Boyce v. United States Fidelity & Guaranty Co. of Maryland

111 F. 138 | 6th Cir. | 1901

SEVERENS, Circuit Judge,

having made the foregoing statement of facts, delivered the opinion of the court.

The contention of the appellant in the case is that his contract with the city was wrongfully terminated by the board of trustees. The argument in this court seems to be based upon the assumption that the district court should have determined whether the fact was so upon original grounds, and that upon appeal we should proceed in the same way. But an important factor in the case is'that, as we understand, no fraud is charged upon the trustees, or, if that is meant to be imputed, there is no evidence which would support the charge. By his contract with the city the appellant consented that the board of trustees should have power to determine whether he was proceeding with reasonable expedition towards the completion of the work. The stipulation is that, if he—

“Sliall fail to commence or proceed with the work to the satisfaction of tlie said trustees, it is agreed that said trustees may give or cause to be given notice or notices in writing to said contractor. * * * And in case said contractor shall, for ten (10) days after any such notice, fail to commence or regularly proceed with the work to the satisfaction of said trustees, all rights-of the said contractor under this contract shall thereupon terminate; and it is agreed that said trustees may declare this contract, as to any and all rights of said contractor thereunder, forfeited, annulled, and wholly canceled, and take away, hold, and complete said work by reletting the unfinished part thereof, or completing the. same by day work, or otherwise, as may be for the best interest of the said first party in the judgment of said trustees.”

The parties expressly made the completion of the contract by the day named an integral part of the contract and it was clearly the purpose of the above stipulation to secure its full and complete performance in this respect, as well as in others. It would have defeated this purpose, if the city was required to lie by, while the other party was neglecting the work, until the day for completion had been reached. The public interests and convenience might be seriously delayed by tying up the hands of the city after it was demonstrated that the contractor either would not or could not, with his facilities, finish his undertaking within the appointed time; and we are convinced that such considerations were the reason on which it was stipulated that the board of trustees should have power to determine whether the progress of the work gave reasonable ground for expecting the due fulfillment of the work. It is contended by counsel for the. appellant that the language of the recited stipulation refers to the manner in which the work was being done, and not to the progress of it. But it is clear that this is not so. There would be no defect in the manner of doing the work if the contractor should “fail to commence” doing it, and the language, “or proceed with the work,” which is linked with the other, would be very ill chosen in a power to simply supervise the manner of doing the work. If the design wras to provide only for the correction of mistakes or defects in the work as it was being done, we should naturally expect to find language especially adapted to express such a purpose. Doubtless the right construction is that it was intended to clothe the board of trustees with authority to determine all questions relating to the progress of the work, whether in respect to its conformity with the specifications, or to the expedition with which it was being executed. This 'delegation of authority by the parties to works of construction to pass from time to time as occasion shall arise upon the incidents of its execution is not unusual. Generaliit is deyolved upon the engineer in charge if there be-one; but the same rule applies, whoever may be appointed. And if the appointee, without fraud or manifest mistake, makes a determination upon any of the matters falling within the scope of the authority committed to him, the parties are bound by the decision. Sweeney v. U. S., 109 U. S. 618, 3 Sup. Ct. 344, 27 L. Ed. 1053; Railroad Co. v. March, 114 U. S. 549, 5 Sup. Ct. 1035, 29 L. Ed. 255; U. S. v. Gleason, 175 U. S. 588, 20 Sup. Ct. 228, 44 L. Ed. 284. There being no sufficient ground for finding that there was any fraud or manifest mistake of fact on the part of the board of trustees, the elaborate and able argument addressed to us by counsel for appellant, intended to demonstrate that the board went wrong in its conclusion that the work was not being properly proceeded with, is wasted. That was a question which the appellant agreed to refer to the board, and its decision thereon is final.

It is contended on behalf of the appellant that the stipulation in the contract for a penalty of $50 per clay as liquidated damages for delay in executing the contract bejmnd the time appointed for its performance negatives the right of the city to require any part of the work within any particular period of time, and that he could not be held in default until the full time had elapsed. But this stipulation is entirely consistent with the construction which we put upon the contract. The city might see fit not to demand that the contract should be terminated. The circumstances might be such that it would be deemed expedient for it to allow the work to go on rather than to exercise its election to put an end to it. There is room for both stipulations to stand without conflict.

It is further argued that the notice of the city should have contained a positive statement that it would absolutely forfeit the contract and that a conditional notice is not sufficient. The contract, however, by requiring a notice of to days, plainly implies that the contractor should have that time within which to retrieve his default, when, if he did not avail himself of his opportunity, the city could, if it elected to do so, declare the default to be absolute. The notice given conforms to this view.

Another point made is that the city itself was in default for the nonpayment of $1,900 due on an estimate made on the 15th of September. The notice was served on the T2th of that mouth. The appellant was then continuing his own default: that is to say he was not proceeding with his contract to the satisfaction of the board. By the terms of his contract with the city it was agreed that “payments may be withheld if the work is not proceeding in accordance with the contract”; and, under his contract of indemnity with the guaranty company, this money would go to the company if his default should continue through the 10 days given him for mending nunters. By that lie agreed:

“That deferred, payments and any and all moneys and properties that may l)e due and payable to me at the time of such breach or default, that may thereafter become due and payable to me on account of said contract, shall be credited upon any claim that may be made upon the United States Fidelity and Guaranty Company under the bond above mentioned.”

We do not decide whether in the absence of any controlling stipulations in his contract, the appellant could, for the nonpayment at the day of this estimate, desert the further performance of it.

Lastly the question is raised “whether if the contract requires ten days’ notice to authorize a forfeiture, a notice for a less time is effectual.” If by this reference is made to the notice itself, we have already answered it, by saying that the notice,conforms to the contract. If it is intended to present the inquiry whether the city could declare the contract off before the lapse of ten days after giving the notice, one sufficient answer is that three days after the notice was given him he abandoned the work, and gave distinct notice that he should not proceed with it. Having done this, he is not in position to insist that the full ten days were not given him in which to set himself -right. There is no occasion to inquire whether, but for his own course in reference to the prosecution of the work, the time which elapsed after the notice and before the contract was declared forfeited by the city was sufficient.

The evidence leaves no doubt that, as found by the district judge, the appellant, while insolvent, transferred his property to some of his creditors with intent to prefer them.

We think no error is shown by the record, and the order must be affirmed, with costs.