#### DAYTON-WRIGHT COMPANY v. THE UNITED STATES

[No. F-49.

Decided February 20, 1928]

*On the Proofs*

*Contract for experimental work; change of plans hy the Government; failure to attain intended) results.*— Where a contractor is denied his own independent judgment as to the preparation and sufficiency of his own plans and specifications for the construction of prescribed structures by a provision in the contract which imposes upon him the duty of following the plans and specifications of the owner, and he does in a wort-manlike manner follow such plans, he is not to be denied compensation therefor because it finally develops that the work done in accord with said plans does not develop the intended results.

*The Reporter’s*statement of the case:

*Mr. Ashby Williams*for the plaintiff.

*Mr. P. M. Cox,*with whom was *Mr. Assistant Attorney General Herman J. Galloway,*for the defendant.

The court made special findings of fact, as follows:

I. The plaintiff, Dayton-Wright Company, is a corporation organized and existing under the laws of the State of Delaware.

II. On May 4, 1921, .the Engineering Division of the Air Service, U. S. Army, at Dayton, Ohio, sent to the plaintiff and other airplane manufacturers a circular ¡wiring for the submission of designs and sealed proposals for the furnishing to that division, among other things, of a special' type of single-seater pursuit airplane, provided with an air-cooled engine, intended for the defense of airdromes or home stations. Each bidder was required to submit a design *545of the plane he proposed to make, with an analysis thereof. Such a plane had not theretofore been constructed. It was an experiment.

III. In response to said circular eight manufacturers of airplanes, among them the plaintiff, submitted bids, the designs differing from each other in many particulars.

After consideration of all the bids received, the Government decided that plaintiff’s design promised most nearly to fulfill the requirements of the type of plane desired, and thereupon accepted its offer.

IY. Plaintiff entered into a contract with defendant, through its contracting officer, Capt. E. H. Fleet, said contract being dated June 29, 1921, but not signed until July 1, 1921, for the manufacture of three airplanes, the weight of each not to exceed, fully loaded, 1,550 pounds. Appended to and made a part of the contract is specification No. 1541, dated June 30, 1921.

A copy of the contract and specification No. 1541 is attached to the petition as Exhibit A and made a part hereof by reference.

V. Before the construction of the first airplane the contractor was required to make and complete a mock-up or rough model of the plane to be manufactured.

Due to the fact that the work was of an experimental nature in the development of a new type of airplane, the contract contained a number of provisions designed to give the Government complete control over the work as it progressed and to enable the Government, if the type was successfully developed, to manufacture the planes in quantities.

Before the mock-up could be constructed, the plaintiff was required to submit to the Government, for its approval' or modification, drawings or sketches, in prescribed detail, of the power plant, armament, and equipment installation, wing section, wind tunnel, and other data. The mock-up was to be constructed in accordance with the plans and data submitted, with such modifications as the Government might make. After the inspection of the completed mock-up, plaintiff was required to submit, in prescribed detail, working drawings and data for the first plane, showing all stress *546calculations, fittings, cross section of typical rib, ‘details of spar, cross section of fuselage, fuel system installation, fuel and oil tanks, and a list and accurate description of all special fittings required for the fuel and oil systems, and drawings showing armament installation. The first plane was to be constructed only after all such drawings and data had been approved by the Government and with such changes or modifications as the Government might make. After the construction of the first plane in accordance with such plans and data, as modified by the Government, the first plane was to be tested by the Government and the second plane constructed in accordance with such plans and data, as modified by the Government, after the inspection of the first plane, and so on to the third plane, the intention being by these provisions in the contract to secure in the last plane, by experimentations in the construction of the mock-up and first and second planes, the type of plane desired.

VI. Specification 1541 stated that a speed of 145 miles per hour at 15,000 feet altitude and a climb of 20,000 feet in 18 minutes were required, subject, however, to the variations permitted by section (6) of Article V of the contract, which provided that, in view of the fact that the Lawrance J-l engine was in an experimental stage of development, had never been flown or tested in an altitude chamber, and its performance at'high altitudes was therefore problematical, a speed of 130 miles per hour at an altitude of 15,000 feet and a climb of 20,000 feet in 25 minutes would be permitted, and the contract reduced by $250 for each mile under 145 miles per hour at 15,000 feet and $250 for each minute in excess of 18 minutes to climb to 20,000 feet.

The weight, climb, and speed of the airplane were predicated upon the assumption that the engine would weigh 400 pounds complete and would develop 200 horsespowér at 1,800 revolutions per minute at ground level; and it was further provided in the specification that, should the engine fail in any particular' to meet the specifications, the weight and performance requirements of the airplane affected thereby would be modified accordingly without liability to the contractor.

*547VII. Pursuant to Article III of the contract, a number of changes in the plans for the construction of the mock-up submitted by plaintiff to defendant were ordered by the Government on August 23, 1921, and the mock-up was constructed in accordance with these plans as modified and was delivered to and approved by the Government in October, 1921. There was considerable delay in the delivery of the mock-up due to the failure of the Government to deliver certain equipment. After inspection of the mock-up, the Government ordered a large number of changes to be incorporated in the first plane.

VIII. On February 13 and 21, 1922, all the drawings and data in respect to the first plane required by the contract to be furnished to defendant were submitted by the plaintiff to the Government. The delajr in the submission of these drawings was due to the inability of plaintiff to secure proper drawings of the Lawrance J-l engine which was being developed by experimentation by the Government.

IX. On March 8, 1922, it was proposed by plaintiff, and agreed to by defendant, that the wing flaps be eliminated and that the wings be increased in size to 140 square feet, giving an approximate wing loading of 11% pounds per square foot. The additional weight of the wings caused by this change was offset by the elimination of the wing flaps and the mechanism employed therewith. Plaintiff also proposed that the speed requirements for the first plane be omitted or modified since it could not guarantee the high-speed requirement with the lighter wing loading, and the defendant waived performance requirements of the first airplane, if flight tested.

X. After inspection of the drawings and data for the first airplane the Government ordered a number of changes to be made therein.

The Lawrance J-l engine, which was to be installed in the plane, was delivered by the Government to the plaintiff June 5, 1922.

The first plane, built in accordance with the plans as modified by the Government, together with all drawings and data, was delivered to and accepted by the Government on November 13, 1922. This plane was not flight tested, but

*548■was given what is known as a sand or static test, after which the Government, on January 30, 1923, issued an order requiring a large number of changes to be incorporated in the second and third planes. Plaintiff was to be paid for these changes the additional sum of $3,057.70. For the mock-up and first plane plaintiff received the contract price of $41,200.

XI. Plaintiff desired to discontinue airplanes after July 1,1923, and suggested to defendant that it be permitted to deliver the second and third planes at the same time. Moreover, plaintiff was advised that unless the planes were completed before June 30, 1923, the appropriation therefor would revert to the Treasury. As a result of these conditions, on May 7, 1923, an agreement was entered into between plaintiff and defendant by which, in consideration of a reduction of $5,000 in the contract ¡nice, the second and third planes were to be constructed and delivered at the same time.

The second plane was on third on July 19, 1923.

The sum of $28,000 was installment payments on account of the second and third planes prior to their delivery, inspection, and test.

■XII. In its “Analysis of design, performance and strength calculations,” submitted with its bid, plaintiff based the performance calculations on a plane of a gross weight of 1,498 pounds. In the construction of the first plane 6 pounds were added on account of the gravity gasoline tank called for by the contract, 31 pounds which the Dayton-Wright Company added to take care of discrepancies in the circular of May 4,1921, and 107 pounds as follows:

Pounds

1. Additions to the useful or removable load_ 28.0 2. The use of steel instead of aluminum in fire walls_ 5. 5 3. Increase of oil capacity_■_ 11. 0 4. 'Installing impulse generator_ 2.5 5. Starting magneto added_ 7. 5 6. Increased weight of engine furnished by Government_ 52.5

Total.

107.0

*549The first item of increase was required by the provisions of specification 1541; the second by the Handbook of Instructions referred to in the contract; the third was found necessary to allow cooling of the oil, causing an added weight for both oil and a larger tank; the fourth was essential for the proper functioning of the machine gun which the contractor was required to install; the fifth was necessary for the proper functioning of the machine gun; and the sixth represents the increase in the weight of the engine over that prescribed in the specification.

In a letter dated December 10, 1921, plaintiff called defendant’s attention to the increased weight of the plane over that prescribed in the circular of May 4, 1921, and asked that this increase be considered with a view to increasing the allowable weight and reducing the performance requirement, stating that the added load would require additional strength in the superstructure.

On December 16,1921, the defendant replied that the matter should be held in abeyance until after the first plane had been received.

When the Lawrance J-l engine was received by plaintiff on June 5, 1922, it was found to weigh 452% pounds instead of 400 as prescribed in specification 1541. Plaintiff on June 16, 1922, notified defendant of this increase in weight of the engine, calling attention to the necessity occasioned thereby of changing the location of the wings and of changing the angle of the wheel forward of the vertical line through the center of gravity.

The Government replied on June 29,1922, that the changes necessitated on account of the additional weight of the engine would be taken into consideration when changes were ordered by the Government to be incorporated in the second and third planes.

By reason of the fact that when the Lawrance J-l engine was received for installation in the first plane the structural members of the first plane had been practically completed, there was no increase in the structural weight of the first plane to accommodate the additional weight due to the increased weight of the engine.

*550XIII. The first plane when delivered weighed, empty, 1,146.9 pounds, and loaded, 1,688 pounds, the difference of 541.1 pounds being the “ military load ” and consisting of fuel, oil, crew, guns, ammunition, sights, Very pistol, gun mount, ammunition boxes, parachute, fire extinguisher, and instruments. The second plane weighed, on delivery, empty, 1,173.4 pounds, and loaded, 1,715 pounds, the difference of 541.6 pounds being due to a like military load. The increase of 27 pounds in loaded weight of the second over the first plane was due to half a pound increase in weight of parachute and a net increase of 26.5 pounds in the superstructure on account of added load and overweight of engine.

XIV. Flight tests were made of the second plane, the weight thereof in these tests, loaded, being 1,673 pounds. To obtain this decreased weight the Government removed 42 pounds of the military load. The Government calculated the military load under the specifications as 547.5 pounds, adding 193.5 pounds for fuel and oil to the weight of 354 pounds named in the specifications for the balance of the military load. The result of the tests in horizontal flight is as follows:

Aug. 14,1923 Aug. 31,1923 Sept. 8,1923 Sept. 11,1923 Feb. 26, 1924 Lieut. Doolittle. Lieut. Pearson. Lieut. Van Veghten. Lieut. Van Veghten. Lieut. Brookley_ *Feet*15,000 15,400 15,200 15,300 14,900 *Miles per*132.4 131.2 133.4 133.0 138.5

The time to climh to 20,000 feet altitude made with the propeller furnished by the contractor was 36 minutes. By agreement between the plaintiff and defendant the engineering division of the Government constructed a special climbing propeller at a cost to plaintiff of $500, and with this propeller the plane ascended to 20,000 feet altitude in 34 minutes. The third plane was not flight tested, because it was presumed that since it was constructed in the same manner as the .second its performance would be the same.

XV.On March 12, 1924, plaintiff was notified by the defendant that since the second and third planes were not in accord with the terms of the contract and specification as to *551performance requirements, they.were rejected by the Government, and that they would be held at the headquarters of the engineering division subject to plaintiff’s orders and at its risk. Demand was made upon plaintiff for the return of $28,000 advanced to it on account of said planes, $500 on account- of propeller, and $196.15, the value of property invoiced to the contractor.

XVI. .The contract provided that plaintiff should be paid $90,000 for the mock-up and the three planes, which was reduced to $85,000 by the agreement of May 7,1923 (Finding XI). The Government also became obliged under changes ordered on May 22,1922, to pay the plaintiff $200, and under changes ordered on January 30, 1923, to pay plaintiff $3,057.70 (Finding X), making a total of $88,257.70, subject to a credit in favor of the Government for materials purchased by the plaintiff iñ the sum of $196.15, and for the cost of the special propeller constructed by defendant amounting to $500 (Finding XIV), leaving a balance of $87,561.55. Of this amount $41,200 was -paid by the Government for the mock-up and first plane and the data submitted therewith, and $28,000 progress payments on the second and third planes (Findings X and XI), leaving a balance of $18,361.55.

The court decided that plaintiff was entitled to recover.

Booth, Judge,

delivered the opinion of the court:

On May 4, 1921, the Engineering Division of the Air Sendee, U. S. Army, at Dayton, Ohio, issued a circular soliciting the submission of designs and sealed proposals for furnishing the division, among other type,s, a special type of single-seater pursuit airplane, a new type of airplane to be used for the defense of airdromes or home stations, and designated as an “Alert airplane.” The possibility of attaining a plane to meet the situation was indeterminative and the construction of one experimental. Each bidder was expressly required to submit its own design, accompanied by a detailed analysis thereof. Eight airplane manufacturers submitted bids in accordance with the terms of the circular. The plaintiff received the award, and a written contract be*552tween the parties followed. The plaintiff was originally to receive $90,000 for the work. Subsequently this amount was by mutual assent reduced to $85,000. Plaintiff concedes that all but $18,861.85 of this amount had been paid, and it is for this balance that this ¿suit is brought. Defendant, on the other hand, insists that plaintiff has been overpaid to the extent of $28,696.15, with interest, and an interposed counterclaim is relied upon for a judgment against the plaintiff for this amount.

The contract was dated June 29, 1921, signed July 1, 1921, and required of the plaintiff the manufacture of three Alert airplanes, the weight of each, fully loaded, to not exceed 1,550 pounds. Annexed to and made a part of the contract was specification No. 1541. The contract, and particularly the specifications, enumerated a variety of detail, and the engineers of the Air Service were especially concerned in reserving the right of making changes in plaintiff’s design and construction. There can be no doubt that under the contract and specifications the engineers of the Air Service were in control of the construction work as it progressed. The Government was to furnish the engine at its own expense, and the plaintiff was advised in advance that a Law-rance J-l engine weighing 400 pounds would be supplied.

The plaintiff was obligated first to submit for approval or modification drawings in detail of the power plant, armament, equipment installation, wing section, wind tunnel, and much other data. Prior to any actual work of construction the engineers were to be furnished a “ mock-up,” i. e., a complete model, of its design, with such changes as the engineers might make. The mock-up was subject to inspection, modification, and change. After the mock-up passed inspection, and prior to the authorization of construction work, plaintiff was to submit in minute detail plans and specifications, disclosing with precision the detail of the proposed construction, both as to materials entering into the same and design. No authority for work obtained until all this was accomplished with the approval of the engineers. The first plane completed was to be subjected to test, and jf satisfactory, was to be accepted; if not, it might be changed. *553If the first plane successfully passed the test, the second and third were to be constructed in accord therewith.

Specification No. 1541 stated that a speed of 145 miles per hour, at an altitude of 15,000 feet and a climb of 20,000 feet in 18 minutes, would be required. Some latitude was allowed the contractor in this respect by Article V of the contract. The Lawrance J-l engine was ,in a stage of experimental development. The engineers did not know its capacity or reliability in high altitudes, so a deviation in speed and altitude was allowed. If the plane at an altitude of 15,000 feet attained a speed of 130 miles an hour, the plaintiff was to suffer a deduction in contract price equivalent to $250 for each mile it fell short of 145, and a like deduction for each minute over 18 required to attain the desired altitude up to the maximum of 25 minutes.

The first plane constructed in accord with the numerous modifications and changes made by the engineers and some made by the plaintiff, the changes made by the engineers increasing the contract price $3,051.70, was delivered to and without flight test, accepted by the engineers and paid for by the Government later on. The plane was given the sand or static test and so far as the record discloses was acceptable.

On January 30, 1923, the engineers required of the plaintiff a .large number of changes in the second and third plane, changes which materially added weight and modified design. The Lawrance J-l engine was 52% pounds heavier than the specifications prescribed. The first plane when delivered weighed empty 1,146.9 pounds; loaded 1,688 pounds. The second plane when delivered weighed empty 1,173.4; loaded 1,715 pounds. The third plane was not weighed, the engineers assuming that its weight was the same as the second, an increase in weight so materially in advance of that anticipated by the contractor in its original design that on December 10, 1921, the plaintiff by letter called the attention of the engineers to this handicap and asked for a material reduction in performance requirements. This request was not immediately denied, but held in abeyance until after the first plane was received. As a' matter of fact it was subsequently refused.

*554The second plane was delivered June 29, 1928, and the third July 19, 1923. The prolonged delay in the delivery of the plane was due entirely to the defendant’s suggestions and changes and the experimental character of the subject matter of the contract. It is clear from the record that the plaintiff predicated its bid upon a plane of gross flying weight of 1,498 pounds. The defendant was expressly apprised of this fact; and it is equally clear that the changes made in design, construction, and addition of equipage made by the defendant increased the designed weight to the extent of at least 107 pounds.

The test to which the second plane was subjected disclosed that as to speed the plane was not seriously below the desired standard of 145 miles per hour. The chief deficiency observed was in the attainment of altitude within the 18 minutes. In this respect the plane was in default 16 minutes. The plaintiff contends that additional weight retards rapid climbing to an extent disproportionate to its effect in horizontal flying, but that the effect is noticeable in both. There is no doubt that with the improved propeller furnished by the Government the plane did reach the prescribed altitude in 34 minutes. We think the record and the findings warrant a statement that the failure of the second plane to meet the intended purposes of the defendant, both as to speed and altitude, is as much if not more attributable to the defendant as to the plaintiff. We say this because the defendant was not only experimenting with a design but trying out an entirely new and theretofore untried type of engine. The plaintiff had been told that the engine would weigh 400 pounds; that it would develop 200 horsepower at 1,800 revolutions per minute at ground level, and that if the engine did fail in any particular the weight and performance requirements would be modified accordingly. The engine did exceed by *52y2*pounds the stipulated weight. In the test of the second plane its performance was not in all respects satisfactory, and, of course, its perfection was a most vital factor. No modification of requirements was made or allowed. The third plane was rejected without a test on the assumption that it would in all respects accomplish no better results than the second.

*555The defendant in support of the counterclaim, and in opposition to plaintiff’s contention, rests its case upon the express requirements of the contract, and treats the provisions of the contract relative to speed and altitude as a warranty, or rather guaranty, the failure to attain which authorized the withholding of plaintiff’s pay. Express terms of a contract are always to be considered in the light of the situation of the parties and the intent which actuated them in coming into agreement. There is no ambiguity in the present contract; it is plain from its provisions what the parties wanted and the obligations assumed by each.^’First, the plaintiff was solicited to design and construct an airplane which in flight would attain a fixed minimum of speed and a like minimum of altitude. Such a thing had not been accomplished before, and neither the plaintiff nor defendant knew at the time whether it could be accomplished. It was wholly an experiment, conceded by all parties to be such. The plaintiff submits its design)' in detail; weight is indisputably a vital factor; the defendant, with full knowledge of plaintiff’s conception, and it must be remembered that the plaintiff was an expert in airplane construction, accepts its bid and awards to it the contract. The awarded contract, fully known to both parties, contains a provision empowering the defendant to make changes, modifications, and, of course, suggestions. The plaintiff knew this and executed the contract with this provision in it. What then happens ? The defendant makes a very large number of changes, so many that when the plaintiff’s original design emerges from the contract it is no longer the original conception of the contractor "and reflects in its design and construction as much the embodiment of the defendant’s ideas as the plaintiff’s. While ’the express provisions of the contract authorized changes, it does not. extend the right to the defendant to make such changes as do in the end gender it impossible for the plaintiff to meet the requirements of the' contract. The changes the defendant might make were to be such as to facilitate the attainment of the intended object of the contract and not such as to bring about a breach of its terms. If, then, it is shown that the defendant’s changes, faithfully observed by the plaintiff, not only failed to facilitate the pro*556duct-ion of an Alert plane but positively stood in the way and prevented the construction of one, assuredly the plaintiff is not to be penalized for doing exactly what he agreed to do; i. e., make an Alert plane in accord with its own design, with such changes as the defendant might suggest to better attain the same purpose.

From this record it is patent, beyond the range of doubt, that the plaintiff was never accorded a fair and full opportunity to demonstrate the possibilities of its own conception of an Alert airplane, or what its own design might do. On the contrary, the final output under the contract was a plane made in accord with the defendant’s notion of how an Alert plane should be constructed; and no complaint is lodged against the detail of construction but one going to performance alone. The case then in our conception of the situation resolves itself into a contract for the designing and construction of a decidedly experimental airplane. The defendant agreed to submit its design and construct accordingly, the defendant reserving the right of cooperation by suggested changes and alterations to procure in the end a plane which by joint efforts would accomplish what the defendant hoped to accomplish. These were dependent covenants, and if it is established that the defendant in fact substituted its own conception of a plane to such an extent as to render it impossible for the plaintiff or the plaintiff and defendant together to produce a plane like the contract called for, surely the plaintiff is not to lose the compensation earned in doing what the defendant ordered it to do. No warranty to do more than was done may apply. The defendant accepted the first plane without a flight test, paid for it in full, and thereby foreclosed a possibility of challenging the plaintiff’s contract right to the stipulated price. The second and third plane did not correspond in detail of construction or weight with the first plane, because of the numerous changes made by the defendant in the second and third plane. If the first plane was acceptable, it is manifest from the subsequent, conduct of the defendant that a program was to be adopted along the lines of the defendant’s plans as to the second and third planes to discover if possible what might be done under circumstances meeting every con*557tingency to which a plane of this character might be subjected in action.

The case we think falls under the principles announced in the cases cited in plaintiff’s brief, viz: *MacKnight Flintic Stone Co.*v. *New York,*160 N. Y. 72; *Filbert*v. *Philadelphia,*181 Pa. 530; *Spearin*v. *United States,*248 U. S. 132. The cited cases sustain the rule that where a contractor is denied his own independent judgment as to the preparation and sufficiency of his own plans and specifications for the construction of prescribed structures by a provision in the contract which imposes upon him the duty of following the plans and specifications of the owner', and he does in a' workmanlike manner follow such plans, he is not to be denied compensation therefor because it finally develops that the work done in accord with said plans does not develop the intended results. In this case we can not escape the conclusion that neither party to this contract intended that the contractor would expressly warrant a specific result, when the attainment of the end was not left by the contract to the contractor’s judgment or plans, but was dependent upon a future contingency which the contractor had no means of anticipating or accurately ascertaining. The third plane was not tested but arbitrarily rejected without test or trial.

Judgment for the plaintiff for.$18,361.55. It is so ordered.

Moss, Judge/ Gkaham, *Judge;*and Campbell., *Chief Justice,*concur'-.