District of Columbia v. Cranford Paving Co.
271 F. 374
D.C. Cir.
1921
Check Treatment
STAFFORD, Acting Associate justice.

This is a case between the District of Columbia, hereafter referred to as the District, and the Cranford Paving Company, hereafter referred to as the Company. The Company is seeking damages from the District, because the District would not allow it to do certain work by way of repairing streets, from the doing of which it would have derived a profit, and for the doing of which, it is claimed, the District had contracted with the Company.

'['he District, under authority of Congress, entered into a two-year contract with' the Company for the latter to do certain work upon the streets, including repair work; and the contract contained an option to the District to renew it for another year. Before the end of the hvo years, Congress authorized the District to purchase a portable plant and do its own repairing, if it found it could do so at a saving, and the District bought a plant and did a part of the repairing specified in the contract, against ihc objection of the Company. After all this, and still before the end of the two years, the District notified the Company that the District availed itself of the option to renew the contract, and ordered the Company to carry on the work for another year. The Company replied that it would do so, but would insist upon having the repair work, or else damages for not being allowed to do it. To tliis the District made no rejoinder, except to acknowledge receipt of the letter containing the notice and to promise to give it due con-' .-.(deration; but it. accepted and approved the Company’s bond reciting that the Company had been ordered to go on with the work provided for in the original contract and conditioned for the performance of all such work during the whole of the additional year. The court below had before it the report of the auditor, finding the amount of the profits lost to the Company during the two-year period and also the amount lost during the one-year period, and ga.ve judgment in its favor for both sums. The case is here upon appeal from that judgment.

[1] 1. The District suggests, rather than argues, that “the work, being dependent upon annual appropriations made and to be made by Congress, and upon annual appropriations for repairs to streets, is payable out of a particular fund, within the meaning of that rule of law which precludes a recovery in such a case,” and cites cases in which it was held, under leases providing that no rent should be paid until appropriation therefor had been made, that there could be no recovery beyond the amount appropriated. Bradley v. U. S., 98 U. S. 304, 113, 25 L. Ed. 105; Hooe v. U. S., 218 U. S. 322, 31 Sup. Ct. 85, 54 L. Ed. 1055. But we think this case is unlike those. Here the contract was entered into under the authority of Congress and in the manner directed. Moreover, the appropriation by Congress was sufficient to have covered this work.

[2] 2. In much the same way the point is made that as the contract provides that the repair work shall be done subject to orders from the engineer commissioner, and as he never gave any orders for this work, there can he no liability. It is enough to say that the contract gives the Company the right to do this work, and that the contract was broken when, instead of giving it to the Company to do, the Dis*376trict did it itself. The provision referred to merely gave the District a right to point out the work and keep a reasonable control over it. It was a bar for the protection of the District, not a door by which to escape from its obligation. United States v. Purcell Envelope Co., 249 U. S. 313, 39 Sup. Ct. 300, 63 L. Ed. 620.

[3] 3. Somewhat more earnestly it is submitted that the District should be excused from liability on this ground: That such a contract as this is subject to the supervising control of Congress in its exercise of the police power. What the police power has to do with the situation presented here is not perceived. It is merely the case of a contract broken for the salce of economy.

[4] 4. Then it is set up that the breach of the contract was the act of Congress, and therefore that the constitutional question is raised whether Congress might not at its will pass a law impairing the obligation of the contract. But such a question is a long way off. Congress did not direct the District to break its contract. It only authorized it to buy a portable plant and use it in repairing streets, if it found it economical to do so—a very different thing.

[5] 5. Plowever, as to the damages arising during the additional year, it is seriously and earnestly insisted that no recovery can be had, because, when the Company obeyed orders and went on and did the work it was allowed, to do, it knew well enough that it would not be permitted to do any repair work, and great reliance is placed upon Bowers Hydraulic Co. v. U. S., 211 U. S. 176, 184, 29 Sup. Ct. 77, 33 L. Ed. 136, wherein it was held that,- under a dredging contract containing an ambiguous phrase descriptive of the material to be removed by the contractor, the contractor, when he renewed the contract, was bound by the construction which he knew the government had placed and would place upon the language. But that is not this case at all. Here there was no ambiguity in the language of the contract. The contractor, the Company, did indeed know that the District had been breaking its contract during the previous period, and so it notified the District that if it continued to break the contract it would be asked to pay damages. And even if the subject had been dropped there, it might well have been said that the District had assented to the notice thus given by the Company. But the Company’s position is greatly strengthened by the fact that even after that notice from the Company the District accepted the Company’s bond covering the contract in its old terms. In such circumstances, how can the District be heard to say that the extension did not cover the repair work?

We think there was no error in the judgment, and it is therefore affirmed.

Affirmed.

Mr. Justice STAFFORD, of the Supreme Court of the District of Columbia, sat in the place of Mr. Justice ROBB in the hearing and determination of this appeal.

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