Case ID: us-ct-cl_15/html/0206-01.html
Source: Caselaw Access Project
Author: {"author": "Hunt, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE KELLOGG- BRIDGE COMPANY’S CASE.
    The Kellogg Bridge Company v. The United States.
    
      On the Proofs.
    
    
      Proposals for furnishing and erecting the iron work of the New York post-office are advertised for. The claimants make a hid. Upon assurances that the work will proceed without delay, and payments he made promptly, they reduce their hid $31,058. It is then accepted and the contract awarded to them. But the contract merely provides that the work shall he completed hy a specified day. The contractors proceed with diligence, hut are hindered and delayed hy the defendants. They 'are also compelled to proceed in winter against their profest and under great disadvantages.
    
    I.A contractor who reduced liis bid upon tlie other party’s representation that his work should not he de] ayed and that payments therefor should he promptly made, cannot recover the amount of his reduction if no such provision he inserted in the final written contract.
    II.Where the other party hindered and delayed a contractor in the prosecution of his work contrary to the intent of their agreement, loss of profit (i. e., interest on capital invested in material and on moneys withheld) is an element of damage.
    III. Where the other party hindered and delayed a contractor beyond the period specified in the contract and compelled him to proceed with out-of-door work in winter, the extra expense to which lie is put thereby is an element of damage.
    IV. Where a contractor is entitled to reciprocal performance on the part of the government or its agents and he neither waives nor forfeits his right, hut they fail to perform, thereby hindering and delaying his] work, he will be entitled to hi s gains prevented as well as to his losses I sustained. I
    
      
      The Reporters' statement of the case:
    This case turned more upon the facts to be deduced from the voluminous, intricate, and involved mass of evidence upon which it was presented than upon the legal questions presented when the facts were ascertained. The following are the material facts found by the court:
    I. In the year 1871 the United States, acting by the superintendent of the post-office and court-house building which the United States was then constructing in New York City, published an advertisement inviting proposals for furnishing,, fitting, and putting in place the wrought and cast iron work necessary in and upon the building, the whole of such materials to be furnished and the whole of the work to be completed on or before the 4th day of July, 1872.
    On the 10th day of January, 1872, the claimant submitted a proposal.
    This proposal having been accepted by the United States, a contract, in writing, in the words and figures following, was made and delivered, to wit:
    
      11 This contract, made and entered into by and between Gal-vin T. JSulburd, superintendent of the new post-office and U. S. court-house building now being erected in the city of New York, for and in behalf of the United States of America, of the first part, and the Kellogg Bridge Company, of Buffalo,, New York, to whom was awarded the contract for furnishing, and putting and fixing in place the wrought and cast iron work of the third and attic floors, roofs, domes, and pavilions, required by the accompanying schedule, specifications, and plans,, numbered 14,15, 16,18, 19, 20, 21, 22, 23, 24, 25, 27, 28, 31, 32, 33, 34, 35, 36, 114,115, 116, 117, 118, 119, 120, 121, 122, 123, 124,124«., & 128, on their bid for the same, received under advertisement dated October 23, A. D. 1871, of the second part, witnesseth:
    “ That the parties of the second part covenant and agree to ad with the parts7 °f the first part to furnish, put, and fix in place all of the rolled-iron beams, channel-irons, angle and T rons, tie-rods, boiler-iron plates, angle and fish plates, bolts, ■ivets, &c., and cast-iron columns, pilasters, cornices, brackets, )ed-plates, &c., required for the third and attic floors, domes, >avilions, and curtains of roof, sky-lights, and ventilators, and such other wrought and cast iron work as may be required by he schedule, drawings, and specifications referred to above aid accompanying this contract and forming a part thereof.
    “It is also being agreed by and between the parties hereto that the said parties of the second part shall furnish, deliver, fit, and put in place, to the full satisfaction of the party of the first part, all of the columns, pilasters, rolled-iron beams as rapidly as required by the superintendent or the the progress of the work; the whole to be completed and put in place on or before duly fourth, A. D. 1872.
    “And it is further agreed that the party of the second part shall furnish all scaffolding required to put the work in place, and the party of the first part agrees to permit the party of the second part to use the derricks and engines at the building without charge, but will be required to pay the time of the men employed in working them, who will be furnished by the party of the first part when required; and it is further agreed that the material and workmanship shall be of the best quality and finish, and in every respect to the satisfaction of the party, of the first part.
    “And the said party of the first part, acting for and in behalf of the United States, doth covenant, promise, and agree to pay or cause to be paid unto the said party of the second part or to their heirs, executors, administrators, or assigns, in lawfull money of the United States, the sum of one hundred and sixty-three thousand one hundred and thirteen dollars and four cents ($163,113.04). Payments to be made in the following manner, viz:
    “Ninety per cent, (nine-tenths) of the value of said work will be paid, from time to time, as the same shall be delivered and put in place and accepted (the said value to be ascertained by the superintendent), and ten per cent, thereof (one-tenth) will be retained until the completion of the entire contract and the approval and acceptance of the same by the superintendent,- which amount shall be forfeited by said parties of the second part in the event of the non-fulfillment of this contract to the entire satisfaction of said superintendent.
    “It is further covenanted and agreed by and between the parties to this contract that if from any cause whatever the said parties of the second part should fail in required promptness in delivering and putting in place said work, by or within the time or times specified above, it shall become the duty of the said superintendent, and he shall be and hereby is authorized and empowered, after six days7 due notice thereof in writing, left at the shop, office, or usual place of abode of said parties of the second part or with their agent without effect, to purchase and supply any deficiency of said iron-work caused by the delinquency of the said parties of the second part; and the actual cost thereof, together with -fifteen per cent, thereon, shall be deducted from any moneys due or owing to the said parties of the second part on'account of this contract; and if that amount be not due them, then their bondsmen are to be held liable for any deficiency, to be recovered of them by suit in the name of the United States ; or the said party of the first part may elect that if the parties of the second part should fail to deliver and put in place said iron, by or within the time or times specified above, that they shall forfeit the sum of two hundred dollars ($200) per diem, for each and every day thereafter until the final completion of said contract, which sum shall be deducted from any moneys which may be due them, and if that amount be not due them, then their bondsmen are to be held liable for any deficiency, to be recovered of them by suit in the name of the United States.
    “It is further covenanted and agreed between the parties to this contract, that the parties of the second part shall execute, with two or more good and sufficient sureties, a bond to the United States in the sum of twenty-five thousand dollars (25,000), conditioned for the faithful performance of this contract, and the agreements and covenants herein made by the said party of the second part.
    “It is also covenanted and understood that no member of Congress or other person whose name is not at this time disclosed shall be admitted to any interest in this contract; and it is further covenanted and agreed that this contract shall not be assigned, except by consent of the Secretary of the Treasury, and that any assignment thereof, except as aforesaid, will be a forfeiture of the same, it is further covenanted and agreed, by and between the parties hereto, that this contract shall be valid and binding when approved by the Secretary of the Treasury and not otherwise, and no departure from its conditions shall be made without his written consent.
    “ In witness whereof, the parties hereto have hereunto subscribed their names and affixed their seals this fifteenth day of January, A. D. eighteen hundred and seventy-two.
    “CALVIN T. Htjlburd, Suftt.
    
    “Witnesses to the signature of the superintendent:
    “Jora IixoN?N' J Tw0 witnesses.
    “Chas. Kellogg, [seal.]
    “ Pres't Kellogg Bridge Co.”
    II. The claimants at the date of the said agreement owned and were operating an extensive establishment in Buffalo, N. Y., for manufacturing iron into building materials. It was of sufficient capacity to enable the claimants to manufacture and fit the iron-works as called for and required by the contract. It was a matter of prime importance to the claimants that the work should proceed rapidly, and by reason of the short time fixed by the advertisement for proposals for the completion of the whole of the said iron work, the claimants were induced to and did' offer to furnish, such ■ materials and perform the labor desired for a much less sum than they ordinarily could or would have done. After the estimates and proposals had been prepared, one of the officers of the claimants’ company visited Washington and had an interview with the Supervising Architect of the Treasury for the purpose of ascertaining whether or not there would be any indefinite delays, such as frequently occur in the construction of government buildings, and was assured by the Supervising Architect that there would be no such delays. The officer of the company then returned to New York City, and, on the faith of the assurances received, reduced the amount of the bid of the plaintiff from §194,171.78 to the sum of $163,113.04, by deducting from the amount of the estimate for the work and materials the gross sum of $31,058.74. This, was at the rate of a fraction less than 9 cents per pound for iron. The original estimate of $194,171.78 was at the rate of about 12£ cents. This proposal was accepted and the foregoing written instrument was signed and delivered.
    III. The claimants immediately set about performing the work of their contract, and actually delivered part of the materials. The claimants started out in the performance of their contract with the expectation and under the obligation of completing the work on or before‘the 4th of July, 1872, the time specified for its completion, and worked with that expectation until the work was interrupted by the defendants, and afterwards for a time entirely stopped by orders of the Secretary of the Treasury.
    IY. When the claimants began to deliver materials, the second floor of the building was ready for the iron work. The work on this floor was soon' completed; but when the claimants were ready to proceed with their work on the third floor the other work on the building was not sufficiently advanced for them to do so, and great delays occurred, and the claimants’ men were kept partially idle, and their work proceeded under great disadvantages. These delays occasioned loss to the claimants.
    About the 14th of Slay, 1873, the Secretary of the Treasury ordered the work suspended and it was stopped. The building as originally designed was to be three stories high with-an attic; and at the time when the work was stopped, the Secretary of the Treasury determined to increase the height of the building by one story, making the building four stories high with an attic-To carry out this design it was necessary to secure a further appropriation from Congress, and the work was therefore suspended for about six months, until the necessary appropriation from Congress was procured. The claimants did not resume work until November, 1873. They complained of this delay caused by this change in the building, but continued to deliver small quantities of additional materials rendered necessary to be increased by the change. They were obliged to discharge some of their workmen, and also to engage in other work. The claimants had purchased nearly all of the cast-iron necessary for the completion of the contract very soon after the'con tract was made, and paid for it in cash and in notes, which caused a loss of interest on the investment which had been made in materials. This delay damaged the plaintiff to the extent of $10,893.33.
    The average date for payment of the $103,113.01-, the amount to have been paid the claimants under the contract, was April 10,1872. The average time of actual payment was June 2,1873, or an average delay of one year, one month, and twenty-two days. By reason of this delay the claimants were deprived for this length of time of the use and employment of this sum, and thereby sustained a loss estimated at $13,072.24. But to have enjoyed and been entitled to receive this suih, the claimants would have been obliged to put up the material and workfur-nished, and so would have incurred expenses amounting to one-fifth of this sum. The four-fifths they would have received but for this delay amount to $10,457.79.
    Y., The plans of the structure, so far as the. work of the claimants was concerned, were not materially changed, except that the work was raised one story, or about 25 feet, higher. The extra tier of floor-beams rendered necessary by the.additional story was not furnished by the claimants, and all the increase to the claimants in the quantity of iron made necessary by the change "was contained in a few additional columns and pilasters which they furnished.
    YI. The buildings which had been previously occupied for the post-office, courts, &c., in New York City, could .be used only up to about the 1st of May, 1875, and the new building was desired for these purposes at that time; and therefore the Supervising Architect of the Treasury gave directions after the resumption of the work in November, 1873, that the work of the plaintiff on tbe building .should be pressed forward without regard to weather or seasons. The claimants were required, notwithstanding their protest, to continue the work on the top of this high building through an unusually severe winter, when men could work only under the greatest disadvantages. The greatest part of the work was done by the claimants during the winter season, and the difference in the cost of performing work of this kind on this building in warm and in very cold weather is $4,698.10.
    YII. The contract provided that the claimants should have the use of certain derricks and engines free of charge. The claimants, however, were to pay for the services of the men who worked them. There were seven derricks and three or four engines.
    After the material of the claimants had been hoisted from the ground to the general level of the roof, the derricks were taken down from the roofj thus compelling the claimants to raise the material by spars worked by hand. This was at a very late stage of the work.
    A considerable part of the work consisted of erections upon and above the roof. The derricks, seven in number, were so arranged that material could bo swung from one to another, and so taken all around to every point of the building. The derricks were all on the roof, and when the erection of the domes and pavilions on the roof was commenced, it became impossible to swing the derricks or make any further use of them.
    The claimants suffered no damage from the removal of the derricks and engines.
    YIII. The plans referred to in the documents purporting to set forth the contract were drawings showing the general design of this particular work, and they had been photographed for the convenience of those wbo had to deal with them. No full size or working drawings of the work to be done by the claimants were prepared until the work was wanted, and then such drawings were prepared under the supervision of the department, and the claimants were called upon for the work. When the working drawings were completed, models for castings, &c., were prepared and forwarded to the plaintiffs’ establishment in Buffalo, and the work was required to be furnished according to tbe models. While the length and general dimensions were generally followed, the thickness was fixed by the officers of the government according to their own judgment and without reference to the schedule or plans with the contract, and the plans themselves as well as the work were in many instances altered by the engineer in immediate charge of-the construction of the building j and this was done either by the previous direction or with the subsequent approval of the department. By this action on the part of the department the weight of the ironwork was increased. The contract required that the claimants should furnish between eighteen and nineteen hundred thousand pounds of iron, but by these alterations they were actually required to, and did, furnish over 2,000,000 pounds. Of that furnished, on the 26th September, 1876, the United States owed the claimants for—
    Pounds.
    Extra weight on crest-rail. 36,780
    Extra weight on other- changes.... 58, 742
    95,522
    The average price at which plaintiff agreed to furnish and deliver material under’the contract was $7,867 per hundred pounds, which for 95,522 pounds was $7,514.71.
    IX. The United States dispensed with material which by their contract the claimants had agreed to furnish, amounting in'value to $1,759.50$ that is to say, three ornamental pediments valued at $472.50; fourteen pilasters weighing 12,870, at 10 cents per pound, $1,287.
    The claimants also became indebted to the United States for the time of men paid by the United States for hoisting claimants’ iron in the sum of $1,934.44, and for hoisting lumber for claimants in the sum of $54.60. For these sums, under their agreement the claimants bound themselves to pay. From this sum is to be deducted the sum of $325, or one-fourth, as the value of hoisting the claimants’ material one story higher than contemplated by the first contract.
    The claimants were furnished by the United States with labor and materials of the value of $2,620.90; and the same was furnished by the United States at the claimants’ request and are chargeable against them.
    
      The defendants’ counter-claim is found to be correct and to stand as proven as follows:
    Ornamental pediments dispensed with .. $472 50
    Pilasters dispensed with ..... 1,287 00
    Hoisting material for claimants. 1,669 04
    Labor and material furnished claimants.- -. 2,628 90
    6, 057 44
    Add amount overpaid by defendants. 3,000 00
    9,057 44
    RECAPITULATION.
    Damages for delay, loss of profit. $10,457 80
    Damages for work in winter.. 4, 698 10
    Balance of contract. 1,856 28
    
    Extra weight of iron. 7,514 71
    24, 526 89
    Deduct reduced counter-claim. $6,057 44
    Cash . 3, 000 00
    9,057 44
    15,469 44
    
      Mr. Enoch Totten for the claimant:
    The defendants violated the contract in its entire scope by, in the first place, interposing interminable delays from January, 1872, until May, 1873, and in the second place by enforcing an entire suspension of the work, and changing, the height of the building one story. The plaintiff is entitled to recover as well for the gains prevented as for the damages sustained. [Bulls-ley v. United States, 7 C. Ols. ft., 543.)
    The claimant was kept in suspense awaiting the pleasure of the government, with its workmen, capital, and machinery idle or casually employed at such outside work as could be procured, and their interest accumulating, and then when the building was again ready the season was so' far advanced that fifty men could not do as much as could ten in favorable weather. For all this the plaintiff is entitled to compensation. [Figh v. United States, 8 C. Cls. K., 319; see also Baird v. United States, 
      5 ib., 848; Harvey & Livesey v. United States, 8 ib., 502.) Tbe plaintiff is entitled to be paid for all tbe iron furnished. Tbe contract required them to furnish a specific quantity of iron. If the government required a greater quantity than that specified, tbe plaintiff has a right to recover for it. After tbe additional story was added and the price of labor and materials had become enhanced, tbe contract was substantially abandoned as to the price of labor and materials, and the plaintiff is entitled to recover for tbe labor and materials, so much as they were reasonably worth. (Dermot v. Jones, 2 Wall., 1.)
    Mr. John -S. Blair (with whom was tbe Assistant Attorney-General) for tbe defendants:
    Tbe schedule was furnished to bidders only to enable them to bid intelligently, and to have a clear and definite description of what tbe contract covered.
    The bidder was not required to fill in the price of each article, and tbe weights estimated formed no part of contract. The schedule itself did, so far as it described and defined the articles required.
    Claimant was paid $81,055.50 on twenty-eight several vouchers, in each of which distinct reference is made to tbe contract of January 15,1872. In twenty-two of these 10 per cent, was retaüed, according to the terms of tbe contract.
    In these features the case resembles that of Hawkins (96 S. O., 6Í3), of which Clifford, J., says: “ Sufficient appears to show that the contract was never rescinded by either party, and that the claimant never signified any intention to abandon it.” See also Construction Company v. Seymour (91 S. C., 646); Mgl v. The United States (8 O. Cls. R., 323; 16 Wend., 586; 4 Weid., 285; 7 Wend., 121); Shaw v. The Turnpike Co. (3 Penn. Rep, 446).
   Hunt, J.,

delivered tbe opinion of the court:

Tie claimants sue to recover from the United States the sum of $109,051.07. They allege that they were largely engaged in the manufacture of building materials, &c., of iron, in tbe city of Buffalo, N. Y.; and that on the 15th of January, 1872, they entered into a contract in writing with the United States to fur-nisi and fix in place certain wrought and cast iron work and materials for the new post-office then about to be erected in the city of New York. Particular descriptions of the work to be done, and minute details of the length, dimensions, and weight of the wrought and cast iron to be furnished, were contained in certain schedules, specifications, and plans which were constituted a part of the contract. The whole work was “to be completed and .put in place by July 4,1872.» The government was to pay the claimants $163,113.04 for their work and labor. Ninety per cent, of the value of the work was to be paid, from time to time, as it was delivered and put in place and accepted. This value was to be ascertained by the government superintendent ; and 10 per cent, óf the value was to be retained until the completion of the entire contract, and the approval and acceptance of the work by the superintendent.

The claimants allege that their original estimate for the work exceeded the contract price finally agreed upon by some $31,000 and that they were induced to reduce their estimate that amount by the consideration that the work was to be pressed to a lapid completion, and to be promptly paid for — thus securing to them, a certain and speedy return of the heavy outlay required by the contract.

The petition charges, and the findings establish, that the claimants proceeded promptly and faithfully in the discharge of the duties imposed upon them under their contract, expecting and preparing to complete their work within the time agreed upon. But they were interrupted in its execution by tie defendants; and the work was at first delayed, then ordered to be suspended, and finally to be entirely stopped, in consequeice of' a change of the plan of the building. Originally it had been designed to be three stories high with an attic. But it was afterwards determined to make it four stories high with an ittic. Whilst awaiting the appropriation necessary to this chmge, the claimants were not permitted to resume work until November, 1873.

In consequence of these delays, and the alterations arc! increase of labor and materials they entailed, the claimant are shown by the findings to be entitled to recover the sun of' $15,469.44, after allowing the counter-claim of the government, as adjusted by the findings.

This sum is composed in part of the damages sustained by the claimants from the refusal of the government to pemit them to complete their contract within the period fixed by its terms. The government interposed unceasing delays from the date of its execution in January, 1872, until May, 1873. Then the entire suspension of the work was required, and the changes in the original plan finally determined on.

The claimants had a right to the full performance of the contract on the part of the government. This right they have neither waived nor forfeited. They have been deprived, through no fault of theirs, of the profits they might reasonably have expected to realize, and which the government also must have contemplated they would make, at the time the contract was formed. The measure of damages in the case of a contract thus radically violated is settled by law. The party should recover his gains prevented, as well as his losses sustained. (See Bulkley v. The United States, 7 C. Cls. R., 547, and the authorities there cited; Figh v. The United States, 8 ib., 320.)

The other items allowed by the findings rest upon grounds which seem to demand no additional explanation.

It is therefore ordered, adjudged, and decreed that the claimants do have and recover judgment for the sum of $15,469.44.