Case ID: us-ct-cl_61/html/0666-01.html
Source: Caselaw Access Project
Author: {"author": "Campbell, GMef Justice,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ERIC LANGE AND A. H. BERGSTROM, COPARTNERS, TRADING AS LANGE & BERGSTROM, v. THE UNITED STATES
    [No. C-930.
    Decided February 15, 1926]
    
      On the Proofs
    
    
      Contracts; delays 6y Government. — Where from the terms of a construction contract it is manifest that the parties thereto contemplated that there might be delays by the Government in furnishing necessary material, and there is no provision therein fixing the time when said materials were to be furnished, the contractor can not recover damages for such delays. GrooTc Go. v. United States, 270 TJ. S. 4, cited.
    
      The Reporters statement of the case:
    
      Mr. George R. Shields for the plaintiffs. Mr. Byrnmn E. Hinton and King <& King were on the brief.
    
      Mr. Ralph 0. ’Williamson, with whom was Mr. Assistant Attorney General Herman, J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. On October 16, 1917, and thereafter during the time of the different transactions set out in these findings of fact, the plaintiffs, Eric Lange and A. H. Bergstrom, were copart-ners doing a contracting business under the firm name and style of Lange & Bergstrom.
    II. On October 16, 1917, plaintiffs entered into a formal contract with the United States, represented by A. H. Parsons, Acting Chief of the Bureau of Yards and Docks, Navy Department, a duly appointed contracting officer, and having authority to represent the United States. By the terms of the contract the plaintiffs agreed to construct and complete nine magazine buildings at the navy yard, Mare Island, Calif., in accordance with specifications appended to and referred to in the contract. The work was to commence immediately after the delivery of a copy of the contract to the contractors and to continue without interruption unless otherwise directed by the Government. The entire work for six of the said buildings was to be completed within two calendar months from the date of the arrival of 90 per cent of all steel required for the six buildings at the works of plaintiffs. The work on the three additional buildings'covered by said contract was to be completed within 35 calendar days after the receipt of the necessary steel at the works of plaintiffs.
    A true copy of the contract and specifications and change orders is filed with the petition herein and attached thereto, and is made a part of this finding of fact by reference' thereto.
    Contractors were to be paid for all of said work the sum of $74,802. They have been paid in full the contract price. In addition to the contract price the contractors have been paid. $12,498.68 for additional work ordered and at agreed prices under change orders, copies of which are attached to the petition.
    On or about March 20, 1919, the contractors executed a final release, but added thereto the clause “ being the full and entire sum due upon the completion of the work except compensation of the party of the first part on account of delay in the delivery of steel if allowed by the Auditor of the Navy-Department.” The claim was not allowed by the auditor.
    III. The Government of the United States was to furnish, the greater part of the steel necessary for the work, and said buildings could not be completed until the steel for that purpose was delivered. On September 15, 1917, at the-time plaintiffs submitted their bid, Mr. Lange, one of the contractors, inquired of Commander Carlson, public-works-officer, when the necessary structural steel would be available for fabrication, and was informed by Commander Carlson, or one of his subordinates, that from advices received shipment of the steel was expected in about three weeks.
    IV. Immediately upon receipt of notice of award of the contract contractors began the work of preparing necessary foundations, purchased the materials they were to supply, made contracts for the fabrication of the steel that was to be supplied by the United States, and prepared themselves in all respects to carry on and complete the work within the time specified in the contract for the completion thereof.
    V. The first shipment of steel that was delivered by the United States consisted of three carloads and delivery was made on or about December 6, 1917. This first shipment consisted of angles and beams but did not include other-steel that was required in the erection of any one building. Following the receipt of these three cars of steel no more-steel in quantity was delivered by the United States until January 24, 1918, when one car was delivered. A large-part of the remaining steel was delivered by the United!
    
      States in March, 1918, but certain parts necessary in the erection of the buildings were not delivered until the early part of May, 1918.
    VI. Contractors made timely and repeated efforts to hasten the delivery of the steel by the United States. They took the matter up orally and in writing with the public-works officer at Mare Island and also with the Bureau of Yards ,and Docks in Washington. One of the contractors made two trips to Washington, one in December, 1917, and one in March, 1918, in an effort to expedite the delivery of steel required in the work of construction of the buildings. They .also notified the public-works officer that the delay in the receipt of steel was greatly increasing the cost of the work. The Government on its part was making through its proper officers every effort possible to secure and deliver the steel within a reasonable time.
    VII. At the request of the plaintiffs, authority was given • to them by the Government to purchase some of the steel in • open market, and by so doing they were able to expedite the erection of the buildings.
    VIII. On September 14, 1918, contractors filed a claim for reimbursement of the increased expense occasioned by the delay in the delivery of steel in the sum of $2,766.08. A ' board consisting of Lieut. Commander A. N. Mitchell, United .‘States Navy (retired); Lieut. T. J. Shack (C. E. C.), United States Navy, and Lieut. C. H. Sheldon (G), (T.), United States Navy, was appointed to consider the claim of • contractors for additional compensation on account of the . delay in the delivery of steel which was to be furnished by the Government. This board convened at 2 p. m. on De- • cember 10, 1918. In appointing this board the commandant had instructed it to inform the contractors that the action in appointing a board to consider their claim did not commit ■ the Government to the payment of the same nor to the recognition of its validity, and the contractors were so informed ' by the board, and having been notified that they would be . given an opportunity to present their claim in person before the board appeared and testified in their own behalf. The board carefully checked the items in the claim filed by the > contractors, compared them with the daily reports of the inspector on the work, and on February 4,1919, submitted its report, stating 'that the increased cost of carrying out the work due to the delay in the delivery of the steel which was to be furnished by the Government was $2,489.47, plus 1 per cent increase on account of increase in the contractor’s bond, to which there should be added a 10 per cent profit. It was recommended by the board that a change order be issued increasing the contract price as follows:
    On account of additional expense to the contractor due to nondelivery of steel, on account of cost of labor_$2, 489. 47
    Increase in bond, 1 per cent_ 24. 89
    Profit on above, 10 per cent_ 248. 95
    Total- 2,763.31
    No change order was issued, nor did the Bureau of Yards and Docks act upon said report.
    IX. The actual cost of the work performed by contractors in 1918, exclusive of profit, over and above what it would have cost them had the Government delivered steel in time for the work to be done in November and December, 1917, was $2,514.36.
    The court decided that plaintiffs were not entitled to recover.
   Campbell, GMef Justice,

delivered the opinion of the court:

The plaintiffs entered into a contract with the United States for the erection of nine magazine buildings at Mare Island Navy Yard. The entire work on six of them was to be completed within two calendar months from the date of the arrival at plaintiffs’ work of 90 per cent of all the steel required for them, and the work on the other three buildings to be completed within 35 days after the receipt of the steel at plaintiffs’ works. The larger amount of the steel was to be supplied by the Government, and the basis for this suit is the alleged delay of the Government in furnishing the steel. The contract was executed on October 16, 1917, and the entire work was completed in June, 1918. The plaintiffs have been paid the full contract price of $74,802, and in addition have received about $18,000, the agreed price for some other work done under “ change orders ” that was authorized by the contract. Pending the delay in delivery of the steel there was an increase in' wages and in cost of transportation and other items of expense, but the two mentioned embrace the principal items of the claim here asserted that the plaintiffs were put to increased cost over what they would have been subjected to if the steel had been furnished earlier. It is manifest from the terms of the contract that the parties had in contemplation that there might be delays incident to securing the materials. The contract is silent as to the time within which the steel would be delivered, and it is probable that it was purposely silent on this score. The plaintiffs were experienced builders, and it was a matter of common knowledge that the existing war was making its demands on all kinds of manufacturing concerns. It is trite to say that the undertaking meant that the steel would be supplied within a reasonable time, but in the existing circumstances it would be difficult to determine what was a reasonable time, and the parties contracted with reference to these uncertainties. Some emphasis seems to be laid by plaintiffs upon the fact that when their bid was made in September they inquired when the steel would be forthcoming and were told that it had been ordered and was expected in a few weeks. But there is not only no such provision in the contract that was subsequently executed in October, but the contract itself contains a provision that “ oral statements ” would not be allowed to affect its provisions. In the case of Crook Co., 59 C. Cls. 593, there was a contract which in most of its essential features was a counterpart of the contract in this case, the general provisions being the same. There was delay caused by the Government and a temporary suspension of the work. This court held that the plaintiff could have refused to go on with the work, but having continued with the work it waived the breach. The petition was dismissed and the H. E. Crook Co. took an appeal to the Supreme Court of the United States. It was in that court contended by the Government “ that by the terms of the contract it was not bound to pay damages for delay.” The Supreme Court, 270 U. S. 4, after reviewing the terms of the contract say: “ We are of opinion that the failure to exclude the present claim was due to the fact that the whole frame of the contract was understood to shut it out.” The cases of Wells Brothers, 254 U. S. 83, 86, and Wood, 258 U. S. 120, both of which were appeals from the Court of Claims, are cited. We do not mean to say that the Government may not be liable in damages for its delay in some cases, but we do mean to say that the construction which the Supreme Court gave to the contract in the .case mentioned is controlling upon this court where the same kind of contract appears. Our conclusion is that the petition should be dismissed. And it is so ordered.

Graham, Judge; Hat, Judge; Downey, Judge; and Booth, Judge, concur.