WILLIAM CRAMP & SONS SHIP & ENGINE BLDG. CO. v. U S(1910)
[216 U.S. 494, 495] Messrs. James H. Hayden and Robert C. Hayden for appellant.
Mr. Justice Brewer delivered the opinion of the court:
On September 24, 1896, the appellant entered into a contract with the United States for the building of an ironclad, afterwards known as the 'Alabama.' The contract was authorized by act of Congress of June 10, 1896 ( 26 Stat. at L. 378, chap. 399). Under this act and that of August 3, 1886 ( 24 Stat. at L. 215, chap. 849, U. S. Comp. Stat. 1901, p. 1056), to which it refers, the Secretary of the Navy was charged with the duty of supervising the contract on behalf of the United States. After the completion of the vessel and the payment of the stipulated amount, there was something asserted to be due to the building company as unliquidated damages on account of extra work caused by the United States, for which it brought suit in the court of claims. That [216 U.S. 494, 499] court found the amount to be $49,792.66. Relying upon the decision of this court in a case between the same parties for also the building of an ironclad, the 'Indiana' ( 206 U.S. 118 , 51 L. ed. 983, 27 Sup. Ct. Rep. 676), the court of claims rendered judgment for the defendant. The controversy in this, as in the prior case, turns upon the effect of a release. In that it was in this form:
Here the same terms of release are used, but they are followed by this proviso:
That release was executed on May 18, 1896; this on April 19, 1901. We held that the former release settled all disputes between the parties as to claims 'under or by virtue' of the contract. Evidently the proviso was incorporated with the purpose of accomplishing some change in the effect of the release. That purpose is disclosed by prior correspondence. On February 13, 1901, the Secretary of the Navy, answering a letter inclosing a claim for extra work of $66,973.23, writes:
To which the company replied, suggesting this proviso: [216 U.S. 494, 500] 'Provided, That nothing herein shall operate as a waiver of this company's right to sue for and recover judgment in the court of claims for damages incurred or losses sustained by the company in the prosecution of the contract work which were occasioned by delays or defaults on the part of the United States,'-- and adding, in response to the statement of the Secretary, 'that the claim, being for unliquidated damages, is of a kind the Department has no authority under the law to entertain,' that the act of March 3, 1887 (24 Stat. at L. 505, chap. 359, U. S. Comp. Stat. 1901, p. 752), known as the 'Tucker act,' vests the court of claims with jurisdiction to hear and determine such claims. Some further correspondence followed between the parties, which culminated in a letter from the company, inclosing the release as finally executed, and saying:
It is well understood that executive officers are not authorized to entertain and settle claims for unliquidated damages. Opinion of Attorney General Taney, in which he says:
In Power v. United States, 18 Ct. Cl. 263, 274, 275, the court thus discussed the matter:
But it is contended that the contract, independently of the release, provided for a settlement of all matters growing out of the delay in the completion of the vessel, although this is in apparent conflict with the opening statement of the government in its brief, for there it says: 'The issue here is whether the proviso in that release saves the contractor from the final and complete surrender of his right to recover on the claims set out in the petition.' But this, although it indicates the views of the government of the question at issue, does not preclude it from presenting other matters, and it insists that by the third clause in the contract, the vessel, when completed without the armor, was to be subjected to a trial provided for in a subsequent clause of the contract, and a board of naval officers appointed by the Secretary of the Navy was to determine the deduction from the total price of the vessel under the contract if completed with armor. It further contends that, by the ninth clause of the contract, the matter of possible delay was recognized by the Secretary of the Navy, and his determination at to the effect thereof was to be conclusive. Now it may be said that both the contractor and the government had the right to insist upon the [216 U.S. 494, 503] delivery of the vessel when it was completed without the armor, and that the deduction in price should then be settled by the board of officers appointed by the Secretary. It may also be conceded that the government could have insisted upon a release in the form specified in the contract, but neither the company nor the government insisted on the delivery of the vessel at the time it was launched and before it was armored. The government left the vessel with the company, waiting for armor to be put on,-armor which it had not then been able to secure and tender to the company; and when the question arose as to a settlement, it did not insist upon a release as specified in the contract. The contract was plainly treated by both parties as impracticable, and therefore waived. Evidently from his letter of February 13, 1901, the Secretary was of the opinion that, equitably, there was something due to the company, and yet, realizing that that question was not one for his determination, in order that full justice might be done, he consented to a change in the terms of the release, and this he had power to do. Salomon v. United States, 19 Wall. 17, 22 L. ed. 46; United States ex rel. Redfield v. Windom, 137 U.S. 636 , 34 L. ed. 811, 11 Sup. Ct. Rep. 197; United States v. Barlow, 184 U.S. 123, 135 , 46 S. L. ed. 463, 469, 22 Sup. Ct. Rep. 468.
By the 'Tucker act' jurisdiction is conferred upon the court of claims 'to hear and determine . . . all claims . . . for damages, liquidated or unliquidated, in cases not sounding in tort.'
It results therefrom that a release executed in accordance with the terms of the contract would have extinguished all claims of the company against the United States growing out of the contract ( 206 U.S. 118 , 51 L. ed. 983, 27 Sup. Ct. Rep. 676); that the Secretary of the Navy had no power to pass upon and adjudicate claims for unliquidated damages; that he had power to accept a release such as was given, and that the proviso left for determination in the courts claims for unliquidated damages growing out of the contract; that, under the Tucker act, the court of claims had jurisdiction to inquire into and determine claims for unliquidated damages, and that upon the facts found there [216 U.S. 494, 504] is due to the company from the United States, for extra work caused by the United States, the sum of $49,792.66.
The judgment of the Court of Claims is reversed and the case remanded to that court, with instructions to enter judgment for that amount.