Robberson Steel Co. v. Harrell

• Decision Date: 12 September 1949
• Docket Number: No. 3815.,3815.
• Citation: 177 F.2d 12
• Parties: ROBBERSON STEEL CO. v. HARRELL et al.
• Court: U.S. Court of Appeals — Tenth Circuit

177 F.2d 12 (1949)

ROBBERSON STEEL CO. v. HARRELL et al.

No. 3815.

United States Court of Appeals Tenth Circuit.

September 12, 1949.

A. W. Gilliland, Oklahoma City, Okl., for appellant.

C. J. Watts, Oklahoma City, Okl. (Looney, Watts, Ross, Looney & Smith, Oklahoma City, Okl., on the brief), for appellees.

Before PHILLIPS, Chief Judge, and BRATTON and HUXMAN, Circuit Judges.

BRATTON, Circuit Judge.

The United States, acting through the Bureau of Reclamation, prepared plans and specifications for the development of an irrigation district in the vicinity of Altus, Oklahoma. The program contemplated the letting of contracts to private contractors for the construction of different parts of the canals, ditches, bridges, culverts, flumes, and other structures. A contract was entered into with Barney W. Harrell and May T. Stebbins, partners composing the firm Stebbins Construction Company, hereinafter referred to as Stebbins, to construct the Ozark Canal, and the bridges, culverts, and other structures incident to its construction. The structures were to be of concrete, reinforced with steel. Stebbins entered into a contract with Robberson Steel Company, hereinafter referred to as Robberson, to furnish the steel required for the structures, estimated at two hundred and forty tons. The contract was dated March 18, 1947. It provided that delivery of steel should begin ninety days from that date and should be completed in six months from the date set for the initial delivery, and it further provided that invoices rendered for steel shipped were due in thirty days from the invoice date. Later Stebbins entered into another contract with Robberson for the bending of the steel. A list of the various concrete structures to be built in the canal, the amount of steel required for each, and the desired sequence of delivery of the steel was delivered to Robberson. Robberson was advised that Stebbins planned to commence the concrete work for which steel was required on June 18th, and that it would be agreeable for Robberson to make delivery of steel prior to that time. After being so advised, Robberson informed Stebbins by letter dated June 13th that it had scheduled shipment of the steel for the first eight structures in the shipping schedule for the first of the following week. But a disagreement arose between the parties in respect to a transaction in which Robberson furnished to Stebbins steel for the construction of a bridge in Cherokee County, Oklahoma, and Robberson refused to ship any steel for use on the Ozark Canal Job until such controversy had been settled. Stebbins wrote Robberson under date of July 1st. After making reference to the original contract, to the plan to start the concrete work on June 18th, and to the refusal of Robberson to make shipment of steel until the dispute arising out of the furnishing of steel for the bridge job had been settled, the letter read, "It is requested that shipment of steel bars be made in accordance with our contract within ten days from date, otherwise should there be any additional expense, or liquidated damages, due to your failure to perform, we will hold you fully responsible." The first carload of steel was shipped on July 11th; the second on September 6th; the third on September 18th; and the fourth on October 9th. Payment was made for the first carload. Invoices for the second, third, and fourth carloads were not paid. Payment for the second and third carloads not having been made within thirty days of their receipt, Robberson notified Stebbins that it elected to cancel the contract by reason of the breach. Stebbins accepted the cancellation but notified Robberson that it would be held liable for all damages occasioned by the failure to make further deliveries. Stebbins thereafter purchased steel elsewhere to complete the job at a price in excess of that fixed in the contract with Robberson.

This action was brought in the name of the United States for the use and benefit of Robberson against Stebbins and the surety on its bond furnished pursuant to the provisions of the Miller Act, 49 Stat. 793, 40 U.S.C.A. § 270a, to recover for the second, third, and fourth carloads of steel, with accrued interest. Stebbins conceded its liability for the three carloads of steel but sought by counterclaim damages caused by delay in the shipment of the steel, extra expense incurred in bending steel not properly bent by Robberson, and extra expense incurred in purchasing steel elsewhere with which to complete the job after Robberson terminated the contract. The surety on the bond adopted the pleadings of Stebbins. The court awarded Stebbins damages under its counterclaim for loss of the use of equipment due to the delay in delivery of the first carload of steel, for expenses incurred in rebending steel not properly bent by Robberson, and for the increased cost above that fixed in the contract with Robberson for the balance of the steel with which to finish the job. These items in the aggregate were deducted from the amount due for the second, third, and fourth carloads of steel, and judgment was entered for Robberson for the balance. Robberson appealed.

Error is predicated upon the action of the court in allowing Stebbins recovery under its counterclaim for the loss of use of leased or rented equipment which had been assembled and was ready for use at the time specified for delivery of the first carload of steel. It is argued that the letter of July 1st, the shipment of the initial carload of steel within the time stated in the letter, and the acceptance of the shipment constituted a subsequent agreement fixing the time within which the delivery of steel was to commence at a date later than that provided in the original contract, and that the initial shipment was made within the time fixed by the subsequent agreement. Unless the power is restricted by law, the parties to an existing contract may subsequently enter into a valid agreement amending, modifying, or engrafting new provisions upon their former contract. Webb v. Moran, 186 Okl. 140, 96 P.2d 308; Leeder v. Cities Service Oil Co., 199 Okl. 618, 189 P.2d 189. But where the original contract does not contemplate the making of a subsequent agreement, the original consideration will not support the subsequent agreement; and therefore a subsequent agreement not forming a part of the original contract, or supported by the original consideration thereof or by any new consideration, is without binding effeet. State ex rel. West v. City of Sapulpa, 58 Okl. 550, 160 P. 489.

The original contract between these parties was still executory at the time of the writing of the letter, and it did not contemplate the making of a subsequent agreement altering, amending, or modifying any of its provisions, or engrafting new provisions upon it. Robberson was then presently obligated by the original contract to deliver the steel, Stebbins was entitled to have it delivered, and shipment of the first carload was overdue. The letter merely requested or demanded that Robberson do that which it was already obligated by the original contract to do, and delivery of the steel in compliance with the request or demand contained in the letter could only place in the hands of Stebbins steel to which it was then presently entitled under the original contract. The writing of the letter and the shipment of the steel in compliance with its request or demand did not cast upon Robberson any new or additional burden not created by the original contract. Neither did shipment of the first carload of steel within the time suggested in the letter give to Stebbins any new benefit or advantage to which it was not entitled under the original contract. No benefit to Stebbins and no detriment to Robberson were brought about by the writing of the letter and the shipment of the first carload of steel within ten days thereafter. And in the absence of benefit or detriment not created by the original contract there was no binding subsequent agreement between the parties fixing the time within which delivery of steel was to commence at a date later than that provided in the original contract. State ex rel. West v. City of Sapulpa, supra; Cueno Press v. Claybourn Corp., 7 Cir., 90 F.2d 233; Pleasant v. Arizona Storage & Distributing Co., 34 Ariz. 68, 267 P. 794; Perry v. Farmer, 47 Ariz. 185, 54 P.2d 999; Queen City Construction Co. v. City of Seattle, 3 Wash.2d 6, 99 P.2d 407; Levine v. Blumenthal, 117 N.J.L. 23, 186 A. 457; Wallace v. Cook, 190 Ky. 262, 227 S.W. 279; Dobbins v. City Bond & Mortgage Co., 343 Mo. 1001, 124 S.W.2d 1111; Pool v. First National Bank of Princeton, 287 Ky., 684, 155 S.W.2d 4.

The action of the court in allowing Stebbins recovery under its counterclaim for the loss of use of leased or rented equipment intermediate the time the first carload of steel should have been shipped and its actual shipment is challenged on the further ground that the letter dated July 1st, the making of the initial shipment within the time stated in the letter, and the acceptance of the shipment constituted a waiver of the right to damages for failure to make such shipment at the time specified in the original contract. It is the law in Oklahoma...