Case ID: us-ct-cl_56/html/0128-01.html
Source: Caselaw Access Project
Author: {"author": "Hay, judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

BROADBENT PORTABLE LAUNDRY CORPORATION v. THE UNITED STATES.
    [No 34656.
    Decided March 7, 1921.]
    
      On the Proofs.
    
    
      Contract, breach of; measure of damages. — Where a contractor enters into an agreement with the United States to furnish a certain number of mobile laundry units, and the United States, without fault on the part of the contractor, prevents the performance of the agreement, the contractor is entitled to recover for all losses, expenditures, and a reasonable profit on the performance of the whole work, with a reasonable deduction for less time engaged, and for release from the care, trouble, risk and responsibility attending a full execution of the agreement.
    
      
      The Reporter’s statement of the case:
    
      Mr. G, Keith Carlin for the plaintiff. Carlin, Carlin c& Hall were on the briefs.
    
      Mr, Wilfred Hearn, with whom was Mr. Assistant Attorney General Frank Davis, jr., for the defendant.
    The following are the facts of the case as found by the court:
    I. The plaintiff is a corporation duly organized and existing under the laws of the State of Delaware, and its officers and stockholders all citizens of the United States, with its main office at Washington, D. C., and its factory and place of business is Benton Harbor, Michigan.
    On November 1,1918, the plaintiff entered into a contract in writing with the United States, through Lieut. Col. P. N. Merzig, Quartermaster Corps, United States Army, whereby the plaintiff agreed to deliver 23 mobile laundry units, without tractors, in accordance with the specifications, at the rate of one unit December 6,1918, and one unit each five working days thereafter until all the units had been delivered, and the United States agreed to pay the plaintiff for said units the sum of $335,478. A copy of said contract is filed with plaintiff’s petition, and by reference is made a part of this finding. Before the aforesaid contract was entered into on October 21, 1918, the plaintiff was informed by Lieut. Col. P. N. Merzig that it would be awarded the contract for furnishing 23 portable laundry units.
    II. Immediately upon receipt of notice from the officer authorized to award the contract the plaintiff began to arrange for the production of the 23 portable mobile laundry units, and entered into subcontracts aggregating $279,-155 with the following persons on the dates and for the amounts following: October 24, 1918, Troy Wagon Works Co., $70,130; November 6,1918, Lutes-Sinclair Co., $177,400; November 9, 1918, Atlas Laundry Machinery Co., $31,625.
    III. In addition to storage facilities, it was necessary for the plaintiff under its contract to furnish special facilities for the assembling of parts in connection with the manufacture of the portable mobile laundry units, and on November 4, 1918, the plaintiff entered into a contract with George A. Mills & Son for the construction of a brick and cement building at Benton Harbor, at a cost of $12,535.90, which was to be completed within 30 days from the date of said contract.' The said building was completed, and after the suspension of the work under the contract the Lutes-Sinclair Co. took over the building at a price of $6,000, and the plaintiff had to pay and did pay George A. Mills & Son the sum of $6,535.90 for the same.
    IV. The plaintiff continued the performance of its contract without delay, and was making good progress in the execution of the contract when, on November 18, 1918, the United States informed the plaintiff that probably the Government would not require, all the units, and on November 22, 1918, the plaintiff was requested by the United States to suspend work on the contract. Immediately thereafter the plaintiff through its agent came to Washington and, together with agents of the United States, went to the plaintiff’s plant at Benton Harbor for the purpose of arriving at some basis for the settlement of the contract. The plaintiff’s agent and the agents of the United States continued their efforts to arrive at a just and equitable settlement, and the plaintiff made an offer to accept in full discharge the sum of $86,940.10, which offer was rejected; after this offer was rejected the plaintiff then took its case before the Board of Contract Adjustment and claimed the sum of $135,818.60, having added to its former claim a claim for profits; and while the case was pending before said board the plaintiff offered as a compromise to complete 18 units under its contract. This offer was also rejected. After extensive hearings before said board, and appeal from decision of said board to the Secretary of War, the Assistant Secretary of War on May 3, 1920, declined to recognize the claim of the plaintiff in whole or in part. Performance of the contract was thus prevented by the United States, ■although the plaintiff was at all times able, ready, and willing to perform its contract.
    Y. On November 22, 1918, when the United States gave notice of suspension of all work under the contract, the plaintiff’s brick and concrete building was nearing completion, and its three subcontractors above named, with the aid and cooperation of plaintiff, had entered into contracts and agreements of purchase for the delivery of materials, raw and finished, laundry machines and other supplies, which, together with labor and materials required for the erection of said building, aggregated $237,115.13, all of •which purchases.were made in good faith and under contracts containing no provision for cancellation.
    VI. Immediately after notice of suspension of its contract the plaintiff did everything in its power to reduce damages by negotiating settlements with various subcontractors, firms, corporations, and individuals, and by its efforts succeeded in reducing claims of subcontractors from $237,115.13 to $93,476. The plaintiff was, however, compelled to pay and did pay out the following sums: to the Lutes-Sinclair Co., $38,898.83; to the Atlas' Laundry Machine Co., $8,025; to the Troy Wagon Works Co., $28,940.10; to George A, Mills & Son, $6,535.90; for freight on materials, $217.70; in all $82,617.23. These payments were reasonable, and the plaintiff was obliged to pay by reason of its contract with the United States. The plaintiff during the progress of the work actually incurred overhead expense to the amount of $6,074.80.
    VII. The plaintiff, had it been permitted to perform the contract, would have made a profit. The reasonable profit to which the plaintiff is entitled under the evidence in the case is the sum of $18,300.
   Hay, judge,

delivered the opinion of the court:

This is a suit brought by the plaintiff against the United States for the sum of $124,801.89.

From the facts it appears that the United States made it impossible for the plaintiff to perform its contract, although the plaintiff was able and willing to perform it on its part. The plaintiff is suing to recover its losses and expenditures and for profits.

The plaintiff has proved its losses and expenditures, and that they were incurred in an attempt to perform the contract which it had, assumed. It seems to the court that the expenditures were reasonable, and the losses the result of the efforts of the plaintiff to perform the contract. The plaintiff has not received a dollar either for what it did or for what it expended, but after spending months in fruitless negotiations with the defendant it has been obliged to seek its remedy in this court. There can be no question that the plaintiff is entitled to be made whole for its losses and expenditures. Those losses and expenditures amount to the sum of $88,692.33.

In addition to its losses and expenditures the plaintiff is also claiming profits, which it alleges it could and would have made if it had been allowed to complete its contract.

In the case of United States v. Behan, 110 U. S., 338, it has been held that the measure of damages for the breach of a contract is the reasonable amount of the loss which the injured party has sustained thereby. If the breach consists in preventing performance of the contract without the fault of the other party, who is willing to perform it, the loss of the latter will consist in what he has already reasonably expended toward performance. He would also be entitled to profits that he would realize by performing the whole contract. These profits must be determined by the circum- * stances of the case and the subject matter of the contract. They must not be remote, nor speculative, and they must be proven with reasonable clearness and certainty.

The contract under which the plaintiff is claiming was entered into during the war with Germany; before the contract was performed the armistice was declared, and the Government concluded that it did not need the materials contracted for. Whereupon the Government requested that the contract should be suspended, and took steps which prevented the contractor from performing its contract. The contract would have been completed in about five months from its inception.

In arriving at the profits to which the plaintiff is -entitled the court must take into consideration the progress attained, the unfinished part of the contract, the probable cost of completion, the whole contract price, the estimated pecuniary result, favorable or unfavorable to it, had it been permitted to go on and complete its contract, and the risks which it must have run had it completed the contract. The court will also take into consideration the relief of the contractor from responsibility for a large part of the contract, and for the time and trouble which a full performance would have required and imposed upon it and the release of contractor’s plant for other work. And as it was relieved by relinquishment of a large part of the contract by the United States of all the responsibility and risks involved in so much of it, as well as from devoting its timé and attention to it to that extent, there must be a reasonable deduction from the probable profits on those accounts. In, the application of the principles above laid down there is always difficulty; each case must be determined by its own circumstances.

In this case the court is of opinion that taking all of its circumstances into consideration the plaintiff is entitled to profits in the sum of $18,300. The defendant does not question the plaintiff’s claim for profits except upon the ground that the Government’s actions in preventing performance do not constitute a breach of the contract, and that therefore no recovery can be had for profits.

As the court is of opinion that the actions of the defendant do constitute a breach of the contract, and as the plaintiff’s claim for profits is proved, the court allows profits as well as expenditures and losses, and judgment will be entered for the plaintiff under Findings VI and VII, in the sum of $106,992.33. It is so ordered.

Graham, Judge; Downey, Judge; Booth, Judge; and Campbell', Chief Justice, concur.