Opinion by
Henderson, J.,
The plaintiff entered into a contract in writing with the City of Philadelphia for work in connection with the construction of the Frankford Elevated Railway and Bustleton Surface line. The undertaking involved a large sum of money, all of which was paid on the completion of the work except two items now disputed and a small claim which was subsequently settled. The issue
comes up on a case stated in which the material parts of the contract are recited. The first claim is for $13,000 for construction work at the unit and lump prices bid in the proposal contained in the contract. The claim brings into consideration two sections of the specifications according to which the bid for the work was received under the captions “Time of Completion” and “Time Charge,” from which it appears that time was to be an essential element in the contract and the work was to be completed by or before October 15,1922. The time of beginning was left somewhat indefinite, but the work could be commenced immediately on notice from the chief engineer that the contract had been approved by the mayor and certified by the city controller. It was provided that the time charge would not begin to be applied until August 1, 1922. The second section referred to recited the fact that delay in completion of the proposed work would involve the city in increased cost for interest on capital already invested and that it was important, the work be pressed vigorously to completion. For1 that reason it was provided that a time charge would be made against the contractor and that this charge “which should be included by the bidder in his cost estimate for all time, except Sundays, elapsing from and including August 1, 1922, to and including the date when he expects to complete the work, will be at the rate of Two Hundred Dollars ($200) per day, to and including the date when all of the work is completed. The time charge will be deducted when payments are made.” Pursuant to these specifications the bids for the work included a time charge of $13,000 on the basis of $200 per day for the period running from August 1st to October 15th. The work was awarded to the plaintiff and was accepted as completed on the 15th of October, 1922. The city declined to pay the amount of the time charge for the reason that the contractor had not anticipated the time of completion and was therefore not entitled to any part of it. The learned trial judge sustained this
action and our examination of the contract brings us to the same conclusion. The language of the specification with reference to the time charge could have been improved with respect to clearness, but a careful examination of it satisfies us that it was introduced for the purpose of facilitating the settlement of any sum earned for promptness or forfeited on account of delay in the completion of the work. It was clearly stated and must have been so understood by the plaintiff and other bidders that the lump sum of $13,000 added to the bids was not to be a part of the compensation to the contractor irrespective of the time when the work was completed, and express notice was given that the amount so added to the bill would be deducted when payments were made. It would be resorted to in a proportionate degree in the event that the contractor completed his work ahead of the limit allowed him, and would be subtracted from his claim if the work should be completed at the time appointed in the contract, and if not so completed would be increased at the rate of $200 per day after that date. On no other theory can it. be satisfactorily explained why the sum involved was directed to be inserted in the bids. If this amount had no relation to the value of the work to be done, it was either a gratuity allowed the bidder or a provision for determining the compensation for promptness or liability for tardiness of the bidder under the time limitation. We must assume that' the parties understood the contract, and that the bids were enlarged to cover the time charge as directed by the city authorities. This is not denied and the plaintiff is put in the position of demanding the amount without having rendered adequate return therefor. The city had no authority to donate this sum, nor can we assume, in view of the terms of the agreement, that he understood when the bid was made that he was to have this reward for completing his contract at the date when he was bound so to do. It is true the provision in the “time charge” was based on the computation from August 1,1922? and
standing alone this might appear to create a liability of the contractor although his undertaking was completed at the time specified, but it is apparent that no such construction of the agreement was intended by the parties. It is not in a proper sense a provision for liquidation of damages, but establishes a method for providing extra compensation for promptness and the standard of reduction of compensation on default in performance as to time.
Free access — add to your briefcase to read the full text and ask questions with AI
Opinion by
Henderson, J.,
The plaintiff entered into a contract in writing with the City of Philadelphia for work in connection with the construction of the Frankford Elevated Railway and Bustleton Surface line. The undertaking involved a large sum of money, all of which was paid on the completion of the work except two items now disputed and a small claim which was subsequently settled. The issue
comes up on a case stated in which the material parts of the contract are recited. The first claim is for $13,000 for construction work at the unit and lump prices bid in the proposal contained in the contract. The claim brings into consideration two sections of the specifications according to which the bid for the work was received under the captions “Time of Completion” and “Time Charge,” from which it appears that time was to be an essential element in the contract and the work was to be completed by or before October 15,1922. The time of beginning was left somewhat indefinite, but the work could be commenced immediately on notice from the chief engineer that the contract had been approved by the mayor and certified by the city controller. It was provided that the time charge would not begin to be applied until August 1, 1922. The second section referred to recited the fact that delay in completion of the proposed work would involve the city in increased cost for interest on capital already invested and that it was important, the work be pressed vigorously to completion. For1 that reason it was provided that a time charge would be made against the contractor and that this charge “which should be included by the bidder in his cost estimate for all time, except Sundays, elapsing from and including August 1, 1922, to and including the date when he expects to complete the work, will be at the rate of Two Hundred Dollars ($200) per day, to and including the date when all of the work is completed. The time charge will be deducted when payments are made.” Pursuant to these specifications the bids for the work included a time charge of $13,000 on the basis of $200 per day for the period running from August 1st to October 15th. The work was awarded to the plaintiff and was accepted as completed on the 15th of October, 1922. The city declined to pay the amount of the time charge for the reason that the contractor had not anticipated the time of completion and was therefore not entitled to any part of it. The learned trial judge sustained this
action and our examination of the contract brings us to the same conclusion. The language of the specification with reference to the time charge could have been improved with respect to clearness, but a careful examination of it satisfies us that it was introduced for the purpose of facilitating the settlement of any sum earned for promptness or forfeited on account of delay in the completion of the work. It was clearly stated and must have been so understood by the plaintiff and other bidders that the lump sum of $13,000 added to the bids was not to be a part of the compensation to the contractor irrespective of the time when the work was completed, and express notice was given that the amount so added to the bill would be deducted when payments were made. It would be resorted to in a proportionate degree in the event that the contractor completed his work ahead of the limit allowed him, and would be subtracted from his claim if the work should be completed at the time appointed in the contract, and if not so completed would be increased at the rate of $200 per day after that date. On no other theory can it. be satisfactorily explained why the sum involved was directed to be inserted in the bids. If this amount had no relation to the value of the work to be done, it was either a gratuity allowed the bidder or a provision for determining the compensation for promptness or liability for tardiness of the bidder under the time limitation. We must assume that' the parties understood the contract, and that the bids were enlarged to cover the time charge as directed by the city authorities. This is not denied and the plaintiff is put in the position of demanding the amount without having rendered adequate return therefor. The city had no authority to donate this sum, nor can we assume, in view of the terms of the agreement, that he understood when the bid was made that he was to have this reward for completing his contract at the date when he was bound so to do. It is true the provision in the “time charge” was based on the computation from August 1,1922? and
standing alone this might appear to create a liability of the contractor although his undertaking was completed at the time specified, but it is apparent that no such construction of the agreement was intended by the parties. It is not in a proper sense a provision for liquidation of damages, but establishes a method for providing extra compensation for promptness and the standard of reduction of compensation on default in performance as to time.
The next item in the plaintiff’s claim is for electric power furnished the defendant for testing and operating cars or other equipment of the Frankford Elevated Kailway. His contract involved the cost of wires, transformers, meters and connections. The price to be paid was 5%c per kilowatt hour. The service was to be “limited in amount to that required for operation prior to October 15, 1922.” The claim is for electrical energy subsequently furnished because of the necessity of such service in testing cars and other equipment. The number of hours charged for was 356,750. The plaintiff claims the same rate of compensation which was provided for in respect to power to be furnished before October fifteenth. The defendant offered to pay on the basis of cost of labor, materials, etc., plus 10% of the amount thereof. This the plaintiff refused to accept. The contention was therefore as to the extension of the written contract to a period subsequent to October fifteenth. We find nothing in the case stated from which it can be held as a conclusion of law that the electric current furnished after October 15, 1922, was so furnished under the written agreement with its definite limitation to that date. The subject of that contract involved a higher rate of compensation than an implied contract called for with respect to the current furnished after October fifteenth. It is not shown that any municipal action was had which extended the contract after the date last named, and if the claim is to be asserted on the ground that service was received and accepted com
pensation would only be due on the basis of the value of the thing supplied. ■ The force account provision allows for unforeseen work found to be necessary in connection with that covered by the other items of the specifications, but as to the unforeseen work the price is to be based on the cost of labor, materials and employer’s liability, plus ten per cent. It is to be observed, however, that under that section no work or material shall be paid for by the city “unless it be ordered as such in writing.” It is not set forth that the plaintiff received any order in writing for his extra claim, nor does he rely on the provisions of the force account section as a foundation for a recovery. We are unable to regard the claim for electric power furnished after the 15th of October as covered by the written agreement. If the plaintiff have a cause of action for compensation for such service rendered, it must •rest on some other right than the written contract affords. The learned trial judge reached a correct conclusion on the facts presented in the case stated.
The judgment is affirmed without prejudice to the right of the plaintiff to assert any right of action he may have to recover compensation for the electric power furnished after October 15, 1922.