United States v. Barlow (184 U.S. 123)

These are cross appeals. The appellees in No. 127, appellants in No. 128, filed three separate petitions against the United States in the court of claims for extra work done and extra materials furnished under a contract with the United States. The petitions were consolidated and tried as one case. On some of the claims the decision was in favor of petitioners, and on others in favor of the United States.

The claimants entered into a contract with the United States for the construction of a dry dock at Puget sound, in the state of Washington. The contract was in writing, and was very full. There are only a few of its provisions in controversy, and those only need to be quoted:

'First. The constructors will. . . construct and complete, ready to receive vessels, a dry dock, to be located at the place shown on a plan accompanying this contract, at the naval station, Puget sound, Washington; and will, at their own risk and 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 and the caisson, pumping machinery, pump house, culverts, and all other accessories and appurtenances, in accordance with the aforesaid plans and specifications, subject to the approval of the civil engineer, or persons as competent officer or person or persons as may for that purpose be designated by the party of the second part; it being further mutually stipulated and agreed that the officer or officers, person or persons, thus designated shall and may, from time to time during the progress of the work, inspect all material furnished and all work done under this contract, with full power to reject any material or work, in whole or in part, which he or they may deem unsuitable for the purpose or purposes intended, or not strict conformity with spirit and intent of this contract and with the aforesaid plans and specifications, and to cause any inferior or unsafe work to be taken down, by and at the expense of the contractors; and that all such rejected material shall be at once removed from the station and replaced by material satisfactory to such inspector, and that all such inferior or unsafe work shall be replaced by satisfactory work, by and at the expense of the contractors. Such inspectors shall at all times during the progress of the work have full access thereto, and the contractors shall furnish them with full facilities for the inspection and superintendence of the same.



'Seventh. The construction of the said dry dock and its accessories and appurtenances herein contracted for shall conform in all respects to and with the plans and specifications aforesaid, which plans and specifications are hereto annexed, and shall be deemed and taken as forming a part of this contract, with the like operation and effect as if the same were incorporated herein. No omission in the plans or specifications of any detail, object, or provision necessary to carry this contract into full and complete effect, in accordance with the true intent and meaning hereof, shall operate to the disadvantage of the United States, but the same shall be satisfactorily supplied, performed, and observed by the contractors, and all claims for extra compensation by reason of, or for or on account of, such extra performance, are hereby, and in consideration of the premises, expressly waived; and it is hereby further provided, and this contract is upon the express condition, that the said plans and specifications shall not be changed in any respect, except upon the written order of the Bureau of Yards and Docks; and that if at any time it shall be found advantageous or necessary to make any change or modification in the aforesaid plans and specifications, such change or modification must be agreed upon in writing by the parties to the contract, the agreement to set forth fully the reasons for such change, and the nature thereof, and the increased or diminished compensation, based upon the estimated actual cost thereof which the contractors shall receive, if any: Provided, That whenever the said changes increase or decrease the cost by a sum exceeding five hundred dollars ($500) the actual cost thereof shall be determined by a board of naval officers appointed for the purpose, and the contractors shall be bound by the determination of said board, or a majority thereof, as to the amount of increased or diminished compensation they shall be entitled to receive in consequence of such change or changes: And provided also, That no further payment shall be made unless such supplemental or modified agreement shall have been signed before the obligation arising from such change or modification was incurred, and until after its approval by the party of the second part: And provided further, That no change herein provided for shall in any manner affect the validity of this contract.

'Eighth. The aforesaid dry dock and its accessories and the appurtenances and each and every part thereof, shall be constructed of approved materials and in a thoroughly substantial and workmanlike manner, in accordance with the true intent, meaning, and spirit of the contract, plans, and specifications, to the satisfaction of the party of the second part.



'Fourteenth. It is expressly understood, covenanted, and agreed by and between the parties to the contract, that if any doubts or disputes as to the meaning or requirements of anything in the contract, or if any discrepancy appear between the aforesaid plans and specifications and this contract, the matter shall be at once referred for the consideration and decision of the chief of the Bureau of Yards and Docks, and his decision thereon shall be final, subject, however, to the right of the contractors to appeal from such decision to the Secretary of the Navy, who, in case of such appeal, shall be furnished by the contractors with a full and complete statement of the grounds of their appeal, in writing, and shall thereupon take such action in the premises as, in his judgment, the rights and interest of the respective parties to this contract shall require, and the parties of the first part hereby bind themselves and their heirs and assigns, and their personal and legal representatives, to abide by his, the said Secretary's decision in the premises.'

The specifications referred to in the contract contain the following provision:

'The ashlar must be of granite or sandstone, of quality approved by the engineer. All stones must be hard, clean, and free from seams and imperfections, and of good bed and build. They must be laid true on their natural beds, and without pinning.'

The largest item in the contentions of the parties arises on that provision of the specifications.

The court found that a bid based on the use of sandstone was accepted, and that shortly after the inception of the work the claimants tendered to U.S. G. White, civil engineer in charge of the work, a sample of the sandstone which was proposed to be used in the ashlar of the dock, and offered at the same time to exhibit to him the quarry from which the stone was taken. Early in the spring of 1893 the engineer visited the quarry, satisfied himself by certain inspections (which are detailed in the findings) of the quality of the stone, observed its satisfactory use elsewhere, and made numerous examinations with a glass magnifying six or eight diameters, looking to the detection of any mica or other substances in its composition, and found none, the texture appearing uniform and good under the glass, and he subsequently made a test to determine the percentage of absorption. As the result of this examination he approved the sandstone from the Tenino quarry, and informed the claimants that the same would be accepted for all work under the contract.

On May 4, 1893, the claimants (appellees), relying on the assurance of the engineer, entered into a contract 'with the owners of the quarry to furnish them from said quarry all of the sandstone required for the work.' By the contract (which is set out in full in the findings) the Tenino Stone Quarry Company covenanted to furnish and deliver 'all of the sandstone required for the stone entrance of the United States dry dock, Puget sound, Washington, according to drawings and schedules of courses, numbers, and sizes furnished by the parties of the second part, and which from a part of this contract, for the sum of forty (40) cents per cubic foot, and all of the stone for the boiler and pump house trimmings for the sum of fifty-five (55) cents per cubic foot.' And it was covenanted 'that the stone shall be Tenino bluestone of good, even, regular texture, of quality approved and acceptable to the civil engineer United States Navy, in charge of construction.' Also that 'payments of 90 per cent to be made monthly for all stone delivered the previous month upon acceptance, approval, and estimate of the civil engineer, United States Navy, in charge of construction, and as soon as payment is received therefor from the government by the parties of the second part, and the remaining 10 per cent upon completion of the setting of the stonework and upon the approval and acceptance of the stone by the said civil engineer, United States Navy.'

Afterwards the claimants entered into a contract with Albert and Lewis Beaudette, stonecutters, to cut the stone. Subsequently 2,377 cubic feet of stone arrived at the site of the dock, which amounted to $1,545.05 at 65 cents per foot, and was included in the vouchers rendered by claimants in the month of June, 1893, to which the following certificates, signed by the engineer officially, were annexed:

'Having fully examined the labor and materials above charged, I certify that they are of good quality and in all respects in conformity with the written contract of date October 29, 1892.'

'Received the above labor and materials in good order at Puget Sound Naval Station this 1st day of July, 1893.'

The amount rendered by the claimants, which included the said sum $1,545.05, was approved by the commandant, John C. Morong, July 8, 1893. The Navy Department struck out the item for $1,545.05 on account of a communication from the Tacoma Trades Council of the State of Washington, complaining of the quality of the stone. A report on the quality of the stone was called for from the commandant, and the latter in turn called for a report from the engineer in charge. The engineer reported favorably on the quality of the stone, and attached to his report letters from the chief engineer of the Northern Pacific Railroad and others. The commandant accepted the report as his own, and forwarded it to the Navy Department.

June 14, 1893, the claimants addressed a letter to the Department describing the qualities of the stone, and stated the protest against it was prompted by a 'spirit of boycotting.'

On the 21st of August, 1893, the claimants sent a letter to the engineer in charge, including their bill for the sandstone, and reciting the circumstances which led to its selection, and insisted 'on immediate payment for said stone and the bureau's decision as to the remaining stone.'

On the 31st day of August, 1893, the chief of the Bureau of Yards and Docks announced by letter to the commandant of the Puget Sound Naval Station that the Tenino stone would not be accepted as material for construction, and on the 8th of September, 1893, the engineer in charge notified the claimants of this decision.

Upon being informed of this decision the claimants protested against the requirement, but offered stone from Sucia island, and also from Dog Fish point, which was accepted and used in the construction of the dock.

Upon their tendering such stone to the civil engineer in charge, he wrote them under date of March 29, 1894:

Messrs. Byron Barlow & Co.

Charleston, Washington,

Gentlemen:--

The receipt of your favor of yesterday is acknowledged, and     in reply would say that the stones referred to therein,      having been approved by the bureau, will be accepted by me,      subject to inspection under such specifications as I may be      furnished with by the bureau.

2. The specifications forming a part of your contract being     of no effect under existing circumstances, I have asked for      such specifications as will doubtless be furnished therewith      before any stone will be delivered here.

Very respectfully,

U.S. G. White,

Civil Engineer, U.S. Navy, in Charge of Construction.

Upon receiving the communication in regard to the quality of the Tenino stone the Navy Department, through the Bureau of Yards and Docks, instituted an examination into the qualities of the stone and its fitness, 'with the result that said Navy Department, through the chief of the Bureau of Yards and Docks, reached the conclusion that said Tenino sandstone was not fit and suitable for the purposes to which it was proposed to use said stone; that said stone did not fulfil the requirements of the contract and specifications as above recited; that it was not a hard stone, nor a clean stone, nor free from imperfections; that its absorbent qualities were too high; that its crushing strength was too low, and that it was in many essential particulars totally unfit and unsuitable and undesirable for the use in the ashlar of this dry dock; and thereupon, to wit, on the 29th day of August, 1894, the contractors were notified of this decision of the Bureau of Yards and Docks, and were required to furnish other and better sandstone. From this decision of the chief of the Bureau of Yards and Docks the claimants appealed to the Secretary of the Navy, who concurred in the opinion of the said chief of the Bureau of Yards and Docks, and concurred in his order requiring a different and better sandstone. The tests and analyses of said Tenino sandstone were made from samples furnished to the Bureau of Yards and Docks by the contractors and by the commandant of the Puget Sound Station. The delay in arriving at the ultimate determination to require a better quality of sandstone, which was reached on the 24th of August, 1894, was partly caused by the fact that the claimants were in correspondence with the Secretary of the Navy in an endeavor to persuade him to accept said Tenino sandstone. The tests and analyses of said stone, as above recited, were made promptly.'

And it was found by the court:

'The amount of Tenino sandstone quarried, cut, and delivered was 2,349 cubic feet, amounting, at 65 cents a cubic foot, to $1,526.85.

'The claimants had also, before receiving notice of the rejection of the Tenino sandstone by the Bureau of Yards and Docks, caused to be quarried and cut, but not transported, 7,280 cubic feet, amounting, at 65 cents a foot, less the cost of transportation, 10 1/2 cents a foot, 54 1/2 cents a foot, to $3,967.60, making a total for stone actually quarried and cut, and part of which was delivered, of $5,494.45. That sum, however, has not been paid by the claimants to the owners of the said Tenino stone quarry, nor does it appear that any action or suit has ever been brought against the said claimants for said sum of money.

'The total amount expended by the claimants for furnishing, delivering, and cutting the stone which actually went into the construction of said dry dock from Sucia island and Dog Fish point, as aforesaid, was $33,556.23.

'If they had been allowed to furnish Tenino stone they could have done so at a cost of $17,948.80. The additional cost, therefore, to the claimants of furnishing the stone which they did furnish, over and above what it would have cost them to furnish the Tenino stone, is the difference between the two sums last named, amounting to $15,607.43.' [35 Ct. Cl. 514.]

In the execution of the contract claimants made a mistake in the cutting off of certain piling, which mistake could be corrected in two ways. One of the ways was accepted by the Navy Department and executed by the claimants as required, but claimants were also required to make some additions which 'had no relation to the error which had been made in the original construction of the sheet piling, but would have been required irrespectively of any such error having been made. The additional cost to the contractors amounted to $59.30.' (Finding IX.)

It was discovered during the progress of the work that the soil at the bottom of the dock was of a very tenacious and unyielding character, so as to be difficult of penetration for piles driven by the ordinary drop-hammer process, and was so reported by the contractors.

It was stated, on the 15th of February, 1894, that penetration was from 8 to 10 feet, and while the Bureau of Yards and Docks thought this might be satisfactory, yet the bureau also thought that the piles should be driven, if possible, 15 feet below the bottom of the excavation. There was no claim made by the contractors at that time that they could not reach a greater depth than theretofore reported. After some correspondence the bureau telegraphed definite instructions to accept no piles driven to a less depth than 15 feet. The contractors made no attempt to show that this could not be done, but employed experts to give an opinion, after tests upon the piles driven, that the bureau was wrong. 'In view of these facts, the Secretary of the Navy, on the 21st day of May, 1894, and upon the occasion of a visit to said dock by that official, verbally authorized and directed the contractors to sink the piles by a method known as the water-jet system; that is to say, by forcing water into the ground by means of a sink pipe operated by the hydraulic system, thus forming a hole into which the pile is set. The contractors objected to and protested against this method of driving the piles upon the ground that it destroyed and weakened the bottom of the pit, and subsequently a board of naval experts was convened for the purpose of reporting upon the advisability of sinking the piles by this system. The board reported adversely to this system, and recommended that the piles be driven in accordance with the provisions of the contract and by the ordinary drop-hammer process, the piles to be driven to a minimum of 6 feet. The remaining 696 piles, which were driven after this report by the drop-hammer process, reached an average depth of 10 feet 4 inches.'

The same board of naval experts, under the direction of the Secretary of the Navy, passed upon the expense caused the contractors by the use of the water-jet system, and recommended an allowance of $1,156.76. The allowance was approved by the Secretary and a voucher drawn therefor; 'but when the same came before the Auditor for the Navy Department for audit and before the Comptroller of the Treasury for payment, it was refused, upon the ground that the services required were not extra and additional, but that they were such as the contract contemplated, and upon the further ground that the Secretary of the Navy, under the specific requirements of § 7 of the original contract, had no power or authority to authorize or direct the incurring of this expense unless the cost of the same was first ascertained by a board of officers provided for that purpose before the expense was incurred, and reduced to writing, as required by the 7th clause of the contract. Whereupon the Secretary of the Navy procured the reference of this item to this court under and pursuant to the provisions of Revised Statutes, § 1063.' (Finding XI.)

The reasonable value of the work set forth and described in the finding is $1,156.76.

The foregoing statement of facts is applicable to the appeal of the United States. The findings applicable to the appeal of claimants (No. 128) are given in the opinion.

Mr. George A. King and Rufus H. Thayer for Barlow & Co.

Mr. George H. Gorman and Assistant Attorney General Pradt for the United States.

Mr. Justice McKenna, after stating the case as above, delivered the opinion of the court: