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Reporter's Statement of the Case

113 C. Cls.

the record, evidencing the difficulties experienced by the plaintiff in assembling the scrap iron required for performance of the involved contract. However, the sum total of such evidence fails to establish the fact that plaintiff was unable to complete performance. The weight of the evidence establishes that the plaintiff had on hand throughout the contract period at the beginning of each of the months from July to October, 1941, or had outstanding purchase orders for, the following tonnages of scrap iron:

June 30, 1941.
August 1, 1941.
September 1, 1941.

October 3, 1941_.

38,936 tons.

44, 457 tons.

43, 940 tons.

36, 497 tons.

It is contended by the defendant that plaintiff's Houston Office was obligated for large sales of scrap iron to the domestic market and that such sales during the contract period interfered with its export deliveries and made the above quantities of scrap iron inadequate for the performance of the contract. Defendant filed a comparative tabulation of domestic and export shipments during the months of July to November, 1941, inclusive, showing total domestic sales of 37,064 tons as against export shipments of 53,422 tons. The domestic tonnage shown on such tabulation was not taken from plaintiff's books but from monthly financial statements issued by the Houston Office, covering its business and also business of the New Orleans Office of plaintiff. Defendant could not state what proportion of such tornage represented that shipped by the New Orleans Office and not subject to the control of the Houston Office.

The weight of the testimony does not establish that domestic shipments from the Houston Office interfered materially with performance of the involved contract.

9. After the cancellation of the contract on October 3, 1941, and the three deliveries made thereafter totaling 10,734 tons, plaintiff still had on hand, or on purchase orders and available for performance of the contract, all of the undelivered tonnage of 26,570 tons with the exception of 3,343 tons. From all of the evidence it appears that plaintiff would have been able in the ordinary course of business to procure and deliver these 3,343 tons.

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Opinion of the Court

10. Upon the tonnage of 53,430 tons delivered by plaintiff pursuant to the contract, plaintiff made a profit averaging $0.92126 per ton. Of the undelivered tonnage plaintiff was able to cancel without loss or liability purchase orders for 9,595 tons. It seems reasonable that if this tonnage had been delivered under plaintiff's contract, its cost and the direct expenses connected therewith would have averaged approximately the same, and its profit would have averaged approximately the same as for the 53,430 tons delivered.

The same prospective profit would probably have been realized on the 3,343 tons which plaintiff had yet to procure.

As to the remainder of the undelivered tonnage amounting to 13,632 tons, plaintiff diverted this amount to the domestic market at an actual profit of $1,136.88. Therefore, this amount should be deducted from the anticipated profit by delivery of this tonnage pursuant to the contract.

Plaintiff states that of the 13,632 tons diverted 2,321.07 tons were purchased at $4,497.34 less than the O. P. A. domestic ceiling price, and therefore asks that this amount be added to its prospective profit. However, no reason appears to differentiate the diverted tonnage of 13,632 tons in this respect from the tonnage actually delivered under the contract, and it appears reasonable to presume that a proportionate part of the delivered tonnage was likewise acquired at less than the O. P. A. domestic ceiling price and entered into the realization of an average profit on the delivered tonnage of $0.92126.

Plaintiff's profit, therefore, lost by reason of the cancellation of its contract, prior to full performance, amounts to 26,570 times $0.92126, or $24,477.88, less the actual profit realized of $1,136.88, or $23,341.00.

The court decided that the plaintiff was entitled to recover.

HOWELL, Judge, delivered the opinion of the court: Plaintiff, a Delaware corporation, with its principal place of business in Cincinnati, Ohio, and a branch office in Houston, Texas, for the general administration of business in the Gulf area, did on July 1, 1941, pursuant to previous invitation for bids, enter into a contract with the United States, acting through the Emergency Relief Branch of the

Opinion of the Court

113 C. Cls.

Procurement Division of the Treasury Department, for the sale to the United States of 60,000 gross tons of scrap iron of various grades and tonnages at the total contract price of $957,000.00. Thereafter, on August 15, 1941, an amendment to said contract was entered into by the terms of which plaintiff agreed to sell to the United States an additional 20,000 gross tons of scrap iron of various grades and tonnages as therein provided, at an additional price of $327,000.00. The total contract price became, therefore, $1,284,000.00, and the total tonnage involved 80,000 tons. Neither the contract nor its supplement authorized the United States to cancel same.

With reference to deliveries of scrap iron the contract provided as follows:

F. A. S. the following Gulf Ports at the option of the Seller and in conformity with vessel space: Tampa, Fla., Pensacola, Fla., Mobile, Ala., Gulfport, Miss., Corpus Christi, Texas, New Orleans, La., Lake Charles, La., Port Arthur, Texas, Texas City, Texas, and Houston, Texas.

The expression "F. A. S." is defined as "free alongside" meaning free alongside ship.

The monthly requirements for delivery under the contract, as well as the actual shipments of scrap iron under the contract, with dates of invoices, names of ships and quantities loaded by the plaintiff are set out in Findings 3 and 4.

As stated therein, the record discloses no complaint made to the plaintiff at any time by or on behalf of the defendant that deliveries were not maintained according to schedule. On October 3, 1941, the defendant addressed the plaintiff a letter cancelling the contract in the following language:

The British Purchasing Commission has advised this office that they are withdrawing from the present Scrap Market and request that we cancel the undelivered balances of all scrap contracts.

You will, therefore, make no further deliveries of Scrap, under the above numbered contract and Supplement No. 1 thereto, other than those already scheduled. Three deliveries were shown to have been made after the date of cancellation for the reason that they had been

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Opinion of the Court

scheduled prior thereto. Total deliveries under the contract became therefore 53,430 tons, leaving undelivered 26,570 tons.

The facts involved in this case are adequately set out in our special findings of fact and need not be again repeated for the purpose of considering the issue involved herein, which is, did the defendant's cancellation of the contract constitute a breach thereof for which the defendant is responsible to the plaintiff in damages.

In our opinion, such cancellation cannot be legally justified either by the terms of the contract or by the reason given in the letter of cancellation set out above.

The defendant contends that the plaintiff was obliged to make advance requests of the British for ships to load its available scrap and that its failure to make such requests accounted for the reduced number of ships furnished; further, that even if ships had been furnished, plaintiff could not have performed the contract due to the shortage of scrap during the period involved and the plaintiff's heavy domestic commitments, but neither contention is supported by the evidence and they are contrary to the findings of fact.

In other words, the plaintiff was at all times ready, willing and able to perform its obligations under the contract, but was prevented from doing so by the act of cancellation on the part of the defendant.

*

It is a principle of fundamental justice that if a promisor is himself the cause of the failure of performance, either of an obligation due him or of a condition upon which his own liability depends, he cannot take advantage of the failure. * *One who agrees to pay for goods on delivery, cannot set up the lack of delivery when caused by his own act. The principle that prevention by one party excuses performance by the other, both of a condition and of a promise, may be laid down broadly for all cases. (Williston on Contracts, Vol. III, Sec. 677).

Hinckley v. Pittsburgh Bessemer Steel Company, 121 U. S. 264, involved a plaintiff who sold the defendant 6,000 tons of steel rails under a contract that provided that 1,000 tons were to be delivered during the first month and 2,500

Opinion of the Court

113 C. Cls.

tons in succeeding months until the total of 6,000 tons was met. The contract further provided that drilling directions for the manufacture of the rails would be furnished to the plaintiff by the defendant, and defendant there failed to furnish the directions. The lower court found the facts specially and entered a judgment for the plaintiff. In affirming the judgment, the Supreme Court said:

On the special findings the only question open for review is, whether the facts found are sufficient to support the judgment. There can be no question that, on those facts, the defendant is liable in damages for a breach of the contract. It is provided in the contract, that the rails are "to be drilled as may be directed."

* * The circuit court further finds that by reason of the repeated statements of the defendant that he was not ready to give drilling directions, not ready to use the rails, and not ready to accept them, the plaintiff postponed the rolling of them, and never rolled any rails to be delivered on the contract, but was at all times during May, July and August, 1882, ready and able to fulfill the contract and make the rails, and the same would have been ready for delivery as called for by the contract, if the defendant had furnished drilling directions and had not stated to the agents of the plaintiff that he was not ready to furnish the drilling directions, and not ready to accept the rails; and that, on or about the 15th of September, 1882, he was formally requested to furnish drilling directions, and to accept the rails, and replied to such requests that he should decline to take any rails under the contract, and had made arrangements to purchase rails of others at a lower price. The circuit court also finds that the defendant, by requesting the plaintiff to postpone the delivery of the rails, and by notifying the plaintiff that he was not ready to accept and pay for them, excused the plaintiff from actually manufacturing them and tendering them to the defendant. This conclusion is entirely warranted by the facts found, and on those facts the defendant must be held liable in damages.

(Van Buren v. Digges, 18 U. S. 683; United States v. Peck, 102 U. S. 64).

The case of United States v. Speed, 8 Wall. 77, is analogous to the case at bar. There the plaintiffs sued in the Court of Claims on a contract in which they agreed to slaughter and

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