United States v. William Cramp & Sons Ship Engine Building Company/Opinion of the Court

This case turns on the release executed by the building company on May 18, 1896. It is contended by the claimant that it applies simply to claims springing out of the construction of the vessel, and therefore has no application to the matters for which the judgment was rendered against the government. The word 'construction,' the company says, is limited to the mere matter of building; that is, the furnishing of materials, the doing of work, and does not include delays or other matters outside the building of the vessel.

To rightly understand the scope of this release we must consider the conditions of the contract, and especially the clause in it which calls for a release. The contract was a large one, the price to be paid for the work and material being over $3,000,000, and the contract was evidently designed to cover all contingencies. Provision was made for changes in the specifications, for penalties on account of delays of the contractor, deductions in price on certain conditions, approval of the work by the Secretary of the Navy, forfeiture of the contract, with authority to the Secretary to complete the vessel. The nineteenth clause contains the stipulations as to the amounts and times of payment with authority for increase of the gross amount upon certain conditions. The sixth paragraph of this clause makes special provision for the last payment, to be made 'when all the conditions, covenants, and provisions of said contract shall have been performed and fulfilled by and on the part of the party of the first part' and 'onth e execution of a final release to the United States in such form as shall be approved by the Secretary of the Navy, of all claims of any kind or description under or by virtue of said contract.' Evidently the parties contemplated and specially provided by this stipulation that the whole matter of the contract should be ended at the time of the final release and the last payment. That which was to be released was 'all claims of any kind or description under or by virtue of said contract.' Manifestly, included within this was every claim arising not merely from a change in the specifications, but also growing out of delay caused by the government. The language is not alone 'claims under,' but 'claims by virtue' of the contract,-claims of any kind or description.' All the claims for which allowances were made in the judgment of the court of claims come within one or the other of these clauses. It may be that, strictly speaking, they were not claims under the contract, but they were clearly claims by virtue of the contract. Without it no such claims could have arisen. Now, it having been provided in advance that the contract should be closed up by the execution of a release of this kind, it cannot be that the company, when it signed the release, understood that some different kind of release was contemplated. It must have understood that it was the release required by the contract,-a release intended to be of all claims of any kind or description under or by virtue of the contract,-and that the form of words which the Secretary had approved was used to express that purpose. With that release stipulated for in the contract the company signed the instrument of May 18, 1896, which in terms purported to 'remise, release, and forever discharge the United States of and from all and all manner of debts, dues, sum and sums of money, accounts, reckonings, claims and demands whatsoever, in law or in equity, for or by reason of or on account of the construction of said vessel under the contract aforesaid.' Now, whatever limitation may be placed upon the words 'for' or 'on account of' the construction, the provision for the release of all claims and demands whatsoever, 'by reason of the construction of the vessel under the contract aforesaid,' is a recognition of the contract, and includes claims which arise by reason of the construction of the vessel under it. 'By reason of' may well be considered as equivalent to 'by virtue of.' It is only by reason of the performance of the contract in the construction of the vessel that these claims arise. But for the contract, and the construction of the vessel under it, there would be no such claims. No payment of moneys not due is necessary to sustain this release. It is under seal, and the contract is itself full consideration. As of significance it must be borne in mind that the release referred specifically to the provisions in the sixth paragraph of the nineteenth clause of the contract, which provided for the character of the release. Indeed, the general language of the release itself and the number of words of description in it show that it was the intent of the Secretary of the Navy to have a final closing of all matters arising under or by virtue of the contract.

Stipulations of this kind are not to be shorn of their efficiency by any narrow, technical, and close construction. The general language 'all and all manner of debts,' etc. indicates an intent to make an ending of every matter arising under or by virtue of the contract. If parties intend to leave some things open and unsettled, their intent so to do should be made manifest. Here was a contract involving three millions of dollars, and after the work was done, the vessel delivered and accepted, and this release entered, claims are presented amounting to over $500,000. Surely the parties never intended to leave such a bulk of unsettled matters. As bearing upon this matter it may be noticed that while the release was signed and the contract between the buildig company and the government closed on May 18, 1896, this action was not brought until August 10, 1897,-nearly a year and a quarter thereafter.

We are of opinion that the parties, by the release of May 18, 1896, which was executed in performance of the requirements of the original contract, settled all disputes between the parties as to the claims sued upon.

The judgment of the Court of Claims is reversed and the case remanded, with instructions to enter a judgment on the findings for the defendant.

Mr. Justice McKenna and Mr. Justice Moody took no part in the decision of this case.