#### RICHARD K. HARWOOD AND JOHN A. MOSS, PARTNERS UNDER THE FIRM NAME OF HARWOOD & MOSS v. THE UNITED STATES.

[No. 308-A.

Decided May 7, 1923.]

*On the Proofs.*

*Contract; delays; liquidated damages; increase in rate of*wages.— Where a Government contract provides that the rate oí wages to be paid to laborers thereunder shall not be “ in excess of the established rates prevailing at the place where this contract is to be performed,” and a Government board establishes a rate of wages at such place identical with that established for union labor, and such rate is paid by the contractor for some time thereafter as the contract rate, the Government is not responsible for delays caused by difficulties of the contractor in securing labor due to an increase in the rate of union labor at that place.

*The Reporter’s*statement of the case:

*Mr. William B. King*for the plaintiffs. *King <& King*and *Mr. Cornelius PL. Bull*were on the briefs.

*Mr. Fred K.*Dyar, with whom was *Mr. Assistant Attorney General Robert PL.*Lovett, for the defendant.

*351The following are the facts of the case as found by the court:

I. Plaintiffs are citizens of the United States and of the State of Virginia, and copartners, doing business under the firm name of Harwood and Moss.

II. On March 8,1919, a contract was entered into between the plaintiffs and the United States, represented by B. E. Bakenhaus, Acting Chief of the Bureau of Yards and Docks, whereby plaintiffs undertook the construction of a grand stand and bleachers at the naval operating base, Hampton Eoads, Virginia. A copy of this contract and a copy of the accompanying specifications are attached to the plaintiff’s petition herein as Exhibit A and Exhibit B, respectively, and are made a part hereof by reference.

The contract provided for the completion of the work in 110 calendar days from the date a copy of the contract was delivered to the contractor, which was done on March 31, 1919.

The contract further provided that the contractors should execute the contract and return the same, together with the bond, within ten days after the delivery to them of the necessary forms for execution, exclusive of time in transit, and that upon failure of the contractors to return the contract and bond duly executed within the period specified, the time prescribed in the contract for its completion should automatically be decreased one day for each day of delay in their return.

A copy of the contract was forwarded to Harwood and Moss for execution on March 8, 1919, and was received by them on March 10. The contract signed by Harwood and Moss, together with their bond, was received in the Bureau of Yards and Docks on March 24. It was accompanied by a, letter dated March 20. The office of the contractor was at Newport News, Virginia. It is not shown when the letter and accompanying executed contract and bond were mailed.

III. The work to be done under the contract was largely the laying of brick, and plaintiffs proceeded promptly as soon as samples were approved to procure brick and have them delivered in the vicinity where the work was to be performed.

*352IV. At the time of the execution of the contract the union scale of wages for bricklayers in the Norfolk district was 87% cents per hour.

Theretofore the board of control of war construction activities in the Hampton Eoads district had prepared and published a schedule of wages to be paid on Government work, and at the time of the execution of this contract the wage for bricklayers on Government work in the locality here involved was 87% cents per hour.

Effective April 1,1919, the union scale of wages for bricklayers in the Nor folic district was increased to $1 per hour.

Approximately 95 per cent of the bricklayers in the vicinity of the naval base were union men. Those who were not union men were for the most part, if not entirely, negroes.

V. The plaintiffs fully understood when they executed this contract that there was a Government scale of wages effective at the locality where the work was to be performed, and when they were preparing to commence work they fully understood that under the provisions of the contract they were not permitted to pay to bricklayers a wage in excess of 87% cents per hour. They began negotiations with the local bricklayers’ union and with the secretary of the international union at Indianapolis, Indiana, to procure permission for union bricklayers to work for them on this contract at 87^ cents per hour, and several weeks were occupied in these negotiations, which were unsuccessful.

During this period there was correspondence and personal conferences between the contractors and the public works officer who was the officer in charge of the work, with reference to the difficulties the contractors were encountering in procuring bricklayers at the Government rate. The contractors made no specific request for a change in the rate, and the officer in charge did not specifically refuse to permit the paying of a higher rate, and there was, therefore, no appeal from the decision of the officer in charge, but it was at all times understood by both parties that the contractors were by the contract limited to the payment of 87-J cents per hour and that the contract in that respect would be enforced.

VI. About the 26th of April, and while the negotiations between the contractors and the union officials were still *353going on, the contractors commenced the work of bricklaying with two men who had theretofore been working for them, and thereafter about the 24th of May they sublet the work of bricklaying to two negroes operating under the firm name of Adams & Company, they to be paid the rate of $15 per thousand bricks laid and to begin work with six bricklayers on the following Monday, the plaintiffs to erect scaffolding and furnish all materials. These subcontractors commenced work with five or six men and increased to seven or eight, and worked with this force for a few weeks, after which the number of men employed on the work began to gradually decrease and finally went down to two, after which, beginning with the week of July 16, the plaintiffs took over the work, carrying the men employed thereon on their own pay roll. They began with four bricklayers and worked with varying numbers, working with irregularity as to time employed until the completion of the work. They made efforts by negotiations with the union officials and by personal interviews with men to procure additional bricklayers, but were unable to secure in that locality more than those employed, because of the refusal of other men to work for 87-| cents an hour. It is not shown that they made any effort to procure bricklayers from other localities.

The plaintiffs gave the officer in charge no notice or information with reference to entering into this subcontract.

VII. The number of bricklayers employed directly by the United States at 87-| cents per hour at the naval operating base and the Norfolk Navy Yard did not exceed six men during the time of the performance of this contract.

VIII. The completion of the work was delayed until November 3, 1919, a delay of 110 days beyond the date fixed in the contract, of which 21 days were found to be due to causes for which an extension of time was granted as unavoidable delay, and for the remaining 89 days liquidated damages were assessed against the plaintiffs at the rate of $40 per day.

IX. Applications for extension of time and for relief from liquidated damages were made from time to time by the plaintiffs.

*354On April 15,1920, the public-works officer at the naval operating base recommended an extension of time and waiver of all liquidated damages.

On May 13,1920, the Bureau of Yards and Docks decided that the plaintiffs were entitled to an extension of time to the amount of 21 days, but that the remaining delay of 89 days was properly chargeable to the contractors under the terms of the contract and that liquidated damages therefor should be assessed.

X. In accordance with the decision of the Bureau of Yards and Docks, $40 per day for 89 days, amounting to $3,560, was assessed against the contractors as liquidated damages and deducted from their final voucher, but in the execution of the final release provided for in the contract they were permitted,-in consideration of the payment of 2 per cent thereof, amounting to $71.29, to reserve and except from the operation of said release their claim on account of the deduction of liquidated damages in an amount not exceeding $3,500, it being provided further that nothing in said release should operate or be construed, as a recognition by the United States of the validity of said reserved claim.

DowNey, Judge,

delivered the opinion of the court:

Plaintiffs seek to recover $3,560, on account of a deduction of that amount as liquidated damages for delay in the performance of a contract entered into on the 8th day of March, 1919, between them and the United States, represented by the Chief of the Bureau of Yards and Docks, for the construction of a grand stand and bleachers at the naval operating base, Hampton Hoads, Virginia.

The contract contained a provision as follows:

> “ 16. *Conditions as to seeming labor.*— No labor shall be withdrawn from any other yards and docks, contractors, subcontractors, or operations of a military necessity. No rates of wages shall be paid in excess of the established rates prevailing at the place where this contract is to be performed.”

In December preceding the execution of this contract a Government board, known as the board of control of war construction activities in the Hampton Roads district, had prepared and published a schedule of wages to be paid by *355the Government and by contractors on Government work, and the scale in force at the time of the execution of this contract fixed the wage of bricklayers at 87-¿ cents' per hour. At that time the union scale in the Norfolk district was also 87-| cents per hour, but thereafter, effective on the 1st of April, the union scale was increased to $1 per hour.

By reason of this condition the plaintiffs had difficulty in procuring a sufficient number of bricklayers to carry on the work expeditiously. They negotiated for some time with union officials with the view of securing their consent, to the employment of union bricklayers on this work at 87-J-cents per hour, but in this they were unsuccessful. Without going into the details, which are set out more fully in the findings, it is sufficient to say that they finally secured bricklayers in varying numbers to work for various portions of the time carried on their pay rolls, and the work was fiirally completed.

The contention of the plaintiffs, and that upon which the case for the most part at least must be predicated, is that under the paragraph above quoted they were authorized to pay the union scale of wages, but that they were prevented from so doing by the Government’s representative in charge of the work.

We think this contention is wholly whithout merit. Whatever the reason may have been for the insertion of that clause in the contract, and whether the reason may have been good or bad, with which we are not concerned, it is quite apparent from the whole record not only that that provision referred to the established rate of wages as fixed by the board of control referred to, but that it was so understood by the plaintiffs themselves. And in this connection it is proper to observe that during all of the negotiations on the part of the plaintiffs with the union officials and correspondence and conferences upon their part with the representatives of the Government, they recognized the fact that under the contract they were permitted to pay but 87-J cents per hour for bricklayers, and the record does not disclose that they ever during the progress of the work made any other contention with reference to the matter. The conten*356tion tbat they were entitled under the contract to pay $1 per hour made its appearance in the case after the completion of the work.

If the situation which confronted the contractors when they began to prepare for the performance of this work was a hard one, it was not because they had in any manner been misled or deceived with reference to the provisions of the contract or had entered into it without a full understanding of its meaning. Some light is thrown upon the situation by the fact that at the time the contract was made the rate fixed by the Government board and the union rate in the Norfolk district were the same. It appears from the record, although we have not found it necessary to incorporate it in the findings, that when the union contemplated an increase in the wage scale they gave the contractors in the vicinity six months’ notice of the fact that an increased rate would be effective on a given date, and it also appears that the plaintiffs were complaining to the secretary of the international union that they had not been notified by the Norfolk union of this advance in the rate of pay. Reading between the lines, there is room for the assumption that there was friction of some sort between these contractors and the Norfolk union. But while these matters may be of interest as side lights they are not at all material to the determination of the question at issue. We have no doubt of the correctness of the conclusion that under the contract the plaintiffs were prohibited from paying more than the Government rate of 87£ cents per hour, and that they, at the time of the execution of the contract and at all times thereafter during its performance, so understood it.

It is to be observed, then, in' this connection that no reason is asserted why the plaintiffs are entitled to be relieved in any manner from the operation of this provision in the contract. If it was a hard situation, it was one into which they deliberately entered and without any pretense that they were in. any manner misled or deceived.

It is further contended for the plaintiffs that they sought permission from the Government officer in charge of the work to pay the increased scale and that such permission was *357refused. The record does not disclose that there was ever any specific request of this nature and therefore there was never any specific refusal, but, assuming the facts to be as stated, they are asserted as a ground for extension of time equal to the delay in the completion of the work, and therefore a relief from the assessment of liquidated damages upon the theory that' the delay was caused by the United States. The theory is ingenious, for, as we understand it, the attempt is thus to bring this situation within the provisions of the contract with reference to unavoidable delays, included in which are “delays caused by acts of the Government.”

It seems to us scarcely pertinent to say much more about this contention than is implied in the use of the word “ ingenious.” It is certainly novel to asume the theory that a requirement that contractors should comply with conditions written into their contract would constitute a delay on the part of the Government, relieving them from the provisions of another clause of the same contract. Further, the complaint in this respect is with reference to the action of the officer in charge of the work. He was there, we may well assume, for the purpose chiefly of seeing that the contractors did comply with the provisions of their contract, and it nowhere appears that he had any power to alter it if he had been so disposed.

A minor question arises as to the number of days of delay due to the difference in the theory of the parties as to the date upon which the contract must under its provisions be completed. The contract required that it should be performed within 110 days from the date upon which the executed copy thereof was delivered to the contractors, and there is no question made as to this date. But there was another provision in the contract which inquired that the contractors should return to the Bureau of Yards and Docks the contracts executed by them within ten days after the receipt by them of the prepared contracts for execution. It is conceded that the contractors received the contracts for execution by them on the 10th day of March, and that they were returned so that they reached the Bureau of Yards and Docks on the 24th of March, an elapsed time of fourteen *358days. The contracts when returned to the Bureau of Yards and Docks were accompanied by a letter, which was dated March 20, just ten days after the receipt by them of the contracts for execution, but it is not proven or attempted to be proven that the contracts were deposited in the mails for return on the 20th day of March, nor is there any explanation as to where they may have been during this four days’ interval. The contractors’ office was at Newport News, and the Bureau of Yards and Docks was in Washington. We may well know that mail deposited in the post office at Newport News on the 20th day of March would in ordinary course be in Washington on the following day, or conversely that mail which did not arrive in Washington until the 24th of March was in ordinary course mail which had been deposited in the post office at Newport News on the 23d. If these contractors had deposited these contracts in the post office at Newport News, properly addressed and stamped, on the 20th day of March, the date of the letter which accompanied them, it would follow that such act on their part would be construed as a return of the contracts within the ten-day limit, but upon that question the burden is clearly upon the plaintiffs, and they have made no effort to discharge it. It is only reasonable, therefore, to allow them one day’s time as time in transit and charge them with a default of three days under that provision of the contract which required a decrease in the time of the performance of the contract of one day for every day of delay in this respect. Upon this basis the number of days of delay in the performance of the contract were determined, and they were charged accordingly, being given credit in that respect for the number of days which it had been determined they were entitled to on account of unavoidable delays.

There are other features of the case woven into its discussion to which we do not find it necessary to refer. The contract was to be construed as we have indicated, and we have had frequent holdings of the higher court to the effect that the working of a hardship is never sufficient to relieve the contractor from an obligation assumed by him when he deliberately and with full knowledge enters into his contract. It must be enforced as written, and so enforced there re*359mains no basis of recovery by the plaintiffs. We have directed judgment accordingly.

Gbaham, *Judge;*Hat, *Judge;*Booth, *Judge;*and Campbell, *Ohief Justice,*concur.