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UNITED STATES v. COOK

decided: February 27, 1922.

UNITED STATES
v.
COOK, EXECUTOR OF EAMES, ET AL.



APPEAL FROM THE COURT OF CLAIMS.

Author: Taft

[ 257 U.S. Page 524]

 MR. CHIEF JUSTICE TAFT delivered the opinion of the court.

Eames and Young, architects of St. Louis, made the plans for a custom house at San Francisco and supervised its construction. They were to receive compensation at the rate of five per centum upon the actual cost of the work. The work was long delayed, three years, by the San Francisco earthquake and fire which increased the cost of labor and materials. Congress authorized the Secretary of the Treasury within a limit of $250,000 to make good to the contractor his loss from the delay and enhanced prices so that he should receive enough to recoup

[ 257 U.S. Page 525]

     him for his outlay but without profit. The architects claimed from the Government five per centum on the extra amount paid to the contractor. Eames died and Cook, his executor, joining with the surviving partner, Young, brought this suit in the Court of Claims. The Court of Claims gave judgment for $5,095.38, the full amount of the claim. The Government appeals.

The contract provided that the fee of the architects was to be computed at the rate of five per centum upon "the actual cost of the work executed from the drawings and specifications, and under their supervision, as shown upon the books of the Supervising Architect's Office, by the met amounts of contracts awarded and proposals accepted for additions or deductions." Until the actual cost could be determined, the monthly payments were to be on the proposed cost as estimated from time to time by the Government, and upon the completion of the building the entire fee was to be computed on the actual construction cost of the work executed from the architects' drawings and specifications and under their supervision, as shown upon the books of the Supervising Architect's Office. The extra amount paid the contractor was in fact shown upon the books of the Supervising Architect's Office though not of course included in the total cost stated before the passage of the act and the ascertainment of the amount due thereunder.

The clause in the Sundry Civil Appropriation Act, approved May 27, 1908, c. 200, 35 Stat. 318, providing for an extra payment to the contractor was as follows:

"The Secretary of the Treasury is authorized, upon completion of the custom-house in the city of San Francisco, California, to pay to Thomas Butler, the contractor for the construction of said building, in addition to the contract price thereof, such sum as may be equitable and just to reimburse said contractor for any loss actually sustained

[ 257 U.S. Page 526]

     in consequence of the earthquake and great fire of April, nineteen hundred and six, not exceeding the sum of two hundred and fifty thousand dollars: Provided, That the amount allowed said Thomas Butler shall not be sufficient to enable him to make any profit out of the making and execution of said contract."

The committee appointed by the Secretary of the Treasury to adjust the claim found that the actual increased cost to the contractor of constructing the building due to delay and the increased prices of labor and material was $101,907.66. During the delay of three years, the architects under their subsidiary contract had to keep a superintendent of construction on the building at a cost of $6,700, and their office and certain contingent expenses in San Francisco went on.

The Government contends that the amount awarded to the contractor under the act was a mere gratuity and can not be properly treated as a part of the cost of construction. We can not agree to this view. It seems to us that this was an alteration of the contract in response to equitable considerations. It was a change from unit prices to a cost plus nothing contract. It was not a mere lump sum gift. It was the result of inspection and examination as directed by Congress, and an award by actual estimates. It was the result of a change in the contract terms made by the principal in whose name and for whose benefit the contract was entered into, and acquiesced in by the contractor. It added to "the actual cost of the work executed from the drawings and specifications and under [the architects'] supervision, as shown upon the books of the Supervising Arvhitect's Office, by the net amounts of contracts awarded and ...


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