Brown v. United States
Brown v. United States
Opinion of the Court
This in an action against Brown and Fleming as sureties on a bond executed to the United States. By the bond, they undertook that if the bid of Charles Frey, Jr., “herewith accompanying, dated June IS,. 1899, for building a riprap breakwater at Earchmont Harbor, Eong Island Sound” should'be accepted within 60 days from the date of the opening of proposals therefor, Frey would, within 10 days after notice of such acceptance, enter into a contract with the proper officer of the United States to do the work proposed by said bid, at the prices offered by said bid, and in accordance with the terms and conditions of the advertisement inviting said proposals, and that he would give bond with good and sufficient sureties for the faithful and proper fulfillment of such contract ; and they further undertook to pay to the United' States, in case Frey should fail to enter into such contract or give such bond within 10 days after said notice of acceptance, “the difference in money between the amount of the bid of said bidder so accepted and the amount for which the proper officer of the United States may contract with another party to do the work proposed, if the-latter amount be in excess of the former.”
By the advertisement mentioned in the bond the government invited proposals from bidders for furnishing and laying in place toward the construction of a riprap breakwater such a quantity of stone, “dependent upon the price per ton of stone bid,” as could be furnished in place for $45,000. The proposal or bid of Frey mentioned in the bond was to “furnish the riprap stone in place at 4-3 cents per ton.” Frey’s bid was accepted by the government; but, after due notification thereof, he failed to enter into the contract, and, more than 10 days after such notification having expired, the government readvertised the work and invited proposals similar to those originally invited, and, having accepted the bid of one Conk ling pursuant thereto, entered into a contract with him. By the bid of Conk-ling he undertook to furnish the stone and lay it in place at the price of 51 cents per ton. Conkling partly performed his contract, but subsequently abandoned it; and thereupon the government contracted with Anderson & Murphy to complete the work, and they fully performed it.
Upon the trial both parties moved for the direction of a verdict, and the court directed a verdict for the plaintiff.
■ It is the meaning of the undertaking that- the sureties will be responsible that Frey will enter into a formal and binding contract pursuant to his proposal, and if he fails the government may relet the work and enter into an essentially similar contract with another party, and then look to the sureties for indemnity to the extent of its loss. The undertaking does not contemplate that if the second contract is not performed the government may enter into a third, and still look to' the sureties for indemnity for the performance of the contract; but it contemplates that when the second contract ■shall be made the government is to rely for its protection against loss upon that contract, and the responsibility of the party who enters into it. It contemplates that, if by the second contract the government secures as favorable terms as it would have obtained by the original contract, no occasion for indemnity from the sureties can arise; but, if the terms are not as favorable, the occasion will arise, and the loss is to be measured by the difference in the contract prices of performance. It does not mean that if the second contract shall not be performed, and a third is made, the sureties are to be thereby released from their obligation. It does mean that, if by the terms of the second contract no apparent loss has accrued to the government, they are no longer liable; but, if by its terms an apparent loss has accrued, they shall be liable; and whether a third contract is made or not,' or whether the government incurs a larger or smaller subsequent loss,' or 'whether it abandons the work altogether, are matters of no concern to them.
The obligation of a surety is not to be extended beyond its terms, and it follows that if the contract made by the government with Conkling was not to do substantially the work which Frey proposed to do, the deviation precludes the government from establishing the amount of the loss.
It appears that the contract which Frey should have entered into would have required him to furnish 101,000 tons of stone, while the contract entered into with Conkling only required him to furnish 88,000 tons. Such a difference in the quantities of stone to be furnished would render the two contracts radically different were it not that the difference was created necessari!}»- by the difference in the' two 'bids for doing the same work. Both contractors by their bids promised oto supply such a quantity of stone as at the prices per
Owing to the failure of Frey to enter into and perform his contract, the government obtained under the Conkling contract 16,000 tons less stone than it would have obtained from Frey. It was obliged to pay $45,000 for 16,000 tons less than it would have obtained by the terms of Frey’s proposal. The phraseology of the bond is not happily chosen, but, read as it must be, with the advertisement a,nd the proposal of Frey, which are annexed to and form a part of it, we are unable to doubt that it obligated the defendants to pay to the government the difference, at the price fixed in Frey’s proposal, between the quantity of stone' which he promised to deliver, and the quantity which the government was able to obtain by the Conkling contract. It follows that a verdict was properly directed for the plaintiff. , .
The assignments of error do not challenge the correctness of the computations adopted by the trial judge in directing a verdict, and consequently we are not called upon to consider whether or not the computation was correct.
The judgment is affirmed.
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