Case ID: us-ct-cl_44/html/0448-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Booth, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ROBERT McINTYRE, ADMINISTRATOR, v. THE UNITED STATES.
    [No. 22871.
    Decided March 29, 1909.]
    
      On the defendants1 Demurrer.
    
    The petition sets up a contract for work to be done under the charge of an engineer officer, whose decision is to be final. The engineer does not make a final estimate, and the claimant’s account remains open on the books of the Treasury from 1858 until 1900.
    I.Where the decision of an engineer officer is a condition precedent to a contractor’s exacting payment the absence of an allegation showing such a decision in an action on the contract is fatal.
    II.An allegation showing that the engineer officer did not comply with the requirements of the contract by making and filing a final estimate within thirty days after the work was completed and has not yet made such final estimate does not relieve the claimant from the necessity of producing it.
    III.Whether the fact that in such a case the Government did not refuse payment, but for more than twenty years carried the contractor’s account upon the books of the Treasury Department as an open, unsettled account, will take a case put of the operation of the statute of limitation, quere?
    
      The Reporters’ statement of the case:
    The facts alleged in the petition sufficiently appear in the opinion of the court.
    
      Mr. Philip M. Ashford (with whom was Mr. Assistant Attorney-General John Q. Thompson) for the demurrer.
    
      Mr. Louis T. Miehener opposed; Dudley <& Miehener were on the brief:
    The contract obligated the parties to submit everything to the decision of the engineer officer, which decision should be binding and the amount so decided should be paid. The Work was done, and the contractor furnished supplies aggregating $22,970.26. All of the engineer officers reported that money was due the contractor, but they differed as to the amount. The result was that he was never paid anything, although he repeatedly demanded payment. The Government did not refuse to make payment, but insisted that there was not as much due the contractor as he claimed, and the accounts, claims, and demands have been carried since as unsettled, undetermined, and unadjudicated on the books of the Government.
    Major Knight, May 22, 1895, the officer in charge of the Washington Aqueduct, reports on the claim, and the last sentence of his report was as follows:
    “ The present status of the case is that the amount, if any, which should be awarded the claimant has not been determined by a competent tribunal, and had it been determined’, there are no funds available for its payment.”
    That report was brought to the attention of the claimant by a letter, dated December 4, 1896, written by the then chief of the Engineer Corps. The report of Major Knight was incorporated in one made to the Secretary of War, May 18, 1900, and both of those reports were incorporated in a report made by Gen. G. L. Gillespie, then Chief of Engineers, to the Secretary of War, March 31, 1902.
    Thus stood the controversy until April 4, 1902, when the Assistant Secretary of War wrote a letter to attorneys for claimant, and in the last sentence he said:
    “ It would appear that this claim is one of a class which no executive officer has authority to settle, and Congress or the courts alone can afford relief.”
    That was the first occasion on which the Government took the stand that no executive officer had authority to settle or pay the claim. Until that time the War Department did not take stand adverse to the arbitration of the claim through its decision by an engineer officer, but on the contrary it had asserted that it was one which should be determined by a competent tribunal, and it had not teen so determined. This was a complete change of front by the Government. At that time, and because of that repudiation of the contract obligation, the right of action matured, but not before, and one month and eleven days from that date the petition was filed in this court. By their conduct prior to April 4, 1902, the parties had treated and interpreted the contract obligation as being in force and effect and the claim as being in full existence.
    It is well settled that where no time is specified within which an award must be made, it may be made at any time. (.Saunders v. Heaton, 12 Ind., 20; Nichols v. Rensselaer Ins. Go., 22 Wendell, 125.)
    Where the submission is silent as to the time in which an award is to be made, the arbitrator’s authority will continue for life unless it be revoked. The parties may request him to proceed within a reasonable time; and if after such request the arbitrator neglect or refuse, such neglect or refusal on his part will be a good ground for revoking the authority. {Small v. Thurlow, 37 Me., 504; Rogers v. Tatum, 1 Dutch., 281; White v. Puryear, 10 Yerg., 441; Harding v. Wallace, 8 B. Monr., 536; Tyson v. Robinson, 3 Ired., 333.)
    In the case at bar, the contract was silent as to the time in which the arbitration should be made, and therefore the authority continued indefinitely, and this is particularly so because neither party took any other stand until April 4, 1902. There was nothing equivalent to a neglect or refusal on the part of .the Government until that date, and within a few weeks after that refusal the action was brought, the petitioner treating the contract obligation as having been violated by the declaration of the Assistant Secretary of War that no executive officer had authority to settle the claim. That declaration was right in the face of the contract — was plainly opposed to it — and upon learning that the department had taken that stand the petitioner brought the action.
    An officer, in making a decision under authority such as that conferred by this contract, acts as an arbitrator, and his decision is an award. {Gleason's case, 175 U. S., 588, 602-604; Kendall's case, 12 Pet., 524, 611, 612; Greencastle Bank case, 15 C. Cls. R., 225,228; He Groot's case, 5 Wall., 419,428; Kennedy's case, 24 C. Cls. R., 122; Lyn's case, 30 C. Cls. R., 352; Barlow's case, 35 C. Cls. R., 544-546.)
    It follows that this case must be governed by the law of arbitrations and awards.
   Booth, J.,

delivered the opinion of the court.

This is a demurrer to claimant’s petition. The case rests upon a contract executed by claimant’s decedent on June 9, 1858. The subject-matter is the furnishing of materials and labor as specified therein, for the completion of what is known as “ Cabin John Bridge No. 4.” The material allegations in the petition, decisive of claimant’s right to sue herein, are found in .the clauses of the contract respecting the time, manner, and mode of payment prescribed for all of said work and material. Clause 2 of the contract provided:

“ The principal assistant engineer, or an assistant engineer by his direction, shall, as soon as practicable after the end of each month, make out an estimate of the quantity and value of each species of Avork done pursuant to this contract at the prices contained in the annexed proposal. He shall also include the Avalué of any extra Avork done in consequence of any alteration of the plan of the Avork Avhich may have been adopted by the said engineer in charge, Avhen such alterations shall have caused an increased expense to the contractor; and Avhen any such alterations shall have caused a saving of ex-pefise to the contractor, the engineer shall make a reasonable deduction therefor from the estimate so made; and if the said engineer in charge of the aqueduct shall approve said estimate, it is mutually agreed betAveen the contracting parties that it shall be binding, and shall be paid by said engineer.”

Clause 3 provided:

“ Within ten days after the return of any monthly estimate to the engineer in charge, nine-tenths of the sum appearing to be due for Avork performed since the preceding estimate shall be paid to the contractor.”

Clause 5 provided:

“ Within thirty days after the work shall haATe been completed and accepted by the engineer, a final estimate therefor shall be made and approved in the manner provided for making and approving monthly estimates, and shall in like manner be paid by said engineer in charge, together with the retained percentage.”

The petition alleges generally that the contractor faithfully performed his part of the contract in pursuance of the terms thereof, and that notlrwithstanding such performance on his part the United States did not comply with its obligation to pay for said labor and materials furnished as prescribed therein, to his damage in the sum of $22,970.26.

The contract — which is made a part of the petition — provided for the completion of the work mentioned therein within twelve months from June 12, 1858.

It is apparent from an observation of the above-mentioned dates that the claimant’s right to maintain suit herein is barred by the statute of limitations, unless some legal impediments forestalled the assertion of his claim. It is insisted in his behalf that the clauses hereinbefore mentioned respecting the time and manner for payment were in effect a reference of said subject to arbitration, and until said engineer officer decided the question the courts were by the terms of the agreement precluded from exercising jurisdiction in the premises; that he demanded payment for said labor and materials on December 17, 1858, on February 3, 1859, on December 1, 1863, and again on March 26, 1902; that the Government did not refuse to make payment, simply disputing the amount due until May 18, 1900, when defendants disclaimed authority to consider and ability to pay. It does not require the citation of authorities to sustain the proposition that where parties to a contract expressly covenant to abide the decision of an engineer officer respecting the time and manner of payment for work and labor or materials furnished under the agreement, the decision of said officer is a condition precedent of claimant’s right to sue for any amount alleged to be due him. In fact, such a decision rendered in accord with the terms of the contract is unimpeachable in the courts, save for bad faith or dishonest disregard of the rights of the contracting parties. (United States v. Gleason, 175 U. S., 588.)

The question herein is not as to the action of the engineer officer under the clauses of the contract authorizing him to act, but his nonaction for a period of time in excess of twenty years. If the defendants by simply carrying upon the books of the proper department what is commonly designated as an open, unsettled account, wherein neither debits nor credits appear for over six years, thereby toll the statute of limitations and give vitality to an otherwise stale claim, then the statute designed as a statute of repose fails in its purpose.

Under tbe clauses of the contract set forth in claimant’s petition remedies which we need not suggest were clearly available to enforce compliance with its terms respecting payment of money due thereunder. Under clause 5 of the contract a time limit of thirty days subsequent to the completion and acceptance of the work by the engineer was fixed within which final settlement was to be made by him. The award must be made within the time limit. (Russell on Law of Awards, 4 ed., p. 126.)

The demurrer is sustainable upon claimant’s contention, for if the decision of the engineer officer is a condition precedent to resort to the courts, then the absence of an allegation showing such a decision is fatal to the cause of action. The petition does not allege bad faith or in anywise seek to impeach the conduct of the engineer officers. The general allegations of indebtedness are sufficient to cover a case predicated as this case is upon an express contract defining mutual rights and responsibilities. The petition must follow the contract and specifically point out the breaches thereof relied upon. The demurrer will be sustained. Leave granted to amend the petition within thirty days from this date.