Roxford Knitting Co. v. Moore & Tierney, Inc.

• Decision Date: 18 March 1920
• Docket Number: 71.,70
• Citation: 265 F. 177
• Court: U.S. Court of Appeals — Second Circuit
• Parties: ROXFORD KNITTING CO. v. MOORE & TIERNEY, Inc. SAME v. WM. MOORE KNITTING CO.

265 F. 177

ROXFORD KNITTING CO. v. MOORE & TIERNEY, Inc.

SAME v. WM. MOORE KNITTING CO.

Nos. 70, 71.

United States Court of Appeals, Second Circuit.

March 18, 1920

The questions of law involved in the two cases are identical. They were argued together and will be decided in one opinion. The actions were commenced in the New York Supreme Court in the county of Saratoga, and were removed to the United States District Court for the Northern District of New York. The defendant in error, in each case, was plaintiff below, and is hereinafter called plaintiff. The plaintiff in error, in each case, was defendant below, and is hereinafter called defendant. The plaintiff is a corporation organized and existing under the laws of the state of New York, and owns and operates a factory for the manufacture of men's underwear, consisting of knit shirts and drawers. The defendant is a corporation organized and existing under the laws of the state of Pennsylvania.

In the first of these actions the plaintiff alleged that defendant is justly indebted to it in the sum of $14,090.08 on account of goods, wares, and merchandise sold and delivered to defendant at its request at agreed prices on various dates and times between the 18th day of May and the 10th day of September, 1917. The defendant in its answer conceded that plaintiff had sold and delivered the merchandise sued for but by way of counterclaim pleaded that the parties to the litigation had entered into an agreement for the manufacture and delivery of certain underwear; that a part only, to wit that sued for, had been delivered, and that because of the failure of plaintiff to deliver the balance, defendant had suffered damage in excess of the amount sued for.

The plaintiff in its reply sought to avoid liability to defendant for its admitted failure to make complete delivery by the fact that the United States government had 'commandeered' it to make delivery to it of supplies of underwear for the army and navy, which required the entire production of the plaintiff's factory and plant from July 1, 1917, until after October 1, 1918, and that this prevented it from making complete delivery of all the goods which it had agreed to manufacture and deliver to defendant. The issue raised by the reply was separately tried in advance, and a jury trial was waived. It was decided that by reason of the facts proved plaintiff had established its reply, and accordingly the counterclaim was dismissed, and judgment was entered for the plaintiff for the amount demanded in the complaint. Moore & Tierney, Inc., v. Roxford Knitting Co (D.C.) 250 F. 278.

Gallert & Heilborn, of New York City (Walter S. Heilborn and David J. Gallert, both of New York City, of counsel), for plaintiff in error.

Thomas O'Connor, of Waterford, N.Y. (George E. O'Connor, of Waterford, N.Y., of counsel), for defendants in error.

Before WARD, ROGERS, and HOUGH, Circuit Judges.

ROGERS Circuit Judge (after stating the facts as above).

In December, 1916, the plaintiff agreed to manufacture at its factory in the city of Cohoes, in the state of New York, for the defendant, certain knit underwear. The deliveries were to be made at various times stated in the orders between February 1, 1917, and December 15, 1917. All the orders received from defendant and accepted by plaintiff were taken subject to the following:

'All orders are taken subject to delays or nondelivery caused by strikes, accidents, fire, or for any other reason beyond our control.'

It is not questioned that, if a party by his contract charges himself with an obligation possible to be performed, he must make it good, unless performance is rendered impossible by the act of God, the law, or the other party. If what is agreed to be done is possible and lawful, it must be done. Sun Printing & Publishing Ass'n v. Moore, 183 U.S. 642, 22 Sup.Ct. 240, 46 L.Ed. 366; Carnegie Steel Co. v. United States, 240 U.S. 156, 165, 36 Sup.Ct. 342, 60 L.Ed. 576. The plaintiff admits that it entered into contracts with defendant which it did not completely perform within the time agreed upon. The performance was not prevented either by act of God or the other party. Was it prevented by the law? If not, was performance excused under the clause in the contracts declaring that the obligations assumed were subject 'to delays or nondelivery caused by * * * any other reason beyond our control'? The plaintiff seeks to excuse its failure to perform its contracts by the fact that the United States government placed with it certain orders for war materials for the army and navy, which orders the plaintiff alleges it was obliged to accept, and that the said orders of the government required the entire production which was possible to be made from plaintiff's factory and plant from July 1, 1917, until after October 1, 1918. This it claims relieved it from any duty or obligation to defendant by reason of the agreements which had been previously made between plaintiff and defendant. It declares that on July 6, 1917, it notified defendant that plaintiff had been obliged to enter into said contracts with the United States government, and that plaintiff in consequence would be unable to make any of the goods it had agreed to make for defendant, except those that had been made and delivered, and that further deliveries were prevented by reason of its orders and contracts with the government of the United States.

In time of war or of impending public danger, and without statutory authorization, private property may be appropriated to the public use. In Mitchell v. Harmony, 13 How. 115, 133 (14 L.Ed. 75), Chief Justice Taney states that there are without doubt occasions in which a military officer may impress private property into the public service, or take it for public use; the government being bound in all such cases to make full compensation to the owner. He adds:

'But we are clearly of opinion that in all of these cases the danger must be immediate and impending, or the necessity urgent for the public service, such as will not admit of delay, and where the action of the civil authority would be too late in providing the means which the occasion calls for. * * * It is the emergency that gives the right, and the emergency must be shown to exist before the taking can be justified.'

That was a case which had its origin in the Mexican War. The subject was again before the court in United States v. Russell, 13 Wall. 623, 20 L.Ed. 474, in a case which had its origin in the War between the States. Mr. Justice Clifford, writing for the court, says that beyond all doubt in cases of extreme necessity, in time of war or of immediate and impending public danger, private property may be appropriated to the public use without the consent of the owner, and in enumerating the property which can be taken he refers among other things to--

'food or medicine for a sick and famishing army, utterly destitute and without other means of such supplies, or (property) to transport troops, munitions of war, or clothing to reinforce or supply an army in a distant field, where the necessity for such reinforcement or supplies is extreme and imperative. * * * Exigencies of the kind do arise in time of war or impending public danger, but it is the emergency, as was said by a great magistrate, that gives the right, and it is clear that the emergency must be shown to exist before the taking can be justified.'

Congress, however, as appears hereinafter in this opinion, has legislated upon this subject, and empowered the President in time of war or of national emergency, to be determined by the President by proclamation, to place 'orders' for war supplies, and made such 'orders' obligatory on any person to whom such orders are given, and provided that such 'orders' shall take precedence over all other orders and contracts theretofore placed with such persons. There are four separate orders which were given to plaintiff by the government:

(1) One dated June 6, 1917, required the plaintiff to deliver to the Quartermaster's Department of the United States Army in the city of New York, on or before December 31, 1917, 36,000 undershirts and 36,000 pairs of drawers in equal monthly deliveries of 12,000 garments, commencing July 1, 1917.

(2) One dated July 25, 1917, requiring the plaintiff to deliver to the Navy Yard in the city of New York, before December 1, 1917, 38,000 undershirts and 38,000 pairs of drawers.

(3) One dated November 16, 1917, requiring the plaintiff to deliver to the Quartermaster's Department of the United States Army, in the city of New York, on or before December 31, 1917, 6,000 undershirts and 6,000 pairs of drawers.

(4) One dated December 12, 1917, requiring the plaintiff to deliver to the Quartermaster's Department of the United States Army, on or before September 30, 1918, 108,000 undershirts and 108,000 pairs of drawers.

These orders were all placed after the enactment of the National Defense Act. 39 Stat. 166. The defendant insists that all four of these orders were contracts voluntarily entered into, and that contracts with the government for military supplies, even in time of war, afford no excuse for the nonperformance of civil contracts. If the orders were contracts voluntarily made, we agree that the performance of contracts so made was not entitled to precedence over other contracts previously taken.

The National Defense Act of June 3, 1916, c. 134, Sec. 120 (Comp St. Sec. 3115g), empowered the President in time of war, or when war is imminent, through the head of any department of the government, to place orders for such products as might be required, and made orders so given obligatory, and gave them precedence over all other orders and contracts. It made any individual or the...