[246 U.S. 610, 611] Messrs. George A. King and George H. Lamar, both of Washington, D. C., for appellant.
Mr. Assistant Attorney General Thompson, for the United States.
Mr. Justice CLARKE delivered the opinion of the Court.
This is an appeal to review a judgment by the Court of Claims in favor of the government, on a claim for damages growing out of a written contract dated May 18, 1898, for the manufacture of 50 wire-wound rapid fire guns, 25 of 5-inch caliber and 25 of 6-inch caliber. No guns having been delivered under the contract, it was annulled by the Chief of Ordinace, with the approval of the Secretary of War in an order, notice of which was given to the claimants on January 17, 1901. The appellant is the administrator of the survivor of one of two claimants, to whom we shall refer in this opinion as 'the claimants.'
The essential parts of the contract to be considered are as follows:
It is apparent from these excerpts that the contract contemplates the making and testing of a 'type gun' of each caliber; that the acceptance of additional guns was dependent on this one 'passing its test satisfactorily,' and that the Chief of Ordnance and his superior officer, the Secretary of War, were to decide, not arbitrarily, but candidly and reasonably, whether the gun had satisfied the required test. Ripley v. United States, 223 U.S. 695, 701 , 702 S., 32 Sup. Ct. 352.
The 5-inch test gun was to have been completed within three months from the date of the contract, but there were delays, assented to by the government, such that it was not completed for ten months, so that the first test began on March 8th of the following year (1899).
The finding by the Court of Claims as to what occurred during this firing test, to which the type gun of 5-inch caliber was subjected, is as follows:
These findings of fact, which under the circumstances of this case, must be accepted as final (United States v. New York Indians, 173 U.S. 464, 470 , 19 S. Sup. Ct. 464; Cramp v. United States, 239 U.S. 221 , 36 Sup. Ct. 70), if considered independently of the report* [246 U.S. 610, 616] of the Chief of Ordnance, yet to be discussed, obviously justify the conclusion that the test gun did not meet the cont act requirements.
The carriage of this new and experimental type gun failed on the fourth round of firing, with a pressure well within the contract maximum; the gun itself developed such cracks in the breach bushing and jacket that the breech could not be opened by hand and did not work satisfactorily after repairs were made; and it showed unusual and abnormal changes in the bore which, while not resulting in an explosion, created, in the mind of the Chief of Ordnance, a reasonable apprehension of danger in the use of the gun, and in his judgment required that it be modified and that it be subjected to an additional firing test, before it could be accepted as having satisfactorily passed the test prescribed by the contract.
The report of the Chief of Ordinance to the Secretary of War on the result of this contract test is dated November 3, 1899, and is as follows:
The claimant's contention is rested largely upon this clause in the above paragraph, viz.: 'Yet its test has apparently met the contract requirements.' And their argument is that the test which the gun must meet was prescribed by the contract; that the facts found, and especially this clause, show that it proved equal to the required test; that the subsequent annulling of the contract by the Chief of Ordnance, with the approval of the Secretary of War 'was not made and taken in good faith, but under a mistake so gross as to justify an inference of bad faith,' and that, therefore, the claimants are entitled to recover the damages prayed for.
If this expression, so much relied upon, stood as the unqualified conclusion of the Chief of Ordnance and had been approved by the Secretary of War, the interpretation claimed for it might be justified, but the contextual setting of the clause shows clearly that in the opinion of the Chief of Ordnance 'defects [had] developed in the test,' which could be remedied only if certain modifications were made in the manufacture of both the gun and carriage, and that his understanding when making the report was that the claimants concurred in this conclusion and willingly agreed to conform to it.
The clause of the report so emphasized is the expression of a soldier, not of a technical lawyer, and the paragraph of the report in which it is found, taken altogether, conveys to us the conviction that the Chief of Ordnance, while concluding that the gun was defective in design and construction, nevertheless believed that it contained elements of invention which, modified and improved, would make of it a weapon of value to his country and that he was eager to lend official assistance to its further development, which he believed the claimants were equally eager to receive and profit by. In the interpretation most favor- [246 U.S. 610, 618] able to the claimants the report is an acceptance conditioned upon development and improvement of the gun which the Chief of Ordnance thought possible, but which conditions, as we shall see, the claima ts, perhaps because of less confidence in their invention, never attempted to satisfy.
On January 31, 1900, this report of the Chief of Ordinance was approved by the Secretary of War and a week later the decision and recommendation thus approved were communicated to the claimants.
But, instead of the co-operation which the Chief of Ordnance thought assured, the government next heard from the claimants through lawyers and then through a letter from the claimants themselves, asking the Secretary of War to suspend further action until argument could be heard, and stating that 'they had not as yet assented to any modification of the gun or carriage.'
The Secretary of War replied to the lawyers that there was no question before him open to argument, but what, if any, reply was made to the letter of the claimants does not appear.
However, long prior to this, on May 18, 1899, after the test firing had been suspended and three months before it was completed, it was suggested by the government to the claimants that they should furnish 'the mathematical computations and engineering considerations upon which their claim of strength of construction and other qualities of their gun were based.' No notice was taken of this suggestion for almost a year, and not until after claimants were officially notified of the approval by the Secretary of War of the report of the Chief of Ordnance of November 3, 1899. Thereafter, on February 17, 1900, the claimants notified the Chief of Ordnance that they had employed two expert mathematicians to work out the various problems connected with the construction of their gun, and suggesting that they would like to [246 U.S. 610, 619] have 'an army officer of practical experience with artillery' assigned to co-operate with their selected experts and that they would compensate him for the service. Two days later the government acceded to this and authorized a major in the army to join in making the computations as auggested by the claimants.
The finding of the Court of Claims does not show that anything further was done until, on January 17, 1901, almost three years after this three months' contract was to have been completed, when, after the claimants had permitted almost a year to pass without accepting the suggestion of the government that modifications should be made in the gun and carriage to cure the defects which the firing test had disclosed, the Chief of Ordnance, with the approval of the Secretary of War notified the claimants that, for failure to deliver an acceptable gun, their contract had been declared null and void. Against this conclusion the claimants protested and appealed to the Secretary of War for a revocation of the annullment order, but after hearing the claimants and their lawyers several times, the Secretary of War refused to revoke this order.
A month after the revocation order, the experts, employed almost a year before by the claimants, rendered to their employers a report on the technical problems connected with the construction of the gun, which the government had called for almost two years before. This report the Court of Claims finds was 'upon the whole, favorable to the style of construction of the gun; but defects of construction were pointed out and remedies therefor suggested in the way of modifications in the construction.'
This discussion of the findings of fact by the Court of Claims leads us unhesitatingly to the conclusion that the claim that the Secretary of War and the Chief of Ordnance acted in had faith or under a gross mistake is wholly [246 U.S. 610, 620] unfounded and gratuitous; that, on the contrary, they dealt candidly, generously, even helpfully, with the claimants, and that the annullment of the contract under the circumstances was abundantly justified. The cause of the misfortune, which the claimants undoubtedly suffered, is not to be found in their treatment by the officials of the War Department but in their own refusal, from whatever cause, to accept the encouraging suggestion of the Chief of Ordn nce that the Department was willing, by generous dealing and co-operation, to assist them in carrying forward their experimental gun to a successful development.
[246 U.S. 610, 4] The claims made in argument that by various delays on its part the government, in some indefinite way, waived its right to annul the contract, and that this right to annul was suspended until report should be made on the technical problems involved, by the experts selected by the claimants, it is true with the co-operation of the government, but almost a year before, cannot be seriously considered. In the matter of delays the claimants were as much at fault and more, than the government, and the delay of the technical report for almost a year was reasonable ground for assuming that no report was likely to be made, or that if made it would not be favorable to the acceptance of the gun, which last, as we have seen, is shown by the finding of facts by the Court of Claims, to have been proved to be the case.
The judgment of the Court of Claims must be