Simpson v. United States (172 U.S. 372)

The essential facts as found by the court below are summarized as follows: Pursuant to an act of congress appropriating a stated sum for building two 'timber dry docks to be located at such navy yards as the secretary of the navy may indicate' (24 Stat. 484), the navy department on April 19, 1887, advertised for proposals for the building of two dry docks, to be located, one at the Brooklyn and the other at the Norfolk Navy Yard. The advertisement, while pointing out the general nature of the structures and their dimensions, contained no detailed plan of the contemplated work, but announced that 'dry-dock builders are invited to submit plans and specifications with proposals for the entire construction and their completion in all respects,' and, moreover, it was said, 'bidders will make their plans and specifications full and clear, describing the kinds and qualities of the materials proposed to be used.' Besides, the advertisement stated that, 'for information in regard to the location and site of the docks, bidders are referred to the commandants of the Brooklyn and Norfolk Navy Yards.' On May 23d, pending the publication, the navy department addressed to the commandant of the Brooklyn Navy Yard the following letter:

'To enable the dry-dock builders who may apply at the yard under your command for information concerning the proposed new timber dry dock, particularly regarding the foundation of the site selected for the dock, I am instructed by the chief of the bureau to request you to direct the civil engineer of the yard to have the necessary borings made at once, with a view of ascertaining the nature of the soil to be excavated for the pit or basin of the dock, as well as to what depth, if any, below the line of water mark it will be necessary to have the piling driven to secure a proper foundation for the structure.'

Conforming to these instructions, Mr. Asserson, a civil engineer attached to the navy department, made an examination of t e soil, making borings to a depth of from 39 to 46 feet at a distance of 50 feet along a certain length in the middle of a portion of the ground of the navy yard. The result of these borings was delineated on a profile plan purporting to show the character of the underlying soil. It may be conceded that this plan indicated that the soil at the point referred to was stable and contained no quicksand. Simpson & Co., who were experienced dock builders, applied for information as to the proposed site, and a copy of the plan was handed to the firm. Simpson & Co. never knew of the above letter until after this suit was brought, and they did not intimate to any one that the bid which they proposed to submit for doing the work was to be conditioned on the existence in the soil of the site to be selected of the characteristics indicated by the profile plan. It is true, however, that Simpson & Co., in making up their estimate and in preparing their specifications, took into view the presumed condition of the soil, and that the amount of their bid was made up upon the assumption that the soil underlying the dock would prove to be like that indicated by the plan.

In June, 1887, Simpson & Co. bid for the construction of the docks. The first two sentences of their proposal were as follows:

'The undersigned, J. E. Simpson & Co., contractors and builders of Simpson's patent timber dry docks, of the city of New York, in the state of New York, hereby offers to furnish, under your advertisement dated April 19, 1887, and subject to all the requirements of the same, and of the specifications, instructions, and plans to which it refers, two timber dry docks of like dimensions, to be built in accordance with plans and specifications herewith submitted. One of said dry docks to be located at the United States Navy Yard, Brooklyn, in the port of New York, and the other at the United States Navy Yard, Portsmouth, in the port of Norfolk, Va., upon available sites to be provided by the government, for the sum of one million and sixty-one thousand six hundred ($1,061,600) dollars, United States currency.'

The price asked for the two docks was very near the sum authorized by congress to be expended for the purpose.

The specifications referred to were prepared by the firm, and contained the following recital:

'Location. These dry docks shall be located as follows: One at the United States Navy Yard, Brooklyn, in the port of New York, and the other at the United States Navy Yard, Portsmouth, in the port of Norfolk, Va., upon available sites to be provided by the government. The length of each dry dock, respectively, shall be five hundred (500) feet inside of head to outer gate sill.'

Such other portions of the specifications as are material to be noticed are contained in the subdivision headed 'General Construction,' and are as follows: 'Piles. All foundation, brace, and crosscap piles shall be of sound spruce or pine, not less than twelve inches diameter at butt and six inches at top, and of such length as may be required for the purpose, and well driven to a firm bearing.

'Sheet piling for cut-offs shall be of sound spruce, pine, or other suitable material, four inches and five inches in thickness, as shown on plans, dressed to a uniform thickness, grooved and fitted with white-pine tongues, driven close, and to such depth as may be found necessary to make good work, and closely fitted to square piles at intersections.



'Should the character of the bottom be found such as to warrant a modification of the pile system of floor construction, a concrete bed of not less than six feet in thickness may be substituted for the foundation piles, and the floor stringers and cross timbers imbedded therein and firmly secured thereto with iron bolts and anchors.'

The bid was accepted, and a written contract was executed. In this contract, recital was made of the advertisement for proposals, the making of the bid with accompanying specifications, a d the acceptance thereof; and these documents thus referred to were annexed, and made a part of the contract.

The contract contained in its first clause the following:

'The contractors will, within twenty days after they shall have been placed in possession and occupancy of the site by the party of the second part, which possession and occupancy of the said site during the period of construction, and until the completion and delivery of the work hereinafter mentioned, shall be secured to the contractors by the party of the second part, commence, and within twenty-four calendar months from such date, construct and complete, ready to receive vessels, a timber dry dock, to be located at such place on the water line of the navy yard, Brooklyn, New York, as shall be designated by the party of the second part, and will, at their own riskland expense, furnish and provide all labor, materials, tools, implements, and appliances of every description-all of which shall be of the best kind and quality adapted for the work as described in the specifications-necessary or requisite in and about the construction of said dry dock.'

The seventh clause of the contract is stated in the margin.

In addition, penalties were stipulated for delay in the performance of the work, and a discretion was vested in the secretary of the navy to allow an extension of time for any failure to complete the dock within the contract period.

The work was to be paid for in installments, upon proper estimate, as it progressed, and 10 per cent. was to be retained by the government until its final completion.

The construction was commenced in Vovember, 1887, and after considerable labor had been expended and material used, 'about August 31, 1888, it first became apparent that a portion of the dry-dock structure had sunk and moved inward towards the excavation, and had thereby sustained damage, and that this damage was caused by encountering a stratum of water-borne sand in the excavation, which flowed from beneath, and undermined the banks forming the side of the dock excavation.' Thereupon it was ascertained that the 'sand stratum hereinbefore described underlay the entire area of the site of the dock, and, beginning at a depth of from twenty-six to thirty feet below the grade of the side, extended to a depth of seventy feet below the same. * * * Between August, 1888, and October, 1889, portions of the dry-dock structure completed by the plaintiffs during that period continued to settle and move inward towards the excavation. * * * This was caused by the presence of the said sand stratum which continued to undermine the side of the dry-dock excavation; hence portions of the dry-dock structures were destroyed or greatly damaged. * * * During the period aforesaid the sand flowed into the excavation made for the dry dock, delaying the completion thereof, and increased the cost of the dock. The character of the soil underlying said site was not as it appeared in the profile plan in the report of the said Asserson, in so far as the said sand stratum is concerned, and both parties were surprised in encountering the difficulty and expense caused by the presence of the said sand stratum. After the discovery of the said sand stratum as aforesaid, Commodore Harmony, chief of the bureau of yards and docks, inspected the work upon the site of the dry dock, and directed the plaintiffs to complete the dock. By reason of the presence of the said stratum of sand, and the difficulties caused thereby, the completion of the dock was delayed seven months.'

'Simpson & Co. in the meanwhile addressed a letter to the navy department, stating that, owing to 'circumstances beyond our control,'-the existence of the quicksand,-they had been unable to complete the dock within the time fixed by the contract, and requesting an extension of four months. This request was granted.

'During the entire period in which the plaintiffs were engaged in the construction of the work, hey did not at any time give notice of any claim, or claim or demand any sum of money, on account of any extra work or materials furnished by them in or about the construction of the said dry dock; nor was any officer or agent of the governmnet apprised of such a claim until the receipt of the letter of Messrs. Goodrich, Deady & Goodrich, attorneys for the assignees of the plaintiffs, dated April 11, 1893.'

As the work progressed, estimates thereof were made as required by the contract, and the amount, less the 10 per cent. reserved, was regularly paid to the contractors. Moreover, additional piling being required, a supplementary estimate thereof was made, the price for the same fixed, and the amount was paid to the contractors.

The dock was completed May, 1890, and a board was appointed to inspect it, and, upon a favorable report, the dock was finally received by the United States; and a claim for 10 per cent., which had been retained on the amount of the whole work, was presented by the contractors, and was audited and paid, and a full and final receipt was given of June 17, 1890. The relations between the contracting parties in reference to the dock then terminated, and no question was raised between them as to any extra claim or allowance, until nearly three years after the final settlement (that is, on April 11, 1893), when the attorneys of the Simpson Dry-Dock Company, as assignees of the claim of J. E. Simpson & Co., addressed a letter to the secretary of the navy, claiming for extra services rendered and material furnished in the construction of the dry dock. This claim was based upon the theory that the site of the dry dock was not 'available, owing to the unfavorable and unstable character of the soil,' and, hence, that the government was liable to the contractors in the sum of $174,322. This demand not having been complied with, the present suit was brought; the claim being for a much larger sum than that stated in the letter of the attorneys, and being made on behalf of the members of the firm of J. E. Simpson & Co., as owners thereof.

James H. Hayden and Jos. K. McCammon, for appellants.

Geo. H. Gorman and Asst. Atty. Gen. Pradt, for the United States.

Mr. Justice WHITE, after making the foregoing statement, delivered the opinion of the court.