delivered the opinion of the court..
We have here under review a judgment for damages in favor of plaintiff in error (also plaintiff below) against defendant in error (also defendant below), reversal being asked upon the ground that, through erroneous rulings made by the trial judge, the recovery was unduly, limited. The writ of error was sued out under §244, Jud. Code (act of March 3, 1911, c. 231; 36 Stat. 1087, 1157), prior to the act of January 28, 1915 (38 Stat. 804, c. 22, §§ 3 and 6).
Defendant, a corporation of the State of New York, on December 12, 1910, secured a contract with the Government of the United States for the construction of a post-office and court building at San Juan, Porto Rico. A few days later it entered into a sub-contract in writing with one Guerini, by the first paragraph of which he agreed: “To furnish and set in position, including the concrete backing, all the imitation of sandstone, and to construct the interior concrete walls, concrete floors, concrete roof, backing the granite construction, enclosing all the I beams ... agreeable to the drawings and specifications 'made by the said architect (copies of which have been delivered to the Sub-Contractor), and to the dimension^ and explanations thereon, therein and herein *266 contained, according to the true intent and meaning of said drawings and specifications,” etc.; it being agreed that the work should be done “under the direction and to the satisfaction of the General Contractors and James Knox Taylor, Architect (acting as Agents of the Owner) or his, or its representative.”
A subsequent paragraph reads as follows:
“25th. The Sub-Contractor further agrees to furnish the material and build the concrete footing complete to thé basement floor for the sum of $6.70 a cubic foot.
“Also to furnish the materials and build all the sidewalks for the sum of $1.85 a square yard.
“Also set in position all the granite walls, steps, balusters, buttresses and curbing, and all other granite work for the sum of 40 cents a square foot surface. The three above items to be at the option of the general contractor. ...”
Thereafter the plaintiff corporation was formed under the laws of Massachusetts, and Guerini transferred the contract to it. Defendant was notified of this, expressed satisfaction in writing under date-February 20, 1911, and thereafter dealt with plaintiff as sub-contractor.
At a later time, defendant exercised the third only of the options given to it. by the twenty-fifth paragraph.
. The plan of the building contemplated a foundation of concrete and piles, which was to be constructed by defendant complete to the basement floor; above this a basement story, surfaced with granite blocks to be furnished by defendant (as a practical matter, to be sent from the United States) and to be set in position by plaintiff under the accepted option. The blocks were to be backed with concrete, to be furnished and set by plaintiff. Above the basement story, the exterior walls were to be faced with imitation sandstone, backed with concrete, which together with interior walls, floors, and roof of concrete were to be constructed by plaintiff.
*267 The contract contained the following clauses that bear upon the matters in dispute:
“6th. The Sub-Contractor shall and will proceed with the said work and every part-and detail thereof in a prompt and diligent manner, . . '. and shall and will wholly finish the said work according to the said drawings and specifications and this contract in 300 days from the date upon which the building is ready to receive' his work and after he has been notified to proceed by General Contractors, and in default thereof, the SubContractor shall pay the General Contractors the sum of twenty dollars- for every day thereafter that the said, work shall remain unfinished as and for liquidated damages. The- Sub-Contractor further agrees to begin' work at the building within three days from the time that he is - notified by the General Contractors that the building is ready to receive such work.
“7th. . . . Should the Sub-Contractor be obstructed or delayed in the prosecution or completion of the work by neglect, delay or default of the Owner, the Architect, the General Contractors, or of any other contractors employed by them upon the work, , or by alterations which may be required in said work, or by any damages which might happen by fire, lightning, earthquake, or cyclone, or by the abandonment of the work by tke employees through no fault of the Sub-Contractor, then the time herein fixed for the completion of the work shall be extended for a period equivalent to. the time lost by reason of any or all of'the causes aforesaid,” etc.
“11th. The General Contractors will provide all labor, and materials not included in this contract in such manner as not to delay the' material progress of the work, and in the eyent of failure so to do, thereby causing loss to the Sub-Contractbr, agree that they will reimburse the Sub-' Contractor for sUch loss.; and the Sub-Contractor agrees that if he shall .delay the material progress of the work so *268 as to cause any damage for which the General Contractors shall become liable, then he shall make good to the General Contractors any such, damage over and above any damage for general delay, herein otherwise provided; the amount of such loss or damage in either case, to be fixed and determined by the Architect, or by arbitration, as provided in Article 3rd in this, contract.
“12th. It is hereby mutually agreed by the parties hereto that the sum to be paid by the General Contractors to the Sub-C5ntractor for said work and materials shall be sixty-four thousand seven hundred and fifty dollars ($64,750.00) subject to additions or deductions as herein-before provided, and that such sum shall be paid in current funds by the General Contractors to the Sub-Contractor in monthly payments on account, not .to exceed in amount 85 per cent, of the cost of the work actually erected in the building, provided that the Sub-Contractor furnishes to the General Contractors a written requisition, on a form to be supplied by the General Contractors, not less than twelve days before payment is required, ...”
The action was commenced -in June, 1912. The complaint, besides the jurisdictional averments, alleged the making of the contract between Guerini and defendant, the assignment to plaintiff and defendant’s consent and recognition of plaintiff as the contracting party; averred that thereafter and during the month of February, 1911, at defendant’s, request and in pursuance of the terms of the contract, plaintiff employed and sent to Porto Rico its representatives, brought laborers from the United States and employed others in Porto Rico, organized its working forces, purchased and supplied the necessary tools and materials, and prepared itself and was ready and willing to perform its obligations under the contract, but that thereafter until the sixteenth day of October, 1911, plaintiff was not permitted by defendant to proceed with the work, owing to defendant’s failure to provide the neces *269 sary granite -blocks; that on that day plaintiff did proceed with all possible diligence and performed all the work provided for by the contract as fast as defendant in the course of construction work permitted plaintiff to do so; that nevertheless during the period from October 16, 1911, until March 9, 1912, the work was unreasonably and unjustifiably delayed by the failure of defendant to provide necessary materials and carry on its part of the construction work so as to permit plaintiff to perform the work required of it under the contract, and that plaintiff was thereby greatly damaged; that on March 9, 1912, all work of every nature was stopped on the building, and plaintiff was prevented by defendant from continuing with any work; that said stoppage “has continued ever since, is still continuing, and . . . will continue for a period of at least several months hereafter,” and that defendant has accordingly committed a breach of its obligations under the contract, the result of which has been and is to cause great damage and loss to plaintiff, which has been obliged to keep its .labor force on hand during all of said period at great loss and expense; that by the terms of the contract payment of not more than 85% of the amount of the work actually done was due and payable by defendant monthly on 12 days’ notice from plaintiff to defendant, and that plaintiff during the months of December, 1911, and January and February, 1912, duly notified and demanded of defendant payment of the sums due for the work actually performed, but .that defendant continuously and repeatedly failed and refused to make said payments; that because of said repeated violation and breach of the contract on the part of defendant, plaintiff, under date of May 22, 1912, notified defendant in writing of its election to terminate the contract and bring its action for damages for breach thereof; and that plaintiff has offered to defendant to arbitrate their differences, but that defendant has refused. Plaintiff claimed damages to the amount of *270 $45,797.45 for work and labor performed, materials furnished, and moneys expended in and about the performance of the contract, and for lost profits. In a separate paragraph an indebtedness of about $40,000 was alleged, for the reasonable value of work, labor, and materials supplied.
Defendant answered, admitting some of the averments of the complaint, but denying that plaintiff had complied with the terms of the contract or had been prevented by defendant from proceeding with and carrying oil its work; admitting that plaintiff notified defendant of its election to cancel or rescind the contract and bring its action for damages for the alleged breach thereof, but denying that there was cause for rescission, and denying that plaintiff had sustained damages as claimed by it. The answer further set up that the sub-contract was subject to all the terms and conditions of the principal contract made between defendant and the Government of the United States; that defendant had at all times proqeeded strictly in accordance with the tprms and conditions of the latter contract, that during the course of the construction of the building the representatives of- the Government found it desirable or necessary to change the manner of constructing the foundations, and that this action of the Government was within its rights under the original contract, and plaintiff was bound thereby equally with defendant.
The case was tried before the judge of the District Court and a jury. Plaintiff introduced evidence tending to support the material averments of its complaint. It appeared that in January; 1911, defendant notified plaintiff’s predecessor that “work must start at once,” and that in February plaintiff sent its representatives to Porto Rico; that upon their arrival so little work had been done upon the foundations that they were unable to do anything upon the building itself, but preliminary work was done in. the way of getting tools and machinery to the Island, building *271 workshops and an .office, and preparing moulds for the casting of the artificial stone; that during the spring and summer delay was occasioned by the failure of défendant to construct the foundations; that this continued .until about the first week in October, when the foundation work and the grading inside the foundation walls had pro-' ceeded to a point that would admit of the commencement of the course of granite, and enough granite was upon the ground to allow a start to be made' of setting it. In August or September plaintiff was notified of defendant’s acceptance of the option to call upon plaintiff to set the granite at 40 cents per square foot, but the granite was slow in arriving, and some of the stones were misfits, so that the work of laying was considerably interrupted. There was difficulty also with the derrick equipment, defendant having under the contract furnished two derricks and an engine, but with insufficient power to admit of operating' both derricks at the same time. This was remedied, some time, in -December, by the provision of additional power. The granite setting proceeded from the middle of October to February 12, 1912, plaintiff’s evidence being to the effect that.it was set as fast as delivered, but that because the granite came in separate shipments, a little at a time, sometimes with needed blocks missing, the work of setting it could not be speeded. On or about February 12, 1912, plaintiff stopped setting granite, with defendant’s consent.
The evidence tended to show that much of the delay during the spring and summer of 1911 was occasioned by a change made by arrangement between defendant and the Government in the provisions of the general contract respecting the mode of constructing the foundations. The pleader would seem to have limited the complaint respecting delay prior to October 16, 1911, to such , as was due to defendant’s failure to provide granite blocks, but the evidence was not thus limited.
In February, 1912, when the granite work had been *272 practically finished-, it was ascertained that the foundations had settled, and that there were variations in the foundation work from the specifications as agreed upon between the Government and'defendant. On March 9 work was suspended by order of the Government, pending an investigation which resulted in showing that practically the entire building would have to be underpinned in order to secure a safe foundation. This result was officially communicated to defendant under date March 25, 1912, arid a few days later, pursuant to an order of the Assistant Secretary of the Treasury, all work upon the building was stopped “pending the settlement of responsibility for deviations from contract requirements regarding foundations.” The question of responsibility lay between defendant and the representatives of the Government; plaintiff having had nothing to do with the foundations. Leaving the question undetermined, the Government, in the month of May, 1912, entered into an agreement with defendant for underpinning the entire building. It perhaps does not clearly appear when this work was commenced, but it was in progress when the -action was begun, and Mr. Berry-man, the Government’s superintendent of construction then in charge of the building, testified: “This work is now [November, 1912] about 85 per cent, completed.” The same witness testified that from March 9, 1912, until the time of the trial, “conditions were such that it was impossible for the Guerini Stone Company to continue with their work under the contract.”
On March 9, 1912, plaintiff’s agent at San Juan was notified by defendant’s representative there that ..the Federal authorities had ordered all work upon the building suspénded pending investigation of the foundations. On the same day he wrote defendant’s San Juan office asking whether plaintiff’s men should be discharged and sent back to the United States, but got no satisfactory reply. Further correspondence upon the same topic led to no result.
*273 Meanwhile, the parties had been in disagreement about payments on account. The contract (paragraph 12) provided for payment of the contract price “in monthly payments on account, not to exceed in amount 85 per cent, of the cost of the work actually erected in the building, provided that the Sub-Contractor furnishes to the General Contractors a written requisition, on a form to be supplied by the General Contractors, not less than twelve days before payment is required,” etc. The contract, however, did not provide how the cost of the work other than the granite setting should be ascertained. For the concrete backing and other concrete work and the imitation sand-stone covered by the sub-contract, no “unit prices” were specified. The price of “6.70 a cubic foot,” mentioned in the twenty-fifth paragraph as the optional price for concrete footings, was treated by the parties as if intended to read $6.70 per cubic yard — ’approximately 25 cents per cubic foot. This, however, had reference to work that plaintiff was not called upon to do, and obviously did not furnish a unit price-for the concreting actually done by plaintiff.
In December, 1911, and January, 1912, plaintiff made written requisitions for payments on account, based upon statements of the “amount of work completed to date.” They were not complied with, and the parties soon realized the practical importance of agreeing upon a unit price to be employed in estimating the amounts payable. According to the testimony of Mr. Converse, President and Treasurer of the Guerini Company, he went from Boston to New York City on February 2, 1912, by appointment, and conferred with Mr. Carlin,, defendant’s representative, upon the subject of unit prices, and it was then agreed that plaintiff' should . make its applications and receive its payments upon the basis of a certain written schedule of units, produced by Mr. Carlin, which specified (inter alia): “Exterior and interior concrete walls, arches and cement *274 work, $1.07 per cu. ft.; Concrete floors and casings, 45)^c per sq. ft.” Mr. Carlin, in his testimony, denied that such an agreement was made, but admitted that the schedule had been agreed upon between defendant and the Government’s superintendent of construction and used as a basis for payments by the Government to defendant, including payments for the work done by plaintiff, under the sub-contract.. At the interview of February 2, Mr. Converse received a check for $3,765.50 on account, as against $12,750.00 previously called for. Under date of March 9th a requisition for $11,735.95 was made, and against this a payment of $674.00 was made about two weeks . thereafter. No other payments were,, made to plaintiff. It appeared, however, that for the work theretofore done by plaintiff,' defendant had received from the Government at least $13,871.25 Xa witness called by defendant said “about $19,000”), based upon the price of $1.07 per cubic foot for concrete. It was explained that this unit price was fixed by the first superintendent of construction, who had charge during the year 1911 and the first month of the' following year, and that his successor, who took charge on February 1, 19.12, employed a lower unit, price, on the basis of which the Carlin Co: had been overpaid about $8,000.
Enough has been said to indicate the situation as it - stood on May 22, 1912, on which date plaintiff wrote' to defendant reciting' briefly its complaints respecting de-. fendant’s previous conduct and the stoppage of the work and concluding as follows:
“Under these circumstances and owing to your entire failure to comply with the terms of the contract, we hereby notify you that we now terminate the contract and shall proceed no further with the work, and that we shall hold you liable'for damages we have sustained by reason of your breach of contract, including your failure- to provide: labor'and materials not included in the contract with *275 us in such manner as. not to delay the material progress of our work and your failure to make páyments in accordance with the terms of the contract, and all other breaches of contract on your part.”
Defendant acknowledged receipt and, replied May 31, 1912: “Said letter is a breach of contract on your part, and we shall immediately .proeeed to have the work done by other parties, and shall charge you with the additional expense, if any, above your contract price.”
Plaintiff .further produced evidence tending to show that the moneys expended by it in and about the performance of the contract amounted, to upwards of $30,000; that if permitted to complete the contract under ordinary conditions, its estimated profits would have been about $9,700; and that defendant had taken over machinery, topis, etc., belcnging to plaintiff estimated to be worth from $3,300 to $3,800. •
Defendant to some extent disputed the facts recounted in .and inferable from plaintiff’s evidence, but based its defense principally iipon the provisions'of the contract between defendant and the Government, which it was insisted must be-read into the contract between plaintiff and defendant. Among those provisions was this:
“It is further covenanted and agreed' that the United States shall have the right of suspending the whole or any part of the work herein contracted to be done, whenever. in the opinion of the ■ Supervising Architect it may be- necessary for the purposes or advantage of the work, and upon such occasion or occasions the contractor shall, without expense to the United States, properly cover over, secure, and protect such of the work as may be liable to sustain injury from the. weather, Or otherwise-; and for all such suspensions the contractor shall be allowed one day additional to the time herein statéd for each and every day of such delay so caused in the com-, pletion of .the work,, the same to -be ascertained by the *276 Supervising Architect; and a similar allowance of. extra time will be made for such other delays as the Supervising Architect may find to have been caused by the United States, provided that a written claim therefor is presented by the contractor within ten days of the occurrence of such delays; provided, further, that no claim shall be made or allowed to the contractor for any damages which may arise out of any delay caused by the United States.”
And among the “General Conditions” prefacing the specifications was this:
“The Department, acting for the United States, reserves the right to suspend any portion' of the work embraced in the contract whenever, in its opinion, it would be inexpedient to carry on said work.”
Other contentions were made which are not now material.
The jury rendered a verdict somewhat special in form, finding for the plaintiff and assessing its damages at $6,609.25, “including the value of tools inventoried at $3,000.” The judge had instructed them that for certain material and appliances used by plaintiff in carrying out its contract, and which were.placed in the custody and charge of defendant, “credit must be given, in whatever decision you arrive at, to the plaintiff company, and in the uncontradicted sum of $3,000.” Just how the residue of the verdict was made, up we have no means of determining, nor is it now important.
The chief controversy here is over' the admission in evidence of the general contract, and the effect given to it in the rulings of the trial judge, which were in substance that the provisions of that contract, including those above quoted, were to be read into the sub-contract, and that for any delays which resulted from the action of the representatives of the Government in changing the foundations or plans.of the building, in suspéndiñg or stopping the work, or otherwise^ defendant was' not *277 responsible td plaintiff. To these rulings exceptions were duly taken.
From what was said by the trial judge it would seem that he labored under the impression that the Supervising Architect of the Treasury was a party to the subcontract. This is not the case; he did not sign-the agreement, and his name was inserted solely in the capacity of architect or referee. And although the sub-contract very plainly imports that it covers only a part of the work of constructing the building, and that the Carlin Company was the general contractor, it contains no clause incorporating into itself the provisions of- the principal contract, or even in terms referring to that instrument. The subcontractor’s work was agreed to be done according to-drawings and specifications, “copies of. which have been delivered to the subcontractor.” These, copies were not produced, nor was their non-production accounted for., The parties seem to have assumed that the drawings and specifications of which copies were to have been delivered with the sub-contract were identical with those- that formed a part of the general contract; and we adopt that assumption.
The reference in the sub-contract-to .the drawings and specifications was.evidently for the mere purpose of indicating what work was to be done, and in what manner done, by the sub-contractor. Notwithstanding occasional expressions of a different view (see
Shaw
v.
First Baptist Church,
44 Minnesota., 22, 24;
Avery
v.
Supervisors,
71 Michigan, 538, 546, 547;
Stein
v.
McCarthy,
120 Wisconsin, 288, 295), in ohr opinion the true rule, based upon sound reason and supported by the gréater weight of authority, is that in the cáse of sub-contracts, as in other cases of express agreements in writing, a reference by the ■ contracting parties to an extraneous writing for a par-* ticular purpose- makes it a part of their agreement only for the purpose specified.
Woodruff
v.
Hough,
91 U. S.
*278
596, 602;
Neuval
v.
Cowell,
36 California, 648, 650;
Mannix
v.
Tryon,
152 California, 31, 39;
Moreing
v.
Weber,
In the present case, not only was the reference to the drawings' and specifications for a limited purpose, but the sub-contract,- by the express terms- of its eleventh paragraph, placed upon the general contractor (defendant) the obligation to “provide all labor and materials not included .in this .contract in such manner as not to delay the material progress of the work.” Applying this to the fact's of the case, defendant agreed to furnish the foundation in such manner that plaintiff might build upon it without delay. This is inconsistent with any implication that the parties intended that delays attributable to the action of the owner should leave plaintiff remediless.
■ We therefore hold that’ the general contract was not admissible. in evidence against plaintiff, unless for' the purpose of showing (if, indeed, it did show) what drawings and specifications .were referred to in the sub-contract;, and that the rulings of the trial judge holding plaintiff bound by the provision of the general contract, so. as to be obliged to submit to delays resulting from- the action of the Government, were erroneous. . .
Another point that may conveniently be dealt with here is. raised by an exception taken to the instruction that “even if there was delay in furnishing granite,-there could have been no liability under the sub-contract for -ysuch delay, in money, but such a condition was to be remedied by an extension, of- time for completion, as therein provided.” This was clearly-erroneous. Paragraph 11 binds defendant tó reimburse plaintiff for any . loss caused by deláy resulting from defendant’s failure to provide materials not included in the sub-contract. The
*279
granite was in this category. The trial court misapplied Paragraph 7. The extension of time therein provided for was intended as a dispensation, under given circumstances, of the liability to liquidated damages imposed upon the sub-contractor by Paragraph 6 for failure to complete his work within the time therein limited. Thp purpose of Paragraph 7 is to relieve the sub-contractor. It cannot properly be construed to deprive him of his right under Paragraph 11 to reimbursement for losses, .attributable to delays assumed by the general contractor.
Nelson
v.
Pickwick Associated Co.,
What has been said indicates the disposition that must be made of another exception taken by plaintiff, which was to the instruction that under Paragraph 7 plaintiff was not entitled to recover damages or money compensation from defendant .even though it should appear that plaintiff “was obstructed' or delayed in the prosecution or completion of. the work by the neglect, delay, or default of the Government of the United States, the Supervising Architect, or his representatives, or by defendant, or by alterations required in the work, since by the provisions oh that paragraph the only remedy of plaintiff in such cases is,the time allowance therein provided for; unless, however, you should believe from the evidence that the defendant failed to' provide labor and materials not included in the Sub-contract, in such manner as to delay the material progress of the work.”
As we have shown, the failure to-furnish a foundation upon which plaintiff’s work could be superimposed was a failure to provide “labor and materials not included in'this contract,” within the meaning, of paragraph 11. To furnish the foupdation defendant assumed an obligation not conditioned by the question whether it.was at fault or whether the .delay was involuntary on its paft because attributable to a stoppage of work by the owner in thé exercise of a right conferred upon it by the principal con *280 tract. Defendant of course had notice of the Government’s right to suspend the work, and could easily have safeguarded itself against responsibility to the sub-contractor for delays attributable to the exercise of that right by an appropriate modification of Paragraph 11 of the sub-contract, .for which presumably an allowance would have been made to the sub-contractor in the form of an increased price for its work or otherwise. This not having been done, Paragraph 11 must be enforced as it is written. It matters not whether plaintiff or its predecessor had notice of the provision of the general contract respecting suspension of the work, since that provision was not incorporated into the sub-contract. It must be presumed that delays' attributable to action by the Government were among those intended to be safeguarded by Paragraph 11.
There was testimony as to the profits .that plaintiff probably would have gained if the contract had been proceeded with in the ordinary manner. But this question was excluded from the consideration of the jury upon the ground that the profits were contingent and speculative. In this there was error. The testimony was from an experienced witness, and included an estimate of the total cost to plaintiff of the doing of the work called for in the sub-contract. This amounted to $53,012. The contract price was $64,750. The witness testified that a profit of $9,700 would have been made. Whether he intended to say $11,700 was for the jury to determine. No more definite or certain method of estimating the profits could well be adopted, than to deduct from the contract price the probable cost of furnishing the materials,and doing the work.
Phila., Wil. & Balt. R. R.
v.
Howard,
13 .How. 307, 344;
Hinckley
v.
Pittsburgh Steel Co.,
Error is assigned to the refusal of the trial judge to give the following instruction:
*281 “If you find'that the defendant failed to make payments as called for by the contract, on account of work done by the plaintiff in accordance with the terms of the contract, such failure constitutes a breach of the contract on the part of the defendant, and justified the plaintiff in stopping work under the contract, and entitles it to recovery from the defendant of such damages as may be proper on- the" evidence and under the instructions which the Court will • give you in that regard.”
The request was evidently based upon the doctrine illustrated in
Canal Co.
v.
Gordon,
. Error is assigned because of the refusal to instruct the - jury'as follows:
“In. estimating the recovery to which the plaintiff is entitled, if you find..he is entitled to recover, you should consider the reasonable' expenditures incurred, the .unavoidable .losses incident to stoppage, the amount of work ‘'actually performed, the amount plaintiff was actually entitled to by reason of such work at the contract price, and the profits which plaintiff could have made if allowed to complete, the work under the contract.” .
Had the requested. application of these ^elements -of damage been confined to the case of plaintiff being found' entitled to recover upon the theory that the contract was
*283
rightfully terminated by the notice of May 22, 1912, we assume it ought to have been granted.
United States
v.
Behan,
Exceptions were taken to the refusal of certain other instructions requested by plaintiff with the object, of basing a recovery of damages, including profits, upon the ground of plaintiff having been prevented by defendant’s acts from performing its contract within the time specified or a reasonable extension thereof, or on the ground that, defendant’s refusal to make payments and other breaches of contract were so unreasonable and inexcusable as to indicate an inability or unwillingness on its part to carry out the contract or to amount to a refusal to perform it in the future, such as to justify plaintiff in stopping work. But these exceptions have not been fully argued, and the requests are perhaps wanting in accuracy; hence, we pass them without consideration.
Judgment reversed, and the cause remanded for further proceedings in accordance with this opinion.