Case ID: us-ct-cl_99/html/0435-01.html
Source: Caselaw Access Project
Author: {"author": "\n      \n      Madden, Judge, Whaley, Chief Justice,\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

NILS P. SEVERIN, AS SURVIVING PARTNER OF NILS P. SEVERIN AND ALFRED N. SEVERIN (NOW DECEASED), FORMERLY CO-PARTNERS TRADING UNDER THE STYLE OF N. P. SEVERIN COMPANY v. THE UNITED STATES
    [No. 43421.
    Decided May 3, 1943]
    
    
      Mr. Herman J. Galloway for the plaintiff. Mr. Bynum E. Hinton was on the briefs.
    
      Mr. Newell A. Clapp, with whom was Mr. Assistant Attorney General Francis M. Shea, for the defendant. Mr. Cwrrell Vance was on the brief.
    
      
      Petition for writ of certiorari pending.
    
   Madden, Judge,

delivered the opinion of the court:

Plaintiffs entered into a contract with the United States on August 3, 1933, to furnish all labor and materials and perform all work required for “the construction, including approaches, etc., of the Post Office at Eochester, New York, per Bid No. 4 (using sandstone for all exterior stonework except where marble and granite are required and substituting steel casement windows for the aluminum casement windows)” for a consideration of $805,923.00, in accordance with designated drawings and specifications. The work was to be completed within 540 days after receipt of the notice to proceed. Plaintiffs were notified to proceed September 2,1932, thus fixing the date of completion on or before February 24,1934.

The defendant employed a firm of architects wlm were “authorized to prepare all drawings * * * criticize and approve plaster models or ornamental work as shown or noted on contract drawings.” Article 46 of the specifications provided that the defendant would furnish the models indicated on the drawings. Plaintiffs proceeded with the work but they, and the subcontractor with whom they had made a contract for the cutting of the marble caps and the ornamental work, were delayed because of the failure of the defendant to furnish the models for the exterior marble column caps for the porticos which were at two entrances to the building. The roofs of the porticos were supported by the columns, the caps of which were between column and frieze.

The letter from the Supervising Architect, who was the duly appointed representative of the contracting officer under Article 30 of the specifications, to plaintiffs on January 26,1934, shows that there was delay in furnishing models No. 6 and No. 7, due to the fact that the contract for the models had not been awarded because of faulty designs furnished to the Supervising Architect and the necessity for new designs. Award of the contract for the models was in May instead of the early part of 1933. The models were not approved until the following June and the marble caps were not received by plaintiffs until August 17, 1933.

The defendant does not deny that by reason of its failure to furnish the models plaintiffs and their subcontractor were delayed. A change order was issued extending the time for completion of the contract for 21 days. No allowance was made in this change order for the actual loss sustained by plaintiffs and their subcontractor by reason of the fact that the delay caused plaintiffs to stop work to await the arrival of the models. The subcontractor had its force ready to go to work on the carving of the column caps. It was impossible for plaintiffs to complete the roofs of the porticos because the roofs were to be supported by the columns.

The actual delay caused to the subcontractor was for thirteen days. The actual damage sustained by the subcontractor due to the cost of labor and rental of equipment, which had to be kept idle awaiting the arrival of the models, and the uncertainty as to when they- would arrive, amounted to $702.00. The subcontractor’s overhead was $35.10, and the plaintiffs’ extra overhead on account of this delay was $73.71.

Plaintiffs may have suffered other.losses on their own account, as a result of the delay, but if so, they have not adequately proved them.

We have, then, a case in which plaintiffs are suing for damages sustained by themselves as a result of the Government’s breach of contract and also for damages sustained by another person, a subcontractor. Plaintiffs may, of course, recover for their own loss, which so far as proved, was $73.71.

As to the items of $702.00 and $35.10 which represent losses of the subcontractor, we think plaintiffs may not recover. The subcontractor could not sue the Government since it has not consented to be’sued except, so far as relevant to this case, for breach of contract. But the Government had no contract with the subcontractor, hence it is not liable to, nor suable by him. Herfurth v. United States, 89 C. Cls. 122.

If the subcontractor did have a claim against the Government, it could not transfer that claim to another person, plaintiffs, for example, since assignment of such claims is forbidden by statute. R. S. 3477; 31 U. S. C. 203. The Supreme Court said of this statute, in Spofford v. Kirk, 97 U. S. 484, 488, 489:

It would seem to be impossible to use language more comprehensive than this. It embraces alike legal and equitable assignments. It includes powers of attorney, orders, or other authorities for receiving payment of any such claim, or any part thereof. It strikes at every derivative interest, in whatever form acquired, and incapacitates every claimant upon the Government from creating an interest in the claim in any other than himself.

See also National Bank of Commerce v. Downie, 218 U. S. 345; Seaboard Air Line Ry. v. United States, 53 C. Cls. 107; Packard Co. v. United States, 59 C. Cls. 354.

If, then, we regard the subcontractor as the real party in interest in this claim, we are faced with a legally forbidden attempted assignment of a non-existent claim.

If we look at plaintiffs as the real party in interest in their own suit, we encounter these facts. Plaintiffs did have a contract with the Government. That contract was breached. That breach might, if the contract had been one between private persons, have given rise to a right to win a suit, and to recover nominal damages, even if no actual damages resulted from the breach. But the futile exercise of suing merely to win "a suit was not consented to by the United States when it gave its consent to be sued for its breaches of contract. Nortz v. United States, 294 U. S. 317, 327; Great Lakes Construction Co. v. United States, 95 C. Cls. 479, 502.

Plaintiffs therefore had the burden of proving, not that someone suffered actual damages from the defendant’s breach of contract, but that they, plaintiffs, suffered actual damages. If plaintiffs had proved that they, in the performance of their contract with the Government became liable to their subcontractor for the damages which the latter suffered, that liability, though not yet satisfied by payment, might well constitute actual damages to plaintiffs, and sustain their suit. Here, however, the proof shows the opposite. The subcontract, which is in evidence, shows that plaintiffs and the subcontractor agreed with each other as follows:

21st. The Contractor or Subcontractor shall not in any event be held responsible for any loss, damate (sic), detention or delay caused by the Owner or any other Subcontractor upon the building; or delays in transportation, fire, strikes, lockouts, civil or military authority, or by insurrection or riot, or by any other cause beyond the control of Contractor or Subcontractor, or in any event for consequential damages.

Thus plaintiffs, effectively so far as we are advised, protected themselves from any damage by way of liability over to the subcontractor for such breaches of contract by the Government as the one which occurred here.

Plaintiffs must, then, so far as their claim includes items of losses suffered by their subcontractor, be merely accommodating another person who was damaged, by letting that other person use, for the purposes of litigation, the name of plaintiffs, who had a contract and could properly have sued if they had been damaged. Orderly administration of justice, as well as the statute against assignment of claims, seem to us to forbid that.

Plaintiffs may recover $73.71.

It is so ordered.

Whitaker, Judge; and Littleton, Judge, concur.

Whaley, Chief Justice,

dissenting:

I cannot agree with the majority opinion.

There is no legal or equitable assignment involved. This is an action by a contractor to recover damages suffered by himself and his subcontractor, occasioned by the delay of the defendant. It is admitted that defendant’s delay caused damages to both the contractor and the subcontractor. The plaintiff failed to prove the amount of his own damages but the damages suffered by the subcontractor were established by clear proof. The majority opinion admits that the subcontractor was damaged in the amount of $737.10 by allowing overhead on this amount to plaintiff.

For fifty years it has been the settled doctrine of this court that a contractor could bring suit for himself and his subcontractor for losses occasioned by delay by the defendant before payment was made to the subcontractor. In innumerable cases from Stout, Hall & Bangs v. United States, 27 C. Cls. 385, to Consolidated Engineering Company, No. 43159, decided February 1, 1943 (98 C. Cls. 256), this doctrine has been uniformly followed and never been questioned.

We must bear in mind that general contractors usually sublet specialized work like plumbing and electrical installations to subcontractors. The effect of the majority opinion would be to compel such subcontractors, and they are legion in numbers, to sue in their own names, which they could not do for lack of privity with the United States. This anomalous situation has never been recognized by this court in all its history. And the majority opinion cites no case in the Supreme Court in which subcontractors have been held to be assignors of claims against the United States, merely because they were unfortunate enough to be subcontractors.

The subcontractor of plaintiff agreed in his contract not to hold the contractor for “loss, damage, detention or delay caused by the owner.”

The contractor is the plaintiff in this action. The subcontractor is not suing the contractor or the defendant. Plaintiff is suing for himself and his subcontractor for an admitted loss. The. defendant was not a party to the subcontract. No consideration has been paid by the defendant for the protection given the contractor in the subcontract and without it the defendant cannot avail itself of this defense.

In my judgment it is a travesty of justice to allow plaintiff overhead on the losses suffered by his subcontractor and to deny recovery to plaintiff for his subcontractor of the amount admittedly due him from the defendant, which any court of equity would require the contractor to pay over to his subcontractor after payment to him by the defendant.

I think plaintiff is entitled to recover $810.81.

Jones, Judge, took no part in the decision of this case.