#### THE NEW YORK CONTINENTAL JEWELL FILTRATION COMPANY v. THE UNITED STATES.

[No. 31505.

Decided April 19, 1920.]

*On the Proofs.*

*Contract; liquidated, damages.*— Where delays have been caused by both parties to a contract, and the period for completing the work has been thereby extended beyond the time fixed for the completion of the contract, the obligation to pay liquidated damages is annulled and can not be revived, and any recovery for delays must be based upon the actual loss sustained.

*The Reporter's*statement of the case:

*Mr. Jesse 0. Adkins*for the plaintiff. *Messrs. Robert 0. May den*and *George W. Dalzell*for the plaintiff.

*Mr. Philip G.*Walker, with whom was *Mr. Assistant Attorney General Frank*Davis, *jr.,*for the defendants.

The contractor was allowed extensions of time for changes in the contract which were sufficient to cover any delay in this connection. The Government, under the contract, reserved the right to make changes and modifications in the contract, and in so doing, allowing the contractor an extension of time to cover any delay in this connection, did not waive its right to liquidated damages. The contractor has not shown that he suffered any damage on account of delays caused by the Government.

It is not admitted by the Government that the Chief of the Bureau of Yards and Docks had the right to waive the liquidated damage clause in this contract, as there was no express provision in the contract giving him this authority, and in the absence of an expressed stipulation in the contract to this effect the chief of the bureau was not authorized to remit or waive the amount due the Government in the way of liquidated damages. This court in the *Pacific Hardware As Steel Go.*v. *United*States, 49 C. Cls., 327, 335, says:

“ It is unquestionably true that an official of the Government is not authorized to give away or remit a claim due the Government.”

*289In the absence of bad faith on the part of the Chief of the Bureau of Yards and Docks or of any of the engineers of the Government, or such gross error as to require that bad faith be inferred, the contractor is bound by the decision of the Chief of the Bureau of Yards and Docks.

The attention of the court is invited to the case of *Brinde,*Receiver, v. *United*/States, 53 C. Cls., 170, and the cases cited; *Pacific Hardware & Steel Co.*v. *United States, supra; Pel-ton Water Wheel Co.*v. *United States,*55 C. Cls., —.

The additional time taken by the contractor in performing the work on the dry dock in addition to that allowed him by the Government was due to causes for which he alone was responsible and were avoidable delays, and the contract provides that no extensions of time will be allowed for delays of this character.

It is not shown that the contractor suffered any damages on account of the actions of the Government. The damages suffered by the contractor, such as the failure of the cofferdam, the break in the false work at the culvert, the failure of his dredge to properly function, damages due to the incompetency, inefficiency, and inexperience of his superintendent, the use of rejected material, such as the setting of stone and placing of concrete, are damages which were occasioned by his own acts.

It is not necessary for the Government to prove actual damage in order to be entitled to liquidated damages as provided by the contract.

The fact that the Chief of the Bureau of Yards and Docks did not enforce the clause of the contract pertaining to liquidated damages to which the Government was entitled does not bar the defendants from the right of recovery, or that the same be a set-off in the event damages are found by the court to have been occasioned by the acts of the Government.

The 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 Jersey, and on October 29, 1902, entered into a contract in writing with the United States *290whereby it agreed to construct a dry dock at the Charleston Navy Yard, Charleston, S. C., for which the defendants agreed to pay the sum of $917,000, the dock having been reduced in size from that described in the specifications before the contract was executed, a copy of the contract and of the specifications part thereof being annexed to the petition and is made a part hereof by reference. Eight supplementary agreements in writing were entered into by the plaintiff with the defendants during the progress of the work. Copies of said supplementary agreements to the contract are annexed to the petition and are made a part hereof by reference. Upon the execution of the contract the plaintiff began work on the construction of the dry dock with an adequate force and plant.

II. The building of the dry dock required the excavation of a hole about 55 feet deep, 670 feet long, and 160 feet wide. It was estimated that 156,500 yards of material would be excavated. The soil consisted of mud and silt to a depth of about 10 to 12 feet; a mixture of sand and mud to a depth of about 20 feet; and a tough, impenetrable, cheeselike marl the remainder of the distance. The mud and sand were excavated by a dredge, and the marl was in part excavated by blasting and in part by pick and shovel. The specifications provided that the necessary amount of excavated material suitable for back filling and grading might be stored on the ground, and that other excavated material should be spoiled “ within the area inclosed by the railway embankment, the 11-foot contour, and the line of the quay wall in the localities where same is needed in such manner as may be approved by the civil engineer in charge.” The plaintiff provided a suction dredge with an efficient pumping radius of 600 feet. The civil engineer in charge directed the plaintiff that the dredge should deposit the material on the site of the steam-engineering building, which was beyond the 600-foot radius, and the plaintiff was required to pump a large portion of the dredged material a distance of from 1,100 to 1,700 feet. This strain upon the dredge caused numerous breakdowns and reduced the capacity of the dredging while it was operating to these distances 50 per cent. The plaintiff objected and protested against the orders of the civil engineer requiring *291it to pump the dredged material to these distances. The steam-engineering building and all other places where the plaintiff was required to place the dredged material were within the area set out in the specification above quoted.

The marl was a tough, cheeselike substance, and much more expensive to excavate with a pick and shovel than by blasting. The usual and economical method of excavating such material was by blasting. Blasting began before April 29, 1904, and continued with some interruptions until it was finally stopped, on January 18, 1906. On April 29, 1904, blasts were limited to 10 pounds of dynamite; on August 15, 1904, the maximum charge was reduced to 4 pounds; on June 29, 1905, blasting was prohibited altogether; on July 11, 1905, permission to resume blasting was given and the charges were limited to 50 pounds of black powder; finally, on January 18, 1906, blasting was forbidden. The Government engineers gave as their reason for forbidding blasting that it seemed to them that two buildings had been injured thereby, and that blasting would endanger the cofferdam. One of the buildings said to be injured was being constructed by the plaintiff; the other building was 600 feet away. The order stopping blasting added to the cost of the remaining excavation, and the plaintiff was delayed in the performance of the work 40 days, for which delay the Government was responsible. The added cost incurred by the plaintiff by reason of this order was the sum of $14,130.40.

III. The specifications provided for a waterproofing course under the floor of the dock and outside of the dock walls 1 inch in thickness, composed of alternate layers of asbestos felt and asphalt or some equivalent material. In July, 1904, the plaintiff submitted samples of felt and asphalt to the defendants. On August 30, 1904, the plaintiff complained of the delay of the defendants. On September 8, 1904, the engineer in charge reported to the Bureau of Yards and Docks that the plaintiff desired to use asphalt* saturated felt in lieu of asbestos felt, described in the specifications, and asked the bureau to consider this change. On September 14,1904, the chief of the bureau decided that the change would not be desirable, and stated that a different change might be made by reducing the waterproofing course *292from a thickness of 1 inch to the thickness specified for the dry dock at the Norfolk Navy Yard. The change suggested by the chief of the bureau was finally made on February 21, 1905. On April 14,1905, the engineer in charge stopped the use of the waterproofing on the ground that the asphalt did not conform to the specifications, and the same was rejected. The plaintiff appealed to the Chief of the Bureau of Yards and Docks, who caused a new analysis of the same asphalt to be made, and on May 20, 1905, informed the commandant of the navy yard that the asphalt conformed to the specifications and to let the work proceed. The plaintiff was delayed in the performance of the work 60 days, for which delay the Government was responsible. The increased cost to the plaintiff by reason of this delay was the sum of $3,524.

IY. The dock required about 8,540 cubic feet of granite. The plaintiff made contracts with the quarries on September 4, 1903, and February 6, 1904. The stones arrived at the dock in large blocks called patterns. The blocks, after they passed inspections, were paid for by the Government as rough stone, were thereafter cut to dimensions, again inspected, and after being passed were stored in place ready for setting. Each stone when cut was intended to go in its appropriate place in the dock. On May 17, 1905, 171 stones which had been cut, inspected, and paid for, were rejected by the Government inspector, and his rejection was approved by the engineer in charge. The plaintiff appealed to the Chief of the Bureau of Yards and Docks, who, on August 4, 1905, decided that the stones conformed substantially to the specifications and he directed their reexamination and acceptance, with the qualification that any stones showing seams should be rejected. Sometime in September, 1905, these stones were reexamined, and all but two were accepted. The plaintiff’s contract with the quarries provided that the stone should be acceptable to the Government. When such large quantities of stone were rejected by the Government, shipments from the quarries were suspended. When the Government finally accepted the stones, the quarries for a long time were unable to deliver stone, their stone of this character having been exhausted by other sales. The rejection of the stone prevented the plaintiff from procuring the stone required for the dry *293dock. This rejection of the stone caused a delay in the performance of the work 40 days, for which delay the Government was responsible. The increased cost to the plaintiff by reason of this delay and other delays hereinafter found was the sum of $99,871.

Y. The contract called for the construction of a culvert through the south wall level with the dock floor about 100 feet from the river end of the dock. The culvert was a concrete cylinder lined with brick, with an inner diameter of 8 feet and outer dimensions of about 12 by 13 feet, extending through the south wall a distance of 105 feet from the center line of the dock. It was about 44 feet long and about 30 feet outside of the dock wall, going almost to the cofferdam. The construction of this culvert required the excavation of the material between the dam and the dock to a depth of about 55 feet and to within a few feet of the dam. At this point the piling of the dam was not more than 55 feet long. The plaintiff notified the defendants that it intended to build this culvert in two sections. The Government inspector instructed the plaintiff that the culvert must be built in one section. This order was approved by the civil engineers of the Government, who based their decision upon the specifications set forth in paragraph 81. The plaintiff proceeded to build the culvert in one section. The dam broke immediately upon the completion of the excavation and before any concrete could be deposited. The break occurred on September 29, 1905, and 36 days was occupied in cleaning up the debris, during which time all work on the dock was stopped. Thereafter the Government engineers permitted the plaintiff to build the culvert in two sections. The delay caused to the plaintiff by this requirement of the Government was 36 days, for which the Government was responsible.

YI. The siphon loop consisted of two 36-inch pipes running throughout practically the entire north wall of the dock, and was intended to provide means for bringing salt water for condensing purposes to the steam engineering plant. It was not contained in the original contract. On May 10, 1905, while the plaintiff was depositing concrete and setting granite, and while it was at work on the north wall, but before it had reached the elevation at which the *294siphon loop was ultimately installed, it was notified that the Government intended to install the siphon loop and was directed not to proceed above a certain elevation on the north wall. Plans were prepared by the junior civil engineer of the Government for the loop. These plans were approved by the Assistant Chief of the Bureau of Yards, and Docks, but were disapproved by the Chief of the Bureau of Yards and Docks. By reason of this disapproval, all work on the north wall, with a slight exception, was suspended from July 3, 1905, to the middle of November, 1905. In July and August, 1905, the plaintiff complained of the delay of the work, and the Government engineers admitted that delay was occurring.

The terminal chamber for the siphon loop contained the valves controlling the siphon loop and was to be located back of the north wing wall at the entrance of the dock. Its construction was essential to the operation of the siphon loop. On December 6, 1905, the Government notified the plaintiff that it intended to install this terminal as part of the plaintiff’s contract. After many delays the defendants informed the plaintiff on January 31,1907, that the terminal chamber would not be included in the contract. The delay in deciding this question caused some delay in the performance of the work before April 1, 1906, and after that date entirely stopped the work on the north wing wall until January 31, 1907.

The original contract did not provide for the construction of the pump well. This was a well in which was to be placed the pumps for pumping the water out of the dock through the culvert. On June 5, 1905, the defendants informed the plaintiff that it intended to add the pump well to the plaintiff’s contract. Plans for the construction of this pump well were not submitted to the plaintiff until December 16, 1905, and it was on J une 14,1906, that the defendants notified the plaintiff that the pump well would be constructed under a separate contract. The delay of the decision on this matter caused delay of the work on the south-wing wall from about December, 1905, to July 1,1906. The delay in the performance of the work caused by the action of the defendants in the matter of the siphon loop, the terminal chamber, and the pump well was 310 days. On May 21,1906, the Government *295engineers stated that the work could be completed in three months. At that time the work was about 95 per cent completed, but owing to the delay above mentioned the work was not completed until May 18, 1907.

The original contract period was three years, ending October 29, 1905; thus there was a delay of 566 days in completing the work. Of this delay the Government was responsible for 486 days’ delay and the plaintiff for 80 days’ delay.

VII. By reason of the delays above enumerated there was a large increased cost in the performance of the work. Three of these items of increased cost will be found in Findings II, III, and IV. The increased cost to the plaintiff on account of temporary and permanent piling and temporary work was the sum of $7,958.50. The increased cost to the plaintiff on account of the concreting, which increased cost was due to the delay caused by the defendants, was the sum of $94,555.

VIII. The contract provided for liquidated damages at the rate of $50 per day, and that deductions from the contract price shall be made at that rate. But the Government was responsible for 486 days of delay, and therefore did not claim liquidated damages. Upon the completion of the contract there was due to the plaintiff an unpaid balance of $6,855.15, which the Chief of the Bureau of Yards and Docks retained as what he claimed was the actual damage to the Government by reason of the delay in the completion of the work. There is no evidence in this case that the Government suffered actual damage by this delay.

Hat, Judge,

delivered the opinion of the court:

This suit, is based upon a contract entered into by the plaintiff with the defendants for the construction of a dry dock at Charleston, S. C. During the progress of the work the plaintiff was delayed in the performance thereof by the defendants. The contract provided that the work should be completed in three years from the date of the execution of the contract, which date was October 29, 1902. The delays caused by the defendants at times caused almost a complete stoppage of the work and^aogeSYlirplajBtiff to incur *296great cost, which it would not have been put to had it not been for these delays. These delays and the increased cost occasioned thereby have been fully set forth in the findings of fact.

It is also true that while the defendants caused delays amounting to 486 days, the plaintiff was responsible for 80 days’ delay, and the defendants now claim that they are entitled under the contract to liquidated damages. The contract provides for liquidated damages at the rate of $50 per day for each day’s delay in the completion of the work after the date fixed in the contract for the completion of the work. But the facts are that the delays were due to both the plaintiff and the defendants, and the defendants now ask that the liquidated-damage clause in the contract be enforced without being able to point out from what date it should be enforced. Having delayed the plaintiff beyond the date fixed in the contract for the completion of the work, and no other date having been fixed by the parties for its completion, the court has no fixed date from which the contract can be enforced, unless the court chooses to enter the domain of guesswork and of- its own accord undertake to arbitrarily fix a date from which liquidated damages must be enforced. We think the law is plain that the court must be able to fix the day from which a liquidated-damage clause is to operate. In this case the date from which the liquidated-damage clause is to operate is uncertain; it has not been ascertained by the evidence, nor can it be determined from any stipulation between the parties. It is well settled that in cases where delays have been caused by both parties to a contract and the completion of the contract has thereby been extended beyond the time fixed the obligation for liquidated damages is annulled, and it can not be revived, and any recovery for subsequent delays must be for actual loss proved to have been sustained. *United States*v. *United Engineering & Con.*Co., 234 U. S., 236, 243; *Camden Iron Works*v. *United States,*51 C. Cls., 9.

The defendants have not proved that they incurred actual loss or damage as the result of any delay caused by the plaintiff, and therefore are not entitled to retain the sum of $6,855fiJ5.rjyhic^-saag_due to the plaintiff at the time the work-vras completed.

*297We are therefore of opinion that the plaintiff is entitled to judgment for $226,894.05, as shown in the conclusion of law, and it is so ordered.

Geaham, *Judge;*Downey, *Judge;*Booth, *Judge;*and Campbell, *Chief*Justice, concur.