The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1906-08-10
The
FORFEIT.
Construction Company
Settles Asylum
Contract.

As between the Department of Public
Works and the Observation-Disclosures
Engineering & Construction Co, the
incident of the Asylum building con-
tract is closed. Yesterday deed was
executed between C. S. Holloway
superintendent of Public Works, and
Henry c. Easton Jr., holding the power
of attorney of the company with the
long name. whereby five hundred dol
lars of the conpany's money passed in
to the treasury as a government realiZ-
alton. This $500 is the penalty the
company pays for failure to perform its
contracts to erect the Asylum build
ings.
Now, although the loan money duly
appropriated for the erection of the
buildings has been segregated to that
purpose in the treasury for years-al-
though as far back as four or five years
ago the Board of Health had voted
the need of new Asylum buildings to
be a real emergency requirement
nothing can be done toward giving a
new contract for the purpose until the
Legislature again makes an appropria-
ton therefor. The reason why, few
facts will show.
To the loan appropriation bill for
the fiscal period beginning July l. 1903,
and ending June 80, 1905, which con-
tanned an item of $4,000 for new Asy-
lum buildings, there was rider to the
effect that in any case in which a con-
tract was let prior to the expiration of
the period the amount unexpended on
such contract should be set aside in
the treasury to the credit of such con-
tract This was a provision to ensure
1114s al
ed for, or the payments becoming due
thereon. when the time for completion
was later than the close of the period
or unforeseen delay should make it so.
There were three contracts let for the
Asylum buildings, respectively in
amounts $306s, $1572 and s47,s16-a total
of $50, 456. The principal if not the sole
contractor was the Ameriean-Hawaiiaa
Engineering & Construction Co. Pur-
suant to the provision in the appro-
priation bill already mentioned, the
Auditor directed the Treasurer to set
apart the amount of the company's
contract price for its payment. This
was done, the amount being credited
in the contractors name-the Ali. z.
&c C. Co.
That is where the hitch came. Had
the contractor failed in performance OF
it's contract at any time before the
close of the fiscal period ending June
80. 1905, long enough to have the con-
tract forfeited aid new bids obtained
prior to that date, new contract
might have been registered timely for
setting apart its price in the treasury.
But it happened that the American
Hawaiian Engineering & Construction
Co. had until October II, 1905, for the
completion of it's contract. What time
it had for beginning work in substan-
tial earnest is immaterial, owing to
the turn affairs took. October II, 1905,
was 900 late for awaiting of the appro-
rriation under any contract made aft
er June 80 of that year. Hence the
necessity of awaiting the session OF
1907 for new appropriation
It will be remembered that there
was a good deal of talk about pro-
curing a forfeiture of the contract,
with some little movement toward
that end initiated. The defense of the
contractor is also within easy memory.
1t was that the specifications required
concrete blocks such as could be pro-
duced by no machine until then in
vented. Governor Carter, having lost
patience over the contractors mac
tivity, directed that legal proceedings
be brought to compel it to go ahead
or have the contract forfeited. Lorrin
Andrews, the then Attorney General,
at that stage rendered an opinion to
the Governor, holding that until the
time limit of the contract had expired
no proceedings could be brought sue
cessfully either to recover the penalty
or to have the contract forfeited. This
is why nothing was done in the matter
before October II last, when as al
ready shown it was too late to use
the appropriation.
1t may be thought by some that the
of $500 just paid by the del
linquent contractor is ridiculously
small. The fact is, however, that the |
bond was for a penalty and not for
liquidated damages. All that could |
have been recovered otherwise would
be the difference between the lapsed |
contract price and the new contract
price had fresh bids been invited, in
the event that the latter was higher
than the former
So ends the history of the famous |
Asylum contract. For fecundity of |
controversy, unmitigated and unliti- |
gated, it forms an episode in Hawai- |
ian public contractual annals without
a parallel until the turmoil over the !
Nuuanu dam construction arose.