Case Name: P. H. McLAUGHLIN & CO. v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1902-02-17
Citations: 37 Ct. Cl. 150
Docket Number: No. 18941
Parties: P. H. McLAUGHLIN & CO. v. THE UNITED STATES.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 37
Pages: 150–201

Head Matter:
P. H. McLAUGHLIN & CO. v. THE UNITED STATES.
[No. 18941.
Decided February 17, 1902.]
On, the Proof it.
The subject-matter of this suit, is a contract for building the Naval Observatory on Georgetown Heights, District of Columbia. The questions involved relate to delays caused by defendants’ interference with the work of their officers; to unreasonable illegal exactions by the engineer in charge; to a release given by the contractors on receiving iinal payment, and to numerous minor matters of controversy.
I. Where a statute provides (Rev. Stat., § 3744) that a contract with the Government must be reduced to writing, the preliminary advertisements, specifications, and proposals, and acceptance of proposals, must be viewed as only a part of the negotiations looking to a formal contract.
II. If, after accepting claimants’ proposals, the defendants unreasonably neglect, to execute the contemplated contract., "but the contractors subsequently execute it, no action will lie for their losses incident to this delay.
III. The parties to a contract may agree that the decision of an engineer or other officer as to matters of dispute that may arise during the execution of the work shall be final and conclusive, and in the absence of fraud or gross mistake his decision will not be subject to review.
TV. Where a building contract provides that changes in excess of a certain amount can only be authorized by the written order of the Secretary of the Havv, the architect of the work is without authority to order such changes. Ho contract can be implied therefor, even though the defendants have reaped a benefit.
Y. Where payments are not made and the contractor lias to borrow money and pay -interest thereon, it can not be regarded as an extra expense.
YI. An account rendered and not objected to within reasonable time must be regarded as prima facie correct. What is a reasonable time becomes a matter of law when the facts are clear.
YII. That the cost of a building exceeds the contract price is insufficient to establish the fact that the. contractor’s losses were due to the fault of the other party. The burden is on the claimant to show that the defendants by their acts or inaction caused the loss.
YTII. A general charge of mismanagement or delay on the part of the defendants or of fraud or dishonesty on the part of their agents is insufficient. The claimant’s pleading and request for findings should contain specific allegations.
IX. Where a contract provides for a final accounting before final payment and such an account is stated, and the contractor raises no objection and presents no additional demands and accepts the balance due, he can not afterwards present demands for extra work.
X. Where a contract provides that in case of annulment the contractors shall be charged with all extra expense, the provision embraces all expenses which would not have been incurred by the defendants if the contractors had complied with their contract.
The Reporter1 s statement of the case:
This case, was previously tried and decided (36 C. Gis. R., 138). The present rests in part on amended pleadings and evidence formerly inadmissible. The rulings of the court remain substantially unchanged, 'but the recovery is somewhat increased. The following are the facts as found by the court:
I. That Patrick H. McLaughlin, of Washington, D. 0., Augustus Davis, jr., of Balls ton, Va., and John G. Craig, of Concord, N. H., are citizens of the United States; have at all times yielded true allegiance to the United States; are copart-ners doing a contracting and building business under the firm name and style of P. H. McLaughlin & Co.. in the District of Columbia; and, as such copartners, are sole owners of the claims herein sued on, never having sold or assigned the same to ail}' person or persons. That as such copartners and under such copartnership, a'nd in the name of P. Ii. McLaughlin & Co., they entered into a written contract with the United States, October 2, 1888, wherein and whereby the said P. H. McLaughlin & Co., át and for the sum and price of $307,811 (and, by authorized additions thereafter made under subsequent agreements, an additional sum of $1,539.57), agreed to furnish all the materials and labor necessary to construct the New Naval Observatory in the Naval Observatory grounds on Georgetown Heights, in the District of Columbia, within the period of eighteen months from said date, consisting of nine buildings, according to copy of the contract, with plans and specifications annexed to and made part of the contract, as set forth in exhibits to the petition. That the bid of said contractors for said work was accepted by the Government June 29, 1888.
II. That immediately thereafter said P. H. McLaughlin & Co arranged for the expeditious prosecution of the work; yet, notwithstanding the said acceptance of their bid at the time aforesaid, the contract was not executed until October 2, 1888. It does not appear that during the time between the acceptance of their bid and the formal execution of the contract in October that plaintiffs made any demand for the signing of the contract, or that they tendered anji- bond for that purpose until a few days before the agreement was finally ratified in writing. One of the contractors, however, gave up a salaried position elsewhere after the acceptance of the bid in the expectation that the formal contract would soon be signed, and they made all preparations for the work, declining other contracts. The contract and bond were approved by the Secretary of the Navy October 5, 1888; that they began work when the building lines were furnished the contractors November 2, 1888.
III. On December 17, 1888, the Government architect officially reported to the Secretary of the Navy that the exact location of the several buildings had been fixed, the site cleared of trees, building materials delivered, and a water supply for building purposes secured, and sheds had been built. That excavations were about completed, except foundations of instrument piers not included in the contract. That in view of the risk of doing such important work at that season he would recommend that the work be deferred until more suitable weather, but the season should not delay work on the boiler house and duct from same to main building. The Secretary of the Navy thereupon declared that work would have to stop with an allowance of time to the contractors.
Following is the Secretary’s letter:
“Navy Department,
“ Washington, Febniary.23, 1889.
“The architect called upon me in the early winter and stated that for a building of this character the foundations ought not to be laid in the winter months, and I verbally authorized a delaj7 of about four months. Then we delayed making the award until ivo had legislation authorizing us to do a part of the work separately. (See appropriation act of 1888.) The previous legislation seemed to contemplate that all of the work should be under contract before it should be begun. As these delays have been made by us, I think he is entitled to an extension of time.
“W. C. Whitney,
“Secretary of the Narny.”
IV. In January, 1889, the contractors addressed a communication to the Secretary of the Navy stating that bids were opened June 12, 1888, and that on June 29, 1888, they had been notified that they were the successful bidders, and that owing to delay on the part of the Government the articles of agreement were not entered into until October 2,1888, and on October 9, 1888, one copy of the contract had been returned to them. That thejr were not able to start active work on the buildings until November 2, 1888 (as on that dajT the Government engineers had furnished them with building lines), and in view of the fact that they had lost the working season of 1888 through delay on the part of the Government, the fore going stated matters should be taken into consideration that credit should be given to them for any unavoidable delay.
The failure to designate the building lines was wholly the fault of the defendants, whereby, the plaintiffs sustained loss and damage amounting to <[>780.
In granting the extension the Secretary of the Navy replied to the contractors on March 1,1889, that in view of the recommendation of the superintending architect, and opinion from him that the foundations for the buildings to be erected under the contract ought not to be laid during the winter months, the Department authorized a deiajT in the commencement of the work upon the buildings. The Secretary further stated that, it appearing from a report of the superintending architect that the contractors had been subject to various other delays arising from the acts of the Department, but beyond contractors’ control, the extension of time requested was a reasonable one, and that the period of time allowed by the contract for the completion of the work was thereby extended to October 1, 1890.
V. A special contract was let to P. Ii. McLaughlin & Co. May 3, 1889, for the foundations of instrument piers. A special independent contract was let September 5, 1889, for instrument piers to the equatorial building to O’Conner & Purcell.
YI. On January 2, 1889, the contractors wore notified b_y the architect and assistant architect that their attention had been repeatedly called to the fact that they were delivering brick not in accordance with the terms of the contract and specifications, and that the architect had pointed out to them the prominent objectionable brick, but notwithstanding those objections the contractors had continued to deliver brick of mixed quality containing a considerable proportion of the objectionable character; that the work of construction could not be commenced with the brick in this condition.
VII. The National Press Brick Company, of Washington, on February 27, 1889, annulled its contract with plaintiffs for the delivery of 2,500.000 red and hard brick, because of a contention that the Government inspector required red brick burned hard, of good shape, and finest quality.
The evidence does not establish to the satisfaction of the court that the contention of the National Press Brick Company, of Washington, was true or well founded in fact, nor does the evidence establish to the satisfaction of the court that the Government inspector required the delivery of brick not in accordance with the terms of the contract. On December 9, 1889, the assistant architect complained to the contractors that they had not men enough employed to remove rejected brick. It appears from the evidence that up to that time there had been delivered at the site of the Observatory some 285,000 brick by the National Press Brick Company.
YIII. An order was given January 11, 1889, to the contractors by the assistant architect to proceed without delay with the excavations provided for in the original contract, especially for the transit-circle buildings, clock, and observer’s rooms, to be carried down to the level indicated on plans, so as to be prepared for the foundations of the different instruments. This notice was accompanied with a statement that the lot of Round Top cement delivered by the contractors on the grounds was not giving satisfactory results upon a test of 15 different barrels of the lot. A prominent defect in its quick-setting properties was pointed out.
The contracts for the instrument piers were awarded May 3, 1889, and September 5, 1890.
IX. On January 22, 1889, the Secretary of the Nav3r appointed a board to ascertain, estimate, and determine the amount of increased or dimishod compensation that the contractors were entitled to receive, if any, in consequence' of any change or changes in the drawings, plans, or specifications of the Observatory which should be duly authorized. Authority was given to the board to meet at the Observatory on notification from the Chief of the Bureau of Navigation from time to time, where the contractors were required to furnish the board with all necessary facilities for the discharge of its duties. On January 31, 1889, the contractors were notified of the appointment of the board, indicating that in case of changes in the plans and specifications the following-course of procedure would be followed:
‘‘'If any changes are proposed bj^ the contractors they will address a letter to the Chief of this Bureau, stating in detail the nature, extent, and effect of such changes and the esti mated cost thereof. Whenever it is necessary to a full understanding of the changes thus proposed, the contractors’ letter must be accompanied by suitable drawings, plans, or specifications, which, together with the letter, must be forwarded to this Bureau through the architect superintending the work, who will examine the subject carefully, and on forwarding the papers to the Bureau will accompany them with a statement of his views and such recommendations in the premises as he shall deem proper, together with his estimate of the probable cost of the changes thus proposed. If, after due consideration, such changes are deemed desirable and proper by the Chief of this Bureau, ho will transmit the papers to the board o.f naval officers appointed by the Secretary in pursuance of the provisions contained in the third clause of the contract (of which board Captain Phythian is the chairman) for immediate examination and report as to the actual cost of such changes, and the amount of increased or diminished compensation which the contractors shall be entitled to receive in consequence thereof. Should the estimate of the board as to the actual cost of such changes not exceed §500, the Chief of the Bureau will issue the necessary instructions for carrying the proposed changes into effect, but if the estimate of the board shall exceed §500, the.Bureau will submit the same to the Department for its action thereon.
“In the case of changes suggested by the architect superintending the work, he will, after estimating the cost of such changes and before reporting thereon, ascertain for the information of the Bureau the views of the contractors respecting such changes, and in case the contractors concur with the architect as the necessity or propriety of the same they will be allowed, if they so desire, to submit for the further information of the Bureau an estimate of the cost of such changes, or, if they do not concur in the change so suggested, their reasons for objecting to the same. The architect will thereupon report fully to the Bureau, stating the reasons for the changes suggested" by him,' accompanied, when necessary, bjr suitable drawings, plans, or specifications, and at the same time transmit the views of the contractors.
“On the receipt of the architect’s report and the papers accompanying it this Bureau will consider the propriety of such changes, and if disapproving of the same will inform the architect accordingly; but if the changes so suggested shall be approved by the Bureau the papers will be transmitted to the board for examination and report, as above provided in the case of changes proposed by the contractors, and if the estimate of the board shall not exceed §500 the Bureau will issue the necessary instructions for carrying such changes into effect, but if the estimate of the board shall exceed $500 the Bureau will in like manner submit the same for the consideration and action of the Department.
■‘In all cases where it shall appear by the architect’s report and the estimates submitted therewith that the cost of the changes suggested by him or proposed by the contractors will exceed §500, the Bureau will, before taking- action thereon, submit the same to the Department for its decision.
“In all cases where changes proposed by the contractors shall be disapproved by the Bureau, or where the contractors object to changes suggested by the architect, whether the cost of such change or changes shall or shall not exceed §500, the Bureau will submit the same to the Department for its action.”
The evidence does not establish to the satisfaction of the court that McLaughlin & Co. requested the appointment of the board as provided for by the third clause of the contract, or that, at the time of the controversy respecting the terms of the contract relating to cellars, they deemed the matter of sufficient importance to appeal to the board or to the Secretary of the Favy.
X. Plaintiffs were interrupted in much of their work from February 23, 1889, to May 3, 1889, bjr an order of the Secretary of the Navy, based on the recommendation of the architect, that the work should stop on account of the winter season. For the same reason much of their work was interrupted by the verbal direction of 'the Secretary of the Navy to the contractors (through the architect) beginning about the last of December. They were also interrupted in the work of excavating foundations under certain buildings, which under their principal contract they were required to build, and in commencing work on the walls thereof, by the neglect and failure of the Government to locate foundations for instrument piers to said buildings. The damages growing out of the authorization to stop and the order of February 23,1889, azid the interruption occasioned in the work of excavating foundations as hereinbefore set forth amounted to the sum of §3,675.
Plaintiffs were also interrupted from time to time during’ the summer of 1889 and until September 5 of that year in the work of excavating foundations under a certain other building, which under their principal contract they were required to build, and in commencing work on the walls thereof, by the neglect and failure of the Government to locate foundation for instrument piers to said other building, to their damage in the sum of $948.
XI. On July 29, 1889, the contractors referred the Secretary of the Navy to their previous letter of July 9 respecting delays on the work, but especially to the great equatorial building, at the same time making charges against the assistant architect and requesting that his management of the work be investigated. The charges were as follows: (1) Incompetencjr, owing to the architect’s unfamiliarity with the work and a lack of knowledge governing the rules and laws of mechanism. (2) That he was entirely ignorant of construing the plans and specifications and incapable of giving or directing an order without first consulting some of the engineers, architects, or Superintendent of Public Buildings. (8) That in the beginning ho accepted a brand of cement known to the trade as Pound Top, and after asking the contractors to get it on the grounds the said architect rejected it, then giving a list of cement known as the Rosondale, from, which the contractors selected the Bridge brand, the kind of cement used in the construction of the piers for the Brooklyn Bridge. The contractors stated that they had ordered a cargo of the latter brand; that after delivery of 104 barrels of the Bridge brand the architect condemned the lot, and after the rejection they were permitted to substitute the Round Top cement which he had first rejected. (4) That he was insulting and overbearing in manner and gave orders to the contractors’ workmen over their heads. (5) That he purposely delayed making estimates for work done or material furnished, resulting in the postponement of payments that were due. (6) That through his action they had been compelled to annul a contract with the National Press Brick Company, of Washington, D. C., for the delivery of brick, resulting in a loss to the contractors of $2,800.
On August 2, 1889, the Secretary’s attention was called to this complaint of the contractors (bjr their counsel), who asked that an opportunity be given to file proof in support of the genera] complaints made by the contractors of the assistant architect.
And on that day Captain Phythian, of the United States Navy, and Architect Hunt, the principal architect in charge of the work, investigated the charges, with the following result:
“U. S. Naval Observatory,
“ Washington, August 1889.
“Sir: In compliance with the directions contained in the indorsement upon the letter of P. II. McLaughlin & Co., preferring charges against Win. H. Grant, assistant to the architect of the New Naval Observatory, we have the honor to report:
“Charges laud If. — As bearing upon these charges, we called upon Mr. Grant for a statement of his professional experience. This statement is hereto appended, marked £A.’ If it be correct, he has certainly had sufficient experience of a technical nature to suggest his fitness for the position which he now holds by the authority of the Navy Department.
“ WTiile we have no means of ascertaining how he performed the duties of the several positions which he has held, we believe it is fair to assume that he would not have remained for such long periods of time in charge of important works, nor would he have been appointed successively to so many responsible positions, if hehad not at least enjoj'ed an excellent, widespread reputation.
“ We can personally testify that we believe, on the part of Mr. Hunt, that Mr. Grant has a clear and intelligent understanding of the duties of his office; and, on the part of Captain Phythian, that he is zealous in the performance of these duties, carefully and watchfully guarding the interests of the Department. The opinion of the former is based upon official correspondence and frequent interviews with Mr. Grant on matters pertaining to the construction of the Observatory; of the latter, upon personal observation of his systematic methods of making tests and of recording, in minute detail, the daily occurrences on the grounds, by means of which he is at all times fully informed upon the progress and character of the work.
“ Charge III. — The portion of this charge which makes allegations concerning the brand of cement known as Round Top is so worded as to convey to our minds the impression that the contractors intend to charge that Mr. Grant has at one time rejected, and at another time accepted, cement of the same quality. The facts of the case, as shown by the official records of tests, are these: The first lot of Round Top cement (about 200 bbls.) was subjected to the usual tests, found satisfactory, and accepted. The second lot (about 200 bbls.) failed to meet the requirements as to time of setting and was rejected. The next lot was delivered in sacks. The tests upon samples of it for time of setting showed that it generally reached the standard. The first tests for strength showed an average of 113i lbs. to the square inch, the requirements being 90 lbs. to the square inch. Subsequent tests on large lots of cement of this brand gave strength ranging from 150 to 200 lbs. per square inch. These lots were accepted. We find no inconsistency in rejecting the lot of 200 bbls. and accepting the other lots.
“ Of the Rosendale cement referred to in this charge 104 bbls. were delivered at the grounds. The official record of tests to which this lot was subjected shows that the cement is defective in strength. Not a single sample was satisfactory, and the average is about 50 per cent of the required strength. Upon these tests the above 104 bbls. were rejected. Mr. Grant asserted to us, in the presence of the contractors, that he had not, as charged, officially rejected any other portion of this cargo; that, on the contrary, he had been requested by the contractors to pronounce the whole rejected, and that he had declined to so. This assertion was not denied by the contractors; it was virtually admitted. In the course of conversation on this point it appeared that Mr. Grant had expressed his belief that, if tested, this lot would fail, but he Avould not official^ pass upon so large an amount as 2,800 bbls. on the number of tests made. It is practically admitted by the contractor that so much of the charge as asserts that Mr. Grant rejected the whole cargo of 2,800 bbls. on the results of tests of 104 bbls. is erroneous, and no part of the charge is proven by the evidence we have been able to elicit on the subject.
“ Charge TY. — This charge was not touched upon. It opens the question as to the right of the architect, his assistant, or the inspectors to give orders to workmen directly, and not ■ through the contractors. The settlement of this point involves the legal construction of certain phrases in the contract, to which the attention of the Department will be called by the architect and its decision asked for. Pending this decision, we do not feel authorized to express an opinion.
“ Charge V. — An exhaustive discussion of this charge in the presence of the contractors, in which they freely participated, was had. The official correspondence between Mr. Hunt and Mr. Grant, as well as the contractors’ records, was carefully examined.
“ The result of this examination and discussion was a full and frank admission by the contractors that Mr. Grant is in no way responsible for delays in payments.
. “ Charge VI — Mr. Hunt states that he — not Mr. Grant— directed the rejection of the bricks referred to in this charge, thereby relieving Mr. Grant from, all responsibility in the matter.
‘‘It is due to the contractors to state that they take exception to our conclusions upon Charge III on the ground that the tests to which we refer are not reliable. As these arc the official tests made by Mr. Grant in the performance of his duties as assistant architect, xvhich tests the contractors give no specific reason for calling into question, and as the contractors have presented no other tests, we are inclined to accept them as authentic.
‘‘It may also be due to the contractors to state that they xvere not called upon for any testimony in support of Charges I and II. To have pursued such a line of immstigation it xvould have been necessary, owing to the general terms in xvhich these charges are couched, to require the contractors to submit more specific, charges, giving- dates and events. The reference of these charges to us for a report does not seem to contemplate such a course, nor to confer the authority to adopt it. Under these circumstances we feel that our duty in this connection is ended by allowing Mr. Grant to submit a statement, and by expressing such individual opinions of his competency as our opportunities have enabled us to form.
Messrs. McLaughlin & Co.’s letter is herewith returned. “
“ Very respectfully,
“R. L. Phythian, Captain, TI. 8. Navy. “
“ R. M. HUNT, Architect.
“The Chief of the Bureau of
“EQUIPMENT AND RECRUITING,
uNavy Department.”
“Statement of W/n. II. Grant, assistant to architect, New Nanai Observatory.
“The folloxving are some of the principal public works upon which I have been engaged:
“The surx'ey of the Erie Railroad, as assistant engineer; on the Erie Canal in same capacity; for several years in charge of construction of new locks, aqueducts, &e., which are admitted to be some of the best masonry in this country: on the Hudson River Railroad, as assistant engineer, in charge of several large sections of the road; as chief engineer of the Cleveland, Zanesville and Cincinnati Railroad in Ohio, in charge of location and construction and designing of all appurtenances, station and depot buildings, etc. (Refer for the character of this work to a report of Hon. J. C. B. Davis on the subject.)
“As acting chief engineer of the Metropolitan Railroad between Georgetown, D. C., and Hagerstown, in charge of location and construction. (The road failed of completion.)
“As superintending engineer of Central Park, N. Y., from the commencement to the completion of the work; had charge •of the bureau of civil and topographical engineering, N -Y., for about four years, in making surveys and mapping the portion of Westchester County which has been annexed to the city of Now York, and laying out a portion of the system of new streets; had charge of the bureau of construction, N. Y., which embraced the improvement of streets, reconstruction of Harlem River bridges, and surveys for the improvement of the navigation of the Harlem River.
“Was engaged on the location of the eastern portion of the N. Y., Ontario and Western Railway; also on the location of the N. Y. and Albany Railroad (now West Shore Railroad); rebuilt a reservoir in connection with Poughkeepsie waterworks ; designed and superintended the work; built a reservoir for private waterworks at Newburgh, N. Y.; was chief engineer of Yonkers waterworks, and was chief engineer of the New York and Northern Railroad; was engaged on river and harbor work in "Virginia and Maryland, under Mr. S. T. Abert, U. S. engineer, Washington.”
“Ofeioe oe Richard M. Hunt, Architect,
uJVew York, Sept,. 25th, 1889.
“To the Honorable B. P. Tracy,
“Secretary of the Nmy,
“Navy Department, Washington, D. O.
“Sir: In view of the charges made by the contractors of the new Naval Observatoiy against Mr. W. IT. Grant, ass’t architect, I deem it my duty, and only fair to Mr. Grant, to state that the contractors have continuously shown a disposition to violate their contract. Among other evidences I would cite the following:
“1st. Attempt to bribe an inspector.
“ 2nd. Quality of brick hauled to the grounds after they had been warned that it could not be used.
“ 3rd. The large quantities of poor material (notably cement) that the3r have presented for inspection.
“4th. Refusing to discharge aman (Fink) after they had been directed to do so, and allowing him to interfere with the work.
“5th. Attempts by Messrs. Craig and Davis to slip an undue proportion of stone and sand into concrete and mortar.
“Besides which the contractors, resenting Mr. Grant’s determination to see the work carried out to the letter of the contract, have used threats of personal violence toward him and his inspectors.
“These matters have not been officially reported before, because by strict supervision these attempts to evade the contract and other matters have not interfered with the interests of the Department,
“The}' are not reported now as a complaint against the contractors, Mr. Grant feeling sure that he can protect the Government’s interests and compel the contractors to comply strictly with the contract.
“The attention of the Department is invited to them, as showing a probable motive on the part of the contractors, when such weight as the Department may choose to give them in considering the complaints of the contractors’
“I have the honor to remain, very respectfully,
“R,. M. Hunt, Architect.”
“Ounce of Richard M. Hunt, Architect,
uIfew Yorh, Oct. 10th, 1890.
“Commodore Geo. Dewet, U. S. N.,
“ Chief of.Bureau, of Equipment,
‘lJV</vi/ Department, Washington, D. C.
“Sir: Owing to the limited amount .remaining available of the appropriation for the construction of the new Naval Observatory at Washington, D. C., not already contracted for, and the necessity for retrenchment in order to complete the structure as authorized by Congress, together with the fact that the stone and brick work is nearly finished, I respectfully request that the services of Assistant Architect Grant and Inspector Lvddam be dispensed with after November 15th, 1890, or as much sooner as can be found practicable.
“Slioidd the Bureau approve of their discharge, 1 would recommend the appointment of Harry E. Donnell as assistant architect (who has had an active part in the preparation of the drawings of the new buildings and is more active than the present incumbent) to supervise, under my directions, the work of the new Naval Observatory, provided that the Bureau will direct the watchman there stationed to assist the new appointment in minor matters within his capacity.
“In addition, I may state that, while the work on the buildings is equal to any in Washington in point of construe tion and material, there has been and is now considerable friction between Mr. Grant and the contractors, resulting, unfortunately, in some delay.
“This may be, or may not be, entirety the fault of the contractors, Messrs. P. H. McLaughlin & Co., and is a matter upon which it is not necessary to enter; but in view of the fact that the contractors have been awarded an extension of time to complete their contract, and as a change is, in my opinion, expedient, I offer the only practical solution.
“ 1 can not part with Mr. Grant without testifying to his integrity and his fearless discharge of his duties.
“The salary, I understand, to be paid Mr. Donnell would be one hundred and seventy-five dollars ($175.00) per month.
“I have the honor to remain, sir, very respectfully,
“R. M. PIuNT, Architect.
“Forwarded.
“F. Y. McNair,
“ Ga2>tain, TJ. 8. iY, Superintendent
XII. On August 31, 1889, the contractors acknowledged receipt of a notice from the principal architect in regard to the slow progress they were making on the work, to which they replied that the assistant architect would not allow them to push the same as fast as thejr would like, on the claim that time was wanted to test the cement.
XIII. On December 21, 1889, the contractors again acknowledged receipt of notice from the principal architect, under date of December 18, 1889, referring to their delays, stating that while the architect “ may have some cause and complaint that the work is not progressing as fast as you (he) would wish, yet they most emphatically denied the assertion that it was not proceeding in conformity to the contract and specifications. ”
XIY. On July 17, 1889, the contractors were requested by the principal architect to discharge one bricklayer named Joseph Fink on complaints that said employee had refused to take down a portion of his bad work when directed to do so, was careless in his work, and otherwise objectionable. Notice was given with the request (by the architect) that he had heard that threats of personal violence had been made, but that the Department would find means to protect its representatives. The contractors denied that Fink was doing bad work or that they had knowledge of threats of personal vio lence having been made against anyone, but stated a willingness to comply with the request to discharge Fink and hoped they would be able to convince the architect that an injustice was being done.
On July 19,1889, the architect informed the contractors that he would give them an opportunity to substantiate their statements relating to Fink. This opportunity was not made use of by the contractors.
On July 23,1889, the architect gave notice to the contractors that Fink was still about the works interfering with the orders of the inspector, the assistant architect supplementing this notice with a peremptory call upon the contractors to discharge this person as objectionable.
On August 3, 1889, the architect officially reported to the Secretary of the Favy that the contractors had not complied with the request made of them to remove Fink, and that this person, as an objectionable employee, remained on the premises, daity interfering with others engaged on the work and interfering with the work of the inspectors.
The contractors paid Fink §250 for the cancellation of their agreement with him.
XV. On October 3, 1889, the architect complained that the work was proceeding with dilatoriness through the fault of the contractors, because material 'needed, such as cement, was not being furnished in adequate quantities to admit of timely inspection; that labor, such as brick masons, were not employed in sufficient force; that much valuable time had been lost in preparing adequate means for setting stones on the main building, and that intimidation was being used toward the inspectors to such an extent as to affect their efficiencjG
Answering complaints of the architect, the contractors on October 9, 1889, stated to the Chief of the Bureau of Equipment that the}' wore not responsible for the delays, because of the impossibility to get cement, which was the only material of "which they stood in need; that the only cement which the assistant architect would accept was the Round Top brand, and that they had been getting eveiy barrel that could be had.
In connection therewith the contractors stated that in justice to themselves they would say that delays had been caused by the Government on account of changes made in the several buildings, which would be enumerated as soon as they could collect the proper data.
It does not appear from the evidence that any further notice was taken of these alleged changes, or that any further complaints were made in detail until the institution of this action.
XVI. On November 14, 1889, it appears that the decision of a civil engineer had been obtained in settlement of a controversy between the architect and the contractors relating to the tests which the architect had applied to a part of 2,800 barrels of cement furnished by the contractors. The architect’s rejection of the cement was sustained by the opinion of the engineer appointed by the Navy Department to make the examination.
XVII. On December 7, 1889," complaint was made to the contractors by the assistant architect that they had not complied with his directions to supply a large quantiy of brick (which directions had been given previously), because their supply was too scant for the proper execution of the work to advantage. The assistant architect stated to them that brick were being delivered in quantities onty sufficient for the work from day to day; that those were dumped in scattered piles about the ground, unsheltered, and frequently in the mud; that they persisted in bringing brick to the work contrary to his daily remonstrances, and that the inspectors were unable to prevent them from doing bad work. The contractors were notified to desist from carrying on any further brickwork until they should comply with orders to provide brick of the quality required by the contract, and were also notified to remove immediately all brick on the grounds that did not comply with the contract.
XVIIt. On December 12, 1889, in consequence of the methods adopted by Augustus Davis, jr., one of the contractors, in laying brick on one of the buildings, differences arose between the said Davis and an inspector named Purcell. While the said inspector was in the discharge of his duties the contractor made a violent personal assault upon the inspector. The attack upon the inspector was reported to the Chief of the Bureau of Equipment by the assistant architect. Correspondence on this subject resulted in a letter from P. H. McLaughlin & Co. to the Chief of the Bureau of Equipment regretting the occurrence. McLaughlin & Co.’s letter concluded with this statement, to wit: “We sincerely hope that the Bureau will see fit to place the whole responsibility with Mr. Davis, who accepts the same as a personal matter.” In consequence of the assault by Davis upon the inspector (which grew out of insulting language used by the inspector to Davis), the said Davis was excluded from active participation in the management of any work under the contract on the grounds. No protest was made to the Secretary of the Navy against the order excluding Davis from active participation in the management, but in consequence of the order the contractors employed an extra foreman at $5 per day for each working day during the time Davis did not participate in the management, aggregating the sum of $2,250. It does not appear that Davis endeavored to find other employment during the time he did not participate in the active work on the grounds.
XIX. On April 21,1890, the Chief of the Bureau of Equipment notified the contractors that proceedings with work on the marble facings of the main budding did not conform to the specifications and were in defiance of the orders of the architect in charge, to which, on April 24,1890, the contractors responded that the matters therein referred to had been attended to by them, they trusted, to the satisfaction of the Department.
XX. On July 25, 1890, the architect officially complained of the contractors because of the insufficient supply of brick and cement of proper qualitjq which delayed the work.
XXI. Under date of May 13, 1890, the contractors stated that work on the Observatory was at a standstill for want of cement that would come up to the requirements of the assistant architect. In that connection they stated that they had ordered the very best cement in the market, paid the highest prices for it, and that it was extensively used on all public and private works of any importance in this part of the country. Complaints were made of the assistant architect and his methods in the matter of inspecting cement.
On May 21, 1890, the Chief of the Bureau of Equipment replied to the contractors that the trouble complained of was mainly due to their bringing to the work cement not up to the standard in quality and to their delays in removing from the work rejected cement; that in the absence of proof that the tests were unusual and too severe the contractors were expected to proceed vigorously with the work of construction and to comply with the requirements of the architect and his assistant, and that if it could not be shown that the inspection was unreasonable the complaints of the architect in that respect must be held to be not well founded.
XXII. Under date of May 26, 1890, the contractors stated their complaints in full respecting- the rejection of the cement. The result of this correspondence was that on June 12, 1890, the architect stated that in order to facilitate work he had directed the standard applied to testing cement to be lowered to nearly one-half the results of the.tests obtained at the office of the Commissioners of the District of Columbia and Washington Navy-Yard or the best tests obtained by his assistant at the Observatory. In this connection the architect stated anew that the cement question had not been the only cause of delay, as the very slow delivery of brick had been repeatedly pointed out to the contractors.
XXIII. Under date of September 23,1890, the contractors asked for a second extension of time for the completion of the work beyond October ], 1890 — (1) because during the two years limited for the execution of the work the weather had been unfavorable, especially in the spring and summer of 1889, when valuable time was lost; (2) because on May 30, 1889, destructive floods had entirely destroyed the Chesapeake and Ohio Canal, which was their main channel of supply for the Hound Top cement, the preferred brand. This request was accompanied with a statement that for clays at a time thej'- had been unable to procure a single barrel of the cement, but to avoid great delay the}r had obtained a number of well-known brands from responsible dealers, including Rosendale cement. Very little of any cement except Round Top (they stated), was accepted by the assistant architect in charge, in consequence of which their work was entirely stopped several times in th¿ middle of the most favorable building season; (3) because the unusual demand for brick and the very small suppN had caused them great annoyance; (4) because the contract called for Tuckahoe marble, and, having contracted with the New York Quarry Company for that stone, it had been ■so badly cut the assistant architect would not accept it until they had recut a great deal of it, which caused considerable delay. In many cases, they stated, the stones arrived broken and chipped so that they could not be used. The Superintendent of the Observatory objected to a further extension because, in his opinion, the principal cause of the failure of the contractors to fulfill in the time required was due to financial embarrassment of the contractors. The superintending architect likewise, in an official communication under date of September 20, 1890, stated that he felt extremely reluctant to recommend an extension of time, because of the persistent disregard and apparent inability of the contractors to promptly carry out orders and directions emanating from him or his assistant. Under date of October 4, 1890, the Chief of the Bureau of Equipment of the Navy Department recommended the second extension, notwithstanding the adverse report of the architect, because the contractors had suffered hardships, one of which was the continued prevalence of rainy weather during the Amar 1889, there having been, according to the official report received from the United States Signal Office, 153 rainy days in that ATear, Avhen outdoor Avork had to be excepted. Upon these reports the time for the completion of the Avork Avas extended to July 1, 1891.
XXIV. On XoAmmber 11, 1890, one of the large pieces of cornice for the library Avas condemned on account of its bad color and quality. In consequence of this the contractors stated that its condemnation would probably prevent them from getting the roof on the library that season.
XXV. On NoArember 25, 1890, the contractors Avere requested by the Chief of the Bureau of Equipment to employ a sufficient force to cany oil the Avork properly and expeditiously. The contractors, in response to his request, stated that until a short time ago they had been unable to proceed with some of the minor details for Avant of proper instructions Avhat to do and how to do them in a satisfactory manner, and stating that hundreds of similar things had been deferred for Avant of a man; that is, a more suitable inspector or architect with a practical knowledge of the plans and building work generally.
XXVI. Under date of June 23,1891, the contractors asked for a third extension of time on the ground of delay in getting stone the preceding fall and because of the great amount of work that had to be done on this stone after the delivery to the grounds, and because they had found it impossible to complete the buildings until the domes were constructed for the great and small equatorial buildings, which work was outside of their contract. On June 29, 1891, the Secretary of the Navy extended the time for the completion of the work to September 1,1891.
XXVII. Under date of August 28, 1891, the contractors asked for a fourth extension of time, chiefly owing (they said) to the condition of two equatorial buildings, they being unable to do anything further in those buildings until the contractors for the domes had completed their work. On September 1, 1891, the Chief of the Bureau of Equipment of the Navy Department informed the contractors that their request for an extension of sixty days from that date had been granted. On September 3, 1891, the claimants discontinued work on the Observatory buildings and abandoned the premises, and five dajTs thereafter the Secretary of the Navy declared the contract forfeited. The buildings were left in an unfinished condition, and a new contract was thereafter made with another part}*- (in which Augustus Davis, jr., had an interest) to complete the work.
The claimants allege that they discontinued the work on the buildings because of the failure of the Government to pay the amounts earned under the contract.
XXVIII. The estimates of the architect in charge for the amount of work as it progressed were prepared in accordance with instructions from the Navy Department dated January 31,1889. These instructions required that the architect should “state from time to time, when such payments were applied for by the contractors, with the proportionate amounts and values, which will be estimated upon the total contract price of the new Naval Observatory.” The form prescribed for the payments was followed by the architect in all of the 23 estimates made by him, except in the third and fourth estimates, which were not subdivided as Avere the others. After the eleventh estimate the architect changed the method of computing marble from quantities in cubic feet to quantities in tons weight. In the twenty-third and final estimate the archi tect stated that the proportionate amount and value estimated upon the total contract price of all labor and material of every kind used in and about the buildings, or ready for use, was §299,333.80.
This final estimate was made August 12, 1891, and is recapitulated as follows:
Total value of materials expended to date.§217,844. 30
Total value of labor expended to date. 77,525.00
Total value of materials on hand to be used. 3,964. 50
Total. 299,333.80
XXIX. The evidence does not establish to the satisfaction of the court the appropriation by the defendants when the contract became forfeited of any condemned cut marble belonging to the contractors. The evidence does not establish to the satisfaction of the court the appropriation by defendants of any condemned materials or other property (except that which was subsequently returned to plaintiffs), as alleged in the petition. The evidence does establish to the satisfaction of the court that after the contract became forfeited certain condemned material on the site of the work was sold by the marshal of the District of Columbia for the sum of §100 under legal proceedings instituted against plaintiffs in the supreme court of the District of Columbia, and that at the marshal’s sale the property sold by that officer was bid off in plaintiffs’ interest.
XXX. After the forfeiture of the contract, and upon the account stated by the Secretary of the Navy, the defendants charged to the claimants the salary of the assistant architect of said buildings from September 21, 1891, to December 3, 1891, and from January 5, 1892, to August 23, 1893, the sum of §2,187.50, and also the traveling expenses of the architect from September 8 to December 31, 1891, and for the years of 1892 and 1893, $377.30, making a total on this account of §2,561.80.
XXXI. When the contract was declared forfeited the Chief of the Bureau of Equipment was directed by the Secretary of the Navy to take and file a full and complete statement and inventory of all work done or commenced in, upon, or about said buildings, and of all materials on hand applicable thereto.
XXXII. On September 16, 1891, the Superintendent of the Observatory, Commander Bishop, United States Navy, and Ensign Hoogewerff, also of the United States Navy, and Assistant Architect Donnell submitted a full and complete statement and inventoiy of all work done or commenced in, upon, or about the buildings at the observatory, with an inventory of all material on hand applicable thereto; also an inventory of the several buildings on the grounds and of the material thereon, and machinery, tools, and appliances appertaining to the work used or to be used in or about the completion of the same. This inventory does not include the marble claimed in the petition.
XXXIII. On September 21, 1891, the Secretary of the Navy, under the fifteenth clause of the contract and in consequence of the failure of the contractors to proceed with the work, appointed a board for the purpose of ascertaining the value of the work and materials in and about the construction of the observatory, with instructions to consider such evidence as it should deem proper which might bo submitted on the part of the contractors with reference to any question concerning the proper valuation of work and materials embraced in the statement or inventory.
The contractors were informed that they might attend in person and by counsel and submit such evidence as the board might deem proper.
On October 22,1891, in compliance with the order appointing it, the board made a report, stating that they had ascertained and declared the fair market value of the buildings and materials on hand, together with appurtenances and fittings, including a reasonable and customary margin of profit upon the work, as follows:
Prime vertical building. $32, 503.50
East and west transit houses. 11,413. 89
Clock room. 7,860. 31
Two observers’ rooms. 2, 375. 01
Great equatorial. 25,894. 33
Main building. 236,082. 56
Boiler house. 17, 353. 38
Duct from boiler house to main building. 1, 787.59
Drainage and sewerage. 1,932.84
Available material on hand. 1,236.95
Total. 308,446.36
All joinors’ material fitted for use, together with the steam heating and gas lighting plants, is included in the cost of the several buildings.
The board further desires to state that it has received and duly considered such evidence as it deemed proper which was submitted on the part of the contractors with reference to questions concerning the proper valuation of work and material embraced in the above-mentioned statement or inventory.
XXXIY. On November 9,1891, the Secretary of the Navy returned to the board for revision its report because the board had included in its estimate of the valuation of the work certain items of work, extra to the contract, required by changes in the plans and specifications, and had omitted other items of such work. The board was directed in its amended report to include a careful and thorough estimate in detail of the cost of the material and labor nece wary to complete the Observatory and all work required under the original contract, and the authorized changes therein, and then ascertain and declare the fair market value, based upon the contract price, including a reasonable and customary margin of profit, of all work done or commenced in, upon, or about the buildings, appurtenances, and fittings, and of all materials on hand applicable thereto.
XXXY. On November 21, 1891, the board returned its revised report, as follows:
Main building.5223,947.91
Great equatorial building. 25,588.51
Clock room. 7, 632. 02
Two observers’ rooms. 2, 375.01
Passageways connecting clock room and observers’ rooms ... 855. 76
East and west transit buildings. ' 9,817.17
Prime veitical building. 2,267. 49
Boiler house. 17,873. 36
Duct from boiler house to main building. 1,787.59
Drainage and sewerage. 1,547.84
Materials available. 3,135.34
Total. 296, 828.00
**•**■##
XXXYI. Following is a statement of the account with P. H. McLaug'hlin & Co. (in connection with their entire undertaking) after the completion of the work, to wit:
Original contract. §>307, 811. 00
Additions authorized (Exhibit A). 7,891.13
315, 702.13
Reductions authorized (Exhibit A). 2,537. 78
Maximum limit of cost under McLaughlin & Oo. 313,164. 35
Cost to Government to complete.
Contract with Mr. Plumley, February 16, 1892. §25,940.00
Reductions authorized. 50. 00
25,890. 00
Extra expenses incurred in completing, chargeable to contract, McLaughlin &Co. 3,759.52
29,649. 52
Appraised value of work done by McLaughlin & Oo. and materials on hand to complete, as per report of board, approved' by Secretary of the Navy December 12,1891 . 284,422.47
Cost to complete under Plumley. 29,649. 52
Total cost to Government to complete. 314, 071.99
Maximum limit of cost under McLaughlin & Oo. 313,164. 35
Excess of cost chargeable to McLaughlin & Oo. 907. 64
McLaughlin & Co., Dr.
To advanced payments on account of contract, 23 installments, at §11,542.91 each.§265,486.93
To advanced payments on account of authorized changes (Exhibit B)... 4,539.57
Excess of cost to complete under Plumley. 907. 64
270,934.14
Cr.
By appraised value of work, etc. S284,422.47
Statement of account.
By appraised value of work, etc. §284,422.47
To charges as above... 270,934.14
Due McLaughlin & Oo. 13,488. 33
Less amount deducted from the contract of Mr. Plumley for omission of sash fasteners, which were a part of the incom-pleted work under McLaughlin & Oo. 50.00
Net amount due McLaughlin & Co. 13,438, 33
The foregoing account was submitted to plaintiffs in February, 1894, and the net amount shown by the account to bo due was paid to them in July, 1894, upon vouchers prepared by order of the Secretary of the Navy and executed by plaintiffs without protest or objection to any of the items.
XXXVII. None of the changes (if anjr Avere made) upon which the items set forth in the amended petition for alleged work and material extra to the contract are based, involving an expenditure in excess of $500, were made upon the order, written or verbal, of the Secretary of the Navy. The actual cost of said changes (if any were made) and the damage caused thereby in no instance, where the alleged cost exceeded $500, were ascertained, estimated, or determined by a board of naval officers, as provided by the third clause of the contract. None of the changes (if any were made) upon which the items set forth in the amended petition for alleged work and material extra to the contract are based, involving an expenditure of less than $500, were agreed upon in writing by the contractors and the architect, as required by the third clause of the'contract. Nor were any such changes approved by the Secretary of the Navy. The evidence does not establish, except as the findings otherwise show, any reference to the Secretary of the Navy of any matters of doubt or dispute as to the meaning of the drawings, plans, or specifications, or of any discrepancies appearing therein. When work was regarded as extra to the contract by the designated authority, such extra work was charged to the Government in favor of the claimants, and was subsequent^ paid to them as extra, or was at the time of such extra work, or subsequently, balanced by omissions from the work set forth in the original contract, drawings, plans, and specifications.
XXXVIII. No compensation was made to the contractors for extra work except as set forth in the account rendered to the plaintiffs as hereinafter set forth. It does not appear to the satisfaction of the court that the Secretary of the Navy had any knowledge that work now claimed as extra was being done by the contractors at the time they claim to have done said work, or that the Secretary ever had knowledge of any claim for said extra work until the commencement of this action, because the evidence does not establish that the differences between the contractors and the architects were referred to the Secretary of the Navy at all, but were settled between the contractors and architects.
XXXIX. December 15, 1894, the contractors addressed to the Secretary of the Navy the following communication:
“WASHINGTON, D. C., December 15th, 189J/.
“To the Hon. H. A. Herbert,
“Secretary of the Davy, Washington, D. C.:
“ Your petitioners beg leave respectfully to ask your attention to an error in the statement of account with P. H. McLaughlin & Co. in connection with their contract of October 2nd, 1888, for building- the new Naval Observatory, to the end that the same may be corrected and the amount erroneously charged against the said petitioners be refunded to them.
“Among the items of extra expense, as set forth in Exhibit B of the detailed statement submitted by Geo. Dewey, Chief of Bureau of Equipment, to the Secretary, of date March 2, 1893, which, in the opinion of said Bureau, should be charged against said firm on account of their failure to complete the Observatory within the time prescribed in their contract, there appear various charges for the salary of an assistant architect and travelling expenses of R. M. Plunt, architect, amounting in the aggregate to $2,564.80.
“Your petitioners are advised and believe that those charges are without precedent in settlements of like character made by the Government with contractors who have failed for any cause whatever to complete their contracts; that they are likewise unauthorized by the terms of the contract between said firm and the Secretary of the Navy, and are moreover a great hardship and injustice to said petitioners.
“The seventeenth clause of said contract of October 2nd, 1888, provided that ‘In case the Secretary of the Navy shall proceed, under the foregoing clause, to complete the work, such procedure' shall be without unnecessary delay, and shall be at the risk and expense of the parties of the first part, who shall be chargeable with any increase in the cost of materials or labor incurred by reason of their failure to perform the contract.’ Upon the final settlement of the liability of the parties of the first part an account shall be stated substantially as follows:
“ ‘ The parties of the first part shall be charged—
“ ‘ 1. With all advanced payments.
“‘2. With the extra cost, if any, of materials and labor and all other extra expenses, if any, over and above the contract price incurred in the completion of the work.
‘“They shall then be credited with the value of the work done up to the time of suspension and of the materials on hand as ascertained by the board and approved by the Secretary of the Navy under the provisions of the fifteenth clause of this contract., and with such advance payments, if any, as may have been refunded. If a balance shall thereupon appear in favor of the parties of the first part the same shall be paid to and accepted bjr them in full discharge of all claims under this contract; but if a balance shall appear in favor of the-United States the parties of the first part hereby covenant and agree as aforesaid to pay and discharge the same on demand.’
“ No question is here raised with regard to any of the items of Exhibit B, except the assistant architect’s salary and the traveling expenses of R. M. Hunt, architect, and these items, it is respectfully submitted, are improperly embraced in said statement. It will not be claimed that they are any part of ‘the extra cost of materials and labor,’ and the contract does not contemplate any other extra expenses unless the same are ‘over and above the contract price.’
“The exact language is, ‘and all other extra expenses, if any, over and above the contract price, incurred in the completion of the work.’
‘ ‘ The account as of this date, it is respectfull3r submitted, should be stated as follows:
The contract price, with, authorized additions and reductions. §313, j.64. 35
Advanced payment on account of contract.$265,486.93
On account of authorized changes. 4, 539.57
Contract to complete with Pumley. 25,940. 00
Extra expense, exclusive of salary of assist, architect and S. M. Hunt’s traveling expenses_ 1,194. 72
Reduction on account of templates. 100.00
Paid on order of McLaughlin & Co., by order of July 12, 1894. 13,338. 33
- 310,599.55
Balance due McLaughlin &Co. 2, 564. 80
‘ ‘ The contract with Plumley relieved the firm of McLaughlin & Co. from all liability for expenses in connection with the completion of the Observatory under the well-settled principles of the doctrine of estoppel.
“It is proper to add in conclusion that your petitioners were in no way" responsible for the delaj^s in the execution of this contract, as will be shown by the correspondence with the Department; and, furthermore, that all extensions of time were duly authorized by the Department.
“We file herewith a statement of erroneous charges, as given in Exhibit B, and respectfully ask that this matter may receive your attention at the earliest date practicable.
“ Very respectfully,
“P. H. McLaughlin & Co.”
In the statement of account rendered to P. PI. McLaughlin & Co., on February 16, 1894, they are charged with expenses-that should not be charged against them, to wit, in Exhibit B of statement as follows:
1891. Sept. 21, asst, architect’s salary from Sept. 8 to 15. 840. 83 Oct. 23, “ “ “ “ “ 15 to Oct. 15. 175.00 Nov. 3, “ “ “ “ Oct. 16 to Oct. 31. 87.50 Dec. 3, “ “ “ for November. 175.00'
1892. Jan. 22, R. M. Hunt, traveling expenses from Sept. 8th to Dec. 31.1891 . 77.25 Jan. 5, asst, architect’s salary for December. 175.00 Feb. 4, “ “ “ “ January. 175.00 Mar. 4, “ “ “ “ February. 175.00 Apr. 4, " “ “ “ March. 175.00 May 4, “ “ “ “ April. 175.00 June 7, “ “ “ “ May. 175.00 July 8, “ “ “ “ June. 175.00 Aug. 4, “ “ “ “ July. 175.00 Sept. 16, “ “ “ “ August. 175.00 Oct. 4, “ “ “ from 1st to 23 Aug. -134.17
1893. Jan. 17, R. M. Hunt, traveling expenses for year ending Dec. 31.1892.J. 282.10 Due R. M. Hunt for travelling expenses, 1893 . 17.95 2,564. 80
“WASHINGTON, D. C., December W, 1891^.
“Hon. H. A. HERBERT,
“ Secretary of the Wavy, Washington, D. G.
“Sir: I have the honor to enclose herewith the petition of P. H. McLaughlin & Co. for a correction of the statement of the account between said firm and the Navy Department in connection with their contract of date of October 2nd, 1888, for the building of the new Naval Observatory.
“It is respectfully submitted that the charge for the assistant architect’s salary and the expenses of R. M. Hunt, architect, do not properly come under the head of ‘ extra expenses,’ as provided in the seventeenth section of said contract, inasmuch as said expenses were not ‘ over and above the contract price for the completion of the work.’
“The excess of cost to complete the work under Plumley, according to the statement, is given at $907.64; but this ‘excess ’ is arrived at by including the salary of the assistant architect and Mr. Hunt’s travelling expenses among the extra expenses of $3,759, for which there is no authority under the terms of the contract.
“It is not known what contract was made with Mr. Hunt, the architect, nor what amount was paid to him, but it seems, clear that it was not contemplated that any part of the money-due to the contractors should be taken from them and paid to him.
“The contractors are prepared to show that all delays up-to the time of the forfeiture of the contract were caused and. authorized by the Department.
“Very respectfully,
“ E. W. HunteR,
for P. II. McLaughlin ds OoP
[3cl endorsement.]
“U. S. Natal Observatort, Dec. SI, 189f
“Subject: Petition of Messrs. P. H. McLaughlin & Co. for correction in statement of account in connection with contract for construction of new Naval Observatory.
“1. Eespectfully returned to the Chief of the Bureau of Equipment.
“2. By terms of the contract between the Nary Department and McLaughlin & Co. dated Oct. 2, 1888, the date for the completion of the new Naval Observatory was fixed as-April 2, 1890; but this date was, upon application of the contractors, extended from time to time by the Department.
“3. The contract was annulled by the Department on September 8, 1891, the contractors having reported that they were unable to continue the work.
‘ ‘ 4. Section five (5) of the contract provided for the appointment of an architect and of inspectors; also, that the duties of the architect may be performed by an assistant. The salary of the assistant architect was paid by the Government, and was one of the expenses beyond the contract price of the building's, incident to their construction.
“5. By the failure of the contractors the period of the employment of the assistant architect was lengthened and extra expenses thereby incurred.
“6. The rules established by the Architects’ Association require that, in addition to a fixed fee, architects shall be paid actual traveling expenses if any are incurred. This established practice was agreed to by the Department, and in conformity to it the expense of necessary travel performed by the architect during the construction of the buildings was paid by the Government.
“I. The trips of the architect between New York and Washington, made necessary by the failure of the contractors to complete the work within the contract time, involved additional expenses to the Government.
“ 8. The contract contemplated that the Government should pay the salaiy of the assistant architect and the traveling-expenses of the architect during the eighteen (18) months allowed for the work. Ify extending the contract time for the completion of the work the Department assumed the obligation of paying these expenses during the period of such extension; and it did pay them up to the date of annulling the contract (September 8, 1891).
“9. The seventeenth section of the contract provides that, in case of annulment, the contractors shall bo charged ‘with the extra cost, if any, of materials and labor, and all other extra expenses, if any, over and above the contract price, incurred in the completion of the work.’
“10. In the statement submitted by the Bureau of Equipment, upon which the Department based the final settlement, the salary of the assistant architect and the traveling expenses of the architect, paid after the annulling of the contract, are charged as ‘ other extra expenses,’ to which the Government was subjected by the failure of McLaughlin & Co. to comply with the conditions of the contract.
“R. L. Phtthian,
“ Commodore, U. 8. IT.,
1 ‘Superintendent JTcoval Observatory. ”
[4th endorsement.]
“NaW DEPARTMENT, BUREAU OP EQUIPMENT,
“ January 5,1895.
“Subject: Petition of Messrs. P. H. McLaughlin & Co. for correction in statement of account in connection with contract for construction of new Naval Observatory.
“Respectfully returned to the Department, inviting attention to the 3d endorsement, with which this Bureau concurs, and in view of which it is of the opinion that the statement submitted to the Department contains no error, and that every item of charge therein stated and herein complained of was and is a proper charge against the original contractors.
“The Government was in no wise responsible for any delay in the fulfillment of the contract, and no extension was ever made except upon the written application of the contractors.
“It is clearly shown by the 3rd indorsement that the charges complained of were authorized by the contract; therefore all expenses of that character made necessary by the failure of the original contractors to complete, and the consequent necessity of the Government to abrogate the same and enter into a new contract with another party, became a proper charge against the original contractors under the seventeenth section of the contract as other extra expenses over and above the contract price incurred in the completion of the work, and should be so considered in the final settlement.
“F. E. Chadwick,
“ Ghief of Bureau,.”
“ Navy Department,
“ Washington, January 8,1895.
“Sin: Referring to the petition of P. H. McLaughlin and Company, dated the 15th ultimo, asking that they be paid the amount, $2,564.80, charged against them under their contract for the construction of the new Naval Observatory on account of the traveling expenses of the architect, and salary of, the assistant architect, and to the letter of their attorney accompanying said petition, the Department desires to be informed as to whether, in the completion of the Observatory after the forfeiture of McLaughlin and Company’s contract, any extra expenses were incurred over and above the contract price within the meaning of the l'7th clause of said contract, and as to what part of the appropriation for building the Observatory remains unexpended.
“The papers referred to herein are inclosed, and will be returned with the Bureau’s answer to this letter.
“Very respectfully,
“H. A. HERBERT,
“ Secretary.
“The Chiee of the Bureau oe EquipmeNt.”
[New Naval Observatory — Claim of Messrs. P. H. McLaughlin and Company that an error was made in settlement with them under contract.]
“The Department does not admit the contention of Messrs. P. H. McLaughlin and Company, made in their communication of the 15th ultimo, that an error was made at the time of the settlement with them under their contract for building the neiv Naval Observatory, in charging against them the traveling expenses of the architect and the salary of his assistant during the period consumed in the completion of the work after the forfeiture of their contract, and their request that the sum of $2,564.80, deducted on that account, be refunded to them, can not, therefore, be favorably considered.
“H. A. Herbert,
“ Secretary of the Nmy.
“JANUARY 30,1895.”
XL. The documentary evidence, taken in connection with all the other testimonj7, establishes to the satisfaction of the court—
(1) That the defendants delayed the actual commencement of the work from the time the contract was signed until November-2, 1888, by not designating the building lines.
(2) That the defendants also delayed building operations from February 23, 1889, to May 3, 1889, by and through an order of the Secretary of the Navy based on the recommendation of the architect that the work should stop on account of the winter. Said work was also in part delayed by the neglect and failure of the Government to locate foundations for instrument piers to certain buildings during said time, and in the work of excavating foundations under a certain other building until September 5, 1889.
(3) That notwithstanding the neglect and failure of the Government to locate foundations for instrument piers to certain buildings certain other work might have proceeded on the boiler house and duct from the same to the main building-had the contractors desired to go on with it.
(é) No pecuniary damages were specifically stated or claimed b}7 the contractors on account of any delays or interruptions in the progress of the work except as shown in preceding findings.
(5) No request at any time was made by the contractors to be released from their agreement unless the work could proceed.
(6) Through an error of judgment, which did not involve the good faith of the inspectors or architects in directing the formula of the concrete of which the piers for instrument foundations was to be composed, plaintiffs suffered loss and damage in the progress of the work to the extent of §1,938.
(7) It does not appear to the satisfaction of the court that the contractors progressed with the work sufficiently to bo entitled to payment of the percentages provided to be paid by the contract on the value of the work as it progressed at an earlier day than said payments were actually made under the decision of the architect.
Mr. John G. Ohcmey and Mr. Robert W. Hunter for the claimant.
Mr. John G. Capers (with whom was Mr. Assistant Attorney General Pmdt) for the defendants.

Opinion:
Howry, u.,
delivered the opinion of the court:
Authority was conferred by an act approved March 3,1887, upon the Secretary of the Navy to have constructed a new Naval Observatory on Georgetown Heights, in the city of Washington, D. C.
Pursuant to that authority, the Secretary invited proposals for the construction and erection, by contract, of nine buildings. The specifications with plans (except certain details of work and materials relating to the construction of floors, piers for instruments, and equatorial domes) were to be had on application, and proposals were to be made in accordance with forms to be furnished. It was required that each proposal should be accompanied by a satisfactory guaranty that the bidder would, within twenty days after the receipt of notice of acceptance, execute the required contract and give a bond, with satisfactory surety, conditioned for the faithful performance of the contract within eighteen months after it was made.
A bid by plaintiffs for this work was accepted June 29,1888, but the contract between the parties was- not actually executed until October 2,1888. It does not appear whether any unusual preparation for the undertaking was made by plaintiffs between those dates.
The building lines not having been designated until November 2, 1888, active work on the buildings was not begun until that time. Because of delay in the execution of the contract and the omission of the engineers to designate building lines, the contractors applied for and obtained an extension of time for the completion of the work to October 1, 1890. Three extensions of time to complete were subsequently granted on the application of the contractors.
With an extension of time to their credit of nearly two months, plaintiffs abandoned the work September 3, 1891, before it was finished, and thereupon the contract was by proper authority declared forfeited.
After forfeiture the buildings were completed under a new contract. The cost of completion was charged to plaintiffs, and an account was rendered to them showing the debits and credits to which each party to this action was entitled under the original contract with the authorized additions. A balance appearing in plaintiffs' favor, the amount of it was paid to them on the order of the Secretary of the Navy. Subsequently plaintiffs suggested an error of $2,864.80, with a view of having the same corrected. The Secretary declined to I'efund the amount asked, whereupon the plaintiffs brought this action.
The claims, tabulated from the amended petition, are as follows:
1. Delay until October 2,1888, in the execution of the contract. $4,500. 00
2. To extra expenses incurred, on account of enforced delays of the work by the Government, April 22, 1890, to September 8, 1891, for enforced idleness for said period of watchmen, drivers to teams, a foreman and engineer, blacksmith and helper, a clerk, timekeeper, office boy, teams and feed of horses, cost of maintaining separate office for assistant Government architect, making a total of §13,714.50; lossoftime and opportunity to each member of the firm for eighteen months, at $200 per month, $10,800; profits lost, which might have been made if other contracts could have been taken during these eighteen months, $6,150; amount paid general laborers, not above enumerated, $10,000; total of these items. 40,673.50
3. Materials furnished and work done by the contractors on the buildings and appurtenances on account of mismanagement and delays of defendants, which cost the contractors $374,-059.96, upon which a commission of 20 per cent profit is claimed. 74,811. 99
4. Materials furnished and work done extra to the contract . 29,371. 35
5. Materials at the site at the time of forfeiture, and appropriated by defendants. 24,478. 35
6. Exclusion of Davis, one of the contractors, without just cause, from the management and direction of the work for a year and a half during the life of the contract (necessitating the employment of an extra foreman at $5 per day). 27,250.00
7. Failure to pay the full amount of 90 per cent of the value of the work at the times specified by the contract, but withheld, to the embarrassment of the contractors in arranging payment for materials and labor, compelling them to borrow-money and to pay interest. 2,588. 77
8. An improper charge against the contractors on account of salary of the assistant architect of said buildings and traveling expenses of the architect... 2,564.80
These demands are so inconsistent witb an apparent adjustment of the matter after the completion of the work, and are so earnestly urged as just, the items will be considered upon their merits irrespective of the supposed settlement.
Respecting delay in the execution of the contract, it is argued for the plaintiifs that the advertisement and specifications were complete when submitted for bids, and that the acceptance of the proposals for doing the work constituted a. contract without the formalities of a subsequent written agreement; and although it is conceded that the Secretary of the Navy was bound by law to make a formal contract, nevertheless it is insisted that it was his duty not to delay doing so to' the damage of the bidders.
The defense is rested upon the ground that plaintiffs did not complete the execution of the bond conditioned for the faithful performance of the work until a few days before the contract was formally executed; and, secondly, that the matter of delay was subsequently submitted to the Secretary of the Navy with a view of securing an extension of time only, which was granted.
The statutes relating to public contracts, some directory, but others mandatory, are not interposed by way of defense to this branch of the case (secs. 3744-3747); but section 3744 of the Revised Statutes provides that "it shall be the duty of the Secretary of War, of the Secretary of the Navj-, and of the Secretary of the Interior to cause and require every contract made by them severally on behalf of the Government, or by their officers under them appointed to make such contracts, to be reduced to writing- and signed by the contracting parties ivith their names at the end thereof. " This statute is mandatory. (Clark v. United States, 95 U. S. R., 539; South Boston Iron Company v. United States, 118 U. S. R., 37.) Operative as a statute of frauds, it makes contracts not reduced to writing and signed by the contracting parties void.
The preliminary advertisements, specifications, and proposals and acceptance of proposals must be viewed as becoming a part of the statutory contract when a contract was executed as required by statute, but until then only the negotiations necessary to the execution of a formal contract. The exception noted in the books that a parol contract wholly or partly executed on one side entitles the party performing to recover the fair value of his property or services as upon an implied contract for a quantum meruit has no application here.
Independent of the statute, while the contractors were no doubt waiting on the Secretaiy, thej1- were quietly doing so and presumably engaged in business profitable to themselves, although it does appear that the contractors declined to accept other contracts.
They made no effort, however, to complete the preliminaries. It does not appear that anj^ demand was made for the formal execution of the contract, or that any request was preferred bjr them to be permitted to proceed, or that they tendered any bond in advance of the time the matter was actually closed. They seem to have begun wort without protest or even an intimation that they had been subjected to an unfair delay in the execution of the formal contract, and under these circumstances we must presume that the failure to submit the formal contract for execution at an earlier time did not materialfy prejudice the interests of the contractors. While it was not necessarily imposed upon plaintiffs to make any demand for the execution of the formal agreement or to tender a bond in advance, their silence is sufficiently suggestive of acquiescence in the delajr attending the submission of the formal agreement and the signature of the proper parties.
Soon after beginning work the contractors asked credit for an unavoidable delay, stating that they had not been able to start active work on the buildings until November 2, 1888, as on that day the Government engineers furnished them with building lines.
The neglect of plaintiffs to make any specific complaint of the failure of the Government to designate the building lines in October (neither the original nor amended petitions disclosing any such complaint), and the omission on the part of plaintiffs to bring to the attention of the court on the first hearing the particular items going to make up the alleged loss or damage to them by reason of the delay in question, led the court to treat the failure of the Government to designate the building lines earlier as inconsequential and immaterial. In view of the contention of the contractors that they supposed the allegation of special damage on this account was embraced in the general allegations made bjT the pleadings, an amendment has been authorized and made. On this amendment the evidence has been reviewed with the result established by the findings that for the twentj^-eight days after the exe cution of the contract plaintiffs were actually waiting for the Government to indicate where the work should begin.
The tenth clause of the agreement required the collection and preparation by the contractors of stone, brick, and other materials without delay and to commence work at the site within twenty days from the date the contract was signed. Making due allowance for everything calculated to keep the contractors in suspense during the month of October, and giving effect to all the circumstances in their relation to the readiness of the contractors to proceed had the building lines been established earlier, the actual loss and damage to plaintiffs could not have exceeded $780, and the court has so found.
It was the duty of defendants to furnish building lines at once without request, from plaintiffs. (Figh's case, 8 C. Cls. R., 319.)
Extra expenses incurred "on account of enforced delays of the work by the Government, April 22,1890, to September 8, 1S91," are next alleged. This part of the petition is indefinite (for which a motion by defendants to make more definite and certain could have been made) in not stating whether the delays complained of were before or after the day first mentioned. Interpreted by the proof, however, we find the allegation to mean that but for the fault of the Government before April 22, 1890 (and not between the dates given), the contract could have been completed bj^ that time, and because of inability to complete as stated, the expenses of plaintiffs subsequently incurred should be charg'ed to the United States.
Though these extra expenses are meant to be charged for the faults of the Government anterior to the date first given, a larger item yet appears partly on the same account, but not limited to anjr portion of the time of plaintiff's undertaking.
The sum of $71,811.99 is claimed by way of profits lost on expenditures forced on plaintiffs "on account of mismanagement and delays of defendants." These profits are figured upon an alleged outlay of $374,059.96 in attempting to carry out the contract. Should these be allowed, plaintiffs would thus recoup their alleged losses.
Assuming that the contractors did lose money on their general undertaking, as they allege, the proof yet must show such fault on the other side as to have caused unnecessary expenditures by plaintiffs before profits or damages can be given.
The alleged mismanagement of the Government agents is necessarily interwoven with the alleged causes of the delays; but here again we deal with an indefinite complaint, because the pleadings do not show specific acts of mismanagement. Defendants might well have relieved the court of the unnecessary labor of investigating the entire record by a motion to compel plaintiffs to be more ' definite and certain on this point. Failing in this, however, we gather the following from the briefs:
First. There is a complaint of the failure of the Secretary of the Navy to make at an earlier time special contracts for the construction of piers for instruments under those buildings where instrument foundations were not covered by the general contract.
Second. A general complaint against the architect and his-assistant (more particularly the latter) because of methods adopted in making changes in the buildings.
Third. The abuse of authority in the inspection of work and material.
Fourth. Complaint of the enforcement of the rule provided for in the contract for the maintenance of order during the progress of the work.
The rules which govern contracts like this are settled. One is that if a party by his contract charge himself with an obligation possible to be performed, he must make it good, unless his performance is rendered impossible by the act of God, the law, or the other party. Difficulties, even if unforeseen, and however great, will not excuse him. If parties have made no provision for a dispensation, the rule of law gives none, nor, in such circumstances, can equity interpose. (Dermott v. Jones, 2 Wall., 1; Cutter v. Powell, 2 Smith's Leading Cases 1, 7 Am. ed.)
Another rule is that it is competent for parties to a contract - of the nature of the present one to make it a term that the decision of an engineer, or other officer, of all or specified matters of dispute that may arise during the execution of the work shall be final and conclusive, and that in the absence of fraud or of mistake so gross as to necessarity imply bad faith, such decision will not be subject to the revisory power of the courts. (Kihlberg v. United States, 97 U. S. R., 398; Martinsburg and Potomac Railroad v. March, 114 U. S. R., 549; Chicago and Santa Fe Railroad Co. v. Price, 138 U. S. R., 185; United States v. Gleason, 175 U. S. R., 602.)
The third, fifth, tenth, and twentieth paragraphs of the contract give the Secretary of the Navy, or persons appointed bj'him, the power to finally determine "any doubts or disputes arising as to the meaning of anything in the drawings, plans, or specifications," and the contractors bound themselves to abide by his or their decision in the premises.
Paragraph 3 provides for a board of naval officers who had authority to pass upon changes involving an expenditure in excess of §500, and the contractors bound themselves to abide by its determination. Such changes could not be made except upon a written order of the Secretary of the Navy. For changes involving an expenditure of less than the amount stated an agreement in writing was necessary between the contractors and the architect, but subject to the approval of the Secretary.
Paragraph 5 makes the decision of the architect upon all questions concerning material and workmanship final.
Paragraph 10 provides that no delay attributed by the contractors to the Navy Department, its officers, or agents, could be considered by the Secretary of the Navy unless the contractors should at the time of the occurrence of such delay notify the Secretary in writing of the facts and circumstances in each case and of the extent that the final completion of the work was thereby delayed.
Some two months after the execution of the principal agreement plaintiffs did not solicit the work, but submitted a bid for a part of the work relating to the construction of piers for instruments. This bid' was subsequently accepted, but not until the winter was over. In the meantime plaintiffs applied for an extension of time to complete the general undertaking. Their application was made some time in January, 1889, and was rested upon the delay of the Government in deferring the execution of any contract until October, 1888, upon the bid accepted June 29, previously, and because active work on the buildings had been retarded for want of building lines. These two considerations, they stated, lost to them the working season of 1888. This «7 anuary letter was followed by another, dated February 18, 1889, declaring the impossibility of completing the work within the time first fixed. The extension was formally granted March 1, 1889, the Secretary of the Navy referring in granting the extension to a recommendation of the architect, made in the early part of the winter, that foundations for the buildings ought not to be laid during the winter months, in consequence of which the Secretary stated ho had " authorized" a delay in the commencement of the work on the buildings.
Plaintiffs' progress with the work was unquestionably interrupted from February 23, 1889 — the date of the Secretary's order — to Majr 3, 1889, because of the inadvisability, in the judgment of the architect, of continuing the work in the winter. For the same reason it was interfered with by the verbal direction of the Secretary of the Navy to the contractors (through the architect) earlier in the winter, and because of the neglect and failure of the Government to locate foundations for instrument piers to the building which, under the first contract, plaintiffs were obliged to build. How much the interference was does not fully appear, as the authority to stop work and the order of February 23, 1889, did not interrupt all the work. Their work was also interrupted from time to time during the summer of 1889 and until September 5 of that year, because of the neglect and failure of the Government to locate foundations for instrument piers to another building. Finding x discloses facts which justify the assessment of damages on these accounts in the sum of $3,675.
The interruption to plaintiffs by the neglect and failure of defendants to locate foundation for instrument piers to another building damaged plaintiffs to the extent of $948, for which an allowance is also made in the tenth finding.
On account of an error in directing the formula of the concrete to be used in the construction of the foundations for instrument piers, plaintiffs also had their work interrupted. Finding xl establishes the amount at $668 for this delay and interruption.
The complaints of mismanagement relate to changes in the plans and the methods adopted for the inspection of work and material. These complaints involve charges against the architect or his assistant, and really constitute the gravamen of this entire proceeding.
Under the rules stated ante, fraud or failure to exercise an honest judgment must appear in the 'conduct of the officer involved. The burden of proof is upon plaintiffs to establish such fraud or dishonesty.
The contract is free from ambiguity, as to the right of the Government to make changes and to direct inspection of work and material. It is surprising that charges so grave as those directed against the architects should not appear by specific allegation of fraud or mistake in the pleading. The petition contains a general charge of "mismanagement and delays on the part of defendants," but does not specify a single act of mismanagement except in the most general terms.
The requests for findings of fact are equally general and deficient. They ought not to be taken more seriously than plaintiffs themselves estimate them as grievances. In none of these requests, except by implication, can be found charges of fraud or dishonesty against the Government agents. Where, then, are we to begin to upset the decisions of the architects?
Waiving the insufficiency of the allegations, however, the findings show the rejection of brick, the condemnation of marble, a requirement to discharge a careless employee, and finally a complaint against one of the contractors for failure to preserve order himself, followed by an .order resulting in his ejection for a time from the grounds.
We have carefully considered everything presented relating to the hindrances caused by the conduct of the Government agents, and especially to those relating to the conduct of the assistant architect against whom the complaints are principally directed. But taking the entire proof, we are unable to adopt the views of the able counsel who have presented this cause so earnestly for plaintiffs. That the architect and his assistant were rigorous in the discharge of their duties; that they required the contractors, in the materials and workmanship used and applied, to use and apply that which was "first-class and of the very best quality unless particularly set forth in the drawing, plans, and specifications," and that the archi tect's assistant may have been personally disagreeable and sometimes too exacting- is probable, but we feel sure that out of the facts found no conclusion of fraud or gross mistake can arise sufficient to necessarily imply bad faith or failure to exercise an honest judgment.
. As to the damag-es claimed for the causes leading to annulment of a contract with an employee named Fink, it majr be observed that with an opportunity to show that an injustice had been done in the order directing the discharge of Fink the contractors did not avail themselves of the privilege at that time. The contract provides that "only skilled, competent, and fit workmen shall be employed on the work, and the architect may by written notice require the parties of the first part to dismiss anjr employee he may deem incompetent, careless, or otherwise objectionable on the work." Though the contractors denied that Fink ivas doing bad work, or that they had knowledge of threats on his part of personal violence to the inspectors, they expressed a willingness to comply with the request to discharge him, and hoped they would be able to convince the architect that an injustice was being 'done. The record does not show that 'any other effort was made b}T them to have Fink remain, and having acquiesced in the order of the inspector we must take it for granted that his action was proper.
The eighteenth finding discloses conditions under which one of the contractors was excluded from active participation in the-management. Differences arising between this contractor and an inspector in the methods adopted by the contractor in laying brick, an altercation ensued, resulting in the use of insulting language of and concerning- Davis (the contractor) by the inspector, who in turn was violently assaulted by Davis. From this occurrence, after some correspondence, an order resulted excluding- Davis from active participation in the management. The contractors made no objection to the order at the time, and no intimation of inconvenience or damage appears beyond the employment of a foreman to superintend the laying of brick. Reference to the finding will disclose the circumstances in full.
With the merely personal features of the controversy which led to the order we have nothing to do. Disobedience of the proper orders of tbe inspector did not justify the use of language by him personally insulting. On the other hand, as a subordinate giving orders under a written agreement, he was entitled to protection from the attack of the contractor. The means of protection taken, however, was unenforceable had Davis chosen to resist the order, because of his right to continue in active management of work which he had bound himself with others to do within the' timo fixed by the agreement. True, the provision' which made the contractors responsible for good order ab,out the structure operated upon them as well as upon their men, and thejr were bound to observe that provision as wéll as the other obligations of their agreement. Put they were not' employees within the meaning of that term of the contract, which authorized the architect to dismiss employees deemed objectionable.
The contractors did not, however, resist the order. Their letter seems to bo something of an admission that Davis ivas at fault. They made no effort to have him retained in active charge. They made no effort to have him reinstated. Pie may have proved useful elsewhere in advancing the work. No account is offered as to what use .he made of his time in the period of his absence. It was his duty to diligently endeavor to find employment during the time damages are claimed from defendants if he was not actively useful on their own undertaking. Failing to shoiv that ho reasonably exerted himself to prevent or diminish damages, the claim can not bo allowed.
On the item on account of interest alleged to have been paid by plaintiff's for defendant's neglect to pay promptly the percentage required by the contract on the- value of the work as it progressed, it does not appear that these payments were unlawfully withheld. But oven if they were, there can lie no recovery under the statute for interest paid in borrowing money to carry on the work. (Rev. Stat., sec. 1091.) Interest presented in the guise of an extra expense or damage in some other form can not be collected. (Myerle, executor, v. United, States, 33 C. Cls. R., 1.)
The extra work and material (exclusive of amount claimed for annulment of the Fink contract) for which payment is demanded is fixed at $25,121.35. This and items aggregating $24,478.35 for condemned materials alleged to have' been appropriated and used by the Government without compensation to plaintiffs can be considered together, in view of the proceeding taken subsequent to forfeiture of the contract.
If forfeited, the contract provides—
'The Secretary of the Navy shall thereupon cause to be taken and filed a full and complete statement and inventory of all work done or commenced in, upon, or about the buildings, appurtenances, and fittings, and of all materials on hand applicable thereto, and shall cause the same to be duly valued by a board, consisting of not less than five persons qualified by knowledge and experience for the discharge of their duties, to be appointed bj^ the Secretary of the Navy, which board shall proceed, without unnecessary delay, to examine such work and materials and ascertain and declare the fair market value thereof, including a reasonable and customary margin of profit upon so much of the work as shall have been, at the time such forfeiture is declared, satisfactorily performed; and upon such an examination the parties of the first part may attend in person and by counsel and submit such evidence as the board may deem proper.
" In case the Secretary of the Navy shall proceed to complete the work such procedure shall be without unnecessary delay, and shall be at the risk and expense of the parties of the first part, who shall be chargeable with any increase in the cost of materials or labor incurred bjr reason of their failure to perform the contract. Upon final settlement of the liability of the parties of the first part an account shall be stated substantially as follows:
" The parties of the first part shall be chargeable—
"1. With all advance payment.
" 2. With the extra cost, if any, of materials and labor and all other extra expenses, if any, over and above the contract price, incurred in the completion of the work.
"They shall then be credited with the value of the work done up to the time of suspension, and of the materials on hand as ascertained by the board and approved by the Secretary of the Navy under the provisions of the fifteenth clause of this contract, and with such advanced payments, if any, as may have been refunded."
An inventory was taken and an appraisement was made by a board duly appointed. The report of the board was approved by the Secretary of the Navy. Upon completion of the buildings an account was rendered showing a balance due to plaintiffs under their original contract, with authorized additions, of $13,338.33. A statement of the account was approved by the Secretary of the Navjr, and was, on February 16, 1894, submitted to plaintiff's. The balance shown by the account was paid to them on the order of the Secretary, July 12, 1894. Plaintiffs executed vouchers for this payment without protest or claim of-lanjr kind that the amount was incorrect.
No penalties for failure to .comply with the terms of the contract were assessed against plaintiffs, nor were any claims of any kind presented to the board for allowance. No exceptions were filed to the return of the board before the Secretary of the Navy.
An account rendered and not objected to within a reasonable time is to be regarded by the party charged as prima facie correct. But five months after the settlement plaintiffs objected to one of the items only. If this objection is .deemed to be within a reasonable time and the other items considered nnobjected to, the latter items are to be regarded as covered by the admission (Wiggins v. Burkham, 10 Wall., 129). This authority holds that reasonable time becomes a matter of law when the facts are clear. By acquiescence, then, we think the account rendered became stated for all items in it except the one to which objections were made, and as to that one item the account was also stated if not objected to within reasonable time. It thus devolves upon plaintiffs to impeach the account as far as it may be considered stated by proof of unfairness or mistake in law or in fact.
It is argued that the board'erred in basing its estimates of the value of the work done and materials on hand by ignoring thecurrentpric.es of the cost of the work to plaintiffs; and inasmuch as the labor and materials cost the contractors an amount alleged by them to equal $374,059.96, plaintiffs insist that the estimate of the board, made under the fifteenth clause of the contract, proceeds upon a misinterpretation of its terms.
If this proposition be true, then, assuming the cost to be as stated by plaintiffs and allowing thereon the claim of 20 per cent commission, plaintiffs would receive in return, on account of expenditures and profits alone, a total of $448,870.95. Thus, on contracts entered into by the Gov ernment for the sum of $313,164.35 (which includes authorized additions), plaintiffs would have the Government pay $135,706.60 more than it agreed to pay.
Again, on the statement of what the}*- paid out and what they admit to have received, plaintiffs ask the Government to refund their loss, if,, in any event, profits on their alleged outlay can not be paid. These would be remarkable results on a forfeited contract and a handsome premium to pay for work abandoned and failure to meet obligations voluntarily assumed in view of the remission of penalties for abandoning the undertaking.
Next, it is argued that the board erred in basing its estimates of the value of the work done and materials on hand by ignoring the value of the extra work and material.
No findings appear to establish the plaintiff's losses, because,, in the view we have of the rights of the parties, the cost of the undertaking can not enter into the final calculation. If the cost of the undertaking exceeded the contract price, with authorized additions, any finding based on this excess cost would rest on an immaterial issue, unless by some act or fault of the Government the contractors were defrauded. Such we do not think was the case.
If the cost of labor and material in the open market fixed the fair market value of the labor and material required to be appraised, then the contract price became inapplicable to the work in an incomplete condition. According to this reasoning, for completing the work the Government would pay $313,164.35, while for not completing it the Government would be liable, if plaintiff's allegation of current cost be true, for $374,059.96. If this was the kind of a contract the parties made, plaintiffs took no risk, but the Government assumed it all in the beginning. If the contract price was profitable, the plaintiffs got the benefit of it; if unprofitable, they lost nothing. This reasoning, however, will not do. The Government did not intend by its contract to hold out inducements, to be availed of at any stage of the proceedings, for a forfeiture. The fair market value of labor and material subject to appraisement was the contract price for doing certain work into which the labor and materials were put. Plaintiffs understood the contract to mean what the Secretary of the Navy understood it to mean, for they agreed to refund, in case of forfeiture, as for liquidated and ascertained damages, a sum equal to the aggregate amount on account of the work, to enable the Government to complete the job within the contract price.
The claims for extra work and material rest upon what plaintiffs term the arbitrary disregard of their rights in the orders given by the architect's assistant. It is asked that these items be enforced upon an implied contract for a quantum meruit, and they are discussed by both sides upon their merits, irrespective of the apparent disregard of the terms of the contract excluding extras unless duty authorized.
The architects were without authority to order changes which increased the cost to the defendants where the expenditures were less than §500, unless an agreement setting forth fully the reasons and stating the quantities and prices was first approved by the Secretary of the Navy. The plans could not be changed when the cost exceeded §500, except upon the written order of the Secretary; and changes involving expenditures in excess of said sum, with the actual cost, had to be first determined by a board on changes. If extra work was done on the order of a subordinate having no authority to give the order, which increased the cost to plaintiff's, it is their misfortune. No contract can be implied, even though defendants may .have reaped a material benefit, without proof of an order from the proper authority showing a •waiver of the express provisions of the agreement. Extra work done on the order of the local assistant architect who supervised the work was prohibited. The contract could neither be enlarged nor changed bjr a subordinate, and even in the case of an assurance that additional compensation would be allowed, such an agreement is inoperative and void. (Hawkins v. United States, 96 U. S. R., 689; Ferris v. United States, 28 C. Cls. R., 332; Driscoll's case, 34 C. Cls. R., 524.) The doctrine of quantum meruit applies only when the defendants have derived a benefit from a partial performance of the agreement which they could have abandoned or rejected, and which exceeded in value the damages sustained by them when the failure to perform is the fault of the plaintiffs.
Various explanations are now given for complying with the orders of the architect in doing the work, now claimed to be extra, without conforming to the requirements of the contract. These explanations are not necessary to be considered to properly determine the cause, but are adverted to- to show how little there is in them to excuse failure to follow the express terms of the original agreement.
It is said that at the time of the order for excavating cellars the board on changes had not been appointed. This is true. The excavations for cellars were oi-dered January 11, 1889, and the board was appointed eleven days thereafter. But plaintiffs' acceptance of the decision of the architect, that the cellars were covered by the specifications, is conclusive that the decision of the architect at the time was correct. In anjr event they were not relieved from appealing to the Secretary of the Navy if the work was deemed by them extra at the time it was ordered. No pretense of an appeal was made to the board on changes, or to the Secretary, for the alleged changes in the system of ventilation or for plastering ceilings. For putting copper on the balcony of the main building the plaintiffs say they were denied the right to have the matter brought before the board on changes. The proof is insufficient to establish this. In the matter of changes in the staircase and elevator, though plaintiffs say they were intimidated by the architect, the proof is insufficient to establish any intimidation. Respecting the floor connecting corridor between the small-equatorial and main transit rooms, there seems to have been a reference of a difference to the board on changes, but no contract was made between the parties, nor did the Secretary of the Navy have any knowledge of any controversy respecting these two small items. In the matter of extra tile, plaintiffs state that had this matter been submitted to the board on changes the decision would probably have been in their favor. And yet there was no appeal. The other small items are in the same condition.
The findings dispose of claims for the value of material owned by plaintiffs and alleged by them to have been appropriated by defendants. The provision investing title in the United States to all suitable material on hand at the time of forfeiture did not include condemned material. That belonged to plaintiffs. But without clearer proof of the appropriation by defendants of condemned material on the site of the structure at the time of forfeiture we are bound to assume that the process against plaintiffs under which certain material on the ground was sold (and purchased in plaintiffs' interest) included all they had.
If plaintiffs have -shown any merit in the items considered, a material question remains to be finally determined, as to the effect of the execution of the vouchers and the receipt of the money in supposed final settlement of claims under the contract.
After reciting- that upon final settlement of the liability of the parties an account should he stated, the contract provides: '"If a balance shall thereupon appear in favor of the contractors the same shall be paid to and accepted by them in full discharge of all claims under this contract." Whatever, then, was agreed to must be taken and held to be a matter of voluntary adjustment, in its nature final and conclusive, irrespective of any judicial power possessed by the board which made the report; and in this respect the case is not unlike those of United States v. Adams, 7 Wall., 479; Mason v. United States, 17 Wall., 73.
With knowledge of what the board had done, plaintiffs presented no claims for extra work or material, and offered no objections before the Secretary of the Interior to any part of the account. This, avc think, they Avere obliged to do under the contract, for purposes of adjüstment, before executing the A'ouchers and receiving the balance stated to be due in final settlement.
It is true in general that payment of part of an admitted sum forms no consideration lor the release of the residue. But here plaintiffs executed A'ouchers Avhich induced the settlement and created the impression that other'claims of a like character Avere A'oluntarily relinquished. It has been held that a certificate given under such circumstances operated to release demands which might have been considered. (Coulter v. Board of Education, 63 N. Y. Rep., 365.) The receipt should be construed in connection with those provisions of the contract which authorized an inventory and an appraisement of all authorized work, inclusive of materials on hand, and the statement of an account Avhich should include all proper charges against the contractors in default in completing the work. The contract did not contemplate a partial investigation of some of the matters of which the board had jurisdiction nor an approval by the Secretary of part, leaving the other demands on account of the same work open to further investigation and adjustment upon the installment plan. It was the intention of both parties to release all claims for work done under the contract,- and if other claims for work existed at that time they were disputable.
The transaction became an accord and satisfaction for the subject-matter considered. (Murphy v. United States, 14 C. Cls. R., 508; 104 U. S. R., 464.) This includes the charge against plaintiffs on account of the expenses of the architects.
It is true that after the settlement plaintiffs took exceptions to the correctness of the charge against them for the assistant architect's salary and traveling expenses of the architect. But these exceptions were presented to the Secretary of the Navjr some months after the close of the transaction, which was an unreasonable time. Plaintiffs predicate their exemption from these charges upon the ground that they were not a part of the extra cost of materials and labor, and the further ground that the contract did not contemplate any other extra expenses unless the same Avero over and above the contract price. •
The seventeenth paragraph of the contract' provides that "in case of annulment the contractors shall be charged with the extra cost, if any, of materials and labor, and all other extra expenses, if any, over and above the contract price included in the completion of the work." These charges were extra expenses. They would not harm been incurred had the plaintiffs complied with their contract. The work was not completed until February 31, 1893. It was plaintiffs' fault that caused the necessity to keep an assistant architect on the grounds until completion. It is not to bo expected that the Government should dispense with the supervision of the principal architect, who was under the necessity to leave his office in New York from time to time to supervise the work of his assistant and the last contractor. If the alleged overcharge was open for consideration it should not be deducted from the account on plaintiffs' theory that the3r were not responsible for the extra time consumed to complete. This in effect would make the Government responsible for their default, which was not the case.
The award of the board and the settlement thereunder not being successfully impeached for eithet' fraud or mistake, the settlement became final as to the subject-matter covered by it.
It can not be said, however, that the vouchers were intended to cover those matters not within the province of the board to consider or the jurisdiction of The Secretary to allow. The parties are presumed to have understood their rights and remedies enough to know that claims for damages on account of hindrances and interruptions in the prosecution of the work could not be entertained by the Navy Department. The Secretary was restricted in his approval of the board's award to those matters only appearing upon the face of the account. If plaintiffs have now shown merit in. their claims for these hindrances and interruptions thejr are entitled to judicial redress. The findings establish the amount of these claims in the aggregate sum of $7,311 (as' hereinbefore set forth in detail), and for the aggregate sum found judgment will be entered for plaintiffs.