Bethlehem Steel Co. v. United States

Citations

• 53 Ct. Cl. 622
• 51 Ct. Cl. 394

Syllabus

<p>Plaintiff entered into a written contract with the defendants for the delivery of certain armor plates for the use of battleships. Pursuant to the provisions of Article XV of the contract the plaintiff furnished a bond in the penal sum of $195,000, it being provided in such article that “ at the end of each calendar year the amount of such bond may be reduced to correspond to the estimated cost of armor then unfurnished under this contract.” All of the armor plate called for in the contract was delivered on or before May 2, 1911. No reduction of the bond was requested by plaintiff until January 27, 1912. A second bond was thereupon furnished by the plaintiff in the sum of $3,500 conditioned for the replacement of any armor plates of the fire-control tower that might prove defective, the defendants agreeing to consider the original bond as fulfilled, but refused to cancel the same. On March 9, 1912, the Secretary of the Navy offered to cancel the original bond if plaintiff would furnish a third bond in the sum of $30,000 conditioned for the fulfillment of the plaintiff’s obligation to furnish replacing plates under the contract. This bond was furnished and the original bond of $195,000 was considered as superseded.</p> <p>The court below decides :</p> <p>The bond required by Article XV was only for the provisional delivery of the armor plate as required by the contract and had no reference to replacement of such armor as might prove defective, as the word “ delivery,” as used in other parts of the contract, had reference only to such conditional delivery. The defendants were secured from loss by the terms of section 3 of Article XIII providing that there shall be a reservation of 10 per cent from the price of each group of armor delivered to be retained until the group shall have been completed, and “ that the reservation on the last group * * * shall be retained until all the armor plate furnished for such vessel has been in place for a period of sirs months.”</p