#### THE SNARE & TRIEST COMPANY v. THE UNITED STATES.

[No. 33657.

Decided June 1, 1920.]

*On the Proofs.*

*Contract; quantum meruit.*— Where work not provided for in a contract is ordered to be done, and no compensation is agreed upon, the plaintiff is entitled to compensation upon the basis of *quantum meruit.*

*Same; liquidates, damages.*— Where work not provided for in the contract was ordered by the Government engineer after the date fixed for the completion of the contract, the Government has no right to deduct liquidated damages for delay covering the period between the date fixed for completion and the date when the work was actually completed.

*The RefortePs*statement of the case:

*Mr. Benjamin Carter*for the plaintiff.

*Mr. Howard W. Ameli,*with whom was *Mr. Assistant Attorney General Frank*Danis, *jr.,*for the defendants.

*387The following are the facts of the case as found by the court:

I. The plaintiff is a corporation organized and existing under the laws of the State of New York, and has at all times borne true allegiance to the Government of the United States, and has never given aid or encouragement to rebellion against said Government.

II. On August 22, 1913, the plaintiff entered into a contract with the United States (No. 1992) to construct a pier, causeway, and inner wharf for torpedo boats at the United States navy yard at Charleston, in the State of South Carolina, in accordance with the plans and specifications forming part of said contract, a copy of which, and of the material parts of said specifications, are attached to the plaintiff’s petition herein as Exhibit A. The plaintiff began work under the contract about the end of the year 1913.

III. The defendant, prior to the drafting of the plans and specifications, in order to determine the character of the materials underlying the site of pier and causeway, took borings, samples of which, together with the plans and specifications, were exhibited to prospective bidders. These borings, at the places where made, showed marl at elevations varying from about 30 to about 32 feet below mean low water, with a thin deposit of soft mud overlying the marl at some points. The plans so exhibited showed the foundation of the pier and causeway as built on concrete cylinders, the same to rest upon and sink into the marl. These cylinders were to be constructed by sinking reinforced concrete shells 2£ inches thick and 4 feet in diameter, widening out at the bottom to a bell 11 feet in diameter deeply enough to have a firm foundation and then pumping out the shells and filling them with concrete. Upon commencing work it was believed the marl was too hard to allow sufficient penetration of the 2£-inch rims of the concrete shells, and on March 23, 1914, 8-foot steel cylinders, with a detachable bottom section were, at the claimant’s suggestion and by agreement, substituted. These steel cylinders were to be driven into the marl to a sufficient depth, the material inside pumped out and excavated, and the detachable bottom section filled with concrete to within a few inches of the top. *388Inside these steel cylinders, and on top of the concrete foundation, there were to be built 4-foot concrete shafts, with flaring bottoms, which were intended to support the superstructure of pier, causeway, and wharf. These steel cylinders consisted of two sections, the upper section of which was detachable and temporary, and the lower section was designed to remain in the permanent construction. After being filled with concrete as stated, the upper sections were to be removed and similarly used in the construction of other concrete cylinders.

IY. Upon starting construction it was discovered that the depth of the marl was not uniform but dipped down quite abruptly. Thereupon a board of officers, known as the “ Chambers Board,” was convened at the navy yard to ascertain, among other things, the correct elevations of the marl or clay strata and the character and quantity of the overlaying materials. This board made new borings, from which the conclusion was reached that the average depth which the cylinders should penetrate would be about 5.1 feet below the depth shown by the plans and specifications.

On April 23, 1915, a supplemental contract was entered into between the United States and the plaintiff (No. 1992-A), in which a number of changes were made in the original contract, among which was one for increasing the penetration of the cylinders into firm clay or marl at least 4 feet, and not exceeding 5.1 feet, and providing increased compensation therefor, and the date of completion of the contract was fixed as December 31,1915. The time for completion of work was subsequently extended to January 31, 1916. A copy of the supplemental contract and of the supplement to specifications are attached to the petition and made a part hereof by reference. By the latter it was understood that the additional depth would not exceed 5.1 feet.

Y. Thereafter it was discovered that on account of its dip the firm clay or marl was at a still greater average depth than shown by the last borings, and that it was more deeply overlaid with deposits of mud and sand, and that it was necessary to place the steel cylinders 5.1 feet deeper than the depth provided for by the above-mentioned supplemental contract. Thereupon by agreement between the parties the *389steel cylinders were lengthened about 6 feet and braced to stand the strain, at the expense of the Government. The cylinders were actually placed at an average depth of 5.1 feet in excess of' that called for by the said supplemental contract, and 10.2 feet in excess of that called for by the original contract.

VI. After the execution of the supplemental contract of April 23, 1915, and the said ascertainment of the fact that the cylinders would have to go deeper, a controversy arose between the claimant and the Government as to the amount of compensation that should be allowed for sinking these cylinders 5.1 feet deeper than called for by said supplemental contract. Thereupon by direction of the Chief of the Bureau of Yards and Docks of the Navy Department a board of officers known as the “Morrison Board” was convened on September 9, 1915, to ascertain the increased cost to the plaintiff of sinking the cylinders 5.1 feet in excess of the depth specified by the supplemental contract. The board made a report and a supplemental report, dated December 22 and December 31, 1915, respectively, and gave an estimate of the total cost of performing the work remaining to be done under the original contract, including the increased cost of placing the cylinders beyond the depth assumed in the original contract, and recommended that the time limit for completion of the contract should be extended to May 1,1916.

On February 4, 1916, this report of the board was disapproved by the Chief of the Bureau of Yards and Docks upon the ground that it had set aside or ignored the supplemental agreement of April 23, 1915, and had assumed an erroneous basis for its computation, namely, the difference between the actual cost of placing 29 cylinders, as shown by plaintiff’s records, and the estimated cost of placing said cylinders. The board was ordered to reconvene and estimate the increased cost directly on the additional labor and materials involved in sinking the cylinders to the increased depth over that provided for in the supplemental contract and to make estimates of decreased cost for work to be omitted because of changes, these estimates to be based on its value as part of the contract.

*390YU. On February 25, 1916, the Morrison board, having reconvened, reported that Mr. Triest, a member of the plaintiff company, had appeared before the board, but had been unable to render any assistance, as the books of the company failed to show the separate cost of sinking the cylinders to the increased depth beyond that provided by ■ the supplemental agreement. The board further reported that the cost of sinking the steel cylinders to the additional depth of 5.1 feet beyond that specified in the supplemental contract of April 23, 1915, and other work incident thereto, allowing special plant charges and 10 per cent profit and omitting general plant charges, was $13,131.05, and that certain work omitted from the contract would have cost $17,399.23 to perform, that this allowance of $13,131.05 should be credited to the contractor on the deduction for work omitted, leaving a net balance against the contractor of $4,268.18, which was deducted from moneys due the plaiñtiff on final settlement. Following said report a supplemental agreement (No. 1992-B) to cover the sinking of the steel cylinders to an increased depth of 5.1 feet beyond that provided for by supplemental agreement No. 1992-A, and stating the compensation as $13,131.05, was drafted by the Navy Department and presented to plaintiff for execution, who, on April 19, 1916, refused to sign the same upon the ground that the consideration named was inadequate, and returned the said proposed agreement with certain proposed changes to the effect that the net reduction of $4,268.18 for omission of part of the work was satisfactory, and that the plaintiff was willing to accept the consideration of $13,131.05 as part payment, the balance to be determined later, and that the time for completion of the contract be extended to July 1,1916. The time for completing the work had been extended, as above stated, to January 31, 1916, and that time had expired before the report of the Morrison board had been disapproved by the chief of bureau, and therefore before the board had reconvened and reported again, as shown above.

On April 24, 1916, the plaintiff was notified in writing by the Chief of Bureau of Yards and Docks (in answer to claimant’s declination of the proposed supplemental agreement) that the bureau had concluded that the “ proper action *391for it to take under the contract was to cover the matter by a change order instead of by a supplemental agreement,” and that such change order had been accordingly issued on the 22d instant. Plaintiff was further advised that with reference to its request for extension of time the navy yard had been requested to make a recommendation on that point to the bureau, and action would be taken on receipt of that recommendation. It does not appear from the evidence that any such recommendation was thereafter made.

The change order was made on April 22, 1916, by the Bureau of Yards and Docks, the same having been approved by the Secretary of the Navy, and the work authorized to be prosecuted to the excess depths, as provided in the Morrison board report.

VIII. The plaintiff proceeded with the work, and finally completed the same on June 10, 1916. There were certain delays on the part of the plaintiff between January 31,1916, and June 10, 1916, for which the defendants were in no way responsible, but which added materially to the cost of the work.

The contract called for a general release, to be executed by the contractor upon final settlement. There was executed a qualified release wherein upon a consideration therein mentioned of $200 paid by the plaintiff to the United States it was stipulated, among other things, as follows:

“ Provided, That this release shall not extend to or include the claim of the contractor for additional compensation over and above that allowed by the Government for and on account of sinking the cylinders beyond the depth specified in paragraph 52H of supplemental agreement No. 1992-A and other work and expense incidental to such additional depth, nor the claim of the contractor for and on account of the deduction of three thousand two hundered seventy-five dollars ($3,275), as damages growing out of alleged delay in the completion of the work. Said two claims amount in the aggregate to not exceeding fifty thousand dollars ($50,000).

“ It is, however, distinctly understood that nothing in this release shall operate as, or be construed to be, a recognition or admission by the Government of the validity of said excepted claims or either of them, but that, on the contrary, the acceptance or approval of this release by the Secretary *392of the Navy shall operate as an express denial by the Government of the validity of said excepted claims.”

IX. The reasonable cost to the plaintiff of sinking the cylinders beyond the depth specified by the supplemental agreement and performing other work and incurring other expense incident thereto was $40,740, upon which is to be credited the said sum of $13,131.05 allowed and paid by the Government as aforesaid, leaving a balance due of $27,608.95.

X. On August 17, 1916, the Acting Chief of the Bureau of Yards and Docks notified the plaintiff that the Secretary of the Navy had directed that liquidated damages for 131 days, the period between the last extension, January 31, 1916, and the date of completion of the work, June 10; 1916, should be deducted in the final settlement, as well as $200 as consideration to the Government for allowing the execution of the qualified release by the plaintiff above mentioned. Liquidated damages in the sum of $3,275 were deducted by the Government from plaintiff’s compensation on final settlement. The sum of $200 as the consideration for the qualified release was also deducted, thereby paying the consideration named in the release.

Campbell, *Chief*Justice,

delivered the opinion of the court:

The plaintiff entered into a contract with the United States to construct a pier, causeway, and inner wharf at the Charleston Navy Yard. A part of the work ■ consisted in the sinking of cylinders to be filled with concrete, for which borings had been made to determine the depth to which the cylinders or caissons would be sunk to reach the marl or firm clay in or upon which they were to rest. The results of these borings were shown to bidders, along with the plans and specifications.

After the contract was made it was discovered that the depth of the marl was not uniform and that it dipped abruptly. This condition rendered it desirable to more accurately determine the average depths to which the cylinders would be sunk and a board was convened for that purpose, which found that the cylinders would have to go deeper *393than the original contract required. This board estimated the cost of the additional work, made certain changes in the plans and deductions from the contract price on account of suggested omissions, and a supplemental contract was executed by the parties covering the extensions of work and the omissions to be made from the original contract. The supplemental contract fixed the price for the additional depth of cylinders, which, according to the supplement to the specifications, were to extend at least 4 feet into firm clay or marl, but it was also understood that the average additional depth to which the caissons were to be driven should not exceed 5.1 feet.

Later it was determined to be necessary, on account of the bottom formation and its dip, to sink the caissons or cylinders deeper than the supplemental contract required, and another board was convened to ascertain this additional depth and to fix the amount of compensation therefor. This board reported that the depth would be 5.1 feet additional to that specified in the- supplemental contract, and, after recommending certain omissions from the contract work, reported that the net amount to be paid plaintiff for the cylinders carried to the proposed new depth would be $13,131.05. A controversy arose between the parties over the sum that should be paid, and the plaintiff declined to sign a proffered supplemental contract providing for the additional work for the sum above stated. It expressed a willingness, however, to do the work, accept the sum named as part payment, and leave the question of amount open for future adjustment. The plaintiff was notified that the department would treat the matter as “ a change order ” and that it could proceed with the work without a supplemental contract. This the plaintiff did, and the work was completed in June, 1916. When the matters came on for final settlement the defendant’s officers in charge contended that the plaintiff should accept the sum of $13,131.05 as the proper compensation for the additional work, and should be charged with $3,275 as liquidated damages under the terms of the contract, and they insisted .that the plaintiff execute a final release such as is contemplated by the contract.

*394The plaintiff took issue with these contentions, but it was finally agreed that the plaintiff should execute what was designated as a qualified release, whereby, for a stated consideration, the plaintiff released the defendant from any and all claims and demands growing out of the contract and any modification or change therein upon payment of the amount admitted by defendant to be due, but reserving certain rights of action as below stated. The release was accordingly executed, and the balance found due, something in excess of $16,000, was paid to the plaintiff. The release provided, however, that it should “ not extend to or include the claim of the contractor for additional compensation over and above that allowed by the Government for and on account of sinking the cylinders beyond the depth specified ” — in the supplemental agreement and specifications thereto — “ and other work and expense incidental to such additional depth.” This reservation applies to the 5.1 feet additional to the 5.1 feet mentioned in the supplemental agreement. The Government having allowed $13,131.05 as compensation, the question is what additional compensation, if any, over and above that sum should be paid for the sinking of' the cylinders the 5.1 feet additional depth, and other work and expense incidental to such additional depth. The petition presents the question as stated.

There is nothing in the case calling for an application of the principles decided in the *Christie*Case, 237 U. S., 234, *Hollerbach*Case, 233 U. S., 165, *Atlantic Dredging Co.*Case, 53 C. Cls., 490, or similar cases. No misrepresentation was made nor information withheld. The borings as made were submitted and their accuracy is not disputed. They did not show that the marl broke or dipped abruptly at or near the places where the cylinders were to be sunk, and there is nothing to show that this information was in the possession of the officer in charge who made the contract or of the officers or agents who made the borings. As has been stated, new borings were made and the results were covered into a supplemental contract executed by the parties. The provision in the latter that the additional depth would not exceed 5.1 feet was evidently intended for the contractor’s *395benefit, because the price of carrying down the cylinders had been stated in the supplemental contract, and it was proper enough that the limit of depth which would be required for that price should be stated. The release states the claim that was reserved from its operation and the question is as above stated. If called on to decide from the evidence before it the total cost of sinking of the cylinders and doing the work incident thereto the court could not determine it, with any degree of satisfaction. The figures furnished in a statement or estimate by plaintiff or its witnesses is plainly erroneous, and cover a much longer period than would be allowable. Nor is the evidence as satisfactory as should have been adduced upon the question of the additional compensation that should be allowed. This additional compensation has been ascertained, however, and is shown in Finding IX.

A second question reserved in the release was whether the plaintiff was chargeable with liquidated damages. We think clearly not. The contract period for completion had been extended to January 31, T916. When that time had expired, the question of the new additional depth of 5.1 feet had not been determined by the board, nor the amount of compensation allowable for it. No new or supplemental agreement was executed, but in April the plaintiff was directed to proceed as upon a “change order.” Upon what theory the plaintiff was chargeable -with liquidated damages for delay in completing the work that was not even included' in the contract, or the supplement thereto, is not made plain. The plaintiff was duly authorized to do this work, and the time for doing it was not agreed upon or covered by former agreements. The plaintiff should recover the amount deducted as liquidated damages, as shown by Finding X.

Judgment for plaintiff in the sum of $30,883.95. And it is so ordered.

Gkaham, *Judge;*Hay, *Judge;*Downey, *Judge;*and Booth, Judge, concur.