Case Name: SHIPPEY & OUTZEN v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1913-12-15
Citations: 49 Ct. Cl. 151
Docket Number: No. 30336
Parties: SHIPPEY & OUTZEN v. THE UNITED STATES.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 49
Pages: 151–171

Head Matter:
SHIPPEY & OUTZEN v. THE UNITED STATES.
[No. 30336.
Decided December 15, 1913.]
On the Proofs.
- Tbe plaintiff in October, 1905, entered into a contract with tbe Government to do certain work near Riverton, Ala. Under tbe contract tbe price of bardpan excavation was fixed at $0.50 per cubic yard, while tbat of eartb excavation was $0.1749 per cubic yard, and rock excavation $1 per cubic yard. .Tbe contract also provided that “the decision of the engineer officer in charge as to quantity and quality shall he final.” A controversy arose between the contractor and the Government and this suit is before the court as a result of a reference by the acting Secretary of War under section 1063, Comp. Stat. 1901, p. 738; 22 Stat. L., 485; and under the act of March 3, 1887, 24 Stat. L., 50§.
I.Where before the contract is awarded the Government makes test holes along the line of work, records the results thereof which are subject to inspection by the bidders, the Government did not guarantee the character of the material and bidders were expected to assume responsibility.
II.Where a subordinate engineer officer refuses to he governed by the construction given to the contract by the principal engineer officer relative to the classifying of materials to be excavated and also refuses to mllow the directions given by the principal engineer as to classifying material to be excavated; and there is no explanation as to why this subordinate did not classify according to his superior’s construction of the contract and as to the material to be excavated, the final action taken by the local subordinate last in charge in conformity to and with the interpretation put upon the specifications by the chief engineer officer will he taken as the best basis for a just settlement.
III.Where the refusal to modify the estimate arising out of the chief engineer’s doubt is predicated confessedly upon the want of . information there was a failure to exercise that kind of judgment the plaintiff was entitled to receive.
IY. A decision of the chief engineer rendered without adequate informa- ' tion is a violation of the spirit and intent of the contract to bind the contractors in the decision of the chief engineer.
V. The specifications can not be said to have been met when the Government agent’s judgment, being required, was followed by his refusal to act.
The Reporter’s statement of the case;
The following are the facts of the case as found, by the court;
I. The claimants, W. A. Shippey and A. Outzen, are citizens of the United States, residing in the State of Tennessee, and were, under the firm name of Shippey & Outzen, as partners, doing business as contractors engaged in excavation work at the time of filing the petition herein and for some time prior thereto.
II. Said partners, on the 12th day of October, 1905, entered into a contract with the United States to do certain excavation work on the Colbert and Bee Tree Shoals Canal, near Riverton, Ala.
Said contract was subdivided into two contracts or divisions, one covering stations 10 to 110 (said canal having been divided into stations by the contract and specifications attached thereto) and the other from station 110 to station 210, or, as far as the then appropriation of .$320,000 would go.
The work between stations 33 and 100 was sublet by Shippey & Outzen to the North Alabama Construction Co. with the consent o'f the Government, the proper officials having knowledge of this transfer and payments being made by the United States with the knowledge that the subcontractors were working under Shippey & Outzen.
III. Under said contract between Shippey & Outzen and the United States, the price of hardpan excavation is fixed at 50 cents per cubic yard while that of earth excavation was fixed at $0.1749 per cubic yard, and rock excavation was to be paid for at the rate of $1 per cubic yard.
The contract provided in section 2 that the work should be subject to a rigid inspection by an inspector appointed on the part of the Government and that “the decision of the engineer officer in charge as to quality and quantity shall be final.”
The specifications which formed a part of said contract contained the following language:
“41. Materials. — Test holes have been made by the driving down steel rods at every station on the axis of the canal, and usually also at points about 50 feet to the right and left of each station, and the results are recorded in this office and are subjected to inspection by prospective bidders. The soil is apparently of alluvial formation within the limits of this contract, and the borings indicate that little, if any, difficult material will be found. The United States will not guarantee the character of the material, however, and each bidder is expected to form his own judgment and assume all responsibility on this point. Bowlders of more than 9 cubic feet in volume, and rock that can not be loosened by pick and requires blasting for its removal, will be classified as ‘Bock excavation.’ Materials other than rock that can not be loosened by a 6-horse plow, or removed by steam shovel without blasting, will be classified as ‘Hardpan excavation.’ All other materials will be classified as ‘Earth excavation.’ * * *
“53. Estimates. — All excavation will be measured in place and paid for by the cubic yard on monthly estimates of yard age covering work tbat has been done in a manner satisfactory to the engineer. * * *
"54. Disagreement. — In case of any doubt or disagreement arising under these specifications the decision of the engineer shall be final.
"55. Engineer. — The word ‘engineer’ is understood to mean the United States engineer officer in charge of the work or his designated agent.”
Hardpan as distinguished from earth excavation frequently shades off from one into the other. A classification of hardpan as distinguished from earth in each excavation under the contract requires the exercise of judgment and discretion on the part of the officer charged with the inspection.
IV. The construction of the canal was commenced under Maj. H. C. Newcomer, United States engineer in charge of the work, who drew the contract and specifications. He had his headquarters at Chattanooga, Term., and remained in charge until about February, 1907, when he was succeeded temporarily by Lieut. Capíes, and afterwards, about June 1, 1907, Maj. W. W. Harts, Corps of Engineers, was placed in charge of the work.
Maj. Newcomer during his administration visited the canal about once á month and made personal examination of the work and of the material excavated for the purpose of determining-its character, spending about half a day on the line of the works at each visit. Lieut. Capíes also visited the site of the works at least once during the time he was in temporary charge, and Maj. Harts made three visits to the canal between June and December, 1907.
During Maj. Newcomer’s administration most of the work under the contract was performed.
C. A. Turrell was the assistant engineer in local charge as the designated agent of said engineer officers during the time the work in controversy was being performed, and as such he classified all the material as to quality and quantity, under the supervision of said engineer officers, submitted 10-day progress reports to them,, and made out monthly estimates upon which payments were made to the contractors. He prepared a record of the work as it progressed, consisting of a series of cross sections or progress charts of the ground from which the-material was excavated. These cross sections were drawn to a scale and made at intervals of 100 feet (sometimes less, as the work required). and contained the dimensions of the amount of work in each cross section which would be used in making up the entire quantity. These cross sections were the basis upon which the estimates of the different classes of material were made up each month and upon which payments were made to the contractors. Turrell’s method of procedure in arriving at the monthly estimates was to calculate the areas of each section, or sometimes the whole or a part of each class was added together, and then to multiply the mean area by the distance between two sections, which gave a result in cubic feet, which was taferwards reduced to cubic yards. Said Turrell spent about one-third of his time at the site of the work.
Through personal observations during their visits and the reports of Turrell and his successor said engineer officers kept themselves informed of the work and its progress.
W. A. Shippey was in charge of the work as representative of his firm, the claimants herein. Before certifying said estimates to be correct and just the engineer officers made no independent estimate, but based their reports solely upon the estimates of excavation prepared by said Turrell and the examinations made by them on their visits to the work as aforesaid.
V. Shortly after the commencement of the work considerable controversy arose over the proper classification of material, the contractors claiming more hardpan than had been allowed them by the inspectors, and general complaints were made orally by claimants at various times to Turrell and to Maj. Newcomer to the effect that the classification was erroneous and that they were not receiving as much hardpan excavation as they were entitled to. Finally, in February, 1907, W. A. Shippey, on behalf of claimants, took the matter up verbally with Maj. Newcomer in person, explaining fully their cause of complaint, protesting against the classification that had been allowed by said Turrell, and requested an additional allowance for hardpan. Thereafter Maj. Newcomer, by letter dated February 4, 1907, advised Turrell of his views as to the manner in which' the contract should be construed and what material should be classified as hardpan. In this letter Maj. Newcomer explained that his purpose in providing an allowance in the specifications for hardpan and rock was to relieve the contractor from apprehension as to the difficulties that might be encountered from unknown quantities of such material as could not be removed economically by ordinary means adopted for excavation. He stated further, in a general way, that if the normal output was reduced one-half or more by reason of hardness of the material it would be proper to allow classification as- hardpan if other conditions of the work favored such classification. Said Turrell thereupon classified the material excavated up to that time and made an allowance of some 14,000 cubic yards additional hardpan between stations 30 and 60 and stations 110 and 160, which classification and allowance was approved by Maj. Newcomer and the additional compensation involved was afterwards paid to claimants.
In making his estimates on subsequent work, said Turrell did not adopt the construction of the contract expressed by Maj. Newcomer in his letter of February 4, 1907, in regard to the material to be classified as hardpan.
VI.- Shortly after making said additional allowance, as stated in Finding V, Maj. Newcomer was relieved from duty in connection with the work under the contract and was succeeded temporarily by Lieut. Capíes, to whom verbal complaints were made by claimants in regard to the classification, but that officer refused to enter into the question for the reason that he would shortly be succeeded by another officer on the work.
In August, 1907, J. M. Faucett, an experienced classifier of material, was appointed an inspector on the work under Turrell. Part of his duty was to observe the working of the material in the canal and judge of the classification. Upon Faucett’s arrival at the site of the work he began an examination of same, and went personally over the banks of the canal, using a mattock, and established a hardpan fine, which he pointed out to Turrell and explained to him how to differentiate between the hardpan and earth. He also made a thorough investigation of the work, using the plow test, under the specifications. He showed Turrell that all the work done during the time he remained on the job, about 15 days, was in hardpan, but Turrell refused to accept this opinion or to follow it in reclassifying the material.
After Maj. Harts became the engineer officer in charge claimants continued to complain of the classification and protested .orally and in writing to him and requested a further allowance of hardpan. Maj. Harts visited the works, in response to Shippey’s request, and asked claimants to submit a specific statement of their demands. Claimants finally submitted a formal claim in writing in January or February, 1908, to Maj. Harts for 97,000 cubic yards additional hard-pan, amounting to $31,534.70.
Maj. Harts referred the' matter to C. A. Turrell for his opinion and any recommendation he had to make. Said Turrell thereupon made a reexamination of the work, and in accordance with the interpretation of the specifications furnished to him by Maj. Newcomer, per his letter of February 4, 1907, and taking into consideration the methods of doing the work adopted by the contractors, Turrell recommended, on February 26, 1908, in writing, in a confidential report to Maj. Harts, an additional allowance for hardpan on all work done up to December 1, 1907, as follows:
Between stations 60 and 110. 35,122 yards.
Between stations 160 and 196 plus 50. 21,048 yards.
making a total of 56,170 cubic yards, amounting to $18,260.86.
This recommendation was approved by Turrell’s superior officer, Maj. W. S. Winn, then assistant engineer in local charge of the work.
In this state of affairs Maj. Harts took charge as district engineer and disbursing officer after the removal of the material from the canals and after the work of excavation under the two contracts had practically been completed. He made no classification himself of any of the earth or hardpan. He directed his subordinate Turrell to examine the excavated canals and Turrell did-so. At that time the said district engineer and disbursing officer had before him the complaints of the contractors that the classification of the material was erroneous and unjust. While it seemed to him that an injus tice had been done to the contractors he was unwilling to decide for them because it was not clear to him that a mistake had been made and he was not sufficiently informed to make a decision. He was likewise unwilling because of the uncertainty of the matter to make an allowance on the recommendation made by Turrell as approved by Maj. Winn, the assistant engineer in local charge of the work. Maj. Harts took the position that the contractors would have ample grounds on which to base a claim against the United States for the reason that their contention of improper classification might be sustained. And because of the fact that the demand of the contractors could not be settled by him as a disbursing officer but should be settled by the exercise of judicial functions in the courts, but not expected to be exercised by himself as a disbursing officer, he refused to make a decision one way or the other. In his judgment there was no method by which the proper classification could be justly and accurately determined at that late stage of the work when he was called in. Without such information' as to authorize or justify him in making a definite decision Maj. Harts refused to decide either for or against the contractors. Thereupon he referred the matter to the Chief of Engineers, United States Army, on duty in the War Department, for instructions. This Chief of Engineers decided that the status of the case was that of a claim for the correction of estimates and fully within the power and duty of the district officer; that if Maj. Harts was satisfied that a mistake hadheen made, such mistake should be corrected. But if not satisfied that a mistake had been made, the official estimates should be confirmed, to the end that the contractors have the proper basis of future action. Upon the return of the opinion of the Chief of Engineers to Maj. Harts that officer took the ground that it was by no means clear that error had been made and that there was not sufficient data available on which to base a correction should it be thought that a mistake in the classification had been made, in consequence of which Maj. Harts refused to make any modification of the estimates as submitted to him.
When Maj. Harts reported his action to his superior officer on duty in the' War Department, the Chief of Engineers, United States Army, officially declared that, considering the statements of Maj. Harts and the recommendations of Mr. Turrell that additional allowance be made, the contractors would have ample grounds on which to base a claim for better classification (as to which, claim would undoubtedly be made by them and subsequently defended by data furnished by his department), and that efforts should be made immediately, while the excavation was comparatively recent and before the canal was watered, for all necessary information and data to be obtained and placed upon record.
No effort appears to have been made by the Chief of Engineers, United States Army, or by Maj. Harts or by any of his subordinates or by any other officer of the United States to. obtain further information or data of any kind for the purposes indicated in the decision of the Chief of Engineers.
It does not appear that Maj. Harts at any time made any independent examination beyond the inspection made by him of the banks of the canals at the time he visited the works pursuant to the complaints of the contractors.
VII. Claimants proposed to the United States a settlement whereby the ground was to be examined by disinterested engineers, their decision upon the classification to be accepted by both parties, but such offer was refused.
Thereupon claimants had the banks of the canal carefully inspected by competent engineers of national reputation. Said engineers examined both sides of the excavation and the bottom of the canal clear across, and took a pick and dug into the sides and bottom of the canal well below the surface where the material was not affected by the action of the air to determine the degree of hardness and the lines of hardpan on each side of the slope. When in the judgment of said engineers the material was of sufficient hardness that it could not be plowed by a six-horse plow it was called hardpan. In arriving at a decision as to what was hardpan said engineers were guided by the specifications and the method in which the work was done. Measurements were taken and cross sections made showing the points 'where the hardpan began at each station along the fine of the canal and the quantities of hardpan calculated between the stations.
The examination of these engineers was based on the appearance of the banks, and after all of the material had been excavated and taken away.
The evidence shows that the strata of the canal was changeable, that it sometimes changed from side to side or from center to side and did not run clear across the canal, but would run in a wavering line, and sometimes only part way across, or in pockets.
The evidence is insufficient to establish to the satisfaction of the court that the larger estimates made by the engineers employed by claimants for the purpose of examining into the matter were correct.
Mr. Luke E. Wright for the plaintiff. Mr. O. E. Wright and Mr. O. M. Bryan were on the brief.
The first requisite for the making -of a valid contract or compromise is, as in the case of every other contract, the meeting of minds of the contracting parties. There must be an intent upon the part of payor to discharge his entire liability by the payment which he makes and the corresponding intent upon the part of the payee to accept the payment in full acquittance of all of his claim. The necessity for the mutual agreement between the parties seems undisputed in the cases decided in the United States court. See Fire Insurance Association v. Wickham, 141 U. S., 564; French v. Shumaker, 14 Wall., 314; Horn v. Detroit, 150 U. S., 610.
Even in those jurisdictions where it is held that the finding of the engineer as to the quantities and class of materials removed must be considered as final, it is invariably the rule than an erroneous construction of the contract adopted by the engineer in charge will always be reviewable by the court. This rule has been expressly recognized by this honorable tribunal. See Collins v. The United States, 34 Ct. •Cls., 294.
A like rule is also declared in O’Brien v. New York, 139 New York, 543; Burke v. New York, 7 New York App. Div., 128; State v. Cuyahoga County, 12 Ohio Cir. Dec., 328; Galveston, etc., Railroad Company v. Henry, 65 Texas, 685; Lewis v. Chicago, etc., Railroad, 49 Federal, 708; Williams y. Chicago, etc., Railroad Company, 112 Missouri, 463; vol. 30, English cfc American Encyclopedia of Law, p. 1271, 2d edition.
This rule seems certainly logical for, as stated in Williams y. Chicago, etc., Railroad Company, supra, it is the province of the court to construe contracts, and the plaintiffs had a right to the construction of the court on this clause, citing King Iron Bridge Company, etc., v. St. Louis, 43 Federal Reporter, 786, and Lewis v. Chicago, supra.
In the last case cited the court says:
“If it appears that the engineer in charge put a wrong construction on any provision of the contract, the court will correct any substantial errors resulting from such mistakes. For the reason that the parties did not make the decision of the engineer as to the proper interpretation of the contract final and conclusive. It is the province of the court to construe the agreement.”
This same rule was approved in the late case of Indianapolis Northern Transit Co. v. Brennan, 87 N. E., 215; 30 L. R. A., p. 87, where the court says:
“Consequently, if, as claimed by counsel for appellee, the engineer misinterpreted or misconstrued the provisions of the contract in his classification of loose rock by applying the plow test either to the first, second, third, or fourth classes of the stipulations as hereinbefore set out, then under the circumstances appellee would be entitled in this action to have such error of the engineer reviewed by the court and corrected.”
The United States decisions expressly recognize exceptions to the rule that the engineer’s estimate as to quality and quantity is to be considered as final when it is so provided in the contract. These are, first, where actual fraud or bad faith upon the part of the engineer is shown, and, second, where there exists such a gross mistake as would necessarily imply bad faith or a failure to exercise an honest judgment upon the-part of the classifier.
In the leading case upon the subject, Kihlberg v. The United States, 97 U. S., 398, Mr. Justice Harlan expressly based the decision upon the ground that there was no allegation or fraud or bad faith upon the part of the quarter master of the United States, and no proof of any such misconduct upon his part. After speaking of the absence of such charges, the court says:
“In the absence of fraud or such gross mistake as would necessarily imply bad faith or failure to exercise an honest judgment, his action in the premises is conclusive upon the appellant as well as upon, the Government.”
In Sweeney v. The United States, 109 U. S., 618, the Supreme Court, speaking through Mr. Chief Justice Waite, and affirming the Kihlberg case, expressly states:
“The court below found that there was neither fraud nor such gross mistake as would necessarily imply bad faith nor any failure to exercise an honest judgment on the part of the officer in making his inspections.”
So, also, in Chicago, Savia Fe ác Cad. Railroad Company v. Price, 138 U. S., 185, the court, in affirming the previous cases, states that—
“In the absence of fraud or of such gross error as to imply bad faith the action of the officer in making the certificate is final.”
This doctrine is reaffirmed in the case of the United States v. Gleason, 175 U. S., 588; in Martinberg and Potomac Railroad Company v. March, 114 U. S., 549; Logansport and W. V. Gas Company v. City of Peru, 89 Federal, 180; Paulay Jail Building and Mfg. Co. v. Hemphill County, 62 Federal, 698; Fletcher v. New Orleans and N. E. R. Company, 19 Federal, 731, and United States v North American Commercial, 74 Federal, 145, and numerous other cases.
In all of these decisions it is expressly recognized to be the rule that where the mistake made is so gross as necessarily to imply fraud, the courts will take up and investigate the matter, not being precluded from so doing by the finding of the engineer in charge.
In Fletcher v. New Orleans, N. E. R. & Co., 19 Federal, 731, the court passed upon this precise question and held charges to the effect that the action of the umpire was “arbitrary, unreasonable, wrongful, and in bad faith,” would include all the charges'of fraud, collusion, and gross mistake necessary. As expressed in another case “the party who has agreed to be bound by that judgment is entitled to have it exercised in good faith, by the officer nominated and can not be bound by the substituted judgment of another authority.”
In Elliott y. Missouri, K. & T. Railroad Company, 74 . Federal, 707, the court, speaking through Mr. Justice San-born and passing upon a question exactly similar to the one at bar, namely, the finality of an estimate made by a designated officer, says:
“Under these contracts the railway company appointed one I. W. Brewton inspector. According to his classification and report the appellant is entitled to recover $5,293.91 more than he is awarded by the decree. The appellant is enjoined from collecting this amount, not on the ground that either the appellant or the inspector was guilty of any fraud upon the company, for there is no evidence in support of that charge, but on the sole ground that Brewton committed mistakes so gross in his classification of the ties that he can not escape the just imputation of bad faith.”
Probably one of the best expositions of the rule, however, is found in Mundy v. the L. & N. Railway Company, 67 Federal, 633, where the court, speaking through Mr. Justice Taft, lays down the following rule:
“The result is that before the complainants can establish their rights to recover any sum over and above that allowed in the final estimate they must show that the engineer, in making his estimates, was guilty of fraud or exhibited such an arbitrary action in wanton disregard of the complainant’s plain rights under the contract as to be the equivalent of fraud, or committed errors and mistakes to the complainant’s prejudice so gross and palpable as to leave no doubt in the minds of the court that grave injustice was thereby done to him.”
Mr. George M. Anderson, with whom was Acting Assistant' Attorney General F. DeC. Faust, for the defendants. Mr. W.F. Norris was on the brief.

Opinion:
Howey, Judge,
delivered the opinion of the court:
This cause was referred to the court under section 1063, Comp. Stat., 1901, p. 738, 22 Stat., 485, and under the act of March 3, 1887, 24 Stat., 505, by the Acting Secretary of War. The first reference under the same sections by the Secretary of the Navy, set forth in the record, did not give the court the necessary jurisdiction.
Plaintiffs entered into a contract in writing with the United States for certain excavation work to be done by them on the Colbert & Bee Tree Shoals Canal near Riverton, Ala., on the Tennessee River. Three different classes of material were to be excavated; for earth excavation, 0.1749 cent per cubic yard; for hardpan, 50 cents per cubic yard; and for rock excavation, $1 per cubic yard. Considerable controversy arose during the progress of the excavation work as to what constituted hardpan as contradistinguished from mere earth excavation, and the present action is to recover for the work alleged to have been done under the original and a supplemental contract. The details of the work covering the different stations need not be stated as the two agreements are the same as to terms, conditions, and specifications.
Before the contract was awarded test holes had been made by driving down steel rods at the different stations on the axis of the canal and usuahy also at points about 50 feet to the right and left of each station. The results were recorded subject to inspection by bidders. The Government did not guarantee the character of the material, and bidders were expected to assume responsibility. Bowlders of more than 9 feet in volume were classified as rock excavation. Material other than rock that could only be loosened by a six-horse plow, or removed by a steam shovel without blasting, was classified as hardpan. All other materials were classified as earth excavation. All excavation was to be measured in place and paid for on monthly estimates of yardage covering work done in a manner satisfactory to the Government engineer. The engineer was authorized to withhold any estimate in case satisfactory progress was not made, and in case of any doubt or disagreement arising under the specifications the decision of the engineer was to be final.
Under the administration of the first engineer officer in charge in the beginning of the supervision of the work, the classification of the material to be excavated as to quality and quantity was made by an assistant engineer. This assistant was the designated agent provided for by the con tract. As the subordinate or designated agent he made an estimate of the material, and about every 10 days submitted progress charts, upon which monthly estimates were made out for the payments. His record of the work consisted of a series of cross sections (called progress charts) of the ground from which the material was excavated. These cross sections were drawn to a scale and made at intervals of a hundred feet (sometimes less) and contained the dimensions of the amount of work in each cross section which were used in making up the entire quantity and were the basis upon which the estimates of the different classes of material were made up and upon which the payments were made. Mr. Turrell was the designated agent, and his method of procedure was to calculate the areas of each section (or sometimes the whole or a part of each class was added together), and then to multiply the mean area by the distance between two sections which gave a general result in cubic feet and which was afterwards stated in cubic yards. As a consequence of the complaints of the contractors the engineer in chief examined the work and material and so construed the contract as to direct his subordinate agent how to classify the material — that is,, how to distinguish hardpan from earth excavation — the principal stating to his agent that if the normal output was reduced one-half or more by reason of the hardness of the material it would be proper to allow classification as hardpan if other conditions of the work favored such classification. The subordinate or designated agent then reclassified the material up to that time and made an allowance of about 14,000 cubic yards as additional hardpan, which increased the compensation of the contractors, for which they were paid with the approval and under the decision of the engineer in chief. Following this, an experienced classifier of material was appointed an inspector on the work carried on by direction of Turrell. This inspector personally went over the banks of the canal, using a mattock in examining the work. He established a hardpan line and explained to Turrell how to differentiate between hardpan and earth. He also used the plow test under the specifications and made a thorough investigation and showed Turrell that all the work done during the time he was there was in hardpan. Turrell refused to follow the reclassifying methods adopted by the inspector.
Turrell also refused, for some reason not explained, to follow the directions given to him by the principal engineer officer after making the allowance of the 14,000 cubic yards which the principal engineer officer had directed. On the contrary, Turrell did not classify according to the construction given to the contract by his principal, nor did he observe or undertake to classify any more material according to the method pointed out by the inspector assigned to the work for the purpose of making a thorough investigation, except as hereinafter stated.
The principal engineer officer first in charge of the work does not appear to have had knowledge of the failure of his subordinate to obey the instructions, inasmuch as this principal was relieved from duty soon after the allowance of the 14,000 cubic yards. Complaints, were made again in regard to the classification to an officer who was placed in temporary charge.
This officer was succeeded by Maj. Harts, to whom the contractors again complained of the classification, protesting orally and in writing to the last engineer-officer of the way they were being treated. Plaintiffs submitted a formal claim in writing to the last officer in charge for 97,000 cubic yards of additional hardpan, amounting to $31,534.70.
The matter.being referred again to Turrell, the work was reexamined by him, and he made a confidential report for an allowance for hardpan of 56,170 cubic yards, amounting to $18,260.86. This recommendation was approved by Turrell's superior officer on duty as the assistant engineer in local charge of the work.
From all the testimony and circumstances in evidence the court is satisfied that the subsequent failure of the subordinate officer who refused to observe the directions of the chief supervising engineer (after the allowance set forth in the first paragraph of Finding V) resulted in an erroneous classification. There is no explanation as to why this subordinate did not continue to classify according to his superior's construction of the contract as to that material excavated for which plaintiffs now seek compensation as hardpan excavation — the amount of hardpan involved in the present action being an addition to the 14,000 cubic yards between stations 30 and 60. Especially does it seem that after an experienced classifier of material had established a hardpan line by using the plow test contemplated in the specifications to the contract and explained to the local subordinate officer how to differentiate between hardpan and earth excavation there should have been no difficulty in making the necessary reclassification to conform to the order of the engineer in chief then on duty at the works. Be this as it may, the court is of opinion that the final action taken by the local subordinate officer in charge in conformity to and with that interpretation put upon the specifications by the first chief engineer (in response to the request of the district engineer and disbursing officer last in charge to examine the work again) is probably the best basis for a just settlement. At the same time the court is not unmindful that in limiting recovery to the sum recommended by the two officers named in the sixth finding, Turrell and Winn, the sum for which judgment is directed is possibly too small.
It is, however, reasonably doubtful that plaintiffs are entitled to the enormous amount claimed after the final decision in the War Office looking to a settlement of the dispute in the courts. The increase in plaintiffs' estimate of hardpan excavation as made in the complaint before us is so far in excess of the formal claim made in the early part of the year 1908 that the court is impressed with the idea that the ad damnum is greatly exaggerated. Finding VI in its third paragraph discloses that in the early part of that year plaintiffs claimed for only 97,000 cubic yards as additional hardpan, which under the contract would have entitled them to $31,534.70. Their subsequent claim, which was later embodied in the petition and has been considered, is for enough additional hardpan to swell the claim to $122,072.12.
We come now to another and final question: Do the findings, taken all together, support the judgment under that line of decisions which make final the judgment of engineer officers in contract cases? Kihlberg v. United States, 97 U. S., 398; United States v. Mueller, 113 ib., 153; Martinsburg & P. R. Co., v. March, 114 ib., 549; Chicago, Santa Fe, &c., R. R. v. Price, 138 ib., 185; Gleason v. United States, 175 ib., 588; Ripley v. United States, 220 ib., 491; 222 ib., 144; 223 ib., 695. In other words, in the view the court has taken of Government liability and the right of the contractors to prosecute a claim for anything more than the estimates before the chief engineer at the time he refused to make any modification of the estimates submitted to him as he found them (before the Turrell and Winn report) is the judgment warranted?
Paragraph 29 of the specifications provided that the decision of the engineer officer in charge as to quality and quantity should be final. That paragraph came under what the specifications termed general conditions.
Paragraph 54 provided that in case of any doubt or disagreement arising under the specifications the decision of the engineer should be final. By paragraph 55 the word "engineer" was understood to mean the United States Engineer officer in charge of the work or his designated agent. These two last paragraphs came under what the specifications termed special conditions.
The court has felt safe in adopting the decision of the engineer's subordinate for the double reason that the word ' "engineer" was construed by the special conditions set forth in the specifications to mean the designated agent of the chief engineer and because this designated agent's estimate conformed to the first engineer officer's interpretation of the contract. No doubts have been suggested as to the correctness of the construction given to the contract by Maj. Newcomer, supported, as his construction was, by the examination of an experienced classifier of the material, and likewise supported, as the estimates finally were, by other officers whose integrity dues not seem to be involved.
The Chief of Engineers of the Army, at the seat of government, did not decide adversely to the contractors as to their right to bring suit for as much as the contractors thought they were entitled to receive. On the contrary, this high official declared that if Maj. Harts was satisfied that a mis take had been made it should be corrected, but that if not satisfied the official estimates should be confirmed to the end that the contractors have the proper basis for future action. He declared that, considering the statements of Maj. Harts and the recommendations of Mr. Turrell that additional allowance be made, the contractors would have ample grounds upon which to base a claim for a better classification and that efforts should be made immediately for the gathering of all necessary information and data to defend the claim of the contractors elsewhere than by engineer officers. This decision was made after Maj. Harts had taken the ground that it was by no means clear that error had been made and that there was not sufficient data available on which he could base a correction should it be thought that a mistake in the classification had been made.
In refusing to make any modification of the estimates submitted to him this court must regard the decision of this officer as made without proper information and involving such doubt in his mind as to make the decision he did render a formal and perfunctory matter, to the end that the contractors might prove their right to another classification in this court, which alone possesses jurisdiction.
It is not doubted at this late day that where a contract provides that in case a disagreement arises under specifications the decision of the engineer is final unless there be fraud or such gross mistake on his part as to imply bad faith. In the case under consideration the contract went a little further in the use of those words which provide that in case of "doubt" the decision of the engineer should be final. But here the chief engineer's doubt grew out of the fact that he did not see the excavated material and did not have opportunity to see or make any kind of an inspection of the material taken out. There was disagreement growing out of the doubt, and the doubt resulting in disagreement the two words must be taken to mean substantially the same thing. The rule mentioned applies to both doubt and disagreement.
The word " engineer" was declared by the contract to mean the engineer officer in charge of the work or his designated agent. This designated agent made a decision, which was in turn approved by one above him but subordinate to the chief engineer, who came to the work too late to have much knowledge either of the subject matter or of his duty in the premises. The court will not undertake to say under these circumstances that the chief engineer was obliged to accept the estimate made by the subordinate. This subordinate, as we have already seen, though sustained by two other officers in his estimates, probably could not have settled the matter after the chief engineer officer took charge and in conflict with the doubt of the latter official. The question is, then, whether the refusal of the chief engineer to modify under the circumstances set forth in Finding VI can be called a decision.
The rule mentioned required not only a decision but a decision involving the exercise of honest judgment. But here there was a failure to exercise anything more in the nature of a judgment beyond the expression of a doubt, which meant, if it meant anything, that the parties should have an opportunity to present proof to the tribunal having jurisdiction. If the chief engineer did not go to the work in time to form a judgment of his own it was his duty to take information, to the end that he might make a more certain decision. The refusal to modify the estimates arising out of the chief engineer's doubt being predicated confessedly upon the want of information, the court is of opinoin that there was a failure to exercise that kind of judgment that plaintiffs were entitled to receive. Under these circumstances it seems proper to say that there was a failure to exercise judgment for want of information when we consider that the doubt expressed was to give the contractors opportunity to make proof of their claim to a court which the chief engineer was unwilling to receive as a disbursing officer. The Government should have no more advantage in the failure of the engineer officer to better inform himself, if possible, and act more advisedly than in those cases where there was a failure on the part of the officer to exercise an honest judgment.
It seems to be a violation of the spirit and intent of the contract to bind the contractors in the decision of the chief engineer when it was a decision rendered without adequate information.
While it is true that the chief engineer may not have been bound to accept the interpretation put upon the contract by his predecessors nor yet bound to receive as final the estimates recorded by others, nevertheless he was bound either to take proof to better satisfy his mind (thereby enabling him to comply with the rule that he must make an honest decision) on better proof or put the parties in position where they might present their proof in another forum.
The paragraph in the specifications can not be said to have been met when the agent's judgment, being required, was followed by his refusal to act, the chief engineer believing at the same time that, in justice to the contractors, they should have the opportunity to present their case on more proof elsewhere.
The court is of opinion that the action of the chief engineer in charge of the works was tantamount to a refusal to render any decision at all. It was error on his part not to examine the sides or banks of the canals and to make such tests in connection with the accessible testimony as would enable him to render a decision approving the claim or disallowing the same. Inasmuch as this engineer officer took the view that he was a disbursing officer and that he could not decide the matter, we must regard his action as perfunctory and not a sufficient compliance with the specifications which required him to make a final decision on the merits of the claim.
In United States v. Adams, 9 Wall., 661, it was said that where proper findings are not made by this court on specific matters sufficient to enable the appellate court to properly review the judgment, additional findings should be made on a remand of the cause. This proposition was acted upon in Ripley v. United States, 220 U. S., 492. It may be our duty to be more explicit in the findings, but as the case presents enough, in our opinion, to enable the appellate court to review our action and proceed to final judgment on what we have found, we conclude to render judgment on the present findings. Injustice may result, if we do not, to the contractors.
The view of the court is that plaintiffs are entitled to judgment in the sum of $18,260.86, which is now directed to be entered.