56 Ct. Cl. 176 | Ct. Cl. | 1921
Lead Opinion
delivered the opinion of the court:
This is a suit brought by the plaintiffs against the United States for the sum of $325,931.97.
On May 19, 1906, the plaintiffs entered into a contract in writing with E. A. Hitchcock, Secretary of the Interior, .acting in behalf of the United States, which contract was made in pursuance and by virtue of the act of Congress approved June 17, 1902, and known as the reclamation act. The plaintiffs in said contract undertook to construct and complete the work provided for in Schedules Nos. 2 and 3 of main canal, Payette Boise project, Idaho, in accordance with the terms of the advertisement, proposal, and specifications attached to the contract, and made a part of the same. For this work the plaintiffs wei'e to be paid as provided in the specifications.
It was provided that the work should be commenced within thirty days after the contract was signed by the Secretary of the Interior, and that the same should be completed by March 1, 1908. The work was not completed by the plaintiffs, and on October 27, 1908, the contract was annulled.
In a general way the contract and specifications and the maps, plans, drawings, and profiles furnished to bidders by the defendant set forth the termini, location, dimensions, and proportions of the canal to be constructed. The specifications (par. 12) provided: “Bidders must satisfy themselves as to the nature of the material and as to all local conditions affecting the work, and no information derived from the maps, plans, specifications, profiles, or drawings, or
The total amount of material to be excavated on schedules 2 and 3 was shown in the estimates furnished plaintiffs to be 583,000 cubic yards, classified as follows: Class 1, 475,000 cubic yards; class 2, 80,000 cubic yards; class 3, 22,000 cubic yards-; class 4,. 6,000 cubic yards. The total quantity of material actually required to be moved by the plaintiffs exceeded largely the total quantity of the estimates submitted to bidders, and was 773,823 cubic yards, classified as follows: Class 1, 470,401 cubic yards; class 2, 119,791 cubic yards; class 3, 23,156 cubic yards; class 4, 60,475 cubic yards. For moving and hauling this material the plaintiffs Avere paid in accordance with the terms of the contract, and under the terms of the contract can not base a claim against the defendant, by reason of the fact that the estimates of quantity of material submitted to bidders differed largely from the quantity of material which they were required to recover and handle. The contract in this connection is as follows: “ The quantities given in the proposal are for the purpose of comparing bids, and are approximate only, and no claim shall be made against the United States on account of any excess or deficiency, absolute or relative, in the same ” (par. 24). It may be well to state here that the Secretary of the Interior extended the time of the contractors, when they asked for it, basing his action upon the fact that the amount of material to be removed was more than had been estimated for, and that there was a change in the amount and kind of
There was a material change in the amount and kind of work required to be and actually performed by the plaintiffs from that shown on the plans, drawings, profiles, and specifications. There was a reduction of 1.23 miles in the length of the two schedules, the plans, etc., stating that the length of the two schedules was about 13 miles, but as they were, required to be constructed the length was 11.77 miles; there was also a reduction from that indicated on the maps and drawings in the average depth of the material excavated from the prism of the canal of 1.76 feet on schedule 3, and 0.53 foot on schedule 2. But the contract provided: “ The Secretary of the Interior reserves the right to make such changes in the specifications of work or material at any time as may be deemed advisable, without notice to the surety or sureties on the bond given to secure compliance with the contract, by adding thereto or deducting therefrom, at the unit prices of the contract, or at such allowances for changes of materials as shall be deemed just and reasonable by the engineer, whose decision shall be binding on both parties ” (par. 25).
The plaintiffs complain that they were greatly damaged by reason of the large increase of overhaul made necessary by the change of location, and they undertake to show what that damage was in dollars and cents. But there is no evidence as to this, which can be relied upon. At most, it could only be claimed for as extra work, and this was not done at the time, nor were the terms of the contract complied with which set out specifically what steps the contractor was to take in the event he claimed for extra work. It is true that the change of location did necessitate more overhaul than was indicated by the plans and specifications, but the paragraphs of the specifications above quoted provided for this, and the
The plaintiffs lay great stress upon what they allege to be erroneous classification of material made by the Government engineers. They allege that by reason of this erroneous classification they have been damaged in the sum of some $64,000. The several kinds of material required to be excavated by the plaintiffs consisted of soil, sand, gravel, limestone, indu-rated material, cemented gravel, loose lava bowlders, lava rocks cemented together, and solid lava rock. According to the specifications the material to be excavated was divided into four classes. Class 1 was to be paid for at 15 cents per cubic yard; class 2, at 50 cents per cubic yard; class 3, at 80 cents; and class 4, at $1.40 per cubic yard (par. 42). Engineer C. C. Fisher did most of the work, and his classification was objected to by the plaintiffs from the beginning of the work. The plaintiffs made protest to the chief engineer, and finally to the Secretary of the Interior. The Secretary appointed a board of engineers to prescribe rules for the classification of material. The board consisted of three engineers connected with the work. This board recommended rules for the classification of materials. These rules were approved by the Chief Engineer of the Eeclamation Service. A reclassification of the material already classified was ordered and carried out in accordance with the recommendation of the board. This work was done by Fisher, by Edward Hedden, by Gilbert, an assistant engineer, and by Bond, an engineer who had been on the work at the beginning of the contract.
During the entire progress of the work complaints were made by the plaintiffs that the classification of the Government engineer was erroneous. These complaints were investigated from time to time by Edward Hedden and F. C. Horn, who succeeded him as project engineer; by D. W. Eoss, supervising engineer in charge of the project; by W. H. Sanders, engineer sent to the work to review the classification; and by A. P. Davis, Chief Engineer of the Eeclamation Service. The plaintiffs’ claim for classification of material was rejected by the chief engineer, and the classification made by Fisher, as well as the reclassification made by him, was approved by all of the engineers. And
Another claim, insisted upon by the plaintiffs was that they were greatly damaged by the turning of water into the canal for irrigation purposes, and that they were erroneously charged with the expense of getting the canal ready for that purpose, the Government having added its own forces to those of the plaintiffs for that purpose. The facts were that the Government was under contract with the New York Canal Co. to secure the passage of the water for irrigation purposes during the irrigating season. The plaintiffs were not parties to this contract and were in no way bound by its terms. The work being done by the plaintiffs in the spring of 1908 was on the New York canal, and if water was to be run for irrigating purposes during the irrigating season of 1908 it was necessary that certain work should be completed before April 15,1908, the beginning of the irrigation season, and the Government notified the plaintiffs that water must be run in the Government canal during the irrigation season of 1908. But the plaintiffs were not bound by their contract to complete the work for this purpose, more especially as their time to complete the contract was extended to June 30, 1908. The Government made the contract with the New York Canal Co. and took upon itself the obligation of supplying water for irrigation purposes, and it could not transfer that obligation to the plaintiffs. It is true that specification 52 attached to and made a part of the contract provided : “ When necessary in the prosecution of the work to interrupt or obstruct the natural drainage of the surface or the flow of artificial drains or irrigation ditches, the contractor shall provide for the same during the progress of the work in such a way that no damage will result to either public or private interests. He shall be held liable for all damages that may result from failure to provide therefor during the progress of the work.” But this specification does not apply to the work of excavation necessary to complete the work, nor does it appear that any damage would have resulted to either public or private interests had the plaintiffs been allowed to complete the excavation work, which it would have taken them only a few days to finish.
The water was turned into the canal by the Government, and on April 18, 1908, the plaintiffs were compelled thereby to cease work. At the time' the water was turned into the canal the plaintiffs were entitled to an extension of time which gave them until June 80, 1908, to complete the work. By turning the water into the canal the defendant made it impossible for the plaintiffs to continue the work, and as the water remained in the canal for six months no work •during that time could be done. The defendant by its action breached the contract, and the extension of time granted the plaintiffs was of no use to them and was rendered of no use to them by the action of the defendant. We think the plaintiffs are entitled to any damages which they suffered by reason of this action of the defendant, and those damages are set out in Finding XI.
On October 5, 1908, before the water was out of the canal the plaintiffs were notified in writing by one of the Govern
For the foregoing reasons the court is of opinion that the •plaintiffs are entitled to recover under Findings IX, XI, and XII, the sum of $50,228.93. It is so ordered.
Dissenting Opinion
dissenting:
While approving of that portion of the opinion which finds two breaches of the contract by the defendant and the amount allowed therefor, I dissent from the other findings and conclusions of the court. I think the findings do not conform with the proof in the following particulars:
First. In not finding that the defendant was .without authority under the contract to turn the water into the canal as it did.
Second. In not finding that at the time the water was turned into the canal the plaintiffs was entitled to at least 9 months, and probably 14 months, from March 1, 1908, additional time within which to complete the contract, being the amount of the extensions of time eventually granted and conceded by the Secretaries of the Interior to be the right of the plaintiffs.
Third. In not finding that the defendant was guilty of misrepresentation in furnishing misleading estimates, which were not based upon the survey shown the plaintiffs, or any survey whatever.
Fourth. In finding that the plaintiffs had notice of the character of the change in the volume and character of the work by reason of the relocation of the line of the canal, and
Fifth. In finding that the Secretary of the Interior had authority under section 25 of the contract to change the location and quantities of material; and in not finding that he had no right under the circumstances of the case to change the location, and that, in any event, he was' precluded from doing so by the wrongful misrepresentations in the estimates, and the furnishing of estimates not based upon any survey, and not based upon the survey shown to the plaintiffs as bidders.
Before proceeding to the discussion of this case I wish to point out that the opinion of the court finds two distinct breaches of this contract by the defendant, both arbitrary and inexcusable.
First. The breach of the contract by turning water into the canal when the plaintiffs’ work, including the additional 70 per cent put on him by the relocation, was 97^ per cent completed, and when the plaintiffs, by the admission of the Secretaries of the Interior, were entitled to nine months’ extension of time by reason of the increase in volume and change in the character of the work.
Second. The breach by abrobation of the contract and seizing the plaintiffs’ property, the court finds was the act of the Acting Secretary of. the Interior based upon information given by officers in the field which was not accurate, and upon facts that did not actually exist, and that the Acting Secretary made no effort to acquaint himself with the true facts of the case.
An examination of the conduct of the representatives of the Government in breaching the contract in these two instances is entirely in keeping with their conduct from the inception of this matter and is characteristic of their whole treatment of the plaintiffs in this case from the time they
Attention is also called to the fact that the officials who were primarily to blame for these two breaches were in the one case, Supervising Engineer Boss, who ordered the misleading estimates to be prepared, and the wrongful change of location; and in the other case, Engineer Fisher, who made the erroneous classification. The latter who, in effect,. did all of the classifying, furnished the facts upon which the contract was abrogated, which, as stated above, the court finds to have been untrue.
The conduct of the chief engineer, acting for the Secretary of the Interior and the higher officials, as pictured by the majority opinion in abrogating this contract without making an effort to become acquainted. with the facts, is characteristic of their conduct throughout this whole transaction.
An examination will also show that the two breaches found in the opinion were due primarily, and logically go back to the misrepresentation which inhered in the letting of this contract and the wrongful change of location, in that these two acts of the defendant increased the volume of work 70 per cent, changed its character, and thereby prevented the plaintiffs from completing their contract by the 1st of March, the time fixed in the contract for its completion. It is indisputable that at the rate the plaintiffs did their work they would have completed the yardage called for in the specifications of the contract before that time. Had they completed their contract there would have been no opportunity or occasion for the defendant to breach it by turning in the water or to breach it by abrogating it. So that the conclusions of the -court of necessity go back to and are based upon, and inevitably grow out of, the misrepresentations and wrongful acts which inhered in the original letting of this contract, and the increase in the volume of work by the change in the location and character of the work. The letter of Secretary
This seems a proper place to give the opinion of the Secretary and the chief engineer of what happened in this case, and what were the real causes of this litigation. It might be well to state that at the time the water was turned into this canal and the plaintiffs stopped work in April, 1908, 97|~ per cent of the work, including the additional 70 per cent not called for by the estimates, had been completed, and a request by the plaintiffs for an extension of time was then before Secretary Garfield. Secretary Garfield, in May, 1908, when he granted this extension of time, had before him a report of the chief engineer which inter alia contained the following:
“ Errors in the specifications entailed upon the contractors the necessity of performing more than seventy per cent more work than was contemplated by the United States and the contractors at the time the contract was executed.”
Secretary Garfield, in his letter of May 22, 1908, to the auditor, says:
“ In further explanation of this situation it is stated that the excess quantities of work actually required oyer those stated in the specifications and schedules were mainly due. to errors in the preparation of the specifications. These errors were made by the United States and the contractors were justified in accepting the figures of the United States as-being at least approximately correct. The excess quantities required to be moved under schedules two and three approximate a total of seventy per cent over and above the quantities cited in the specifications. This is an increase over the quantities estimated to an extent which can not be held to be a reasonable one, and the discrepancy in the figures being chargeable to the United State's it is therefore apparent that the contractors are entitled to an extension of time for moving these excess quantities.”
“ * * * In addition to the above cause of delay, changes in the plan of the canal have greatly increased the quantity*197 of overhaul and changed the character of the work in such a way as to require the contractors to secure additional equipment which resulted in further delay.”
A year after this the chief engineer again reports to Secretary Ballinger:
“ These delays have resulted from the acts of the United States; first, in requiring an amount of work approximately double that covered by the agreement as signed.”
And Secretary Ballinger in his letter of June 5, 1909, to the auditor, alluded to in the opinion of the court, states:
“At the time of the final completion of the work the gross earnings under the contract amounted to $250,000, representing, therefore, approximately double the amount of work covered by the contract. It is therefore apparent that the amount of extra time to which the contractors are entitled owing to this unusual increase in the quantity of the work, is considerable. In extensions heretofore granted this element has been considered to some extent, but not sufficient to accord the contractors the total amount of time to which it is now apparent they were entitled from this cause.”
And thereupon he granted them 120 days extension of time from the time to which Secretary Garfield had previously extended it.
At this very time, June, 1909, there had been held up since July 1, 1908, the amount due the plaintiffs, whose contract called for monthly settlements, on their work for the month of June, 1908, upon the ground that they were liable for liquidated damages for delay. It is interesting to note that the amount of this estimate was not paid until some time after June, 1912. This wrongful claim for liquidated damages wss set aside by Secretary Ballinger at the time the above-mentioned extension was granted by him, he finding that instead of the contractors being liable for damages for delay they were entitled to an extension of time on account of additional work, as Secretary Garfield had done a year before. This is mentioned as illustrative of the whole conduct of the Government officials in charge of the work at Boise in dealing with the plaintiffs. This breach in failing to pay this estimate would alone have been sufficient to have prevented the exercise of the right to cancel the contract upon the ground that the plaintiffs were not progressing satisfac
In order to clearly understand and analyze the situation presented in this case it is necessary to keep constantly and distinctly in view certain salient facts. They are these:
First. That this was a contract for work which required a previous survey and estimates. Prior to the advertising for and letting of the contract the Government had made and had on file in connection with the work but one survey, namely, the original survey of Engineer Smith made during the spring, summer, and fall of 1905. Attached to this survey were cross sections and typical sections. It was the survey the profile maps and plans of which were shown to bidders. The profile of this survey showed the line of the canal to be over a comparatively even surface and the normal cross section showed a balanced can ah The two together unquestionably showed a balanced canal: That is, a canal whose banks could be built from the excavations made in digging it, and, relatively, with the dirt at the point from which it was dug, without much hauling, and that the dirt excavated would be sufficient for the banks without securing additional material from borrow pits outside, and, as stated, without moving the material long distances from the point of excavation. There is no practical dispute about these facts. In any event, the two most competent engineers, Bostaph and Baldwin, men of long experience in all kinds of engineering projects and in irrigation matters, so testified. The qualifications of these men to speak on the subject can not be questioned as far as the record shows. This survey for the two schedules in this contract called for the aggregate handling of 1,339,800 cubic yards of material, for 25,000 cubic yards of stone-work, for 81,248 cubic yards of overhaul, and for 59,039 cubic yards of free haul. These estimates, however, while known to the Government’s engineers, were not disclosed to bidders.
Second. These estimates just given showed that the cost of the construction of the canal would be greater than the funds available for that purpose, and as the law forbid the letting of contracts unless funds were available, it became
Third. That no survey, profile, plans, or maps were prepared or ever made for the construction of this mutilated trunk of a canal. The estimates for it were not based upon any plan or survey, although they were represented to bidders to be based upon the above-described original plans and survey of Smith. How misleading this was and what gross misrepresentation it was to give bidders these estimates for a canal with a gross yardage of 583,000 cubic yards, which was the amount the estimates in this contract called for, while the Smith survey called for 1,339,800 cubic yards, can readily be seen, and as fuller details hereafter presented will more fully show.
Fourth. Having secured a bidder for this contract by this misrepresentation as to estimates and survey, and knowing that the canal could not be built according to the’ estimates furnished in the contract and that they would not dare to build it, as it would only have one bank and would be useless,
Fifth. Whether the contractors had any notice of this change and survey and whether it was ever intended to give them any notice, I will discuss later. I think that the conclusion is clear that they not only did not receive notice, but
It should be pointed out here that when the witnesses for the Government stated that the cost of the canal was reduced by this relocation they refer to the estimates of the original Smith survey. They do not refer to the dummy estimates contained in the contract for the reason that these estimates, as shown above, were based upon no survey, and consequently there could be no comparison.
Sixth. It would seem unnecessary to assert that the contractors had a right to rely upon the good faith and reasonable accuracy of the Government engineers in furnishing the estimates and of the truthfulness and genuineness of the surveys which were shown as related to those estimates, and to rely upon the correctness of the facts which these surveys showed, namely, that it was a balanced canal, that it was a plow and scraper job, and that the overhaul and free haul were comparatively small, as was the stonework, which, of course, requires extra machinery and higher class labor than a plow and scraper job. They had a right also to assume that as the original Smith survey shown them contained a profile with cross sections and typical sections it was a permanent survey, at least approximately so. They had a right to assume that any “final location” or survey would not materially change the character and volume of the work and would only apply to certain minor matters, such as putting in curves, etc., and that when they were told that what was being done was a “ final location ” they had a right to assume these things without further inquiry. They also had a right to assume that the estimates and schedules furnished them were approximately correct and approximately represented the work to be done.
Seventh. Bearing in mind the last statements, let us see what change in the situation was produced by this relocation. The volume and cost of the work was increased approximately 70 per cent. The canal was changed from a balanced canal to an unbalanced canal. It was changed from a plow and scraper job to an increase of 1,000 per cent in the stonework alone. The overhaul was increased from
The estimate for stonework in the contract of 6,000 cubic yards, which could readily have been let to local contractors, was increased to 60,000 cubic yards, and the cost of getting it out, as stated above, increased 15 per cent, entailing the purchase of much additional machinery and higher-priced labor and a very much larger outlay of capital and loss to the plaintiffs. It is clearly established by the record and the testimony of competent engineers that a contractor in bidding always pays particular attention to the overhaul, as he usually counts upon losing money upon this. As stated, no mention of overhaul was made in the estimates furnished for this contract and attached to it, and the contractors in making their bid had a right to assume that this would be nominal, whereas they were required by the change of location to remove 497,688 cubic yards. The material in, and character of, the classification was changed by the relocation from that shown in the cross sections and typical sections of the original Smith survey. In the estimates furnished the contractors based upon the one-bank canal reduced by the cutting down of estimates, the plan and scheme had been so mutilated, confused, and disfigured that, as Smith states, the classification was not reliable and was not correct. Presumably from Smith’s testimony, he had made a guess at classification in the matter of making these deformed estimates. The mere statement of the facts as to these vital and material changes in the location and plan shows to a fair mind that something had gone wrong in this matter at the expense of these contractors. This change was deliberately planned and was a part of the original scheme of the Gov-
The chief engineer seems to have been kept in ignorance of the real facts, although he visited the work, he claims, three times — in the spring, summer, and fall of 1907 — until about the same time, and when he saw the light he stated in May, 1908, to Secretary Garfield, and in June, 1909, to Secretary Ballinger, respectively, as quoted above.
It is proper to call attention here to the fact that when these statements were made in May, 1908, the contract had been breached according to the opinion of the court by turning in the water and stopping the work when only 2-1- per cent of it remained to be performed. This was done with the knowledge of the chief engineer and his approval, and that of Secretary Garfield, to whom as early as March 3, 1908, the plaintiffs had protested against it being done. And although the facts upon which they acted in May were before them in the plaintiffs’ protest of March 3, 1908, they seem to have done what the court says in its opinion was done in the breach, canceling the contract, i. e., made no effort to acquaint themselves with the true facts of the case.
I am convinced that the plaintiffs are entitled to recover in this case upon either or both of the following grounds:
First. That the situation was'misrepresented to him when he was told that his estimates were based upon the original
Second. That the contract was breached by the change in the location, which unreasonably, and at great additional cost and loss to the contractors, changed the canal from a balanced to an unbalanced canal, from a plow and scraper job to a greatly increased volume of stonework; increased the overhaul and free haul and the cost of getting out stonework. This was done not only without notice to the contractors, but so as to, in effect, lull them to sleep as to its character and to prevent them, except as the work progressed, from finding out what had happened. As stated, this was accomplished not by cross sectioning this re-location in advance, but by cross sectioning it as the work progressed, making it impossible' for the contractors to find out the general effect of the change upon the character and quantity of work which they would be called upon to do.
If these conclusions be right, there remain only two grounds upon which the defendant can rely to prevent a recovery by the contractors, and the burden of establishing them satisfactorily is on the defendant. They are these :
First. That the contractors had notice of this change, its .character and volume, and by proceeding with the work and accepting pay at the contract prices they waived the breach caused by the change of location.
Second. That under the contract the Secretary of the Interior had a right to change the location.
I will discuss each of these question separately.
As to the first: The plaintiffs were certainly not called upon to employ an engineering force for a month to overhaul this survey and ascertain the facts as to the estimates. It would have taken at least this length of time, as it took Engineer Smith over five months to make the survey and estimates of the seven schedules, of which those in' this case were two.
Aside from this there is no proof of notice to Page of the material and radical change which was made by this relocation. The only notice ‘that he received, so far as the record shows, was a statement by the witness Bond, while
But aside from this, which would seem to be conclusive so far as the question of notice to Page is concerned, on the 28th of June, 1907, a little over a year after the work was begun, the plaintiff wrote a letter to the Secretary of the Interior in which he claims that he had at that time completed the amount of work which the schedules and estimates called for, and used the following language:
“ I am not thoroughly familiar with the law or your regulations governing such matters and would therefore respectfully request that I be advised and receive assurance from the proper source as to future payments as to whether or not I should continue on with the work.”
What was the answer to this the record does not show. However, on July 8, 1907, he wrote a very full letter reviewing the whole situation. This was followed by a telegram at some time between July 8 and 16, 1907, to the Secretary of the Interior, which is as follows-:
“ The amount named as the liability for this contract is exceeded under such conditions. Do you authorize me continue, assuring payment as the work progresses ? Am under heavy expense and desire positive answer.”
The chief engineer replied to this as follows:
“ Quantities named in schedule are only approximate. See paragraph twenty-four contract. Payment will be made for all work according to contract.”
Two days later, on July 18, the Acting Director of the Reclamation Service wrote a letter to the plaintiff quoting these two telegrams and stating that the report to the supervising engineer as to the work on his contract showed “ The per cent of work done to the end of June, 1907, 43 per cent; percentage of time elapsed, 62 per cent. According to this the work called for in this contract is less than half done. You appear to be under the impression that quantities called for in your contract have already been exceeded, but this is not in accordance with the engineer’s report on the subject.
“ Your contract calls for the construction of certain portions of the canal and distinctly states that the quantities mentioned therein are only approximate. * * * There is ample provision for extra work also in the contract and*207 you may be assured that whatever work is directed by the engineers will be paid for by the United States in accordance with the provisions of your contract.”
It may be well to state here what is indisputably true, that while Page had performed “ 43 per cent ” of the work including the 70 per cent additional put upon him, he had, in fact, in amount of yardage and compensation therefor, including the yardage for which he had not been paid, at this time performed the amount of work called for by his contract. It is also indisputable that at all times during the progress of the work, he was ahead of time with his work on the basis of his contract estimates; that is, on the basis of these estimates of percentage of the work done — was ahead of the percentage of time consumed. Secretary Ballinger in his letter to the Auditor for the Interior Department of June o, 1909, heretofore mentioned, in reviewing this matter saj's on this point:
“ The quantity of work required of the contractors was practically doubled. The value of the contract based upon quantities given therein was $135,900. At the end of February, 1908, at which time the contract was originally required to be completed, there had been performed by the contractors an amount of work considerably in excess of the total quantity required under the agreement, the gross earnings to that date being approximately $209,000. At the time of the final completion of the work the gross earnings under the contract amounted to $250,000, representing, therefore, approximately double the amount of work covered by the contract.”
The above letter of July 18, the acting director states, was written after reference of these telegrams to him by the Secretary of the Interior. It is very clear from this letter that Page was “under the impression that the quantities called for in your contract had already been exceeded.” It is equally clear that in spite of his protest he was directed to complete the work under the veiled threat of the penalties of the contract. L. P. & J. A. Smith v. United States, 54 C. Cls., 119; affirmed 256 U. S., 11. At this time the chief engineer and the Secretary of the Interior were ignorant of the real facts of the case and of the misrepresentation and the deceptive estimates and the greatly increased volume of the work which the change of location brought about. It is also
The foregoing, to my mind, disposes of the defense here that Page knew or was informed of the change by relocation in the volume and character of the work, and proceeded with the work without protest, thereby waiving his rights.
As to the second ground of defense: It is clear to me that clause 25 of the specifications, which was relied upon as authority for a change by the Secretary of this location, does not apply to and was not intended to apply to a change in location in a case of this kind.
A reading of that clause will show, as appears from several other clauses in the specifications, that this was a standard form of specifications intended to apply particularly to building work and a change in quantities and materials therefor. It is evident from reading the specifications that there was no attempt to alter these standard specifications so as to fit this particular work. Aside from this want of authority to change the location, if the authority existed, it could only be a reasonable change. It could not, as in this case, cover an entire change of the character of the contract and an increase of nearly double the quantities and costs called for by the estimates. Further, if this change, as I contend, was made it could only be legal after full and adequate notice had been given to the contractors of its character. This, as I have attempted to show, ■ was not done, as the survey for the relocation was not cross-sectioned before the work began and only cross-sectioned as it progressed. However, aside from this, as the defendant relies upon the authority of the Secretary to make this change, it must be assumed that he was cognizant of it and that it was made with his authority and that he knew of its character and the very material changes which it made in the volume and character of the work. It is assumed, therefore, that he had full knowledge of this. It must be remembered that,
To understand the defendant’s evidence in this case the estimates of Smith’s original survey must be borne in mind. It was known that under these estimates the work could not be done within the limits of available funds. Therefore, as Ross states, Bond was instructed in making this location “ to shorten the line and save material ” and “ avoid increasing the cost of the construction of the canal, the purpose being to get it within available funds.” It may be mentioned here as an interesting fact that this canal as originally designed was intended to be 70 feet wide at the bottom. For the purpose of this construction it was decreased to 40 feet at the bottom. Two years after it was completed the bottom was widened to the original 70 feet. The effect of Bond’s survey in this matter of reducing the amount of excavation was to reduce the estimated amount of excavation in Smith’s original survey from 1,399,800 cubic yards to 873,923 cubic yards. According to Smith’s original survey — and it must still be borne in mind that his profiles and cross sections were in the engineer office for reference by this contractor, as representing the estimates and the schedules under his contract, being the data to which he was given reference in
Now, look at the situation after the contract had been executed with this misrepresentation inhering in it by the change of location. The contract was hardly signed when within a space of 10 days, or probably sooner, Engineer Bond
By this relocation, as it turned out, the estimates under Smith’s original survey were decreased from a total of 1,-839,800 cubic yards to 873,'923 cubic yards, but were increased over the estimates furnished the plaintiff for his bid 290,923 cubic yards, the estimate for his bid being 583,000 cubic yards. The amount of overhaul was increased from 81,248 cubic yards under Smith’s original survey, and from being negligible under the estimates of the schedules of the plaintiff’s contract, to 497,688 cubic yards. The amount of free haul between 100 and 200 feet was increased from 59,039 cubic yards under Smith’s original survey, and from being negligible under the schedules of the plaintiffs’ contract between 100 and 200 feet, to 213,704 cubic yards. It might be said in passing that it is shown that a contractor, in making his estimates, expects to lose money on the overhaul and free haul. The amount of stone, class 4, was increased from the estimate under Smith’s original survey from 25,000 cubic yards, and from 6,000 cubic yards under the schedules of the plaintiffs’ contract to 60,000 cubic yards. The depth of the canal was decreased 1 foot, which increased the cost of getting out this rock, class 4, at a low estimate, 15 per cent.
I am attaching hereto the elements of damages which I think should be allowed to the plaintiffs in addition to those which are allowed by the opinion of the court. These, it will readily be seen, if there was a breach of the contract by the change of location without a waiver of it by the contractor, are losses which necessarily grow out of this breach. The items of interest therein mentioned are inserted as elements of damages. I believe the amounts are established by the evidence. These items are as follows:
Loss on overhaul- $7, 287.60
Loss on free haul- 2,319. 98
Loss by decrease in depth of canal-- 21, 099.31
Interest and depreciation on extra equipment_ 2, 050. 00
Loss on classification- 64,322. 57
In addition to these items I think there should be allowed the following:
Extra premium on bonds during period of suspension of
work_ 1,890.60
Interest on $22,558.98, amount due on the June estimate,
from January 14,1909, to July 1, 1912- 4, 737. 38
Reducing height of banks- 1, 000.00
Total_ 104, 707.44
Amount fixed by the court-1- 60,228. 91
154,936. 35
I am of the opinion that this sum of $154,936.35 is the amount that the plaintiffs should be allowed to recover in this case as damages.
Before concluding I desire to notice one or two positions taken in the majority opinion.
Before proceeding to do so, it is proper to call attention to the following principle laid down by this court in the case of Christie v. United, States, 51 C. Cls., 18-22; 237 U. S., 234, 240:
*213 “ We might also add that we can not see any force in the contention that a party can claim exemption from liability for damages in the performance of a contract arising from his deception on the ground that such damages were aggravated by his own unreasonable conduct in the performance of his part of the same contract.”
Without extending the discussion, the principle laid down in the above quotation precludes the defendant from relying, as is done in the opinion of the court, upon the following provisions of the contract:
Paragraph 12, which provides that bidders must satisfy themselves as to the nature of material and as to local conditions affecting the work, etc.
Paragraph 24, which is to the effect that the quantities given in the proposal are for the purpose of comparing bids, and are approximate only, and no claim shall be made against the United States on account of any excess or deficiency, absolute or relative, in the same.
Paragraph 25, which is to the effect that the Secretary of the Interior reserves the right to make changes in the work and materials, and that bidders must make their estimates accordingly.
And paragraph 8, making the decision of the chief engineer binding on both parties on all questions concerning the execution of the work, classification of material in accordance with the specifications, and determination of cost.
It will readily be seen without an extended discussion, that if there was a breach of this contract by misrepresentation of the estimates and survey or by a material and unreasonable change in the volume and character of the work by the relocation of the line, without notice to the plaintiffs, the defendant is estopped from pleading these provisions of the contract by way of defense and excuse. The defendant can not induce a person to enter into a contract by misrepresentation and afterwards make material changes in the amount and character of the work, without notice, and then shield itself behind any or all of the provisions above mentioned of the contract. To do so would be to enable it to occupy the inconsistent and conflicting position of breaching the contract and then protecting itself against the breach
It may be well to say a word as to the question of classification involved here in the above-mentioned provision of the contract with regard to the engineer’s decision thereon being final. It will be recalled that when the estimates under this original Smith survey were indiscriminately reduced to meet the funds available for the construction of this canal, the classification of the Smith survey was destroyed. By the relocation, the whole character of the classification under said Smith survey was changed. The classifications given in the plaintiffs’ contract were based upon pure guesswork and amounted to no classification at all.
These acts so changed the whole question and situation as to classification and so breached the contract as to classification as to prevent the defendant from pleading the power of the chief engineer under the contract to control this matter, as a ground of defense and as a means of extricating the Government from the situation produced by the effect of its own wrong. Again this decision of the chief engineer can not correctly be said to have been based upon any definite or reliable information. He was only on the work, according to his own statement, three times — in the spring, summer, and fall of 1901. He did not make his first visit until after the board of engineers had passed upon the classification theretofore made, and had held that it was not only incorrectly made, but that it was made without even the proper attention to it by the supervising engineer Boss, and others in authority over the man Fisher, who made it. This board
He lived 5 miles from the work, usually got there late in the morning after the blasting of the rock of the night before had been covered up by the additional excavations made in the early hours of the day, and very often did not visit the work for days at a time. The character of his classification and his estimates are found to have been wrong, both as to amount and kind, by a board of four capable engineers, asked by the plaintiffs to go over the work with a view to reporting on the classification. This engineer Fisher is the person who furnished the facts to the effect that the plaintiffs were not properly progressing with their work, upon which the defendant based its action in abrogating this contract, which action, the opinion of the court has found, was based upon a false statement of facts, namely, the facts furnished by this engineer Fisher. This last untruthful statement of his, which caused a breach of this contract by the Government, the repudiation of his work by the board of engineers — competent men — -selected by the plaintiffs, his want-of equipment and experience as an engineer in such work, all go to render his work and his statements unworthy of reliance. And as the supervising engineer, who knew little or nothing of this matter of classification, intrusted it to Fisher, it will be violating every principle of reasonable and fair dealing if the plaintiffs were wronged by this classification, to allow the Government to escape from the injury by reliance upon the statements and work of Fisher. If this conclusion be correct, it would be clearly wrong to allow the Government to protect itself against its wrongful acts by relying on the power of the chief engineer as to classification, when the classification was wrong and the engineer himself had a most imperfect and no adequate knowledge- of what was being done about it, except as reported to him by his subordinates, who, as stated, had intrusted the matter almost exclusively to Fisher. It is not shown that there was any independent action of an engineer officer in responsible charge having finally passed upon the classification of materials, but that the action all through was that of Fisher. The
It is proper, before concluding this branch of the case, to call attention to the fact that no trouble was experienced in the matter of classification for the first two or three months when Engineer Bond was in charge of the work. Pie was succeeded by Engineer Fisher, and from that time the plaintiffs were constantly complaining of their treatment by Fisher and eventually by .Boss and those above him in not heeding their complaints against Fisher, which the Government board of engineers found were justified.
In conclusion it is, I think, proper to call attention to the fact that the plaintiff, Page, died before he could testify, and the Government’s witnesses who had dealings with him and who testified in this case knew that there was no danger of their statements being controverted by him. As his complaints made as the work progressed, and the charges in this suit, reflect severely upon their inattention to their work and their prejudice and incapacity in some instances, I think that their testimony should be taken with some grain of allowance in view of the fact that they themselves and their professional records were in a sense on trial. In many important particulars it is plainly to be seen that the presentation of the plaintiffs’ case was much embarrassed by the want of Page’s testimonjf, and also, it may be presumed, of the benefit of his advice and knowledge in examining these Government witnesses and in meeting their statements.
I am convinced from a full and careful examination in •detail of the record in this case, that the plaintiffs from its
Concurrence Opinion
concurring:
The view of this case as presented by the findings and opinion does not in all respects accord with my conception of it, and I therefore withhold a general concurrence; but since the conclusions reached result in a substantial judgment for the plaintiffs in an amount to which, in my judgment, they are fully entitled I concur in the judgment.
I am authorized to say that Judge Booth concurs in this conclusion.