United States v. Kanter

• Decision Date: 04 September 1943
• Docket Number: No. 12541.,12541.
• Parties: UNITED STATES v. KANTER et al.
• Court: U.S. Court of Appeals — Eighth Circuit

137 F.2d 828 (1943)

UNITED STATES v. KANTER et al.

No. 12541.

Circuit Court of Appeals, Eighth Circuit.

September 4, 1943.

Earl A. Grimes, Asst. U. S. Atty., of Kansas City, Mo. (Maurice M. Milligan, U. S. Atty., of Kansas City, Mo., on the brief), for appellant.

Myer M. Rich, of Kansas City, Mo., for appellees.

Before SANBORN, WOODROUGH, and RIDDICK, Circuit Judges.

RIDDICK, Circuit Judge.

This suit was brought by the United States to recover liquidated damages for delay in the performance of a contract between the Veterans Administration and appellee Kanter, by which Kanter agreed to manufacture and deliver to the Veterans Administration 1,500 duck feather pillows. The Veterans Administration's invitation for bids, with accompanying specifications, and Kanter's bid and its acceptance constitute the contract between the parties. The American Surety Company of New York became Kanter's surety on his performance bond. The United States appeals from a judgment in its favor in the sum of one dollar and costs.

The contract sued on provided: (1) That the pillows must comply in all respects with the detailed specifications accompanying the invitation for bids; (2) that the bidder should state the time within which delivery would be made, in no event to exceed 90 days from receipt by the bidder of an order for the pillows, provided that on failure of the bidder to specify the time for performance, the date of delivery under the contract should be within ten days from receipt of the Government's order by the bidder; (3) that the Government should have the right to inspect the pillows before delivery and the right in the event public necessity should require, to accept pillows not completely complying with specifications the price for such pillows to be subject to adjustment; (4) that if the contractor failed to make delivery of the pillows within the time specified in the contract or any extension thereof, the actual damage to the Government for delay would be impossible to determine, and, in lieu thereof, the contractor should pay to the Government as liquidated damages for each calendar day of delay in making delivery the sum of ten dollars; (5) that the Government reserved the right to terminate the contract for delay by the bidder and to purchase the pillows in the open market charging the bidder with any excess cost occasioned the Government thereby, together with the specified liquidated damages accruing until such time as the Government might reasonably procure the pillows elsewhere; and (6) that Kanter agreed to deliver the pillows for the price of $1.35 each, or for a total sum of $2,025.

The facts material to the decision here are not in dispute. Kanter did not specify in his bid the time for delivery. He received the Government's order for the pillows on July 1, 1935. The evidence fails to show when the pillows were tendered to the Government for inspection, but it appears that on July 25, 1935, the pillows were inspected at appellee Kanter's factory in Kansas City, Missouri, and were found to be in all repects in accordance with the specifications of the Veterans Administration, except that in their manufacture the appellee Kanter had not used the required number of stitches in sewing the pillows and had used thread other than the type specified. The Government's inspector at that time advised Kanter of the failure of the pillows to comply with specifications in the respects stated, but suggested that he request the acceptance of the pillows on the ground that the departures from specifications were of minor importance.

On July 29, 1935, appellee Kanter shipped the pillows to the Veterans Administration at Perry Point, Maryland, calling attention to the failure to comply with specifications concerning the kind of thread and the number of stitches used in sewing the pillows, and requesting acceptance of the pillows. On October 25, 1935, the Government advised Kanter that the pillows had been again inspected and had been found defective because of failure to comply with specifications in many particulars. No explanation was offered by the Government for the delay which occurred between the date of the arrival of the pillows in Maryland and their rejection on October 25, 1935.

Nothing further occurred between October 25, 1935, and November 21, 1935, except that Kanter made a trip to Washington and offered to have the pillows resewn with the proper number of stitches and using the proper thread, and attempted to secure their acceptance on these conditions. His offer was declined. On November 21, 1935, the Government notified Kanter that the rejection of the pillows was final, and that unless he substituted others complying with specifications by the 21st day of December, 1935, a default would be declared in the contract. Kanter made no response to this offer, and on January 14, 1936, the officers of the Veterans Administration declared the contract in default. On the following day other pillows were purchased from another manufacturer for delivery on February 22, 1936. The purchase price for the pillows in this transaction was $1.30 per pillow, or a total of $1,950.

In its complaint the appellant alleged that by the terms of the contract sued on Kanter was obligated to deliver the pillows on or before September 29, 1935, and that on his failure to do so he became liable to appellant for ten dollars for each day from that date until February 22, 1936, the date of delivery under the Government's second purchase. The number of days involved was 146 days, and the Government alleged liability upon the part of Kanter and the surety in the sum of $1,460.

After finding the facts substantially as above stated, the district judge held...