupancy, until required to remove by the President of the United States, and that the laws of the United States shall be continued in force, in respect to their trade and intercourse with the whites, until otherwise ordered by Congress.

4. When another treaty was made on September 30, 1854, 10 Stat. 1109, plaintiffs were still in possession of the land covered by the treaties of 1837 and 1842, which they had occupied from time immemorial. Pertinent terms of the treaty of 1854 follow:

ARTICLE 2. The United States agree to set apart and withhold from sale, for the use of the Chippewas of

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