The appellant had a four-year contract, commencing July 1, 1902, for screen-wagon mail service between the postoffice and railway mail stations at Omaha, Nebraska. On May 20, 1903, the Postmaster General canceled the contract and relet it to other parties. Thereupon appellant brought this suit in the court of claims, asserting that he had faithfully performed his agreement, but that he had been required to carry mails to and from three railway companies not included in his contract. That his equipment was ample for the service he contracted to render, but that he had been ordered to provide equipment adequate to the excessive service demanded, and that the cancelation of his contract was therefore unauthorized. His suit was to recover, first, the balance due under the contract as construed by the Department; second, the reasonable value of the excess service he had, under protest, been compelled to render; third, the loss of profit resulting from the wrongful annulment of his contract; and, finally, the loss sustained in disposing of equipment which had been bought for the purpose of carrying out his contract.
As is the case with mail contracts, the manner and means of performance were carefully prescribed, and power was reserved to the Postmaster General to require other and further facilities if it should be found necessary for the good of the service. The power of the Postmaster General to supervise and the duty of the contractor to conform to his regulations were plainly written down. That vigilant and prompt service might be enforced, he was given the right to make deductions, by way of fines, from compensation earned, for defects in equipment or negligence in the performance of the service. For repeated failures in performance, or acts of neglect or disobedience to orders, he was given power to annul the contract without impairing the right of the government to recover damages for nonperformance.
The findings of the court below as to the repeated failures of the appellant in the performance of his contract, the inadequacy of his equipment, and his disobedience to the requirements that he should enlarge and improve his facilities, make it clear that the Postmaster General did not act arbitrarily, nor exceed the power reserved, by the inflicting of fines or the final cancelation of the agreement on May 20, 1903. When the contract was canceled, it was directed that compensation due should be withheld and the contract relet at the contractor's expense. This reletting was at a price of some $14,000 in excess of what the cost would have been if appellant had performed his agreement. The court below found that when the contract was annulled there was due appellant $2,984.72. For this a judgment was asked, but denied, the court below finding that the loss to the government as a result of reletting the contract was greatly in excess of the amount due to appellant. His petition was therefore dismissed.
If the contract, fairly construed, exacted the amount of service which the Department claimed, the case of appellant must fail, in view of the facts found as to his insufficient performance, and the loss resulting to the government from the necessity of reletting the unfinished term of the agreement.
The Postmaster General construed the contract as requiring appellant to receive from and deliver to all railroads using the Union Station at Omaha. This construction required him to receive from and deliver to three railroad companies not specified in the contract; namely, the Wabash, the Chicago & Northwestern, and the Chicago, Milwaukee, & St. Paul. The case must therefore turn upon the question as to whether the service contemplated by his contract included mails to and from the railways mentioned.
Coming, then, to the service required by the contract. The proposal for the Omaha mail-wagon service and its acceptance were according to a printed official form. This proposal and acceptance, making the contract proper, refer to and make the public advertisement of the Postmaster General for proposals a part of the agreement, and from it the service contemplated is discovered. That advertisement included certain 'instructions to bidders,' of which they were required to take notice. Among other things, these 'instructions' included the following provision: