Messrs. William H. Robeson, Benjamin Carter, and F. Carter Pope for ripley.
Assistant Attorney General Thompson and Mr. Philip M. Ashford for the United States.
Statement by Mr. Justice Lamar:
Appeal and cross appeal from a judgment by the court of claims for $ 14,732.05 in favor of Henry C. Ripley against the United States, in a suit for the recovery of damages in connection with the construction of a public work, consequent upon the action of the agent in charge.
By the act of June 13, 1902 (32 Stat. at L. 340, chap. 1079), Congress appropriated $250,000 for the completion of the work of improving the harbor of Aransas Pass, Texas. The contract was awarded to Henry C. Ripley. It provided for [223 U.S. 695, 696] the completion of a jetty, having a brush foundation, to be covered with a layer of stone, on which was to be built a superstructure, with sloping sides and a top width of 10 feet. This superstructure was to be formed of a core or mound of riprap, 'and when, in the judgment of the United States agent in charge, this mound has become sufficiently consolidated, its gaps shall be filled and its crest leveled; . . . large blocks shall then be bedded in the crest of the mound.'
It was provided that--
The contract also provided that the work should be executed under the supervision of the engineer officer in charge or his duly authorized agent. The United States was to employ one or more inspectors, and the contractor, without additional compensation, was bound to furnish facilities for the inspection of work and material. The contractor was to furnish extra labor at cost prices, as determined by the engineer, and should furnish board and lodging to government employees at reasonable rates satisfactory to the engineer. If the work was not diligently prosecuted, the contract might be annulled, or the engineer in charge, 'with the prior sanction of the Chief of Engineers, may waive for a reasonable period the limit originally set for the completion of the work, and remit the charges for the expenses of superintendence and inspec- [223 U.S. 695, 697] tion for so much time as, in the judgment of the engineer officer in charge, may actually have been lost on account of . . . violence of the elements, or by epidemic, or local or state quarantine restrictions, or other unforeseeable causes of delay arising from no fault of the contractor, and which actually prevented him from commencing or completing the work within the period required by the contract.
Claimant entered upon the performance of the contract August 18, 1903, and completed 2,100 feet of jetty when operations ceased about September 17, 1904, owing to the exhaustion of the appropriation.
About the time work began, without fault on the part of the contractor or of the United States, there was a delay of about thirty days, due to the fact that the contractor's tug, while in charge of a licensed pilot, was grounded on a sand bar. The government apparently incurred expenses for inspection during this period and deducted that amount from Ripley's account.
Owing to an epidemic of yellow fever the force of the contractor was disorganized, and work was necessarily suspended for thirty days. The government did not charge him with inspection expenses during the fifteen days the quarantine was in force, in a city through which the cars hauling the material were prevented from passing. And the court held also that Ripley was not chargeable with the inspection expenses for the other fifteen days, during which his force was scattered as a result of the epidemic.
During the progress of the work, a large number of blocks were rejected by the inspector as not conforming to specifications. 'Many of those so rejected were afterwards accepted, but ninety of the stones offered as crest blocks were rejected as such, and were accepted and used as riprap and paid for as such. The difference in the amount paid claimant for said stones used as riprap and [223 U.S. 695, 698] the amount he would have received if they had been used as crest blocks' was allowed him by the court of claims. It found that 'he was compelled to furnish other crest blocks to take the place of those rejected, which caused a delay of ten days to claimant in the completion of the work.'
It appears that the rejection of these blocks was due to a difference in the method of measurement, the inspector insisting that the blocks should be measured at the narrowest, thinnest, and shortest points. The contractor contended that mean or average measurements should be taken, claiming that this was the understanding of himself and the officer who drew the specifications. The engineer at Galveston thereupon suggested that the matter should be referred to the Chief of Engineers in Washington; and later a supplementary agreement was drawn, which permitted the use of blocks 'which would make the work as stable, or more stable, than if the dimensions conformed strictly to the letter of the specifications. In consideration of which change the contractor agrees to accept $5 per ton for all blocks received under the supplementary agreement which would have been rejected under the original specification.'
The plaintiff's claim for additional compensation for extra labor furnished the government and for board and lodging furnished its employees was rejected by the court, as also his claim for damages for double handling caused by the inspector's refusal to permit him to unload certain material on the jetty.
The contractor's principal claim, however, was for damage caused by the delay resulting from the refusal of the inspector in charge to permit crest blocks to be laid after the core had fully consolidated. As long as the jetty was uncovered by these blocks it was subject to the rough action of the waves, and the plaintiff's employees were deprived of the advantage of working in still water on the [223 U.S. 695, 699] lee side of the jetty. The work began August 18, 1903, and the court found as a fact 'that in December, when plaintiff had completed 200 feet of the core, he requested permission to lay the blocks. This was refused, on the ground that the core had not been consolidated. By the end of December he had completed 500 feet, and again requested permission to lay the blocks. The inspector refused and continued to refuse permission to lay the blocks until May 1, 1904, at which time 1,500 feet of the core had been repaired and completed.'
The court entered judgment for plaintiff for $14,732.05,-made up of damage for difference between price of [223 U.S. 695, 700] large blocks and riprap, delay caused by such rejection, value of ten days' services of plaintiff during the delay, remission of expenses for additional fifteen days during yellow fever epidemic, remission of expenses while tug was grounded on a sand bar, value of contractor's time during sixty days' delay occasioned by refusal to permit crest blocks to be laid, $1,500, and average daily expense, $162.70, and remission of inspection charges during the sixty days' delay.
After the case was argued here it was twice remanded ( 220 U.S. 491 , 55 L. ed. 557, 31 Sup. Ct. Rep. 478, 222 U.S. 144 , 56 L. ed. 131, 32 Sup. Ct. Rep. 60), and the court of claims made the following additional findings of fact:
Mr. Justice Lamar, after making the foregoing statement, delivered the opinion of the court:
The plaintiff sued the United States in the court of claims for damages sustained by him while carrying out a contract to build a jetty in the harbor of Aransas Pass, Texas. There were nine items in his claim, which aggregated $45,950. The court rendered judgment in his favor for $14, 732.05. Both parties appealed,-the contractor on the ground that he was awarded too little, and the United States on the ground that he was not entitled to recover anything whatever. The principal contention related to the right of the plaintiff to recover damages occasioned by the refusal of the inspector to permit blocks to be laid on the jetty as the work progressed. The contract provided that these blocks should be put in place when, 'in the judgment of the United States agent in charge,' the core or mound had sufficiently consolidated. Until the agent determined that the core had settled, the contractor had no right to do this part of the work. No matter how long the delay or how great the damage, he was entitled to no relief unless it appeared that the refusal was the result of 'fraud, or of such gross mistake as would imply a fraud.' Martinsburg & P. R. Co. v. March, 114 U.S. 549 , 29 L. ed. 255, 5 Sup. Ct. Rep. 1035; United States v. Mueller, 113 U.S. 153 , 28 L. ed. 946, 5 Sup. Ct. Rep. 380.
But the very extent of the power and the conclusive character of his decision raised a corresponding duty that [223 U.S. 695, 702] that agent's judgment should be exercised not capriciously or fraudulently, but reasonably, and with due regard to the rights of both the contracting parties. The finding by the court that the inspector's refusal was a gross mistake and an act of bad faith necessarily, therefore, leads to the conclusion that the contractor was entitled to recover the damages caused thereby.
The defendant claims that the plaintiff lost his right to recover because he failed to appeal to the engineer in charge, at Galveston, or to the Chief of Engineers, in Washington. But there was no requirement or provision for appeal in the contract. The clause relied on by the government relates to the duty of inspection and acceptance, making the decision of the engineer in charge conclusive as to the quality and quantity of work and material. That part of the agreement had no reference to the settlement of the core. Whether it had sufficiently consolidated involved the determination of a matter of fact, varying from day to day. The contractor had to act or refrain from acting when the decision was made. That matter was expressly left to 'the judgment of the United States agent in charge.' The contractor, in submitting to his decision, did not lose his right to recover damages occasioned by the refusal to permit the crest blocks to be laid, when, as found by the court, this refusal was gross error and an act of bad faith.
The court therefore, declared in plaintiff's favor on this issue. He appeals, however, on the ground that the court only allowed him $11,908.90, being for expenses and loss of time for sixty days, insisting that he was entitled to recover $28,953 as damages directly caused by this delay.
This claim is based on the fact that there were three hundred and ninety-two days between the beginning and the completion of the work. But on account of Sundays, holidays, and storms, there were only one hundred and thirty-one working days. Of these, fifty-eight were after April 30, 1904, when, for the first time, the inspector permitted [223 U.S. 695, 703] the crest blocks to be laid. The contractor contends that as it only took him fifty-eight days after May 1, when the permission was given, to complete the work, and as the court finds that he was delayed for sixty days before the permission was given, it is evident that he could have finished the work before May 1, and is therefore entitled to recover the value of his own time and all the expenses for inspection and labor which were incurred after that date.
The findings of fact do not require any such conclusion. Prior to May 1 the contractor worked seventy-three days out of two hundred and forty seven. But it does not appear how many of these working days there were between August 18, 1903, when he began construction, and December, 1903, when he first applied for permission to lay the crest blocks. Neither is it shown how many working days there were between the date of the first refusal and the first permission to lay the blocks; nor on how many of such working days the contractor was able to do labor of another character on the jetty. In the absence of such data it is impossible to verify plaintiff's calculations. The burden was on the contractor. If the evidence would have sustained his present claim, he was bound to have applied, in due season, for additional findings of fact by the court. Our decision must be predicated on what appears in the present record. Insmuch as the court found that $162.70 was the average daily expense, and assessed plaintiff's damage at sixty times that amount, it is evident that it considered that the contractor had been delayed for sixty average days, and not for sixty working days. He is therefore entitled to judgment for $ 9,762 expenses, $646.92 inspection charges, and $1,500 found to have been the value of his own time for that period of sixty days.
The other findings in his favor for items aggregating $2,822 must be reversed, and the cross appeal of the government sustained.
The greater part of this sum was for loss and delay arising from the inspector's rejection of ninety large blocks [223 U.S. 695, 704] as not complying with the specifications. The fact that the court gave judgment in Ripley's favor indicates that it was of opinion that the agent had made an improper decision. But so far as appears, his only error was in construing the contract strictly, according to its terms, instead of adopting a method of mean or average measurement for which the contractor contended. The supplemental agreement was not retroactive, so as to give the plaintiff a cause of action for the prior rejection, even though thereafter a different method of measurement was permitted.
The balance of the amount allowed the plaintiff was by way of returning the expenses of inspection which had been charged against him, during the suspension of the work while the tug was grounded on the bar and the contractor's force disorganized on account of the yellow fever epidemic. The contract provided that the expenses of inspection might in some cases be remitted, but this could only be with the prior consent of the Chief of Engineers. There is no finding that such consent was given.
But the error in entering judgment in Ripley's favor as to any of these items, and the propriety of disallowing the others for which he sued, arises from the fact that the officer's decision was binding. All these claims relate to matters which, under the contract, were submitted to the engineer. There is no finding that he acted in bad faith. Indeed, it is not even found that the decisions were erroneous, though that is implied. But the contract did not contemplate that the opinion of the court should be substituted for that of the engineer. In the absence of fraud, or gross mistake implying fraud, his decision on all these matters was conclusive.
On the findings of fact the plaintiff is entitled to recover $11,908. 90, with interest as provided in Rev. Stat. 1090. The judgment of the Court of Claims must be so modified and affirmed.
Motion to modify judgment denied April 1, 1912.