Where a contractor, though not in default, abandons the work and
refuses to complete the contract, the government may relet the
unfinished work to another and apply retained percentages towards
recoupment of additional expenses so incurred.
58 Ct.Cls. 671 affirmed.
Page 270 U. S. 252
Appeal from a judgment of the Court of Claims in favor of the
United States in a suit to recover the amount of moneys retained by
the government from payments made to the claimant on account of
work done under a contract which the claimant afterwards
abandoned.
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
On August 12, 1907, the Midland Land & Improvement Company
agreed with the United States to dredge and dispose of 4,177,110
cubic yards of material in Newark Bay and Passaic River at 16 1/4
cents per yard, payable as the work progressed. The contract
provided that the work should be prosecuted with "faithfulness and
energy," and that the rate of work "will be at least 50,000 cubic
yards per month." On September 24, 1912, the company stopped work,
leaving much unperformed. In 1913, the government declared the
contract "annulled," and had the uncompleted part of the work done
by another contractor, who was paid 26.7 cents per yard.
See
United States v. O'Brien, 220 U. S. 321,
220 U. S. 328.
The additional cost to the government was $141, 127.31. The Midland
contract provided that the government would reserve from each
payment 10 percent until half of the work was completed, and that
the amount reserved might be applied toward reimbursing it for any
additional cost resulting from the contractor's default. The sum of
$33,998.15, which had been reserved, was so applied. In 1917, the
company brought this suit in the Court of Claims to recover the
amount. Upon elaborate findings
Page 270 U. S. 253
of fact, that court entered judgment for the United States. 58
Ct.Cls. 671. The case is here on appeal, taken May 15, 1924, under
ยง 242 of the Judicial Code.
It is contended that, at the time when the government annulled
the contract, the amount of work done had exceeded the aggregate of
the monthly requirements, and hence that the company was not in
default. This question we have no occasion to consider. The
correspondence between the parties and other facts found warranted
the conclusion that the company had abandoned the work and refused
to complete the contract. There was thus an anticipatory breach by
the company, which entitled the government to relet the uncompleted
part of the work.
Compare 82 U. S. 15
Wall. 36,
82 U. S. 48;
Dingley v. Oler, 117 U. S. 490,
117 U. S. 503.
It is also contended that the judgment is erroneous because it was
incumbent upon the government to show that the uncompleted work
done under the later contract did not materially depart from that
described in the repudiated contract, and that this was not shown.
See United States v. Axman, 234 U. S.
36. The lower court concluded that the uncompleted part
of the work was relet on the same specifications. Enough appears to
show that the loss to the government resulting from the plaintiff's
repudiation of the contract far exceeded the amount reserved.
Affirmed.