United States v. Weisberger , 124 C.C.A. 429 ( 1913 )

ROSS, Circuit Judge

(after stating the facts as above). Only three of the five assignments of error‘can be considered b)*- us, to wit:

“(2) That the court erred in denying plaintiff’s motion for judgment at the close of all the testimony in the case.

“(3) That the verdict herein is contrary to the evidence and against the law.

“(4) That the court erred in entering judgment herein in favor of the defendants, and erred in entering judgment upon the verdict.”

At the time the motion was made for judgment in favor of the plaintiff, the evidence before the court and jury tended to show that the government had suspended the contract, taken possession of the contractor’s material and equipment, and, departing from the provisions of the contract in a number of material particulars, had finished that portion of the work covered by the contract at a claimed excess of $51,095.05 in cost, for which it sued the contractor and his surety. 'It is true that the Secretary of the Interior was by the express terms of the contract authorized, upon' the happening of the conditions therein specified, to suspend the operation of the contract, take possession of the contractor’s material and equipment, and use the same for thé completion of the work contracted for, either directly by the government or by other parties for it,- and recover any excess, of cost arising therefrom over and above the contract price from the contractor and his surety. The work so authorized to be taken over and completed, either by the government itself or by other parties employed by itj was manifestly the work specified in the contract, and not any substantially different work. This is shown, not only by general principles applicable to such matters, but also in this instance by specific provisions of the contract itself, notably by the provision of the contract just referred to, and also by subdivisions 25 and 27 thereof, by 'the first of which the Secretary of the Interior is given the right to make certain changes and modifications at any time while the contract is being performed by the contractor, and by the second of which the contractor is given the right to make application to the government for a modification of the structural requirements or methods of work, should he, by reason of conditions developing during the progress of the work, find it impracticable to comply strictly with the specifications of the contract.

The law is, we think, well settled that where the government undertakes to take over work contracted to be done for it, for some breach of the provisions of the contract, and itself perform the work, or employ a third party to do so at the expense of the former contractor and his surety, the work so to be completed, in order to hold the contractor or his surety for the excess of cost, must be in substance the work that was contracted for, and must be performed without substantial departure from the contract. United States v. Freel, 186 U. S. 309, 22 Sup. Ct. 875, 46 L. Ed. 1177; American Bonding Co. v. United States, 167 Fed. 910, 93 C. C. A. 310; American Bonding Co. v. Gibson, 127 Fed. 671, 62 C. C. A. 397; United States Fidelity & G. Co. v. United States, 194 Fed. 611, 116 C. C. A. 187; Mundy v. United States, 35 Ct. Cl. 265.

If the power conferred upon the Secretary of the Interior to suspend the contract, take over the work contracted for, and complete it at the cost of the contractor, could be properly held to authorize a substantial departure from the provisions of the contract in completing it, and the recovery from the contractor of the excess of the costs of such completion, it might very well work the ruin of the contractor. To hold him or his surety liable for the excess of cost of substantially different work would clearly be to hold them liable for something for which they did not bind themselves and the cost of which they might have no means of determining-. Besides, the third affirmative defense set up by the contractor alleged, as has been seen, that there was a mutual mistake of the parties in the making of the contract, and that it was impossible and impracticable for the contractor to perform it in accordance with its terms and conditions. Much of the testimony of several of the government’s own officers, having charge and supervision of the work, strongly tends to sustain that conclusion; and one of the defendant’s witnesses — Herbert J. King— expressly testified that it was practically impossible to perform the work in accordance with the contract. The whole case shows that it was a novel undertaking, neither the government nor the contractor knowing much of its feasibility; for otherwise, as said by the court below in one of its opinions, the contract was “such that no man in his senses and not under delusion would make on the one hand, and as no honest and fair man would accept on the other” — citing Hume v. United States, 132 U. S. 406, 10 Sup. Ct. 134, 33 L. Ed. 393.

We are of the opinion that the disposition of the case made in the court below was right, and its judgment is accordingly affirmed.