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222 U. S.

Argument for Defendants in Error.

Dorn v. Mengedoht, 59 N. W. Rep. 800; Savage v. Glenn, 10 Oregon, 440; Anderson v. Nordstrum, 61 N. W. Rep. 1132. The rule is not the difference between contract cost and the actual cost; but the difference between contract cost and the reasonable cost or necessary cost. This distinction is pointed out in State v. Ingram, 27 No. Car. (5 Ired.) 441; Cincinnati Ry. Co. v. Carthage, 35 Oh. St. 631; Fletcher v. Milburn Mfg. Co., 35 Mo. App. 321.

It has not been shown here whether or not the United States ever completed this work of construction. Chesapeake Transit Co. v. Walker & Son, 158 Fed. Rep. 850.

It cannot be said that because the accepted bid was the lowest obtainable by the advertisement made that it was reasonable for the completion of the work under the original contract, for it was not a bid to do the same or substantially the same work. Goldsboro v. Moffitt, 49 Fed. Rep. 213; New York v. Second Ave. Ry. Co., 55 Am. Rep. 839; Kidd v. McCormick, 83 N. Y. 391; Brown v. United States, 152 Fed. Rep. 964.

The contract with the New York Dredging Company was unenforcible against it for uncertainty and want of mutuality. 7 Am. & Eng. Encyc. of Law, 116; 9 Cyc. 248; Pulliam v. Schimpf, 19 So. Rep. 428; Davie v. Lumberman's Min. Co., 53 N. W. Rep. 625.

The United States is seeking to enforce a unilateral contract in which it is the promisee. One party to the contract cannot be liable in damages when the other is not. 7 A. & E. Encyc. of Law, 114; 9 Cyc. 327; Dorsey v. Packard, 12 How. 126.

An agreement is not binding on either party unless both are bound. In the case at bar the United States was not bound to anything whatever. Morrow v. Southern Express Co., 28 So. Rep. 998; Jordan v. Indianapolis Water Co., 61 N. E. Rep. 12; Vogel v. Pekoc, 42 N. E. Rep. 386; Crane v. Crane & Co., 105 Fed. Rep. 869.

There was no means whereby the burden on the VOL. CCXXII-30

Argument for Defendants in Error.

222 U.S.

Dredging Company could be ascertained at all, the quantity of dredging being left absolutely to be determined by United States. Harvester King Co. v. Mitchell Co., 89 Fed. Rep. 173; American Cotton Oil Co. v. Kirk, 68 Fed. Rep. 791; Dennie v. Slyfield, 117 Fed. Rep. 474.

The case at bar is easily distinguishable from cases cited in Crane v. Crane, 105 Fed. Rep. 869, where agreements to furnish such supplies as may be needed during a certain period for business or manufacture have been upheld.

In the case at bar the United States could vary the amount of work to be done to any extent, could vary the location of area to be dredged to any extent, and in fact, as is shown, decided to have performed only 149,000 cubic yards instead of one million, and claims that the contract is performed. Cold Blast Transp. Co. v. Kansas &c. Co., 114 Fed. Rep. 81.

The contract was void for uncertainty and want of mutuality.

The rule that where a contract on its face assumes to provide for all the work authorized by an appropriation, the contractor is bound to know the amount of the appropriation, Shipman v. United States, 18 Ct. Cl. 146, does not apply to this case.

It would be unconscionable to hold that United States could advertise for bids for a certain work of dredging approximately one million cubic yards, so as to form a deep water basin, thirty feet deep, on a marked area; accept a bid based on that amount of work; and then hold the contractor to a contract for dredging a very much smaller quantity at the same rate because the appropriation was not sufficient to pay for the work as originally planned, for which bid was submitted.

Plaintiff in error cannot now be heard on the question of the claim for liquidated damages urged in the Circuit Court, such claim having been disallowed by that court.

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MR. JUSTICE HOLMES delivered the opinion of the court.

This is a suit upon a contract for dredging and a bond made part of the contract, both executed by the New York Dredging Company as principal and by the defendants in error as sureties. The plaintiff got judgment in the Circuit Court, but in the Circuit Court of Appeals the judgment was reversed on the ground that the time for performance had been extended, and was ordered to be entered for the defendants. 167 Fed. Rep. 460. 93 C. C. A. 96. The contract provided that if, during the progress of the work, any changes in the plans or specifications should be deemed desirable by the Government, the changes in compensation should be ascertained in stated ways. The work was to begin within thirty days from the date of the contract, October 25, 1897, and to be completed in sixteen calendar months from the same date. In case of unavoidable delays, through accident, storm, or other act of Providence, the contractor was to notify the officer in charge of the occurrence &c., to provide for an investigation. In case of avoidable delays no extension of time would be recommended except on condition that the contractor bear specified costs and other expenses, to be deducted from the money coming due to it under the contract. No extension of time was to be granted except upon the authority of the Secretary of the Navy. In case of delay beyond the period fixed by the contract deductions of fifty dollars per day might be made in the discretion of the Secretary of the Navy as liquidated damages. In case of the contractor's failure in any respect to perform the contract the United States reserved the option to declare it void without prejudice to its right 'to recover for defaults herein or violations hereof,' and might recover as liquidated damages a sum equal to the penalty of the bond ($30,000).

The contractor began its preparations on the spot on

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November 26, 1897, and began actual dredging in the following March. It was bound to finish by February 25, 1899. In January, 1899, it asked for an extension of time on account of storms, accidents, unforeseen hardness of material and other difficulties. On February 15 the time was extended by the Secretary of the Navy to December 30, 1899. But in about two months the contractor stopped work and asked leave to dump in deep water instead of on shore. This was refused. There were another application and refusal and further correspondence, and finally leave was granted on February 21, 1900. The contractor, however, did no more work after April, 1899. On May 25, 1901, the Navy Department declared the contract void, and a new contract was made, after advertisement in the required way, by which a third party was employed to complete the work at the lowest rate that the Government could get by such a bid. The damages allowed in the Circuit Court were the difference in cost between the old contract and the new; viz. $25,588.02 with interest, or $33,389.52 in all.

The defence is rested mainly on the extension of time, it not appearing that the sureties assented to the change otherwise than by the contract, which, it is said, merely recognizes what was true without it, that the contractor might ask for more time and the Government grant it if so minded. It is argued that the expression of the obvious does not alter the general rule of law. But the question is not what was possible but what was contemplated as not improbable, and we are of opinion that the sureties were not discharged. There is no sacrosanct prohibition of change as against them; the law has no objection to it if they assent. Whether they have done so or not is simply a question of construction and good sense, taking words and circumstances into account. If we should assume in their favor that in this case there could be no change without mutual agreement, still in our opinion this contract so

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definitely contemplated what the nature of the work made manifest, that it might be necessary or very convenient to extend the time; that the sureties must be taken to have contemplated it also as permissible against themselves. In United States v. Freel, 186 U. S. 309, 317, it was recognized that a clause similar to the one to which we have referred concerning the case of the United States deeming changes desirable would authorize some changes of plan without discharging the sureties. It is true that that contract contained a proviso that no change of the kind should affect the validity of the contract, which of course it would not in any event if the contractor agreed to it. But the sureties, so far as appears, signed the bond only and were sued upon that. The proviso did not affect their case. See also Guaranty Co. v. Pressed Brick Co., 191 U. S. 416, 424.

It is urged that the last mentioned section dealing with changes deemed desirable by the Government requires that they, as well as the increased or diminished compensation, must be agreed to in writing by the parties to the contract before they are begun; and it is suggested that this requires the consent of the sureties. We do not read it so. We think that so far as this clause goes it contemplates an imperative right on the part of the Government to make a change, but requires a writing as a condition of going on. See Rev. Stat., § 3744. The same notion is repeated in the specifications with even more definite assumption that the Government may make changes if its sees fit. "Should it be to the interest of the Government to make any changes in the plans the compensation is to be determined" &c. So again the Government reserves an unqualified right to change the limits of the dredging and the points of deposit. Moreover, comparing the clause with the specifications, which more or less repeat the provisions, as we have said, and deal with the contractor eo nomine, we should be inclined to construe

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