Reporter's Statement of the Case ner as contracting officer, for the general construction at Camp Knox, Kentucky, in accordance with specifications thereto attached at stipulated rates and prices set out in the said contract. 2. Heretofore you have been directed to suspend work under the above contract in view of the enactment by the Congress of the act of July 11th, 1919, by the provisions of which moneys therefor and therein appropriated were rendered not available for the continuance of construction work at Camp Knox and other points. 3. You are advised that an act has been passed by Congress approved February 28th, 1920, entitled "An act to amend the Army appropriation act for 1920, and for the purchase of land, and to provide for construction work at certain military posts, and for other purposes." Under the provisions of this act, and under the approval of the Secretary of War, a sum of $50,000 is available for general construction work at Camp Knox. 4. This act of Congress imposes at this time a limitation upon the amount of work which may be proceeded with now. As this fund, however, is available, you are directed to proceed without delay and to complete the following items set out in your contract at the lump-sums or unit prices indicated therein. Item XVII. Moving wooden tanks on Indian Hill and con- sum_. $13, 177. 20 6, 455. 40 2, 860.00 Item XXXI. Six-inch terra-cotta sewers per lineal foot, about 2,380 feet but not to exceed 5,500 feet, at one dollar and ninety-six cents ($1.96) per lineal foot. Item XXXII. Eight-inch terra-cotta sewers per lineal foot, about 600 feet but not to exceed 1,200 feet, at two dollars and twenty-two cents ($2.22) per lineal foot. 5. Your contract provides for the performance of certain items of work at a certain lump sum or unit price for each item. In case of the five items above mentioned the quantities and prices herein just above specified represent the balance remaining to be done under each item and the appropriate price for that item necessary to complete it according to the contract. 6. The foregoing items are specified in the order of their importance. The total compensation for those items under your contract is less than the authorized sum of $50,000. Additional items will be designated, which items shall be completed by you, subject to the conditions of the contract. Reporter's Statement of the Case The additional items will be specified to you by proper authority, either from this office or by the constructing quartermaster at Camp Knox. 7. You are advised that, due to the limitation imposed by the act of February 28th, 1920, supra, the decrease in the work to be done under your contract has been found necessary under the stipulations of that contract for the omission of work at unit prices, and that your said contract is in effect only so far as appropriation adequate to its fulfillment has been granted by Congress and is available. By: (Signed) R. C. MARSHALL, Jr., Brigadier General, U. S. A., Chief of Construction Division. G. F. D. TRASK, Colonel, Quartermaster Corps. Plaintiff replied March 18, saying it would proceed as directed, and reiterated its protest against the breach of the contract. Plaintiff did proceed on the items enumerated, and on completion thereof received payment in full under the terms of the original contract. XI. On May 11, 1920, on letterhead "Construction Division Utilities Branch, Camp Knox, Ky.," the plaintiff received a letter directing it to proceed under item 40 of the contract with certain work designated in the letter, which work, it was recited, amounted to 462 per cent of the total amount as shown in the contract of June 26, 1919, or $33,600. This letter was signed Robt. E. Scott, major, Construction Division, constructing quartermaster. The plaintiff received payment in full of the contract price for all work done under the items indicated. These payments, together with those of 1919, were approximately $92,000, of which approximately $50,000 was profit to the plaintiff. XII. As a result of the order to stop work on July 7, 1919, the plaintiff was forced to expend and did expend the sum of $1,874.61 for wages and salaries after July 7, 1919, in closing up the work; for labor in collecting tools and equipment, $136, incurred on July 9 and 10, 1919; for freight and carrying charges, on materials and equipment ordered, delivered, and returned, $797.06; for miscellaneous expenses in closing up the work, $1,681.85; and $214.72 for rental of Opinion of the Court necessary equipment for the days of July 8, 9, 10, and 11, 1919; in all, $4,704.24, which sum was expended by the plaintiff for and on behalf of the United States, and which the United States has not paid to the plaintiff. XIII. The plaintiff after it returned to the work in March, 1920, expended for new material and extra labor the sum of $3,993.19; this amount was expended on the items which the plaintiff performed and completed under the terms of the contract after March, 1920, and for which it was paid the full contract price. The plaintiff also expended the sum of $7,417.02, which sum represented the cost of labor on work done in 1920 above what labor would have cost if the work had been done in 1919. The labor was done on the items which the plaintiff performed and completed under the terms of the contract after March, 1920, and for which it was paid the full contract price. XIV. The plaintiff expended for necessary extra work the sum of $700.10. The plaintiff performed this extra work without receiving a written order therefor. In order to comply with the specifications of the contract, this work had to be done and was essential to the progress of the work. The work was ordered to be done by the construction quartermaster having charge of the work. The United States has had the benefit of this work and is now enjoying the use of it. XV. The plaintiff, had it been permitted to perform all the items of the contract, would have made a profit. The reasonable profit to which the plaintiff is entitled on the items of the contract which it was not permitted to perform, under the evidence in the case, is the sum of $45,900. The court decided that plaintiff was entitled to recover. HAY, Judge, delivered the opinion of the court: The facts are fully set forth in the findings and it is not necessary to recapitulate them here. The first item claimed by the plaintiff is the sum of $4,704.24, which amount the plaintiff expended in the proper care of the materials and property of the United States as Opinion of the Court a necessary result of the stoppage of the work by the United States. This item should be paid to the plaintiff, and the defendant does not dispute it. The next item allowed is the sum of $700.10, which the plaintiff expended for necessary extra work, of which the defendant has received the benefit. This work was done. by the plaintiff upon the verbal order of the constructing quartermaster in charge of the work, but no written order was given. The work so done was necessary to the completion of the work. If it had not been done the work would have been left unfinished. Under the circumstances it does not seem to us that a written order was necessary in order that the plaintiff might be paid for it. The Government received the benefit of it, and the plaintiff is entitled to recover on quantum meruit therefor. Gearing v. United States, 48 C. Cls. 12, 26, 27. The next item allowed is the sum of $45,900, which, under the evidence in this case, is the reasonable profit which the plaintiff would have made had it been permitted to perform the contract. There is no question that the United States breached the contract by its refusal to allow the plaintiff to perform and complete its contract. The plaintiff would have completed its contract within the period of time prescribed therein if the United States had not stopped its performance. It has been held that if the breach consists in preventing performance of the contract without the fault of the other party, who is willing to perform it, he would be entitled to profits that he would realize by performing the whole contract. As to how these profits should be arrived at see Broadbent Laundry Corporation v. United States, 56 C. Cls. 128, 132, 133. The court in arriving at the amount of profits to which the plaintiff is entitled followed the rule laid down in the Broadbent case, supra. See also United States v. Smith, 94 U. S. 214, 217, 218, 219; United States v. Behan, 110 U. S. 338. The law is well established that the United States must be bound by the same rules which govern in cases between individuals; and the plaintiff in this case must be awarded damages to the extent of the loss Opinion of the Court which was the necessary consequence of the suspension of the contract by the United States. In this case the work was stopped by the United States. After eight months or more the plaintiff was allowed to resume only a part of the work, but was still refused permission to complete the entire contract. This was an improper interference with the work on the part of the United States. If the plaintiff by reason of this stoppage incurred any loss or damage, the United States must answer for it, and hence the plaintiff has been allowed the items found in Finding XII. The Government contends that by virtue of the passage of the act of July 11, 1919, 41 Stat. 128, the contract was canceled; that the Congress had the right to so cancel the contract, and that therefore there was no breach of the contract by the United States. A reading of the statue referred to discloses the fact that Congress did not withdraw the appropriation which had been made for construction work at Camp Knox; it only withdrew appropriations which had been made for the purchase of real estate for the construction of Army camps and cantonments. The insertion of the word "of" before the words "for the construction of camps" in the statute does not make sense; it was evidently a clerical or typographical error. The word "of" can not be turned into "or," and Congress having its attention called to this error, on August 12, 1919, passed a joint resolution clarifying that part of the statute above quoted, and in the preamble of the resolution that part of the statute was restated and the word "of " was left out. The joint resolution reads as follows: "Whereas doubt exists as to the proper interpretation of said provision and as to the intention of Congress in enacting the same: Therefore be it "Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the foregoing provision of said act shall not be construed to prevent the payment from the unexpended balances of said appropriations of bills lawfully incurred for construction work actually performed or construction material actually purchased and actually produced under the terms of the contract prior to the approval of said act. "Approved, August 12, 1919." (41 Stat. 278.) |