Case: BURTON & COMPANY v. THE UNITED STATES
Abbreviation: Burton & Co. v. United States
Decision Date: 1916-06-05
Docket Number: No. 31662
Citation: 51 Ct. Cl. 362
Volume: 51
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: BURTON & COMPANY v. THE UNITED STATES.
Judges: 
Pages: 362–394

Head Matter:
BURTON & COMPANY v. THE UNITED STATES.
[No. 31662.
Decided June 5, 1916.]
On the Proofs.
Contracts.—This suit involved eleven different items, the result of contracts with the United States for work in connection with the excavating and construction of the approaches to the lock connecting the Mississippi River and Bayou Plaquemine at Plaquemine, La.
Same; changes; agreement of parties.—Where a contract contains a provision that if it “ be found advantageous or necessary to make any change or modification in the project ” which would “increase or diminish the cost of the work," such change or modification “must be agreed upon in writing * * * and before taking effect must be approved by the Secretary of ’War,” there was no breach of the contract if at the time the change or modification was agreed to between the contractor and the engineer officer in charge it appeared that it would be advantageous by way of facilitating progress, and that it would not involve any increase in cost, although subsequently the cost was increased by reason of conditions wholly outside those reasonably to be anticipated. Deduction; breach of contract.—Where a sum of money was rightfully paid under one contract, there is no authority to deduct it from money due under another contract because of an alleged breach of the first contract.
The Reporter’s statement of the case:
Mr. Harold J. PacTe for the plaintiff. Mr. John G. Gapers was on the briefs.
Mr. H. 8. Whitman, with whom was Mr. Assistant Attorney General Huston Thompson, for the defendants.
The following are the facts as found by the court:
I. On the 6th day of June, 1905, pursuant to notice theretofore given and bid received, Lieut. Col. Clinton B. Sears. Corps of Engineers, United States Army, for and on behalf of the United States, entered into a contract with W. O. Burton & Co. for the excavating, driving piles, and erecting concrete walls and floors of the approaches to the Plaque-mine Lock at Plaquemine, La., in accordance with specifications thereto attached and drawings referred to and made a part thereof. The lock and approaches were to connect the Mississippi River and the bayou. The work to be done was of estimated quantities of excavation, pile driving, concreting, and setting of snubbing posts, and the contract price for the excavating of the approaches and placing of excavated materials as required by the specifications was 40 cents per cubic yard. Other prices are not material. The excavating to be done in the bayou approach to the lock was estimated at 20,000 yards, and that to be done in the river approach to the lock was also estimated at 20,000 yards, and the excavated materials were in each instance to be placed behind the lock walls. The contractor was required to commence work within 60 days after the date of notification of approval of the contract and complete work within five months thereafter. The contract was approved and the contractor notified of such approval on the 19th day of June, 1905. The contract, together with the specifications, instructions, notice, and proposal is made a part of the petition herein and marked “ Exhibit A.”
II. On the 9th day of August, 1905, after the contractor had assembled a force of men preparatory to commencing work under the contract, he made application to the contract ing officer for an extension of time on the ground that an epidemic of yellow fever had broken out, which had resulted in scattering his' force and which made it impossible for him to proceed with the work until it should subside. He was granted an extension for a reasonable time, and was so advised on the 17th day of August, 1905. During the months of July, August, and September he was engaged in assembling and preparing a plant for the prosecution of the work under the contract, and he began work thereunder on the 10th day of October, 1905. The work under this contract was completed on, or soon after, the 1st day of February, 1908.
III. During the progress of the work of excavating the bayou approach to the lock there was a very considerable caving of the banks thereof and movement of soft materials from the banks into the excavation, and this condition continued to such an extent that it endangered an adjacent street of Plaquemine, and because thereof the mayor of Plaque-mine ordered the work stopped. Thereafter, and because of this condition, the contractor was compelled to excavate in short sections of approximately 12 or 15 feet, and to retain the banks, while so excavating and until the concrete could be placed, with sheet piling; and because of such caving and movement of soft materials into the excavation the work became more difficult and the contractor was compelled to and did excavate a quantity of material largely in excess of that estimated. It is not shown, however, that the conditions were materially different from those reasonably to be anticipated. Bidders had been notified that they were expected to visit the place and make their own estimates of the difficulties attending the work, and a member of the firm of W. O. Burton & Co. had visited the place before submitting bid. The total excavation in the areas covered by this contract was 65,729 cubic yards, included in which is that part of the 7,910 cubic yards excavated by Burton & Co. and placed under the McGee contract, hereinafter in the fifth finding referred to, which came from the area covered by the contract of June 6,1905.
IY. Beginning with the 10th day of March, 1906, the claimant was charged with the expense of superintendence and inspection, and such expense under this contract was continuously charged against the claimant to and including the month of January, 1908; and from each voucher issued to the claimant in payment for work done under said contract the amount of such expense of inspection and superintendence for the period covered by such voucher was deducted. The total amount thus charged against the claimant and deducted was $4,815.22. Such charges were on the basis of one-fourth time of an assistant engineer and full time of an inspector from March 10 to April 30, 1906, inclusive; full time of one inspector and one-half time of another inspector for the months of May, June, and July, 1906; one-fourth time of an assistant engineer, two-fifths time of a junior engineer, and full time of an inspector from the 1st to the 29th day of August, 1906, on which day an additional inspector was added, after which the charge was for assistant engineer and junior engineer, as last above stated, and two inspectors continuously up to and including January, 1907. Thereafter and continuously up to and including January, 1908, the charge was for assistant engineer and junior engineer as last above stated, and full time for one inspector. The pay of the assistant engineer as charged was $200 per month; of the junior engineer, $125 per month; and of the inspectors, $100 per month. All of these charges against the contractor were first reported to the engineer in charge by the assistant engineer in immediate charge, in monthly reports, each for the preceding month, as “ expenses of inspection,” and were included in the vouchers issued to the contractor as deductions for inspection and superintendence, which vouchers were certified by the engineer officer in charge to be correct, and also certified by the contractor, in connection with his receipt, as being correct. If any portion of the services thus charged for and deducted were not rendered in connection with the work under this contract, the evidence does not establish that fact or tend to show the part of such services which were not so rendered, nor does the evidence in fact show that the Government incurred the expenses deducted as aforesaid on account of inspection and superintendence of the work under this contract during the period of delay.
V. At the time of the execution of this contract of June 6, 1905, there was in force and in process of performance a contract between the United States and McGee & Co. for the placing of certain filling behind the wing walls of the lock at the river end for which, by the terms of the contract, McGee & Co. were to be paid 59 cents per yard. When Burton & Co. were preparing to commence or were prosecuting work under their contract of June 6, 1905, they found that a track used by McGee & Co. as part of their equipment in the prosecution of their contract was laid across the area to be excavated by Burton & Co. for the bayou approach to the lock, over which track McGee & Co. were transporting filling material from a borrow pit, said track interfering with the prosecution of their work by Burton & Co., and because of this condition and at the suggestion of J. I. Conklin, an assistant engineer on this work, serving under the engineer officer of the United States in charge thereof, Burton & Co. entered into a contract with McGee & Co. to complete the* fill which McGee & Co. were under contract to make, at the price of 25 cents per cubic yard, to be paid by McGee & Co. to Burton & Co. In the performance of that contract Burton & Co. took 7,910 cubic yards of earth, part of which was excavated from the area to be excavated by them under their contract of June 6, 1905, and part from the area covered by the contract of August 7, 1906, hereinafter referred to, and placed it in the fill to be made by McGee & Co. Of this material 1,870 yards were from the bayou approach included in the 1905 contract and 6,040 yards from the river approach. The 6,040 yards from the river approach represented 5,179 yards of excavation, measured as such, 529 yards of which were from the area included in the 1905 contract, and 4,650 yards from the area included in the 1906 contract. Burton & Co. was paid 25 cents per yard by McGee & Co. for this material as filling, and McGee & Co. was paid 59. cents per yard therefor by the United States.
That amount of material was thus diverted from the purposes for which it was to be used under the Burton contracts and applied to the purposes of the McGee contract. Such diversion was with the knowledge and consent of the en gineer in charge and his subordinates, but there was no modification in writing of the original contracts as to the disposition of this material, and no modification with the approval either of the Chief of Engineers or of the Secretary of War. It became necessary subsequently to procure at an additional expense an equal amount of other material to be placed behind the lock walls in lieu of that thus diverted, although it was anticipated at the time of the diversion that there would be ample material available for the purpose from excavations necessarily to be made. This material was included in estimates made of excavating done by Burton & Co. for which they were paid by the United States.
VI. The contract of McGee & Co. for filling contemplated that the necessary materials would be procured from borrow pits, but in the spring and early summer of 1905 they took materials from the area known as the river approach to the locks, which was afterwards included in the Burton contracts of 1905 and 1906. They excavated from this area about 9,529 yards, most of which (viz, more than 8,800 and less than 9,000 yards) was taken from the area included in the Burton contract of 1905 and the remainder from the area included in the contract of 1906.
A survey of the river approach had been made and platted, elevations at 10-foot intervals being shown thereon, in 1902, before any excavating was done by anyone. In June, 1905, after the excavating above referred to had been done by McGee & Co., and before any excavating had been done by Burton & Co., another survey was made and field notes thereof recorded, but plat was not made therefrom until some time after. Comparison of the two surveys showed the excavation by McGee & Co. as above stated.
After the contract of 1905 had been let to Burton & Co., one Windette, an engineer in the employ of Burton & Co., asked for a copy of the original survey of the river approach, and he was given a copy of the plat made from the survey of 1902, which did not show the excavating done by McGee & Co. The survey of June, 1905, had not then been platted.
VII. On the 7th day of August, 1906, pursuant to notice and bid, Lieut. Col. E. H. Buffner, Corps of Engineers, United States Army, for and on behalf of the United States, entered into a contract with W. 0. Burton & Co., a copartnership, composed of W. 0. Burton and R. Burton, and the claimants herein, for the work of excavation and construction of river approach and back fill of the lock at Plaque-mine, La., in accordance with specifications and drawings referred to and made a part of said contract. This contract, so far as excavating was concerned, covered an area adjoining and toward the river from the approach area covered by the first contract. The contract price for the moving of an existing levee was 30 cents per cubic yard, and for excavating for approach and placing the excavated material where required was $1.05 per cubic yard. The contractor was required to commence work under this contract within 30 days after notification of approval of the contract by the Chief of Engineers, and to complete the contract within 4 months from the time after May 1, 1907, when the Mississippi River gauge at Plaquemine, La., read 20 feet. This contract was approved August 29, 1906, and the contractor notified thereof. This contract, together with specifications, instructions, advertisement, and proposal is made <j. part of the petition herein, and marked “ Exhibit B.”
VIII. A portion of the work to be done under this contract was expeditiously done; there was delay on the part of the contractor as to other parts of the work to such an extent that annulment of the contract was considered and authority so to act given to the engineer officer in charge; there were also differences of opinion on the part of the engineer officers as to the method of prosecuting the work, a convening of a special board of engineers to consider and report on the situation and the stoppage of further work of excavating under this contract, by order of the engineer officer in charge, on the 10th day of September, 1907. These conditions resulted in the execution, on the 15th day of November, 1907, of a supplemental contract between Col. Ruffner, Corps of Engineers, representing the United States, and W. O. Burton & Co., approved by the Secretary of War January 22, 1908, under which the time of completion of the said contract of August 7, 1906, was extended until such time as the recom mendation of the board of engineers referred to could be carried out and the unfinished work completed, in connection with which it was provided that during that time none of the expenses of inspection and superintendence should be charged against the contractor. It was also provided in this contract that it should not be construed as a waiver on the part of the contractor of any claim for damage under the said contract of August 7, 1906, because of the stoppage of the work and disuse of their plant. In other respects the contract of August 7, 1906, was to remain in full force and effect. This contract is made a part of the plaintiff’s petition herein as “ Exhibit C.”
IX. Thereafter, on the 8th day of March, 1908, another contract, called a supplemental agreement, was entered into between Maj. J. F. Mclndoe, Corps of Engineers, United States Army, acting on the part of the United States, and W. O. Burton & Co., which contract was approved by the Secretary of War on the 20th of March, 1908. This contract recited the existence, uncompleted, of the contract of August 7,1906, and the report of a special board of engineers recommending that back filling behind both lock .walls should be completed as soon as possible, and provided for the furnishing of all necessary labor, plant, tools, machinery, and appliances, and the placing of approximately 20,000 cubic yards of earth behind the lock and wing walls, at such places and in such manner and order as the engineer in charge might direct, said work to be commenced within 30 days after notification of approval of the contract, and to be completed within 4 months after such date of notification, for which said W. O. Burton & Co. was to be paid 95 cents per cubic yard, place measurement. It was further provided that the contract of August 7, 1906, should remain in full force except as modified by the supplemental agreement of November 15, 1907. The special board of engineers had recommended that this filling be done at once and the necessary material could not then be taken from the excavations to be made because it was regarded as unsafe to excavate further until the lock gates were in shape to furnish protection. The amount of filling necessary to be placed under this contract was augmented by the diversion referred to in Finding Y. This contract, together with the general specifications applicable thereto is made a part of plaintiffs’ petition, marked “ Exhibit D.”
X. Thereafter, on the 28th day of September, 1908, a further supplemental contract was entered into between Lieut. Col. Lansing H. Beach, Corps of Engineers, United States Army, representing the United States, and W. O. Burton & Co., which contract was approved by the Chief of Engineers on the 13th day of October, 1908, and by the Secretary of War on the 22d day of October, 1908. This contract further amended and modified the contract of August 7, 1906, as theretofore amended, by eliminating certain parts of the work required under the original contract, provided for the wasting of certain excess materials, for the furnishing of materials and constructing pile clusters, and for the payment to the contractor of $1.05 per cubic yard for the excavation of materials from the river approach and the proper placing of the same. Said contract also provided for the payment to said W. O. Burton & Co. of the sum of $10,000 for the relinquishing of their profits upon the unexecuted portions of the work, and for the expense of taking down and removing that portion of their plant rendered unnecessary through the abandonment of work as aforementioned, in consideration of which said W. O. Burton & Co. relinquished all claims of whatever nature by reason of any changes in plans, delays- or disuse of plant, including therein all claims for work performed in connection with said contract of August 7, 1906, except retained percentages. It was further provided that said contract of August 7, 1906, except as modified by the supplemental agreements of November 15, 1907, and March 8, 1908, and by this contract, should remain in full force. This contract is made a part of claimants’ petition as “ Exhibit E.”
XI. After the completion of the contract of June 6, 1905 (viz: in Mar., 1908), a final voucher was drawn in favor of Burton & Co., on which they were paid for a small quantity of material excavated and placed’ amounting to $17.20, and were paid retained percentages to the amount of $12,016.83. This settlement was accepted and is not now questioned, except as to the deduction for superintendence and inspection set out in Finding IY, and the claim further made by the contractors that they had not been paid for excavating the 7,910 yards of material placed for McGee & Co. under their contract. There was then no claim asserted against Burton & Co. by the United States on account of the diversion of that quantity of material from its intended purpose under the 1905 and 1906 contracts to the purposes of the McGee contract. Under the contract of March 8, 1908 (Finding IX), Burton & Co. were also paid for the placing of 24,203 yards of filling behind the lock walls at 95 cents per yard without deduction on account of the diversion referred to. Afterwards, when settlement was about to be made with Burton & Co. for work done and retained percentages under the contract of August 7, 1906, it was concluded by the departmental and accounting officers that Burton & Co. should be charged with the expense to the United States of placing behind the lock walls a quantity of material equal to that diverted from that purpose to the purposes of the McGee contract, and from the retained percentages due Burton & Co. under the 1906 contract there was deducted $7,514.50 as the cost to the United States of 7,910 yards of filling at 95 cents per yard. Prior to the execution and approval of the contract of September 28, 1908, the fact of the diversion of the aforesaid 7,910 yards of excavation by Burton & Co. had been made known to the Chief of Engineers and the Secretary of War.
XII. The work under the contract of August 7,1906, was, by the terms thereof, to have been commenced within 30 days after its approval and completed within 4 months from the date, after May 1, 1907, on which the Mississippi Fiver gauge at Plaquemine showed a 20-foot stage of water. The gauge indicated that stage on July 22, 1907. The limit of time for the completion of the contract was therefore November 22, 1907. The work of removing the levee was commenced in September, 1906, and completed November 20, 1906. Work on the excavation of the river approach did not commence until February, 1907. On the 10th day of September, 1907, work on the excavation of the river approach not being completed, Col. Ruffner, then the engineer officer in charge, because of apprehension that further excavating in the approach would endanger the temporary levee, and because of the unsatisfactory and unsafe condition of the lock gates by reason of the spreading of the walls, ordered the work of excavating in this approach stopped. Thereafter the supplemental agreement of November 15, 1907 (Finding VIII), was entered into. On February 1, 1909, Burton & Co. were notified that the lock gates would be in condition to withstand pressure of water in 20 days and that work must be resumed within 30 days, and probably could with safety be begun sooner. They had during the interval removed a small amount of material from between the approach walls, but work had been practically suspended. During that period also tests had been made of the lock gates, and in that connection the river approach inside the temporary levee had been flooded. When ordered to resume work Burton & Co. objected on the ground that their contract was for excavation in the dry, and also because the river was then rising and likely to flood the work, whereas they maintained that the provision of the contract requiring completion of the work within a specified time after the river reached the stage of 20 feet meant that the work was to be done on a falling river.
Thereafter, on the 2d day of March, 1909, Col. Beach notified Burton & Co. that, as it was evident the river would in a few days be at such stage as to prevent work, his former instruction was so modified as to require work to begin “ when the gauge at Plaquemine again reads 20 feet, which will be when the river falls.” The river continued to rise and reached such a height that it overflowed the embankment and flooded the area covered by the Burton contract, and when it receded conditions were such that the work of excavating and placing the materials in the fills could not be prosecuted by Burton & Co. with the plant in use by them. It was then concluded by the Engineer Officer in charge that if the excavation and fill were completed as contemplated by the contract it was immaterial whether the fill was made with the material excavated from the approach or made with material obtained elsewhere and the excavated material wasted. Thereupon Burton & Co. entered into subcontracts, one for the completion of the fill at 30 cents per yard and one with Clarke & Co. for the dredging of the remainder of that portion of the river approach included within their contract at 15 cents per yard. Clarke & Co. under this contract resumed excavation on the 30th day of April, 1909.
XIII. Under the contract of August 7, 1906, Burton & Co. removed 14,600 yards of material from the old to the temporary levee, for which they were paid at the contract price of 30 cents per yard, and excavated from the river approach 75,207 yards of material for which they were paid, except as to the deduction of $7,514.50, referred to in Finding XI, at the contract price of $1.05 per yard. There were 7,040 cubic yards of material within the limits of Burton & Co.’s contract which caved into the river on the 28th of November, 1908, and there were 3,973 cubic yards of material within the original contract which Col. Beach, the Engineer officer in charge, refused to allow them to excavate, on the ground that it was rendered unnecessary by the abandonment of the building of certain parts of the approach walls. This 3,973 yards was one-half of 7,946 yards of material which remained at the time of the execution of the contract of September 28, 1908 (Finding X), to be excavated for approach walls, construction of which was abandoned. Burton & Co., contending for the right to remove all this material, were permitted to excavate the one-half of that total amount and were paid therefor at the contract price. From the decision of the Engineer officer in charge refusing to permit them to excavate the remaining one-half they appealed to the Chief of Engineers, before whom a hearing was had, and the conclusion was reached that they were not entitled to excavate the material in question, and right to do so was refused them. They could have procured the excavation of this 3,973 yards of material and the excavation of the 7,040 yards which caved into the river by their subcontractors, Claxke & Co., at 15 cents per cubic yard, and their profit thereon would have been, respectively, $3,575.70 and $6,336.
XIV. In order to carry out the recommendations of the special board of engineers, convened to consider conditions at this lock with reference to a test of the lock and gates, water was siphoned and pumped in from the river, and the area of the river approach within the temporary levee and within the contracts of Burton & Co. was flooded. After the water was removed, about August 10, 1908, there remained a deposit of sediment consisting of washings from the banks and mud carried in with the river water over an area part of which had been theretofore completed by Burton & Co. and part not fully completed. A portion of this deposit of sediment was over an area in which the heads of piles driven by Burton & Co. had not yet been cut off to grade as required, and it was necessary to remove the sediment over this portion of the area to complete the work of cutting off the pile heads. Burton & Co. were notified that they must do this work or it would be done at their expense, and they accordingly did it. The removal of this part of the deposited material could not be accomplished by dredging because of the interference of the piling, and Burton &'Co. removed it by hand labor and wheelbarrows and were paid the contract price therefor. They were refused the right to remove that portion of the material deposited on the area where piling did not interfere, and it was removed by the United States by the use of its own and hired equipment and at a cost of 13 cents per yard. Burton & Co., if permitted to remove this material, could have required its removal by Clarke & Co., their subcontractors, at a cost of 15 cents per cubic yard. There were 5,464 yards of this material, and if permitted to remove it under their contract, and paid therefor the contract price of $1.05 per yard, the profit to Burton & Co. would have been $4,917.60.
XV. At the time of the execution of the contract of September 28, 1908, Burton & Co. had on hand 136J barrels (in. sacks) of cement and 180.5 yards of sand, which were intended for use on the work, and for which the contractor had no further use because of abandonment of certain parts of the work under the provisions of that contract. A. voucher was tendered the claimants for payment for 128£ barrels of cement at $1.98 per barrel, and for 7f barrels at $2.30 per barrel, the difference in price being made on account of the return of the sacks, estimated as worth 8 cents each, four sacks to the barrel. A voucher also provided payment for the sand at $1 per bushel. Claimants refused to accept the prices tendered. The cement was taken and used by the United States. The evidence does not show return of the sacks. The sand was not actually taken and used by the United States, but remained on the ground until taken by some one else or dissipated in course of time. The voucher issued and tendered but refused on account of the price certified its receipt. The cement, on the basis of the price to be paid Burton & Co. for concrete, was worth $2.30 per barrel, sacks included. In the market it was then worth $2.70 per barrel. The sand was worth $1.30 per yard. Neither have been paid for.
XVI. From the 28th day of September, 1908, the day on which the contract referred to in Finding X was executed, to the 30th day of April, 1909, claimants’ plant, consisting of dredge, engines, derricks, cableways, pile driver, etc., was on the ground in readiness for the resumption of work but remained practically idle during all of that time. The claimants had expected to resume work immediately on the execution and approval of the contract of September 28, 1908, but were not permitted to do so because the lock gates were not yet in position to withstand the water, and it was regarded as unsafe to do any more excavating which might endanger the temporary levee or to remove that levee until the lock gates might furnish protection. They were notified on the 1st of February, 1909, to resume work within 30 days, but protested because the river was then rising and likely to flood the excavation, and maintained that they were to do the work on a falling river and when the gauge was at or below 20 feet, and they were permitted to defer resumption of work until the gauge should read 20 feet. On the 12th day of March the river, having continued to rise, reached such a height as to overflow the bank between it and the lock and flooded the approach area, and work could not be resumed until after it receded, and claimants resumed work on the 30th of April through their subcontractor, as stated in Finding XII. During this period W. O. Burton, who had been in charge of operations for claimants, was present ready to resume work, and two watchmen and a clerk were under employment. The value of the use of the plant referred to and claimed for was $750 per month, the time of Burton was worth $250 per month, and the expense on account of the employees named was $204 per month.
XVII. On the 28th of November, 1908, by reason of a caving of the river bank, caused by high water in the river, one of the claimants’ towers and the cableways collapsed and claimants were damaged thereby in the sum of $500. The collapse was not due to any fault or negligence on the part of either party to the contract.

Opinion:
Downey, Judge,
delivered the opinion of the court.
The claimants in this case seek recovery on 11 different items which are all the outgrowth of contracts entered into between them and the United States for work in connection with the excavation and construction of the approaches to the lock connecting the Mississippi River and Bayou Plaque-mine at Plaquemine, La. The several contracts are referred to in the findings of which they are made a part, and since to review them as a whole would very much lengthen this opinion without apparent profit, they will be discussed only as may be regarded necessary in the separate consideration of the various claims presented.
Claimants first seek to recover $4,815.22 deducted as expenses of superintendence and inspection under the contract of June 6,1905. (Findings I, II, and IV.)
Under this contract dated June 6,1905, approved and contractor notified of approval June 19, 1905, work was to commence within 60 days after notification of approval and be completed within five months thereafter. About the time the contractor was ready to commence or had begun work an epidemic of yellow fever broke out, scattering the force employed, and on their application an extension of time was granted for " a reasonable time." The contractors proceeded with their preparations for the doing of the work, and, the epidemic having abated, they commenced or resumed work on the 10th day of October, 1905. The fact that they voluntarily commenced work on this date is sufficient to warrant the conclusion that the elapsed time was all the extension necessary on account of the cause stated and was reasonable. The contract was therefore to be completed within five months from that date, or before the 10th day of March, 1906.
Beginning with the 10th day of March, 1906, expenses of superintendence and inspection were charged against the contractor monthly until completion of the contract except that it was not fully completed until a few days after February 1, 1908, and no charge was made after the month of January, 1908. The expenses charged and deducted were first certified in itemized form by the assistant engineer on the work and then certified on the vouchers drawn as deductions by the engineer officer in charge, and the contractors then certified that the vouchers as drawn were correct and, so far as appears, made no objection to the deductions.
The contract provided that if the contractors should fail to complete the contract within the time limited it might be annulled, or in lieu of annulling the time limit might be waived and the contractor permitted to finish the work, in which event all expenses for superintendence and inspection due to the delay beyond the time originally fixed for completion should be determined by the party of the first part and deducted from any payments due or to become due the party of the second part.
The party of the first part in this contract was " Clinton B. Sears, lieutenant colonel, Corps of Engineers, United States Army," but he was contracting, as recited, " for and in behalf of the United States of America." If in course he was succeeded at any time by another officer as engineer in charge, representing the United States, questions for determination, under the contract, by the contracting officer were for the determination of the officer in charge as the representative of the United States, and it can not be held, as contended by claimants, that they were, during the entire progress of the work, entitled to the individual determination of Col. Sears even though he may have been succeeded by another engineer officer as officer in charge.
Since it appears from the facts found that the contractors encountered some difficulties in the prosecution of the work in the bayou approach and excavated much more than the estimated amount of material, it is contended that there should have been an extension of time on that account, and that therefore a part of the charge for superintendence and inspection was improper; but we find no right under the contract to an extension of time for the reasons stated, and, indeed, it does not appear that any was then asked. It is also contended that it does not appear that the United States was actually put to the expense for superintendence and inspection as charged, and it is asserted that the employees for whose time charges are made were otherwise employed and in outside enterprises. It was not necessary, in our view of the situation, that it should be specifically proven, outside of the official certificates, that the United States was actually put to the expense charged, and there is no evidence which we can regard as even approximately sufficient to impeach the integrity of the official certificate of the engineer officer in charge. We conclude that there is no sufficient basis for a recovery on this item.
Claim is made for 7,910 yards of excavating, at 40 cents per yard, $3,164. This is the material which these contractors diverted to the purposes of the McGee contract, as shown in detail in Finding Y. There is nothing involved except a pure question of fact as to whether this excavating was paid for, and in the finding referred to it is said that this material was included in estimates made for which the contractors were paid. There is apparent in the presentment of the case some tendency to confusion as between the material taken by Burton & Co. for the purposes of the McGee contract and material taken from the area of the river approach by McGee & Co. before Burton & Co. entered into their contract, but it is not worth while to enter into any discussion of the matter, since the finding is conclusive on the question. There can be no recovery on this item.
Claim is also made for excavating 16,914 cubic yards of material, under the contract of August 7, 1906 (Finding VII), at $1.05 per yard. This claim is disposed of by the findings, but it is perhaps proper to say that it is based on a calculation made by Prof. Dougherty from data furnished and made for the purpose of a presentation of the facts to this court. Prof. Dougherty's skill as a mathematician has not been questioned by the court, but he was evidently laboring under difficulties, and it appears from the evidence that some matters essential to correct conclusions were not considered by him, possibly not presented properly. However that may be, the findings (Finding XIII) determine the quantities of material excavated under this contract and that, except as therein stated, the contractors were paid therefor. The conclusion on this item is against the claimants.
The next item is a claim for anticipated profits on 5,464 yards of excavating at 90 cents per yard, $4,917.60. The facts on which this claim is predicated are found in Finding XIV and, if entitled to recover, the amount claimed is found to be correct. It is the difference between the price the United States would have been compelled to pay for this excavating if these contractors had been permitted to do it and the price at which it is shown they could have procured it to be done by a subcontractor. That the profit would have been comparatively enormous probably does not affect the rights of the claimants.
It appears that when the water was let into the river approach inside the temporary levee for the purpose of testing the lock gates there was some washing from the banks and a deposit of sediment carried in with the river water. This deposit was over a considerable area, in a part of which it was plainly apparent that contractors' work was not complete, since there were yet pile heads remaining to be cut off. Over this area the contractors were required to remove the sediment and cut off the pile heads. By reason of the ob stacles presented by the pile heads this part of the work was necessarily tedious and perhaps not very profitable, but the contractors recognized their obligations in the matter and did it. The removal of the sediment from the rest of the area could be easily accomplished by a dredge, and the contractors demanded the right to remove it under their contract, but were refused. The theory presented is that there was yet work to be done by them in the smoothing up of the uneven surface of this area which they had already excavated, and that removal of the sediment was necessary before the smoothing up could be done, and that the contract provided for payment at contract price for the removal of any material from sliding or caving banks. The dispute hinges on contrary contentions as to whether the contractors' work in the area in question had been completed. Controversies of this kind usually find the parties in reverse position, and, rather strangely here, the contractors are contending that they yet had to do that, which, as a matter of common knowledge, they are usually somewhat loath to do because " smoothing up " does not furnish much yardage in proportion to the labor involved.
This contract is not different from the usual run of such contracts, in that its whole import is to make the engineer officer the judge of the satisfactory performance of the contract. He, by its terms, was to give all lines, slopes, etc., and his decision was to be final on any question of the interpretation of the specifications in regard to shape or dimensions shown on the plans, and, as to all materials and work, " the decision of the engineer officer in charge as to quality and quantity shall be final." We think that as between the parties it was the province of the engineer officer in charge to determine whether the work in this area was completed according to plans or not, and even if he might not arbitrarily so determine, it is not satisfactorily shown that his conclusion was erroneous. He treated this area as a completed area, and the findings so refer to it. The conclusion is that the claimants are not entitled to recover.
The next claim is for anticipated profits on 3,973 cubic yards of material at 90 cents per yard, $3,575.70. This claim arises by reason of the abandonment of certain parts of the work to be done under the contract of August 7, 1906.
Apparently many difficulties had attended the work of constructing this lock and its approaches. The lock walls had spread, causing the gates to stand apart at the top, engineers had differed as to the proper course in the premises, work by Burton & Co. had to be stopped on the 10th day of September, 1907, it was concluded that further pile driving would be detrimental to the work; and on the 28th of September, 1908, a further supplemental contract (Finding X) had been entered into between Burton & Co. and the United States providing for the elimination of certain parts of the work which they were to do and for the payment to them of $10,000 for the relinquishing of their profits on certain parts of the work and the expense of taking down and removing that part of their plant intended for use on the abandoned work, Burton & Co. releasing certain claims on account of the payment of the sum named.
At the time of the execution of this contract there were 7,946 yards of material within the original Burton contract, which remained to be excavated for approach walls, construction of which had been abandoned (Finding XIII). They were permitted to excavate one-half of this quantity and were paid the contract price therefor but were refused the right to excavate the other half.
This supplemental contract again provided for the payment of $1.05 per yard for excavating for approach and placing earth behind the lock walls, and with reference to the abandoned work it recited that " in view of the fact that the said W. O. Burton & Co. are relinquishing their profits upon the unexecuted portion of the pile and concrete work of the river approach," etc. The only theory apparent on which the contention of the Government as against the soundness of this claim can be sustained is that the abandonment of the construction of a part of the approach walls because of the danger from pile driving necessarily implied an abandonment of the excavation necessary for the walls and an abandonment by the contractor of his right to do that excavating or receive his fair profit therefor. We can not say that this necessarily followed. Indeed, it would seem that the inclusion in the contract of a stipulation as to the class of work as to which the contractors abandoned their profits seems to exclude those things not stipulated. And if the Government's theory is correct, it is a theory which would apply to the entire 7,946 yards, and made difficult of satisfactory explanation the course of the officer in charge in allowing the contractors to remove one-half of the total quantity and paying them for it. We think there is nothing in this supplemental contract which took from the contractors their right to excavate to lines, slopes, and grades as contemplated in the original contract. Upon this item the conclusion is that the claimants are entitled to recover $3,575.70.
The next item is a claim for $6,336 as anticipated profits on the excavation of 7,040 yards of material. The material in question in this item is material which caved from the bank into the Mississippi River on the 20th of November, 1908. It was material otherwise to be excavated by the contractors. The caving was caused by a flood in the river. The statement of the cause of the caving would seem to determine the conclusion. If, as contended by the claimants, they had a right to commence work at once after the execution of the supplemental contract of September 28, 1908, a contention we will consider in connection with another item, and if they were wrongfully prevented by the United States from so commencing work and if they had been permitted then to commence work they would have excavated this material before it caved into the river, the rights of the claimants would have been presented in a different light, but we have not found the facts in accordance with these suppositions. The conclusion must be against the claimants' right to recover on this item.
The next two items are, respectively, claims for 136¿ barrels of cement at $2.70 per barrel, and 180.5 yards of sand at $1.45 per yard. The contract of September 28, 1908, obligated the United States to purchase this material rendered useless to the contractors by the abandonment of concrete work in which it was to be used. The only question is as to the price. It is found (Finding XV) that the cement on the basis of the price to be paid Burton & Co. for concrete was worth $2.30 per barrel. By reason of an advance in price in the market it was then worth $2.70. It is concluded that the price, $2.30, which the contractors would have realized for the cement in the form of concrete had this concrete work not been abandoned is the proper basis of allowance. The finding fixes the value of the sand at $1.30 per yard. The claimants are entitled on these items, respectively, to $313.37 and $234.65.
Claimants next maintain their right to recover $15,253 as damages for disuse of plant for seven months. The period claimed for is from September 28, 1908, to May 1, 1909. The value of the use of the plant as found is stated in Finding XVI. We are of the opinion that no right to recover on this item is shown.
The theory of the claimants is that they were entitled, under the contract of September 28, 1908, to commence work immediately and that they were not permitted to do so, but were compelled to remain idle and under expense during the entire time stated. The contract of the date named did not contain any provision as to when work thereunder was to commence. If it stood alone as a contract for work to be performed, uninfluenced in its construction by any other circumstances, the conclusion would probably be justified that the contractors had the right to commence work as soon as they wished. But we are of the opinion that the contract in this respect must be construed in the light of the attendant circumstances and its purposes and that so construed it did not imply a right to commence work at once but, on the contrary, that there was a contingency upon which the commencement of work must depend. Work had been stopped some time before. The lock gates were not in shape to hold out water. While they were in that condition the temporary levee could not be taken away. Further excavating in the river approach could not be permitted for fear of weakening this temporary levee. It was because of this condition that, when the board of engineers concluded that filling should be placed behind the lock walls at once, the contract of March 8, 1908 (Finding IX), was entered into with Burton & Co. under which they were paid for placing 24,203 yards of filling taken from borrow pits, at 95 cents per yard, when the required filling could have been supplied without additional cost for excavations yet to be made, levee included, if the work of excavating could be permitted to proceed under the contract therefor. This condition as to the gates had not been remedied when the contract of September 28, 1908, was made. The whole situation was necessarily known to Burton & Co. After the work of excavating in the approach had been stopped they had entered into a supplemental contract dated November 15, 1907 (Finding VIII), providing for an extension of time and relieving them of any charges for inspection and superintendence and in which it was recited that the board of engineers had reported that the removal of the temporary levee, which was a part of the excavating to be done, would be postponed until the back filling was completed and " the lock is ready to be opened." Bight was reserved to seek compensation for delay and disuse of plant and delay and disuse of plant was a part of the consideration for the payment of the $10,000 under the contract of September 28, 1908. Under these circumstances it borders on absurdity to say that in the face of the existing condition of the lock gates it was the intention that work was to commence immediately on the execution of that contract.
Thereafter, on February 1, 1909, Burton & Co. were notified that the lock gates would be in condition to withstand water pressure within 20 days, and that they must commence work within 30 days, and probably could commence sooner with safety. This is a rather clear indication of conditions at that time and of the contingency determining when work could be commenced. It does not appear that there was unreasonable delay on the part of the United States in putting the gates in such condition as to permit the commencement of the work.
It is now of importance to note, as found, that after this notice to Burton & Co. to commence work they objected, because the river was rising and likely to flood the work, and they contended that under the contract their work was to be done after the river reached a given stage and on a falling river. And thereafter, and plainly as a result of their protest, they were notified that former instructions were so modified as to require them to begin work "when the gauge at Plaquemine reads 20 feet, which will be when the river falls." Delay at this period then was permitted because of their protest and not caused by any refusal of the United States to allow work.to proceed. The river continued to rise until it flooded the area to be excavated, and when it receded conditions were such that Burton & Co. could not advantageously prosecute the work with the plant they had, and they were permitted to sublet the work, and work was commenced by their subcontractors on the 30th of April, 1909. It is thus apparent that there was no delay caused by the United States which can furnish a basis for this claim, and as to it, it is our conclusion that the claimants are not entitled to recover.
The next claim is for damages to towers and cableway in the sum of $7,427.80. The amount of damges is found to be $500. (Finding XVIII.) It was caused by the caving of the river bank caused, in turn, by high water in the river. The contract placed upon the contractor full responsibility for the safety of his plant. It is contended that this provision applies only to the period of the contract and any extension of that period by mutual consent and not when the contractor is compelled, against his will, to keep his plant subject to such a risk. We understand the claimants' contention as to this item to revert to the theory that the contractors were entitled to commence work immediately on the execution of the contract of September 28, 1908, and that if so permitted they would have completed the work and removed this plant before the caving of the bank occurred. We have already discussed the claimants' rights in this respect under this contract and need not repeat. We see no proper basis for the allowance of this item.
The last item is stated in the petition as "Balance due claimants on account of the 10 per cent reservations on their contracts, $7,514.50."
This statement of the claim, while correct in a sense, is not clear, and the facts appearing otherwise than as stated in the petition must be resorted to for explanation. There is no contention that the amount in question was not due the claimants as retained percentages under the 1906 contract. There was a larger sum than that admittedly due as retained percentages under that contract, but when settlement was made that sum was deducted as the amount alleged to be due the United States on a claim asserted in the nature of a counterclaim for the cost of 7,910 yards of filling material at 95 cents per yard (Finding XI), that amount of material being the same amount as that diverted by Burton & Co. to the purposes of the McGee contract (Finding Y).
A summary of the facts, chronologically stated, may aid consideration of a question which is perhaps not without its difficulties. When Burton & Co. entered into their contract of June 6, 1905, there was in existence, uncompleted but in process of performance, a contract between the United States and McGee & Co. for the placing of filling behind the wing walls of the lock. This contract had nothing to do with the excavation of the approaches. When Burton & Co. were ready to commence work under their contract it was found that a track used by McGee & Co. in transporting material from borrow pits was laid across a part of the area to be excavated by Burton & Co. and interfered with prosecution of their work, and to get McGee & Co. out of the way and at the suggestion of the assistant engineer on the work Burton & Co. entered into a contract with McGee & Co. to complete their contract for them, and Burton & Co. were permitted by the assistant engineer, with the knowledge of the engineer in charge, to use 7,910 yards of materials excavated from the approaches in the completion of the McGee contract. There is a controversy as to just where this material was taken from. In case it should be regarded as material, although its materiality for the purposes of this question is not apparent, it is found that a part came from the area covered by Burton & Co.'s 1905 contract and a part from the area covered by the 1906 contract. It was placed in part before the 1906 contract was executed and in part thereafter. Under the contracts of Burton & Co. the material excavated by them was to be placed, to the extent, needed, behind the lock walls, and there was no modification of their contracts in this respect in writing with the approval of the Chief of Engineers or the Secretary of War. Burton & Co. profited by the transaction in that they were paid by the United States for excavating the materials and were paid by McGee Jj Co. for placing them as filling, and the United States suffered in that it paid Burton & Co. for the excavating and paid McGee & Co. for the filling; but there is no evidence that the transaction was in any way tainted with fraud, and it was then assumed that there would be more than enough materials to be excavated in the completion of the work than would be required to make the fills behind the lock walls.
Subsequently an engineer officer in charge was of the opinion that no more filling material should then be placed behind the lock walls. Differences of opinion arose, a board of engineers was appointed to investigate and recommend, and the board concluded that filling should be placed behind the lock walls at once, the condition of the lock gates rendered it unsafe to chance removing or weakening the temporary levee by taking materials which Burton & Co. could otherwise have been required, under their contract, to place behind the lock walls, and contract was made with them, March 8, 1908, to furnish from other sources and place behind the walls approximately 20,000 yards of filling material. Soon thereafter, in the same month, Burton & Co. were paid balance found due them under their 1905 contract without deduction or the assertion of any claim on account of the diversion of the' 7,910 yards of material to the purposes of the McGee contract. The contract of March 8 for filling was completed within the time limited, viz, four months after notice of approval, and Burton & Co. were paid thereunder for 24,203 yards of filling at 95 cents per yard without deduction or assertion of claim on account of the diverted materials. When the Chief of Engineers and the Secretary of War were informed of the diversion of this material to the McGee contract it is not shown ex cept that it was before the execution of the contract of September 28, 1908. Indeed, this contract, which was approved by the Chief of Engineers and by the Secretary of War, recited the placing of the 24,000 yards of filling material under the contract of March, 1908, and under this contract Burton & Co. were paid $10,000 for the relinquishing of certain rights by them without, so far as appears, the assertion of any claim on account of the diverted material, and this contract apparently recognized their right to retained percentages. Afterwards, when final settlement was about to be made under the 1906 contract and contracts supplemental thereto, payment in full of retained percentages was refused and the sum in question was deducted as the cost to the United States of placing 7,910 yards of filling material at 95 cents per yard, on the theory that the United States had found it necessary to place that much more material under the contract of March, 1908, than it would had that amount of material placed by Burton & Co. behind the wing walls under the McGee contract been placed behind the lock walls. The amount deducted from the percentages due Burton & Co. is the amount paid Burton & Co. under the contract of March, 1908, for 7,910 yards of material at the price provided in that contract.
At the time that this deduction was made on final settlement under the 1906 contract, it is conceded that this amount, and more, was due Burton & Co. as percentages retained. The deduction, so called, was then a retaining of of $7,514.50 of percentages admittedly due. It was a retaining of an amount of percentages exactly equivalent to an amount paid Burton & Co. for 7,910 yards of the material placed under the contract of March, 1908, it being admitted that they actually placed the material and were paid only what they were entitled to receive under that contract. It is, then, a retaining from an amount admittedly due of another amount also admittedly due when paid. The justification is an alleged breach of contract, through another transaction, to the damage of the United States in that amount. It would seem that since the claimants are coneeded to be entitled to this money, considered as retained percentages, the burden must be on the United States to establish its right to withhold it to compensate for alleged damages by way of breach of contract.
It is perhaps well to consider first whether there was a breach of contract resulting in a liability. The contract of 1905 contemplated the placing behind the lock walls of all excavated materials fit for the purpose. The contract of 1906 contemplated the same disposition of the materials except that it seems plainly apparent that there would be an excess of materials to be " wasted." When Burton & Co. made their contract with McGee & Co. at the suggestion of a representative of the United States, the primary object was to get McGee & Co. out of the way so that Burton & Co. could proceed with their contract, a consummation desirable from the standpoint of the United States. There could be no object in Burton & Co. taking over at 25 cents a contract under which McGee & Co. were being paid 59 cents if they were to be required to get the materials from outside sources, and indeed if they were to do so and retain the plant in place or install another for doing the work from the same source, nothing would be gained, since they would be with their plant as much in the way of the progress of excavation in the approaches as McGee & Co. had been. But by permitting Burton & Co. to complete the McGee fill with materials taken from the area to be excavated, the work of excavating would be facilitated and the McGee contract completed at the same time. And when Burton & Co. were permitted to take those materials for that purpose it was believed by the officer in charge that there was much more material to be excavated than would be required for the fills behind the lock walls. But for a contingency not then to be anticipated this view would no doubt have been verified and there would have been no occasion for the contract of March, 1908, with Burton & Co. for filling from outside sources, for it appears that when that contract was made to meet a determined necessity the material could not be taken from the area to be excavated, not because it was not there, but because, on account of the condition of the lock gates, it could not then be moved with safety. This condition could not reasonably be anticipated, and when the diversion by Burton & Co. to the McGee contract of the 7,910 yards of material was permitted there was no reason to believe that its diversion would ever entail any additional expense on the United States.
A contract is always susceptible of modification or amendment by the parties to it, and this contract did not differ in that respect from the ordinary contract, unless it be by virtue of some provision in it or the law applicable to it. It is contended that it could only be modified by a contract in writing approved by the Secretary of War, and that any departure from its terms, even though with the approval of the engineer officer in charge, would constitute a breach if not agreed upon in a writing so approved. íhe contracts of 1905 and 1906 contained the same provision on this subject, as follows:
" If at any time during the prosecution of the work it be found advantageous or necessary to make any change or modification in the project, and this change or modification should involve such change in the specifications as to character and quality, whether of labor or material, as would either increase or diminish the cost of the work, then such change or modification must be agreed upon in writing by the contracting parties, the agreement setting forth fully the reasons for such change and giving clearly the quantities and prices of both material and labor thus substituted for those named in the original contract, and before taking effect must be approved by the Secretary of War: Provided, That no payments shall be made unless such supplemental or modified agreement was signed and approved before the obligations arising from such modification was incurred."
We are well aware of the rule laid down in the Plvmley and other cases as to the effect of contract provisions similar to this, but it seems clear to us that this transaction is not within the rule or the quoted contract provision. That provision, in its first clause, recognizes the fact that it may become advantageous or necessary to make changes, and the implication is that there may be changes which may be informally made, but if they change the specifications as to character and quantity so as to increase or diminish the cost of the work they must be made with the stated formality, giving the quantities and prices substituted for those named in the contract, and, according to the proviso, before the obligations arising from such modification were increased.
These contracts involved other work than excavating. So far as the excavating was concerned, the excavating of the approaches was the primary object and the basis of payment; Coupled with it was the obligation to place excavated materials behind lock walls to the prescribed grade. The modification involved no increased cost as to the excavating. It involved directly no increased cost as to filling. Since there were plainly many more yards of materials to be excavated than could be used in the fills, there was at the time no possibility apparent that the diversion of this quantity of material could ever entail any expense on the United States. It was then apparently but a part of an available surplus necessarily to be wasted. The transaction was " advantageous," in that it was designed to facilitate progress; its placing behind the lock walls was by one of the engineers in charge during the time regarded as detrimental, and so far as human foresight could see it involved no increase of cost. That it did involve increased cost was not primarily due to the diversion under the circumstances existent at the time it was authorized, but was .due to the fact that when, after a controversy between the engineers, it was concluded by a majority that the filling should be placed at once, the materials which it was assumed would be available for the purpose and which would otherwise have been available could not be taken because of wholly unanticipated defective condition of the gates. And in this transaction there was no " substitution " of labor or material, and the transaction in itself clearly imposed no " obligations arising from such modification." There could hardly be said to be error of judgment on the part of the officer in charge in permitting the diversion, for human judgment can not be expected to consider contingencies wholly outside those reasonably to be anticipated. We think this was not such a modification of the contract as was required to be in writing with the approval of the Secretary of War, and it is shown that it was authorized by the representatives of the United States in charge of the work. What effect is to be given to the fact that it must have been known to the Secretary of War in all its consequences when he approved the contract of September 28, 1908, we need not here discuss. There was, in our opinion, no breach of this contract.
But if this conclusion should not be justified there are other features of the transaction for consideration.
The diverted material was taken in part from the area covered by the contract of June 6, 1905, and the diversion as to all the material necessary for the purposes of the McGee contract was authorized in connection with the performance of that contract and long before the execution or even the letting of the contract of 1906. Full settlement was made with Burton & Co. under the 1905 contract, with no deduction or claim on account of any breach thereof except as to expense of superintendence and inspection. If the diversion was a breach of the contract of 1905 to the damage of the United States, the theory upon which the deduction was made, we think there was no authority in the accounting officers or the department to determine the damages and arbitrarily withhold them from amounts due under the contract of 1906.
When the contract of March 8,1908, for the placing of filling from outside sources behind the lock walls was entered into, this so-called diversion had already occurred, and the void where the 7,910 yards were not was as glaringly in evidence as ever. Burton & Co. were awarded the contract without competition, since they were on the ground prepared to do the work, and they were paid in full for 24,203 yards of filling without deduction or claim of right of deduction. For every 7,910 yards of this material so placed they were paid $7,514.50, the amount in question, and it was never and is not now contended that they were not entitled to it under that contract. This particular sum rightfully paid under that contract is withheld from money rightfully due under another contract. If it retains its identity as a specific sum of money it clearly could not be so deducted, since the sum paid and the money from which it was deducted were both rightfully due. If it resolves itself into a measure of damages for an alleged breach of the 1905 con tract, the theory adopted, we are of the opinion that after settlement in full under that contract there was no authority to deduct it from money due under the 1906 contract. Camden Iron Works v. United States, 50 C. Cls., 191, and cases cited.
It is found that the Chief of Engineers and the Secretary of War were informed of this diversion before their approval of the contract of September 28, 1908, and we have called attention to the fact that the placing of this material by Burton & Co. under the contract of March 8, 1908, is recited in the contract referred to. While there is in this contract no express waiver of any claim against Burton & Co. on account of this diversion, it was declared to be a modification of the contract of 1906 as already modified, and was for the purpose of providing for changes in the work yet to be done and adjusting with Burton & Co. as to transactions occurring previous to that time. It recognized that Burton & Co. were entitled to an "equitable recompense" of $10,000 for relinquishing anticipated profits on abandoned work, including therein a release of all claims by them on account of previous changes in plans or delays or for work done " except for payment of retained percentages now held by the United States." After thus modifying the contract of 1906, apparently attempting to adjust ail differences with Burton & Co. up to that time, finding that Burton & Co. were equitably entitled to receive $10,000, recognizing that in addition thereto they were entitled to receive the retained percentages and thereafter paying the $10,000, we do not think that, in the absence of fraud or mistake, neither of which is shown, the United States was entitled to thereafter declare a breach of contract, determine the measure of damages therefor, and deduct the amount thereof from money admittedly earned under the contract and due and unpaid.
These last suggestions, following discussion of the question as to whether there was in fact a breach of contract, have not been elaborated. Their brief mention has seemed sufficient under the circumstances. Other views of the transaction which might be presented would seem but to add reasons for a conclusion apparently already well founded. Upon the whole situation as presented without necessity for determining where is found the best basis for the conclusion, we are of the opinion that the claimants are entitled to recover this item.
On the whole case the claimants are entitled to judgment for $11,638.22, and it is so ordered.
Campbell, Chief Justice; Booth, Judge; and Barnet, Judge, concur.