(45 S.Ct.)

the option to ship or to refrain from ship- They did not object to inequality of weekly ping as it saw fit, or leave the quantity to shipments, but attempted to invoke the vis be delivered to its choice. There was no major clause to justify or excuse their rewant of consideration or lack of mutuality. | fusal to take and pay for the ore at the con3. Appellants contend that the seller fail-tract price applicable at that time. ed to make shipments in as nearly as pos- [8] The District Court found that the sellsible equal weekly quantities, as provided in the contract, and that the buyers thereby were released from performance.

The contract was signed September 29, 1914, but the first shipment was not until November 28. Between the last-mentioned date and March 11, the seller made 28 shipments, which were accepted and paid for. There was considerable inequality in the weekly shipments. It is apparent from the language of the contract that variations were expected. It was contemplated that produc

*253

tion would be increased substantially by the use of the picking plant. From the time of

the execution of the contract to about the

time of the first shipment the market price
of spelter did not exceed $5 per hundred-
weight and consequently the contract price
of ore
was not more than $19 per ton.
When the first shipments were made, spelter
prices were $5.10 per hundredweight. By
March 1, they advanced to $9.40, making the
contract price of ore $41 per ton. By March
17, they receded to $7.80, making the con-
tract price of ore $33 per ton. January 20,
when spelter was at $6 per hundredweight
and the contract price of ore was $24 a ton,
the agent of the buyers wrote a letter to
the manager of the seller in which he called
attention to the high price and, in effect,
suggested that the seller ship as much as
possible.

er attempted in good faith to carry out its
part of the contract until it was stopped;
that the claim that the seller broke the con-
tract was without merit; that no objection
to the deliveries was made on the ground of
inequality, and that the breach was waived
as to all ore accepted; that the buyers' re-
fusal to accept the ore tendered in March
was based solely on the vis major clause;
and that there was no evidence that the sell-
er did not ship in as nearly equal weekly
quantities as possible. And the Circuit

Court of Appeals found that the Mammoth
Company carried out its promises under the

terms of the contract. No reason has been

shown why the findings of the lower courts Co. v. United States, 234 U. S. 76, 78, 34 S. should be disturbed. Washington Securities Ct. 725, 58 L. Ed. 1220. Our own examination of the evidence satisfies us that there is no merit in appellants' contention that there was a breach of the contract by the

seller.

4.

Appellants contend that the contract sued on was not enforceable because made in violation of an earlier agreement, dated June 10, 1914, selling the same ore.

[9] The Mammoth Mining Company, operating in Kennett, Cal., and the United States Smelting Company, operating in Salt Lake City, Utah, were subsidiaries of the United States Smelting, Refining & Mining ComThe executive officers and boards of

*255

On

tical, but each subsidiary had a separate
general manager and operating staff.
June 10, 1914, the Smelting Company made
a contract covering the sale of certain ores
to the American Metal Company, and ap-
pellants assert that it covered the same ore
which was subsequently sold by the contract
in suit. The product described in the earlier
contract is:

Later, the prices of spelter rose enormous-pany. ly, but the market prices of ore declined un- directors of the subsidiary companies and of til buyers could obtain it on their own terms. the parent company were substantially idenThe war had created a great demand for zinc. The ores produced in Japan, Spain. Mexico, and Australia were cut off from their former markets in Germany and were shipped into this country in quantities far in excess of the capacity of the smelters. February 23, when the spelter prices were over $8 per hundredweight, making the price of ore more than $34 per ton, the buyers tried to get the seller to consent to reduction of the contract prices. But no change was made. Increased tonnages were shipped after completion of the picking plant, March 5. March 17, the buyers sent a telegram to the seller, calling attention to the shipment of 50 tons daily from March 6 to March 9, and stating that the monthly average from the beginning had been about 200 tons, and added:

"All the zinc sulphide crude ore, zinc sulphide concentrates and zinc sulphide middlings, shipped from Midvale, Utah, Kennett, Cal., or any other point by or under the control of the seller during the period of this agreement."

Through some misapprehension, the lower courts considered the case as if the Mammoth Company were a subsidiary of the Smelting Company. This was more favorable to appellants than was warranted by the facts. Nevertheless, they declined to sustain Both held that the appellants' contention. Mammoth Company and the Smelting Company were separate and independent corporations, and the Circuit Court of Appeals held that the Smelting Company did not

make the contract for the Mammoth Com- | Appeals from June 29, 1916. Appellants obpany. 286 F. 503, 509. The zinc product of ject on the ground that this is a suit against the Mammoth Mine is not specifically men- the United States, and interest is not allowtioned. The language is not definite, and, as

that mine is at Kennett, one of the shipping

points mentioned, the product might be deemed to be included, if under the control of the Smelting Company. Neither of the parties to this suit was a party to that contract, and parol evidence was given to show what ore was covered. Barreda v. Silsbee, 21 How. 146, 169, 16 L. Ed. 86; Central Coal & Coke Co. v. Good & Co., 120 F. 793, 798, 57 C. C. A. 161. It was shown that the Mammoth Company and the Smelting Company, while both subsidiary to the Mining Company, were wholly independent; that neither had control over the other and that the Smelting Company did not control and had no authority to sell the product of the Mammoth Mine. Appellants' contention is not supported by

the facts.

*256

[10] 5. *Appellants insist that no more than nominal damages should have been awarded because, as they say, the evidence showed no actual loss on resale. After Beer, Sondheimer & Co. rejected the ore, the Mammoth Company resold it to the United States Smelting Company. The amount of the judgment is based on the difference between resale prices and those fixed by the contract in suit. The purchaser smelted the ore and made a profit. The master found that the price obtained on resale represented the best price that the Mammoth Company could obtain after energetic efforts in good faith to sell the ore on more favorable Appellants make no claim of bad faith. There was no dispute as to the evidentiary facts. The report of the master was confirmed by the trial court, and its ruling was sustained on appeal. It must be taken as established that the resale was

terms.

made in good faith for the best obtainable price. Crawford v. Neal, 144 U. S. 585, 596, 12 Sup. Ct. 759, 36 L. Ed. 552. The Mammoth Company and the Smelting Company were separate entities. The intercorporate relations above referred to furnish no ground for charging against the Mammoth Company the profits made by the Smelting Company. It

is obvious from the facts found that the latter could have obtained zinc ore in the market on as favorable terms. The Mammoth Company did not operate a smelter or use the ore in its own business. The smelting of the ore was separate and apart from the contract in suit, and the seller was not bound to smelt the ore or have it smelted and account for the profits, if any, to the buyers. The amount of profits realized by the Smelting Company was immaterial, and the buyers had no right to have it set off against the damages resulting from their breach of the contract.

*257

able against it; *that at common law interest

was not recoverable, and the case was not a proper one for the exercise of chancery discretion; and that, if it was not an abuse of

discretion to allow interest from the date when the war was practically ended, its allowance from June 29, 1916, was erroneous. In an attempt to commence an action in Utah against the buyers to recover damages June 29, 1916, served a summons and comresulting from their breach, the seller, on On the facts found, which need not be replaint on the representatives of the buyers. peated here, the Circuit Court of Appeals (286 F. 511) rightly held the attempted serv ice to amount to a demand, and that interGoddard v. Foster, 17 Wall. 123, 143, 21 L. est might be allowed from that date. See Ed. 589; Kaufman v. Tredway, 195 U. S. 271, 273, 25 S. Ct. 33, 49 L. Ed. 190; United States v. Poulson (D. C.) 30 F. 231; Dwyer Mather v. Stokely, 218 F. 764, 767, 134 C. C. v. United States, 93 F. 616, 35 C. C. A. 488;

A. 442.

While the suit, as held in Banco Mexicano v. Deutsche Bank, 263 U. S. 591, 603, 44 S. Ct. 209, 68 L. Ed. 465 (affirming 53 App. D. C. 266, 289 F. 924), is one against the United States, the claim was not against it. No debt was alleged to be owing from it to the plaintiff. The rule of sovereign immunity from liability for interest (Judicial Code, § 177 (Comp. St. 1168) National Home for Disabled Volunteer Soldiers v. Parrish, 229 U. S. 494, 33 S. Ct. 944, 57 L. Ed. 1296; United States v. North American Co., 253 U. S. 330, 336, 40 S. Ct. 518, 64 L. Ed. 935; Seaboard Air Line Ry. v. United States, 261 U. S. 299, 304, 43 S. Ct. 354, 67 L. Ed. 664) does not apply.

[12-15] Compensation is a fundamental principle of damages whether the action is in contract or in tort. Wicker v. Hoppock, 6 Wall. 94, 99, 18 L. Ed. 752. One who fails to perform his contract is justly bound to make good all damages that accrue naturally from the breach; and the other party is entitled to be put in as good a position pecuniarily as he would have been by performance of the contract. Curtis v. Innerarity, 6 How. 146, 154, 12 L. Ed. 380. One who has had the use of money owing to another justly may be required to pay interest from the

*258

time the payment should have been made. Both in law and in equity, interest is allowed on money due. Spalding v. Mason, 161 U. S. 375, 396, 16 S. Ct. 592, 40 L. Ed. 738. Generally, interest is not allowed upon unliquidated damages. Mowry v. Whitney, 14 Wall, 620, 653, 20 L. Ed. 860. But when necessary in order to arrive at fair compensation, the court in the exercise of a sound. [11] 6. The, District Court allowed inter-discretion may include interest or its equivest from July 3, 1919; the Circuit Court of alent as an element of damages. See Bern

(45 S.Ct.)

hard v. Rochester German Insurance Co., 791 free on board cars at the buyers' smelting Conn. 388, 397, 65 A. 134, 8 Ann. Cas. 298; Frazer v. Bigelow, 141 Mass. 126, 4 N. E. 620; Faber v. City of New York, 222 N. Y. 255, 262, 118 N. E. 609; De La Rama v. De La Rama, 241 U. S. 154, 159, 160, 36 S. Ct. 518, 60 L. Ed. 932, Ann. Cas. 1914c, 411; The Paquete Habana, 189 U. S. 453, 467, 23 S. Ct. 593, 47 L. Ed. 900; Eddy v. La Fayette, 163 U. S. 456, 467, 16 S. Ct. 1082, 41 L. Ed. 225; Demotte v. Whybrow (C. C. A.) 263 F. 366, 368.

works at Bartlesville, Okl., or at such other works as the buyers might designate, and any difference of freight charges between the point of shipment and other smelting works so designated as against those to Bartlesville should be for the account of the buyers. The ore which was rejected by the buyers and resold was shipped to Altoona, Kan. The freight rates were graduated on the basis of "actual value" of the ore shipped and were the same from Kennett, Cal., to Altoona as to Bartlesville. The rates on the shipments to Bartlesville were based on the prices fixed by the contract in suit; and those on shipments made to Altoona on the resale prices. The charges for the transportation of ore resold were $42,201.50 less than they would have been if based on prices fixed by the original contract. The master reported that if the ore had been shipped un

[16] In this case, at least as early as June 29, 1916, the date of demand, the seller was entitled to have from the buyers the difference between the sum which it would have received prior to that date, if the buyers had kept their contract, and the amount it received on resale. Payment in 1924 or later of that sum is not full compensation. Cf. Seaboard Air Line Ry. v. United States, supra, 306 (43 S. Ct. 354). All damages had ac-der the contract the carrier, for the lack of crued prior to the demand. There was nothing dependent on any future event. The elements necessary to a calculation of the amount the seller was then entitled to have to make it whole-namely, the quantities of ore produced, its metallic content, the prices to be paid by the buyers under the contract,

*260

any other available standard, would have based its rates on the contract prices. And he excluded from the amount fixed as damages the excess over the charges actually paid. His report was adopted by the trial court, and its decision was affirmed by the Circuit Court of Appeals. The plaintiff on and the amount realized on resale-were known or ascertainable. Our entrance into his appeal contends that under the Interstate the war was long subsequent to June 29, Commerce Act (Comp. St. § 8563 et seq.) 1916, the date of the demand. General rep- there cannot be two freight rates in effect resentatives, who had long been in charge of at the same time between the same points the business in this country of Beer, Sond-on the same commodity dependent upon the heimer & Co., remained here until after that event. At all times until it was taken over

under the act, they had money and property . of that firm more than sufficient to make good the seller's damages. It would be unjust and inconsistent with the remedial purposes of section 9 to hold that the seized

*259

invoice under which it is shipped, and that the courts below erred in making the deduc

tion. But we think that the question whether rates that might be so produced would be unlawful was not involved in the case. The ore covered by the original contract was not shipped from Kennett to Bartlesville and Altoona at the same time, nor would it have enemy property cannot be held for the full been if there had been no breach; and it was amount of the seller's loss, and that, to the not shown that any other zinc ore was so extent of interest during the period of the moved. If different rates had been exacted war,2 compensation must be denied. The for contemporaneous transportation of ore to proposition that the enemy defendants, as a the same destination, or its equivalent, a quesmatter of law, are entitled to be relieved tion between the carrier and shipper might from interest during the war cannot be sus- have arisen. But on the facts of this case tained. Cf. Ward v. Smith, 7 Wall. 447, 452, no such question was involved. The cost of 19 L. Ed. 207; Connecticut v. Pennsylvania, transportation on the resale was less than 6 Fed. Cas. pages 282, 291, No. 3104; Yeat-it would have been if the buyers had accepton v. Berney, 62 Ill. 61, 63; Gates v. Union Bank, 12 Heisk. (Tenn.) 325, 330. The allowance of interest made by the Circuit Court of Appeals was just and is sustained. [17] 7. The seller agreed to deliver the ore

2 Restrictions on intercourse between citizens of this country and citizens of Germany were removed by War Trade Regulation No. 814, July 20, 1919. See Ward v. Smith, 7 Wall. 447, 452, 19 L. Ed. 207.

ed all the ore. Both courts so found. The seller was not entitled to charge against the buyer anything on account of the expense of resale in excess of the amount it paid. It was not entitled to be put in a better position by the recovery than if the buyers had fully performed the contract. Plaintiff's appeal is without merit.

Decree affirmed.

If within one year after the account is audited and stated the corporation files an application for revision, "the commission

*Mr. Justice SANFORD delivered the opin- shall grant a hearing thereon and if it shall

(45 S.Ct.)

its manufacturing is done in Rhode Island. It has there its main office and sells its ware to customers in all the States of the Union and some foreign countries. It also has a branch office and showrooms in New York City, where it keeps on hand a stock of its ware, partly samples, makes sales to customers from such stock and takes orders for ware to be shipped from the Rhode Isiand factory. In 1917, however, it also engaged extensively in the manufacture and sale of munitions. No part of this business was carried on in New York.

where the allocation includes certain arbitrarily selected factors, none of which are determinative of net income, and omits other factors equally important, and the result is to allot more income to the State than was earned there and employ income totally unrelated thereto to enlarge the measure of the tax; and (2) that such a tax upon the income earned without the State by a foreign corporation engaged principally in interstate commerce, is a direct burden upon such commerce.

We are of the opinion, however, that, without reference to these constitutional questions, the bill was properly dismissed by the District Court because of the failure of the Company to avail itself of the administrative remedy provided by the statute for the revision and correction of the tax.

*270

The Company, in 1918, made a report to the Commission in compliance with the Tax Law. In this report, both as originally filed and later amended, it stated that the business which it transacted was "manufacturing and selling silverware, bronze and metal ware"; gave the amount of its net income A taxpayer who does not exhaust the remfor the year 1917 as determined by the Unit-edy provided before an administrative board ed States, claiming only one deduction therefrom, namely, the amount paid for Federal to secure the correct as*sessment of a tax, income taxes; and stated the aggregate values of the classes of its assets specified in the Tax Law, both in New York and wherever located. It did not, however, show that it was also engaged in manufacturing and selling munitions, that its net income as reported was derived to any extent from that business, or that it did not manufacture any ware in New York.

260

pany notice, 5 The Company, however, did not apply to the Commission for a revision of the account and resettlement of the tax, but, within less than one year after the account had been audited and stated, brought this suit in the Federal Court to enjoin the collection of the tax.

cannot thereafter be heard by a judicial tribunal to assert its invalidity. Farncomb v. Denver, 252 U. S. 7, 10, 40 S. Ct. 271, 64 L. Ed. 424; Milheim v. Tunnel District, 262 U. S. 710, 723, 43 S. Ct. 694, 67 L. Ed. 1219; McGregor v. Hogan, 263 U. S. 234, 238, 44 S. Ct. 50, 68 L. Ed. 282; First Nat. Bank v. Weld County, 264 U. S. 450, 455, 44 S. Ct. 385, 68 L. Ed. 784.

The Commission thereupon audited and The Company did not report to the Comstated the Company's account, and computed mission any of the facts upon which it now the tax thereon, of which it gave the Com-challenges the validity of the tax. Its report indicated that its net income was derived solely from carrying on in New York and elsewhere the unitary business of manufacturing and selling ware. After the account had been audited and the tax computed, it was entitled, as a matter of right, to make application for a revision of the tax and to a hearing before the Commission, at which it might submit evidence; and if it appeared that the account included taxes which could not have been lawfully demanded, the Commission was required to resettle the same "according to law and the facts," and adjust the tax accordingly. The Company, however, made no application to the Commission for a revision of the tax; it submitted no evidence to the Commission as to any of the matters on which it now relies, either as to the inclusion of profits derived from the munitions business or otherwise; and it did not request the Commission to resettle the tax on the ground of any error or invalidity, in matter either of fact

The Company insists that the inclusion in the net income upon which the tax was based of the income derived from business not carried on in New York, in the manufacture and sale of munitions and the manufacture of ware, and the allocation of that net income to New York by the statutory ratio into which only certain assets entered, has resulted in an assessment against it of a tax based upon an allocated income greatly in excess of that in fact derived from the business of selling ware which it carried on within the State. The grounds upon which it challenges the constitutionality of the law are, in substance, as summarized in its brief: (1) That a State cannot constitutionally levy a tax computed on an allocated part of the total net income of a foreign corporation,

than that which would result, as a matter of calcu

or law.

Under these circumstances we think that the Company, having failed to avail itself The amount of this tax was somewhat larger of the administrative remedy provided by lation, from the figures set forth in the Company's the statute for the correction of the tax, report. It is stated in the opinion of the District was not entitled to maintain a bill in equity Court that the "tax as actually assessed contained for the purpose of enjoining its collection.

a duplication of the accounts receivable." And it

is conceded that the Commission did not deduct the Federal income taxes from the net income.

45 S.CT.-6

The decree of the District Court is
Affirmed.