페이지 이미지
PDF
ePub
[blocks in formation]

hension of the parties and the seizure of the property. Whatever rights they had are asserted to arise by virtue of the assignments made April 1, 1913, and after the filing of the original petition in bankruptcy.

For an attorney fee for services to be rendered in contemplation of bankruptcy the act makes specific provision in subdivision d of § 60, and the amount thus attempted to be used in contemplation of bankruptcy proceedings is subject to revision in the court of original jurisdiction and not elsewhere. See In re Wood and Henderson, 210 U. S. 246.

The contention of the appellants and the proposition upon which they rely to sustain jurisdiction in this court is that by their intervention in the proceeding in the United States District Court in Louisiana they initiated a controversy in the bankruptcy proceeding, which is appealable to this court from the Circuit Court of Appeals, as are ordinary cases in equity where original jurisdiction does not rest on diverse citizenship entirely (Judicial Code, § 128). To maintain that proposition Hewit v. Berlin Machine Works, 194 U. S. 296; Coder v. Arts, 213 U. S. 223; Knapp v. Milwaukee Trust Co., 216 U. S. 545; Houghton, Receiver, v. Burden, 228 U. S. 161, and cases of that character are cited. In those cases it was held that controversies arising in bankruptcy, in the nature of plenary suits, concerning property claimed by others than the bankrupt do not come under the special provisions of the Bankruptcy Act governing petitions for review and appeals, but take the course of ordinary cases in equity and are not final in the Circuit Court of Appeals where other cases of a similar character would not be.

The Bankruptcy Act provides for review under § 24b of administrative orders and decrees in the course of bankruptcy proceedings which are not made specially appealable under § 25a.. And controversies arising in bankruptcy proceedings, of the character of which we

[blocks in formation]

have spoken, under § 24a, are appealable like other equity cases. See Matter of Loving, 224 U. S. 183. In this case merely ancillary jurisdiction in a summary proceeding in bankruptcy was invoked in the seizure of this property in the hands of those holding it for the bankrupts, and its character could not be changed or enlarged by the attempted intervention of Lazarus, Michel & Lazarus under alleged assignments of the property made after the filing of the petition in the original bankruptcy proceeding. We think the District Court was right in holding, and the Circuit Court of Appeals right in affirming its decision, that whatever claim Lazarus, Michel & Lazarus had under the circumstances here shown must be asserted in the court of original jurisdiction. The attempted intervention in the ancillary proceeding did not give jurisdiction over a controversy in bankruptcy appealable under the Judicial Code to the Court of Appeals and thence to this court. This conclusion must result in the dismissal of the attempted appeal here.

It is contended, however, that this motion is premature, because the record in this case has not been printed. It is true that ordinarily such motions made before the record is printed must be accompanied by a statement of facts upon which they rest or by printed copies of so much of the record as will enable the court to understand the case. Under the present practice it is permissible to file the record printed in the court below, and we have a printed transcript of the proceedings in the District Court. In this printed record matters which the briefs do not dispute are shown, and we think we are sufficiently advised as to the situation of the case to dispose of it now without doing injustice to the parties. National Bank v. Insurance Co., 100 U. S. 43.

We reach the conclusion that this appeal

Must be dismissed.

Argument for Plaintiffs in Error.

234 U.S.

STONE, SAND AND GRAVEL COMPANY v. UNITED STATES.

ERROR TO THE CIRCUIT COURT OF APPEALS FOR THE FIFTH CIRCUIT.

No. 302. Argued April 23, 1914.-Decided June 8, 1914.

Where the contract contains a provision for a method of annulment and liquidated damages in case of a breach by failure to commence work and the Government avails of that provision it is only entitled to the liquidated damages and cannot recover damages for difference in cost on reletting the contract under a provision for failure to complete or abandonment after commencing the work. United States v. O'Brien, 220 U. S. 321, distinguished.

The benefit and burden of a provision in a Government contract giv

ing a right to annul in consequence of a breach by failure to commence work must hang together and the Government cannot avail of the former without accepting the latter.

195 Fed. Rep. 68, reversed.

THE facts, which involve the liability of a contractor and its surety under a contract with the Government for excavation work, are stated in the opinion.

Mr. William Marshall Bullitt, with whom Mr. Henry C. Willcox and Mr. T. M. Miller were on the brief, for plaintiffs in error:

The contract as construed in United States v. O'Brien, 220 U. S. 321, means: Clause A: If the contractor (1) fails to begin work on the day specified or (2) fails (in the judgment of the Government engineer) to prosecute the work faithfully, then the United States may annul the contract, i. e., refuse to perform it further; in which event the United States may keep all money or retained percentages in its hands, but shall have no further damages.

Clause B: On the other hand, if the contractor fails to

234 U.S.

Argument for Plaintiffs in Error.

complete work by the time agreed on, whether such failure be due to (1) a repudiation or refusal amounting to an anticipatory breach or (2) abandonment after doing some work or (3) mere failure to complete though still working at the expiration of the contract period, then in either such event, the United States may recover the excess cost of completing the work. Farrelly v. United States, 159 Fed. Rep. 671; United States v. O'Brien, 163 Fed. Rep. 1022; S. C., 220 U. S. 321.

When the United States annulled the contract and retained the $6,206.69 money or reserved percentage due the contractor (which clause A authorized it to retain), then ipso facto the United States exercised the sole, exclusive and entire right it had under the contract; and it cannot hold the contractor liable for the excess cost of completing the work, which it had, by annulment, prohibited the contractor from further trying to perform.

Clause A calls for liquidated damages. United States v. O'Brien, 220 U. S. 321; Sun Printing Ass'n v. Moore, 183 U. S. 642, 669; United States v. Bethlehem Steel Co., 205 U. S. 105, 119.

As clause A fixed the forfeiture of retained pay as the penalty to a contractor upon an annulment under the conditions specified in clause A, the United States cannot claim an inherent right to further damages under clause A. United States v. O'Brien, 220 U. S. 321, 327.

Clause B (which is the only clause in the contract permitting the United States to recover the excess cost of completion) never came into operation against the contractor; and hence no recovery can be had under its provisions. The petition does not declare upon a breach of clause B. There is no "failure to complete" when the contractor is stopped from further work by an annulment of his contract. Cases supra.

There were two independent grounds why there could be no recovery in the O'Brien Case, both of which exist here.

Argument for Plaintiffs in Error.

234 U.S.

See also Quinn v. United States, 99 U. S. 30; Sparhawk v. United States, 134 Fed. Rep. 720; United States v. McMullen, 222 U. S. 460; Graham v. United States, 231 U. S. 474; United States v. Maloney, 4 App. D. C. 505.

The American Surety Company was released by reason of the 50 days' extension of time, which the United States granted to the contractor without the knowledge or consent of the surety; which extension was not made pursuant to any reserved power in the contract.

The time of beginning was material and was of the essence of the contract.

The extension of time for beginning was permissible only for freshets, ice, etc. United States v. Gleason, 175 U. S. 588, 604.

The extension was not granted on account of freshets, ice, etc.

The contractor gave a valuable consideration for the extension; it was not a mere forbearance by the Govern

ment.

The surety never consented in advance to the extension except on account of freshets, ice, etc.

The surety was released by the extension. Reese v. United States, 9 Wall. 13; Earnshaw v. Boyer, 60 Fed. Rep. 528; United States v. Freel, 186 U. S. 309. United States v. McMullen, 222 U. S. 460, and Graham v. United States, 231 U. S. 474, distinguished.

Even if defendants are liable for all the damages suffered by the Government, the excess cost of completing the work under the Atlantic Gulf and Pacific Co. contract, is not the proper measure of damages, owing to vital differences between the original contract and the relet contract.

Excess cost of completion is the proper measure of damages, but it must be for doing substantially the same work, under substantially the same conditions as the original

« 이전계속 »