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Government Hospital for the Insane, founded 1852 |
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In 1883, the Government Hospital for the Insane (National Insane Asylum) in Washington (later to be known as St. Elizabeth's) had a desperate need for 8,000 pounds of shucks. Frank Hume, a supplier of goods, responded to the U.S. government's call for bids. Mr. Hume bid 60 cents per pound for shucks, which the Secretary of the Interior accepted. It is important to note that at that time, unhackled shucks were worth $12/ton and hackled shucks went for $35/ton. Per pound that is .6 cents and 1.75 cents. The Court of Claims found the contract to be a grossly unfair and thus an unconscionable contract.
Oh Frank Hume, you were such an "equity rouge." But how could the Secretary of the Interior be such a "common-law fool" as to math? The Court of Claims suggested that the bid sheet was misprinted and instead of "pounds," it should have read "100 pounds." Anyway, the Court of Claims disregarded the contract, following the precedent set in the famous "equity rouge" case of
James v. Morgan, 1 Lev. 111 (1663). Morgan, like the U.S. Secretary of Interior, agreed to buy a horse for a barley of corn for each nail in the horse's shoe, doubling the price for each nail. This convoluted calculation (similar to car lease agreements) resulted in a price 12.5 times the market value of the horse. Thus was born the common law principle that gross mathematical ignorance is a defense to contracts. As applied by the Court of Claims, Mr. Hume was only entitled to the market value of his shucks (thus the phrase "Aw Shucks" was born): $117.60 ($35/ton).
Both the
United States and Frank Hume filed a petition for review to the U.S. Supreme Court.
Hume v. United States, 132 U.S. 406 (1889). In a tradition of government contract shenanigans, Mr. Hume argued that he fully intended to bid .60 cents per pound, an amount 35 times the market value of the shucks actually delivered. "One day," Mr. Hume argued, "the U.S. government will pay
$436 for a hammer and $640 for a toilet seat, whatever that is. My attempt to defraud the government should be judged in light of future fiscal failings by Washington." In response, Asst. A.G. Maury stated that, "The time is now that you [Legislators of the Bench] create an escape door for the mathematically-challenged of the world to unshackle themselves from contracts that they did not understand in the first place. Our complete and utter ignorance should void the contract and protect us from having to pay anything for these shucks. Furthermore, Mr. Hume should be punished for allowing the us to enter into this contract without comprehending how much the contract will cost."
The Supreme Court, with the wisdom of Solomon, returned to nail-counting case of
James v. Morgan and affirmed the general rule that an unconscionable contract is void and an "equity rouge" shall receive no more than market value for his shucks.
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