United States v. Swift & Co.

Background

Swift & Company, a large meat packer, supplied tin-packed army bacon under allotments for January, February, and March 1919. The packer accepted written allotments and began curing and preparing bacon. After the Armistice the Army rapidly demobilized and canceled most March orders. Swift sued for the loss from the Government’s refusal to accept the March deliveries. A lower Court of Claims awarded $1,077,386.30 for bacon not taken and denied additional recovery for unsmoked bellies that Swift had sold abroad; the Government’s counterclaim was rejected.

Reasoning

The Court examined whether the November–December 1918 allotments and written acceptances created a binding contract and whether the officials who signed had authority. The Court held those writings, signed by the depot quartermaster and the Food Administration representative, did create a valid contract under the Quartermaster Department practices and the 1915 appropriation amendment. It also accepted the Court of Claims’ approach to damages for this unusual, noncommercial army bacon—using the contract price less diligent sale proceeds—because there was no general market. On the cross appeal about the unsmoked bellies sold abroad, the Court found Swift acted in good faith and awarded an additional $212,216.69. The Government’s counterclaim rejection stands.

Real world impact

The decision requires the United States to pay the packer the earlier award plus the added amount for bellies, resolves the dispute over whether allotments and acceptances created a contract, and affirms the damage measure used for this special army product. The judgment is affirmed with a modification adding the belly award.