Maxwell v. United States

• Decision Date: 13 January 1925
• Docket Number: No. 2268.,2268.
• Citation: 3 F.2d 906
• Parties: MAXWELL et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Fourth Circuit

3 F.2d 906 (1925)

MAXWELL et al. v. UNITED STATES.

No. 2268.

Circuit Court of Appeals, Fourth Circuit.

January 13, 1925.

Christie Benet, of Columbia, S. C., and George A. King, of Washington, D. C. (King & King, of Washington, D. C., Benet, Shand & McGowan, of Columbia, S. C., F. A. W. Ireland, of New York City, Frank G. Tompkins, of Columbia, S. C., and Charles F. Harley, of Baltimore, Md., on the briefs), for plaintiffs in error.

J. D. E. Meyer, U. S. Atty., and Louis M. Shimel, Asst. U. S. Atty., both of Charleston, S. C.

Before WOODS, WADDILL, and ROSE, Circuit Judges.

ROSE, Circuit Judge.

The plaintiffs in error, William H. Maxwell and the Globe Indemnity Company, hereinafter referred to as the contractor and the surety, respectively, were defendants below. The plaintiff there was the United States, herein styled the government. It sued them on the bond they had given for the performance by the contractor of his undertaking to build the post office at Columbia, S. C.

The surety says that the late Judge Smith, before whom the case was tried below, had not been properly designated to hold the District Court of the United States for the Eastern District of South Carolina and what was there done was a nullity. At the time, Judge Smith was a retired District Judge of that district, having the status defined and regulated by section 260 of the Judicial Code as amended by the Act of February 25, 1919, 40 Stat. 1157 (Comp. St. Ann. Supp. 1919, § 1237). The surety's contention is that a special authorization is required before such a judge can discharge any judicial function. If he is to act in the judicial circuit to which he formerly belonged, that authorization must come from its Senior Circuit Judge. If what he is to do is to be done outside of that circuit, the authority may be given by either the Chief Justice of the United States or by presiding or senior judge of the court in which he is to sit. It is admitted that the Senior Circuit Judge of this circuit did not designate Judge Smith to hold a District Court in the Eastern District of South Carolina. The short answer to all this is that Judge Smith, under his original commission, was entitled to hold the court of that district and required no designation from any one to do so. He was still a District Judge of that district, as the act itself clearly recognizes by directing, "The judge so retiring voluntarily * * * shall be held and treated as if junior in commission to the remaining judges of said court." Such is the construction which the act has universally received in practice in this circuit and so far as we know, in all the others. Moreover, it may be said, in passing, it was the one given to it in the congressional debate which preceded its enactment. Mr. Steele, who spoke for the committee which reported it to the House, said: "The merit of this provision is that instead of resigning, the judge simply retires and is still enabled to perform such judicial service as he is capable of performing when the business of the district demands it. The district receives the benefit of such service without any additional expense to the government." Congressional Record, 65th Congress, Third Session, 368. During the course of the debate, Mr. Dyer said: "If this bill becomes a law, it will still permit the other judge, that is the judge who is being given this assistance, but who still remains on the bench, to be a judge in fact, not a supernumerary, and if any one appeared before him for a writ of any kind, he would have full authority to issue that writ. In other words, the new judge would not be the only judge of the court." Id., 370.

Of the dozen errors assigned, some refer to the refusal of the court to direct a verdict for the defendants, others to the direction of a verdict for the plaintiff, and the remainder to the exclusion of testimony which the defendants sought to introduce. The bond sued on was executed and delivered on the 1st of August, 1917, and the contract, the due performance of which it was intended to secure, bore date on the previous day. The contractor bound himself to complete the work within 20 months; that is to say, by the 31st of March, 1919. Time was declared to be of the essence of the undertaking, and the contractor was to pay $10 per day as liquidated damages for each and every day's delay not caused by the government. The Secretary of the Treasury might waive such damages in whole or in part, and the contractor was to be entitled to one day in addition to the stipulated time for each day the work might be suspended by the government and to a similar extension for each day's delay caused by the government provided written claim for such extension was made within 10 days of the occurrence of such delay. There is nothing in the record to show that the contractor ever made any such claim. The contract further provided that if the contractor should fail to prosecute the work with such diligence as in the judgment of the government would insure its completion within the time provided, the government might after eight days' written notice to him, and his failure within that time to take such action as would in the government's judgment remedy the fault for which the notice was given, take possession of the work and of the tools and materials on the site and complete the undertaking at his expense.

On the 22d of March, 1920, 11 months and 20 days after the contract time for completion, the government gave the contractor written notice, a copy of which it also caused to be delivered to the surety, that from the reports on file with it his dilatory and unsatisfactory manner of conducting the work had caused, and was causing, unwarrantable delays, resulting in loss and damage to the United States. The notice warned him that unless within eight days from its service he should satisfy the Department he had taken such steps and made such arrangements as would absolutely insure the full and satisfactory completion of all the work embraced in the contract without any further delay on his part, the Department, acting for the government under the contract, would terminate his right to proceed under it and would take possession of the work, machinery, tools and materials on the site belonging to him and would complete the work at his expense and that of his surety. Neither the contractor nor the surety, did, said, or wrote anything in consequence of the notice, and on the 31st of March the government notified both of them that the conditions were very unsatisfactory and that the contractor's right to proceed under the contract was terminated. Each of them received this notice in a silence which upon the part of the contractor was never broken, so far as the record discloses, until after this suit was brought some 16 months later. At first, the surety apparently was quite as reluctant to commit itself to anything. More than 3 months of repeated letters and telegrams from the government representing the urgency of the situation and the need for immediate action elicited nothing more definite from it than the statement that it would look into the matter. It was not until July 17th that it finally notified the government that it would not complete the contract. The government thereupon invited and received competitive bids from other parties for finishing the building and awarded a contract to do so to one of them. This suit was brought to recover the amount for which the total cost to the government of the post office exceeded the sum for which the contractor had undertaken to erect it. There is no controversy that this excess amounted to $110,323.55, for which the government is entitled to a judgment if it is entitled to recover anything as defendants say it is not.

By cross-examination of witnesses offered by the government and by direct testimony of those produced by the defendants, the latter sought to show that the government itself had prevented the contractor from obtaining the labor and materials needed for the work. Much of this testimony was altogether excluded by the court, and the effect of granting the government's prayer for a directed verdict in its favor was to hold that such of it as had come in did not raise any material issue of fact upon which the defendants were entitled to have the jury pass.

It will tend to clearness if consideration be first given to so much of the testimony, the admissibility and materiality of which is in dispute, as in the judgment of the defendants tends to show the government prevented the contractor from getting the labor he required. The gravemen of their complaint on this score is that the government by pressing the construction of the enormous works at Camp Jackson as well as at other sites near enough to Columbia to affect its labor market, and by the wages it paid or authorized its cost-plus contractors to pay, made it impossible, in a commercial sense, for the contractor to get or to keep sufficient men on his job. He offered to show what the mechanics and laborers employed in the government service received, that they were allowed to work for more hours than the eight to which by law and his contract, his employees were restricted, and that for overtime, that is, for the time in excess of eight hours, the men directly or indirectly in government employ were paid at the rate of time and half, while for their work on Sundays and holidays they received a double wage. He tendered testimony that other inducements, such as free rides to and from their places of employment, were offered to laborers by the government or by contractors whose labor bills it paid. He sought to show that the government not only inserted advertisements in South Carolina papers for laborers of many or all kinds, and offered them the high wages and attractive working conditions already referred to, but put the like advertisements on handbills which it caused to be distributed in the immediate vicinity of the...