Guerini Stone Co v. Carlin Const Co

Decision Date07 January 1919
Docket NumberNo. 218,218
Citation63 L.Ed. 275,39 S.Ct. 102,248 U.S. 334
CourtU.S. Supreme Court

[Syllabus from pages 334-336 intentionally omitted] Mr. Edward S. Paine, of San Juan, P. R., for petitioner.

Mr. John C. Wait, of New York City, and Charles Hartzell, of San Juan, P. R., for respondent.

Mr. Justice PITNEY delivered the opinion of the Court.

This case is before us for the second time, our former decision being reported in 240 U. S. 264, 36 Sup. Ct. 300, 60 L. Ed. 636. It was an action for damages, brought by the present petitioner as plaintiff against the present respondent as defendant in the District Court of the United States for Porto Rico. Our first review was upon a direct writ of error sued out by plaintiff under section 244, Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1087, 1157 [Comp. St. § 1215]), prior to the amendment of January 28, 1915 (38 Stat. 804, c. 22, §§ 3, 6 [Comp. St. § 1704a]). Judgment was reversed and the cause remanded for further proceedings. Upon the going down of the mandate a new trial was had, resulting in a verdict in plaintiff's favor for substantial damages. To review the judgment entered thereon, defendant, under the act of 1915, prosecuted a writ of error from the Circuit Court of Appeals for the First Circuit, setting up assignments of error based upon rulings of the trial court in admitting and excluding evidence and in giving and refusing instructions to the jury. The Court of Appeals reversed the judgment and ordered the cause to be remanded for further proceedings (241 Fed. 545, 154 C. C. A. 321); and to review this judgment the present writ of certiorari was allowed (245 U. S. 643, 38 Sup. Ct. 9, 62 L. ed. 528).

The controversy arose in the course of the construction of a federal post office and court building at San Juan, Porto Rico. Plaintiff had a subcontract for a part of the work under defendant, which was the general contractor under the government of the United States. Pertinent clauses of the contract and a general history of the case were set forth in out former opinion and need not be repeated at length.

The evidence at the second trial followed the general lines of the first. Defendant was to construct the foundation complete to the basement floor. Upon this, plaintiff was to construct the principal part of the building, including exterior and interior walls, floors, and roof, to be built of concrete. For this work and the necessary materials defendant agreed to pay to plaintiff the sum of $64,750 in certain monthly installmenst on account and the balance on completion. The plans called for certain granite work, for which defendant was to send the cut blocks from the United States; and under an option set forth in paragraph 25, afterwards accepted by defendant, plaintiff was to set this granite for 40 cents per square foot of surface.

It appeared that after the work had been in progress for some time a disagreement arose between the parties about payments on account. Paragraph 12 of the contract provided that there should be 'monthly payments on account, not to exceed in amount 85 per cent. of the cost of the work actually erected in the building, provided that the subcontractor furnishes to the general contractors a written requisition, on a form to be supplied by the general contractors, not less than twelve days before payment is required,' etc. The contract, however, did not provide how such cost of the work, other than the granite setting, should be ascertained. In December, 1911, and January, 1912, plaintiff made written requisitions which were not complied with; and, according to plaintiff's evidence, it was agreed between the parties on or about February 2, 1912, that future applications and payments should be made upon the basis of a schedule which specified, inter alia, 'Exterior and interior concrete walls, arches, and cement work $1.07 per cubic foot.' On March 9, 1912, plaintiff made a requisition for payment computed on this basis, and showing a balance due of $11,735.95. This requisition was in effect refused, and no further payment was made except the sum of $674, which was paid a few days later.

In the month of February, 1912, the government superintendent of construction found a serious settlement in the foundation, as a result of which work upon the building was ordered to be stopped. This order was communicated verbally by defendant's representative to plaintiff's agent at San Juan on the 9th of March, and was confirmed two days later by letter, in which, however, a request made by plaintiff's agent for instructions as to what should be done with plaintiff's force of men pending the suspension of the work was evaded. Plaintiff stopped work pursuant to defendant's notice, and did nothing more upon the building.

Thus matters remained until May 22, 1912, plaintiff in the meantime having received no payment pursuant to its requisition of March 9 beyond the small sum mentioned above, nor any instructions or permission to pro ceed with the work upon the building; and, according to plaintiff's evidence, it was impossible to tell when the work could proceed. On May 22 plaintiff wrote to the defendant, referring to the stoppage of the work and to 'the very considerable cost and damage to us caused by your breach of contract,' to the inability to get payments from defendant in accordance with the terms of the contract, and to defendant's refusal of an offer of arbitration and refusal of 'an assurance that even now we would have an opportunity within any reasonable time to proceed with our work,' and concluding with this notification:

'Under these circumstances and owing to your entire failure to comply with the terms of the contract, we hereby notify you that we now terminate the contract and shall proceed no further with the work, and that we shall hold you liable for the damages we have sustained by reason of your breach of contract, including your failure to provide labor and materials not included in the contract with us in such manner as not to delay the material progress of our work and your failure to make payments in accordance with the terms of the contract, and all other breaches of contract on your part.'

The principal ground of action was based upon the contention that in refusing to respond to plaintiff's requisitions for payments on account, and in the complete and indefinite stoppage of plaintiff's work under the circumstances mentioned, defendant had committed breaches of the contract so material as to amount to a total breach, justifying plaintiff in declining to proceed further and in suing at once for its damages. See Anvil Mining Co. v. Humble, 153 U. S. 540, 552, 14 Sup. Ct. 876, 38 L. Ed. 814. But as we pointed out in 240 U. S. 283, 36 Sup. Ct. 300, 60 L. Ed. 636, plaintiff counted also upon a quantum meruit for work and labor performed and materials furnished in and about the construction of the building.

The Circuit Court of Appeals attributed error to the trial court in the following respects:

1. The trial court refused defendant's request to instruct the jury that plaintiff was not justified in terminating the contract because of delays, and in instructing them on the contrary, as the court did in substance, that if it was evident to the parties on May 22, 1912, that there would be a long delay or an indefinite delay, or if it was evidently impossible to tell when the work could be begun again, plaintiff had a right to terminate the contract and was not obliged to await indefinitely the pleasure of the government as to the resumption of work. It should be noted that when plaintiff took action to terminate the contract, more than two months already had elapsed since the work was stopped. This was undisputed, and of course must be considered in dealing with the instruction referred to.

It is sufficiently obvious that a contract for the construction of a building, even in the absence of an express stipulation upon the subject, implies as an essential condition that a site shall be funished upon which the structure may be erected. In this case the matter was not allowed to rest upon an implication, for, as we held in our former opinion, the eleventh paragraph of the subcontract, providing:

'The general contractors will provide all labor and materials not included in this contract in such manner as not to delay the material progress of the work, and in the event of failure so to do, thereby causing loss to the subcontractor, agree that they will reimburse the subcontractor for such loss'

—as applied to the facts of the case, imported an agreement by defendant to furnish the foundation in such manner that plaintiff might build upon it without delay, and was inconsistent with an implication that the parties intended that delays attributable to the action of the owner should leave plaintiff remediless; and defendant's obligation to furnish a suitable foundation was not dependent on whether it was at fault or whether the delay was attributable to a stoppage of work by the owner in the exercise of a right conferred upon it by a provision of the principal contract which was not brought into the subcontract.

The Circuit Court of Appeals, however, held (241 Fed. 549, 154 C. C. A. 321) that although under paragraph 11 defendant would be liable to respond in damages for such delays if plaintiff completed or stood ready to complete its contract, yet it did not follow that if plaintiff was delayed in completing its work within the 300 days specified in paragraph 6 it could decline to go on, since by paragraph 7 it was provided that should the subcontractor be obstructed or delayed in the prosecution or completion of the work by neglect, delay, or default of the owner (among other causes), the time fixed for the completion of the work should be extended for a period equivalent to the time lost from such causes. The court held that this rendered it clear...

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    ...further performance [such as unexcused failure to make progress payments to a contractor--Guerini Stone Co. v. P.J. Carlin Construction Co., 248 U.S. 334, 344, 39 S.Ct. 102, 106, 63 L.Ed. 275 (1919) ] entitles the other party to repudiate the contract and treat the obligation for further pe......
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