On January 30, 1932, the United States (appellants) entered into a written contract with ’ W. C. Briddell Company for the construction of a bridge over Rock Creek at L Street, Northwest, in the City of Washington. Appellee Cunningham is receiver of the Briddell Company. The contract provided that the work should be completed on July 17, 1932, failing which the United States were authorized to take over the work and prosecute it to completion, holding the contractor for any excess cost, or to permit the contractor to continue the work to completion and then to collect an agreed amount of “liquidated damages”. On September 12, 1932, nearly two months after the' expiration date, the work not then being completed, the United States terminated the contract, and in the final settlement with Briddell Company deducted from the contract price the excess cost of the work and also liquidated damages for delay, amounting to $2,030.00. In September, 1938, appellee as receiver of Briddell Company brought suit under the Tucker Act 1 to recover from the United States (1) the sum of $3,358.02 damages caused by the fáilure of the United States to supply on time preliminary information called for under the contract; (2) the amount deducted by the United States for liquidated damages. The case was tried to the'court without a jury, and judgment in the süm of $4,949.80 entered for the plaintiff (appellee). Of this sum, $2,919.80 represents damages due to failure of the United States to supply preliminary information under the contract, and $2,030.00 the amount retained as liquidated damages. The question is whether either or both of the above mentioned sums were legally recoverable.
First. The contract provided that the .work should be completed within 150 calendar days after nptification to the contractor of the signing by the government contracting officer. By another clause, the United States agreed that prior to the beginning of the work they would establish at the site, for use and guidance of the contractor, fundamental alignment points and a bench mark. The claim on the first item in suit is for damages sustained by the contractor due to the failure, for a month.and a half or more, to furnish this essential information. The trial court found there was delay by the United States and assessed damages in the sum of $2;919.80. No question is here made as to the correctness of the amount, the defense of the United States being that damages were not recoverable in any amount, since the contractor had failed, as required by the contract, to give written notice of the delay. The applicable provision of the contract is: “* * * the contractor shall within ten days from the beginning of any such delay notify the contracting officer in writing of the causes of delay, -who shall ascertain the facts and the extent of the delay, and his findings of facts thereon shall be final and conclusive on the parties hereto, subject only to appeal, within thirty days, by the contractor to the head of the department concerned, whose decision on such appeal as to the facts of delay shall be final and conclusive on the parties hereto.”
The lower court found that the contractor did not give the written notice, but did give oral notice shortly after the contract was awarded. But the ground on which the court rested its decision in this regard was not that the oral notice was compliance with the contract, but that the United States had waived the defense of failure to give written notice by not pleading it. The record here does not include a copy of the complaint or answer', but the stipulated facts show that the complaint failed to allege compliance in respect to written notice, and likewise that the answer failed to allege that the notice had not been given. The cause, as we have seen, was submitted to the court without a jury, and it is stipulated that “the entire file of the Interior Department, containing all correspondence relative to the contract, was received in evidence”. At the close of the contractor’s case, the government moved for a directed *30 finding as to the item of damages for delay, on the ground that the contractor had not within ten days notified the contracting officer in writing of the cause of delay. The judge thereupon announced that he was of opinion the complaint stated a good cause of action on its face and also that the defendants had waived the defense of written notice by not pleading it. A few days later, and before the court had handed down its formal findings' of fact and conclusions of law, the United States moved for leave to amend the answer to show plaintiff’s failure to comply with the provision of the contract requiring the written notice. The court refused to hear the motion until after the findings of fact and conclusions of law were made, and when this was done, denied leave to amend. In view of the trial court’s action in this respect, it is necessary to decide whether the obligation to give written notice was waived, before considering whether the oral notice given was a sufficient compliance with the contract.
We think the answer to this must be in the negative. The record shows that the entire correspondence between the parties was without objection received in evidence and that counsel for the contractor then admitted that no written notice had been given the United States. • Based on this, counsel for the United States, as we have seen, moved for a directed finding as to this item of the suit, and the question was fully argued. This, we think, brought the case within Rule 15 (b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, which provides that when issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as though they had been raised in the pleadings. In the present case, the question whether the giving of
written notice
was a condition precedent, was submitted just as though it had been pleaded, and the evidence in relation thereto was all before the court. There was no element of surprise or concealment or prejudice. The question was as much in the open as if it had been pleaded and denied, or admitted and excused on some other ground. We think, under the circumstances, there was an implied consent on the part of both parties to the consideration and determination of the case on that issue. Haskins v. Roseberry, 9 Cir.,
This brings us, then, to consider whether oral notice admittedly given by the contractor was the equivalent of a notification “in writing of the causes of delay”. Obviously, the intent of this provision is to inform the government of the cause of delay and afford an opportunity to remove it, and likewise to warn the government of the intention of the contractor tp insist upon it as a means of prolonging the stipulated time for completion of the work. Strangely enough, the question whether mere oral notice of delay is sufficient where the contract requires notice to be in writing appears not to have been raised or decided in any previous case involving such a contract. In Plumley v. United States,
The reasoning in these cases seems to be that a provision in a contract of the nature we are discussing is a condition precedent, compliance with which must be shown; and this is true because it must be assumed that the parties in inserting the provision attached both value and importance to its precise terms. In such circumstances, “The court is not at liberty, either to disregard words used by the parties, descriptive of the subject-matter, or of any material incident, or to insert words which the parties have not made use of.” Harrison v. Fortlage,
Second. The other item constituting the judgment was, as we have seen, for moneys unlawfully retained by the United States as liquidated damages for delay in completion. The deduction was made under Article 9, by the terms of which the contractor was required to prosecute the' work to completion within the specified time, failing which the United States were given two rights — one, to take over the work and complete it and hold the contractor for any excess cost; the other, to permit the contractor to continue the work subject to the right of the United States to retain out of the contract price liquidated damages for each calendar day of delay ■ until the work should be completed. We think these rights are alternative. The article states that if the Government does not terminate the right of the contractor to proceed, then the contractor shall continue the work and liquidated damages may be assessed. -
But in this case the United States did terminate the contract and did take over and complete the work and did collect the excess costs. Having chosen this method of completing the contract, they cannot also claim the other alternative of liquidated damages. Similar provisions in government ' contracts have been consistently so construed by the Court of Claims. See particularly, Fidelity & Casualty Co. of New York v. United States,
The same conclusion was reached in United States v. Maryland Casualty Co., D.C.,
This view was adhered to in American Employer’s Ins. Co. v. United States,
The only case cited by the United States where liquidated damages and ex
*32
cess costs were both recovered under a contract such as we have here is Continental Casualty Co. v. United States, 5 Cir.,
We are, therefore, of opinion that the judgment of the court below should be reversed as to the sum of $2,919.80, which was allowed as damages for the delay of the United States in fixing the location for the work, but should be affirméd as to the sum of $2,030.00 deducted by the United States as liquidated damages.
Affirmed in part; reversed in part; and remanded,