Case: ATLANTIC DREDGING COMPANY, WALTER B. BROOKS, AGENT, v. THE UNITED STATES
Abbreviation: Atlantic Dredging Co. v. United States
Decision Date: 1918-06-03
Docket Number: No. 33240
Citation: 53 Ct. Cl. 490
Volume: 53
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: ATLANTIC DREDGING COMPANY, WALTER B. BROOKS, AGENT, v. THE UNITED STATES.
Judges: BarNet, Judge, and Booth, Judge, concur.
Pages: 490–521

Head Matter:
ATLANTIC DREDGING COMPANY, WALTER B. BROOKS, AGENT, v. THE UNITED STATES.
[No. 33240.
Decided June 3, 1918.]
On the Proofs.
Plaintiff enters into a contract with defendants for certain dredging work. The specifications and the map thereto attached describe parts of the material to be dredged as “ mainly mud or mud with an admixture of fine sand,” whereas the material was in fact different and more difficult and expensive to dredge. Test probings made by the defendants disclosed more difficult material at two places and “ wash borings ” were then made. A tracing was made upon which the data obtained from probings was accurately stated and from said tracing the map submitted to bidders was prepared, upon which the data so obtained from probings was correctly delineated save as to the two places where “ wash borings ” were made, and as to these the data as to the material ascertained in that manner was correctly shown. The map did not disclose the methods used for ascertaining the character of the material. The legends on the map did not accurately describe the character of material actually encountered by plaintiff. The specifications recited that bidders were expected to examine the work and decide for themselves as to its character, “ as the United States does not guarantee the accuracy ” of the description of the material to be dredged, “ although the general information given by the borings is believed to be trustworthy,” and plaintiff did not examine the site of the work before executing its contract.
Contracts; specifications, warranty in. — Held, where the specifications make specific statements as to the character of material to be dredged, upon which representation the contractor had a right to rely, and it develops that the material actually dredged by the contractor was in fact different, more difficult and expensive to dredge, and that the defendants knew of the existence of this more difficult material before the execution of the contract, such representation amounts to a warranty in a case where the contractor could not protect himself by mere observation and the material dealt with was hidden from view. Plaintiff had a right to rely upon the description of the materials shown on the maps furnished as a guide to bidders, and to which their attention was specifically called, notwithstanding it was stated that “ no guarantee is given as to the correctness of these borings.”
Damages, measure for ’breach of implied warranty. — Plaintiff having been induced to enter into a contract by representations upon which it was entitled to rely, and which turned out to be untrue, had the right to stop work at any time and sue to recover for whatever amount might be justly due it for the work already performed.
Campbell, Ch. J., and Downey, J., dissenting.
The Reporter’s statement of the case:
Mr. 'William L. Marbury for the plaintiff.
Mr. J. Harwood Graves, with whom was Mr. Assistant Attorney General Huston Thompson, for the defendants.
Defendants’ contentions are that the material did not differ to an unreasonable extent from what it was indicated to be in the specifications; that plaintiffs were expressly required to make their own investigation of the material to be dredged and specifically informed that no allowance would be made by the failure of the contractor to estimate correctly the difficulties attending the execution of the work; that they were allowed ample time within which to make such investigation; that the description of the material in the specifications was expressly not guaranteed; that the test borings were actually made in the usual and customary manner of making such borings, and the results thereof were correctly platted on the maps to which bidders were referred; that defendants specifically stipulated that no guarantee was given as to the correctness of these borings as representing the character of the material in the entire vicinity in which they were taken; that the officers and defendants had no information as to the character of the material other than that disclosed by the borings; that all other information as to the character of material which existed, although not known to the contracting officers, did in fact corroborate the information furnished by the bor-ings; that said officers did honestly believe, from the information at hand, that the material to be dredged was of the character mentioned and were justified in that belief; that an experienced and careful bidder would not have been misled by the statements of the specifications either as to the material or as to the borings; and that therefore this case is governed by Simpson v. United States, 31 C. Cls. 217; 172 U. S., 372; Lewman v. United States, 41 C. Cls. 470; and Burgwyn v. United States, 34 C. Cls. 348.
Under the terms of the supplemental contract made with full knowledge of the material to be removed plaintiffs are precluded from recovering anything for material thereafter removed.
Defendants contend further that plaintiffs’ plant was inefficient, even in the handling of material which might properly be described as “mainly mud or mud with an admixture of fine sand,” and the delay and extra expense were due to this cause.
Plaintiffs abandoned their contract before completion, and therefore, even if their contentions were true, they could recover only the reasonable value of the work performed as on a quantum meruit, and that this would apply only to the material removed prior to the supplemental contract.
Plaintiffs rely upon the cases of Christie v. United States, 237 U. S. 234, Hollerbach v. United States, 233 U. S. 165, and Sheridan-Kirh Contract Co. v. United States, decided by this court December 3, 1917.
Those cases, however, can be easily differentiated from this, and the principles therein announced do not control.
The Christie case: This case is so thoroughly familiar to the court that but brief reference to it is necessary. The claim was based on a charge of erroneous and deceptive bor- ings and misrepresentations in the specifications and drawings.
It was held, as stated in the syllabus:
“ Where there is a deceptive representation in the specifications as to the material to be excavated which actually misleads the bidder who obtains the contract, and it is admitted by the Government that time did not permit borings to be made by the contractor to verify the representations, the latter is entitled to an allowance for the actual amount expended over what would have been the cost had the boring sheets been accurate, notwithstanding there was no sinister purpose whatever.”
In this case (1) there ivas no deceptive representation in the specifications; the material encountered might have been expected from the statements in the specifications; (2) the bidder -was not actually misled, or, if he was misled, it was through his own fault, since the specifications would not have misled a reasonable, careful, and experienced contractor; (3) the Government did permit investigation to be made by the contractor and did require it to be made, and there was ample time within which to make said investigations, and the making of such investigation ivas a usual and customary practice among bidders on this character of work; and (4) the boring sheets were accurate and did truthfully disclose the character of the material where they were made, and did furnish all the information in the possession of the Government.
The Christie ease was decided on the ground that the statements in the specifications were untrue in fact and misleading, and that they were untrue was known to the officers of the United States. Further, the Supreme Court says, 231 U. S. 240, that “ claimants were forced to rely wholly upon the information furnished them, the time not being sufficient to permit them to make their own borings. * * * .”
This fact, as is clearly shown in the court’s decision, relieved claimants of their responsibility under the contract to make their own investigation; whereas in the present case the accuracj1' of the description of the material was specifically not guaranteed and the correctness of the borings, as representing the character of the material, was also specifically not guaranteed, and plaintiffs were required to make their own examination, and ample time within which to make such examination was allowed.
In the 0Kristie case, the specifications show that there was no warning given the plaintiffs that the description of the material and the accuracy of the borings were not guaranteed. In this case such warning was expressly given.
Again, the representations made in the specifications in the Christie case were positive, and it was on this ground, coupled with the admitted fact that time did not permit investigation to be made by the plaintiffs, as required, that the Supreme Court based its decision.
The Ilollerbach case: In this case relief was granted in respect to positive misstatements in the specifications to the effect that the dam which was to be repaired was backed “ for about 50 feet with broken stone, sawdust, and sediment to a height within two or three feet of the crest,” whereas it was found that it was not so backed, making the work more expensive to the contractor; it being held that as these representations were positive, the contractor was entitled to relief with respect thereto. The court in that case, 233 U. S., 172 says:
“ In paragraph 33 the specifications spoke with certainty as to a part of the conditions to be encountered by the claimants. True the claimants might have penetrated the seven feet of soft slushy sediment by means which would have discovered the log crib work filled with stones which was concealed below, but the specifications assured them of the character of the material, a matter concerning which the Government might be presumed to speak with knowledge and authority. We think this positive statement of the specifications must be taken as time and binding upon the Government, and that upon it rather than upon the claimants must fall the loss resulting from such mistaken representations.
In that case “the specifications spoke with certainty,” whereas in this case they merely spoke of the belief of Government officers, giving the grounds on which that belief was based and particularly cautioning the contractor that the investigations indicated were not guaranteed and that he should make Ms own investigation, for which ample time was allowed.
In that case the court thought that “this positive statement of the specifications must be taken as true and binding upon the Government,” whereas in the present case there is no positive statement in the specifications.
In that case the Supreme Court further said that “ it would be going quite too far to interpret the general language of the other paragraphs as requiring independent investigation of facts which the specifications * * * left in no doubt ”; whereas in the present case the specifications specifically required independent investigation and specifically threw doubt upon the statements in the specifications.
In that case, as the court says, if the Government had wished to leave the matter open to independent investigation by the plaintiffs, it might easily have omitted the positive satement of fact; whereas in this case it not only did leave the matter open to investigation, but by the terms of the contract required such investigation by the plaintiff.
The Sheridan-Kirh Case: This is another case in which there were positive representations of fact with no opportunity between the date of advertisements and the opening of the bids .for the contractor to make an independent investigation.
Drawings were exhibited to the plaintiff prior to the making of bids for the construction of a dam in the Ohio River, which drawings showed bedrock at certain depths below low water. The actual depth to bedrock at a number of places shown on the drawings was greater than the depths there shown. There was not sufficient time allowed for the plaintiffs to make an independent investigation and no independent investigation of the location of bedrock was required by the specifications. It was on this positive statement, without any investigation required of the contractor, and without time allmved within which to make such investigation, that this court held that in respect to the additional work performed by the plaintiff because of bedrock being at a greater depth than shown, he was entitled to recover under the decision in the Eollerbach and Christie cases, supra.
How different is this state of facts from that in the. present case where plaintiff was given all the information in the possession of the Government; was merely told that the Government officers believed this information to be correct; was specifically warned, however, that it was not guaranteed either in method or result; and was required, under his contract, to make his own investigation for which ample time was allowed.
Atlantic Dredging Go. v. United States, 35 C. Cls., 463 was decided on the ground that the specifications posi: tively representing the material to be “ chiefly sand and mud with a little gravel,” whereas it turned out to be different material more costly to excavate, constituted a warranty or guaranty as to the character of the material, and therefore plaintiff was entitled to recover the additional cost of excavating the more difficult material. In that case, as in the other cases cited, there was a positive representation and no qualification of the statement made in the specification and no requirement of plaintiff that he should make his own investigation. In the instant case there, were both — the statement in the specifications was expressly not guaranteed, and the plaintiff was expressly required to make his own investigation and ample time was allowed in which to make it.
Having abandoned their contract plaintiffs are, under any view of the case, limited in their recovery to the reasonable value of the work performed prior to the supplemental contract as on a quantwm memit. United States v. Behan, 110 U. S. 339; Dermott v. Jones, 2 Wall. 1-9; Sedgwick on Damages, 9th ed., vol. 2, secs. 658-602.
In the Behan case the Supreme Court of the United States says, p. 345:
“ When a party injured by the stoppage of a contract elects to rescind it, then, it is true, he can not recover any damages for a breach of the contract, either for outlay or for loss or profits; he recovers the value of his services .actually performed as upon a quantum meruit. .There is no question of losses or profits.”
In the case of Dermott v. Jones, supra, the Supreme Court said, p. 7:
“ It is a well settled rule of law, that if a party by his contract charge himself with an obligation possible to be performed, he must make it good, unless its performance is rendered impossible by the act of God, the law, or the other party. Unforeseen difficulties, however great, will not excuse him. * * *
“ When he (the contractor) has been guilty of fraud, or has willfully abandoned the work, leaving it unfinished, he can not recover in any form of action.”
The measure of recovery would be the rightful cost of doing the work performed without anything added for profit, since, having abandoned the work, he can not recover for profits. United States v. Behan, sufra; Quinn v. United States, 99 U. S., 30.

Opinion:
Hat, Judge,
reviewing the facts found to be established, delivered the opinion of the court:
On December 18, 1912, the plaintiff entered into a contract with the defendants whereby it agreed to dredge to a depth of 35 feet below the plane of mean low water a certain section of the Delaware Eiver, designated as lower end of Mifflin Eange, Connecting Eange, and upper end of Tinicum Eange. The width of said dredging was to be 800 feet in the straight parts and 1,000 feet in the bends. The plaintiff was to receive for its work 0.1299 cents per cubic yard, scow. measurement.
The specifications, which were made a part of the contract, stated that the material to be removed is believed to be. mainly mud, or mud with an admixture of .fine sand except at certain stations which were fully described in the specifications. ' The specifications also stated that bidders were expected to examine the work and decide for themselves as to its character and to make their bids accordingly, " as the United States does not guarantee the accuracy of this description." Immediately following the above statement, and in the same paragraph of the specifications the following appears : " A number of test borings have been made in all of the areas where dredging is to be done under these specifications, and the result thereof may be seen by intending bidders on the maps on file in this office. No guaranty is given as to the correctness of these borings in representing the character of the bottom over the entire vicinity in which they were taken, although the general information given thereby is believed to be trustworthy." The plaintiff before executing the contract visited the office and examined the maps referred to in the specifications.
These maps contained a record of ten borings covering the section of the Delaware River which by its contract after-wards made the plaintiff agreed to dredge. Eight of these borings, according to these maps, indicated that the only material encountered had been soft mud, or firm sandy mud, and the other two borings indicated that the material encountered was loose gravel. The maps did not indicate the time when the borings were made, nor was it stated whether the borings were core borings or wash borings, or whether the boring was done by a probe. There was nothing on the maps exhibited to bidders showing the field notes taken at the time the borings were made.
The numbers of borings covering that section of the Delaware River embraced in the contract of the plaintiff were 111 to 120, inclusive. On the map opposite numbers 111 to 120, inclusive, under the heading, " Material," were legends which had for their purpose the description of the material found at the places where the borings had been made. Opposite No. Ill the legend was as follows: Firm sandy mud; opposite No. 112, firm sandy mud; opposite 113 and 114, loose gravel; opposite 115 to 120, inclusive, soft mud. The map also showed that the material, as indicated above, was in each case more than 35 feet below the plane of mean low water.
The plaintiff did not examine the site of the work for itself before making its bid or before executing the contract, and had no information as to the character of the material to be dredged except that given by the defendants on the maps, to which its attention had been directed by the defendants. The borings shown on the map of the defendants were made by them in the year 1909, three years before the contract of the- plaintiff was executed.
The legends on said map did not contain a true description of the character of the material which had been, en countered by the defendants when the borings were made over that section of the Delaware River which was embraced in the contract of the plaintiff. These borings disclosed material much more difficult to dredge than that described on the map shown to the plaintiff for its examination and information. At the time the borings were made by the defendants their officers who made the borings took and recorded field notes, which were set down in a book kept for the purpose. At borings 113 and 114 these field notes showed that there was impenetrable gravel, through which the probe used by those making the borings could not penetrate ; these notes were transferred to a tracing made by the defendants, but were not shown on the map which defendants exhibited to bidders for their information. The books containing the field notes as to the other borings in the section embraced in the contract of the plaintiff could not be found. It appears from the evidence in the case that the character of the material at these borings was not that shown on the map exhibited to bidders, but was of a more difficult character for dredging.
There are three kinds of borings in use to ascertain the character of material to be dredged, to wit, core borings, wash borings, and borings by forcing a rod into the bottom by hand to the necessary depth, the character of the material encountered being determined by the feel of the rod, and the location below mean low water is determined by measurements marked on the rod itself. The method of boring which determines accurately the character of material to be dredged is that known as core boring; the other two methods above mentioned do not determine accurately the character of the material to be dredged. The method used by the defendants in this case was the third method above described as to all of the borings embraced in the contract of the plaintiff, except borings 113 and 114, in which the defendants made wash borings. -
The character of the material in the area covered by the plaintiff's contract, and which the plaintiff encountered in its work on said contract, was difficult to dredge and consisted mostly of compacted sand and gravel mixed with clay and cobbles. The plant which was brought on the work by the plaintiff was inspected and approved by the defendants and was efficient for dredging the character of material which was mentioned in the specifications and described on the map to which bidders' were referred by defendants for information.
Before the plaintiff knew that at the time of the execution of the contract the defendants had knowledge that the character of the material to be dredged was different from that shown on the map exhibited to plaintiff for its information, the plaintiff on May 4, 1915, entered into a supplemental contract with the defendants by which it was agreed that all material excavated and removed under the contract, other than mud or mud with an admixture of fine sand, might be deposited in Delaware River at locations to be indicated by the contracting officer, and further agreed in consideration of the change in manner of disposal of said material that the unit prices per cubic yard should be reduced in the sum of 2 cents.
On December 15,1915, the plaintiff refused to go on with the work, although he did not then know that the map which was exhibited to bidders did not disclose a true record of the character of material which had been encountered when the borings were made. Nor did it discover this fact until after the bringing of this suit. The total amount of material actually dredged and removed by the plaintiff under the contract was 1,437,469 cubic yards, and the amount of material remaining to be dredged after the plaintiff ceased work was 400,000 cubic yards.
The plaintiff expended in the prosecution of the work the sum of $354,009.19; it received from the defendants the sum of $142,959.10, making its loss on said contract the sum of $211,050.09.
The plaintiff brings this suit for the extra cost of dredging operations under its contract with the defendants to do certain dredging in the Delaware River, and bases its claim for recovery on a charge of misrepresentation in the specifications and drawings as to the character of the material which it was to dredge and remove under the contract.
The contention turns upon the language used in the specifications, which is fully set out above. The plaintiff claims that when invited to bid on the work it examined the map which was exhibited to bidders for their information by the defendants, and that said map stated that the material to be dredged was loose gravel and soft mud, but that the material which was actually to be excavated consisted of compacted sand and gravel, mixed with clay and cobbles, and that such material was more difficult and expensive to excavate and dredge than was the material described on the map; that the borings were made by officers of the defendants; that the existence of the more difficult material was known to them; that the statement in the specifications was untrue in fact, causing the plaintiff to propose to do the work upon the basis shown by the map; that the plaintiff relied wholly upon the information furnished it by the defendants; that it expended the sum of $211,050.09 over and above the amount paid it under the contract; that it was led to expend this sum of money by the untrue statements made to it, and relied upon by it; and that it had the right to rely upon these statements, and was not obliged to make any investigation for the purpose of showing that these statements were false.
We think that the evidence sustains the contention of the - plaintiff. It establishes that the borings were made by the officers of the defendant; it also establishes the fact that the defendants made specific statements as to the character of the material to be dredged, and that the material which was actually dredged by the plaintiff was different from that described in the specifications of the defendants, and that the existence of this more difficult material was known to the defendants.
It is also established from the evidence that the plaintiff relied wholly upon the information furnished it by the defendants.
It appears that there was a deceptive representation of the material to be dredged, and that the plaintiff was misled by it. The officer making the contract which we are considering was authorized to make it, and the plaintiff in its dealings with him had a right to rely on any representation made by him which related to the subject matter of the contract. The plaintiff was told that the character of the mate rial was loose gravel and soft mud. That was a positive statement of the character of the material which was to be dredged, and the plaintiff had a right to rely on the representation so made, for it was so worded as to create and justify the belief that it was intended to enter into and qualify the contract. It was a representation which amounted to a warranty, particularly, as in this case, the defendants knew and spoke with authority as to the character of the material, while to the plaintiff its character was unknown, and it could not protect itself by mere observation and dealt with a material which was hidden from view.
It is contended by the defendants that the specifications did not guarantee the character of the material described, and only stated what was believed to be its character, and that the plaintiff should have made an investigation for itself and had no right to rely upon the information offered by the defendants. But the defendants in its specifications especially directed the attention of bidders to a map on file in their office which purported to disclose the character of the material to be dredged, and this map was based upon borings made by the defendants, the specifications stating: "A number of test borings have been made in all of the areas where dredging is to be done under these specifications, and the result thereof may be seen by intending bidders on the maps on file in this office. No guaranty is given as to the correctness of these borings in representing the character of the bottom over the entire vicinity in which they were taken, although the general information given thereby is believed to be trustworthy." And on the map the character of the material is fully described, and set out with particularity. The statement thus made was unequivocal, and was set out in a document prepared for the guidance of bidders. It seems to the court that the bidder had a right to rely on information so given, and was not obliged to make an independent investigation of a fact which the Government had left in no doubt. United States v. Stage Co., 199 U. S., 414, 424. In the case of Hollerbach v. United States, 233 U. S., 165, 172, a case similar to this, where the question was as to the right of the plaintiffs to rely on state ments made by the defendants in specifications, setting out the character of the material to be dredged, the court said: " True the claimants might have penetrated the seven feet of soft slushy sediment by means which would have discovered the log cribwork filled with stones which was concealed below, but the specifications assured them of the character of the material, a matter concerning which the Government might be presumed to speak with knowledge and authority." In this case the specifications spoke positively as to the character of the material to be dredged, and to that extent the statement must be taken as true and binding upon the Government. In its positive assertion of the character of the material the Government made a representation upon which the plaintiff had a right to rely without an investigation to prove its falsity. Hollerbach v. United States, supra.
It is, however, insisted that the falsity of the statements made in the specifications as to the character of the material was not known to the contracting officer with whom the plaintiff contracted to do the work. But as was asserted in Christie v. United States, 237 U. S., 234-242:
" It makes no difference to the legal aspect of the case that the omissions from the records of the results of the borings did not have a sinister purpose. There were representations made which were relied upon by claimants, and properly relied upon by them, as they were positive."
In this case not only omissions from the records of the results of the borings were made but false statements of the character of the material were placed upon the maps, which were exhibited to bidd.ers for their information, and to which their attention was directed by the defendants.
This case is to be distinguished from the case of Simpson v. United States, 172 U. S., 372, in that the alleged warranty in that case related to the surface indications of an available site open to the inspection and view of the plaintiff; but in this case the alleged warranty is as to the character of the material which was to be dredged, the composition of which was hidden from view. One related to the surface or site; the other refers to composition hidden from the view. A warranty will not extend to guard against defects plain and obvious to the senses of the contracting party; but the condition of the material in this case afforded no opportunity to the plaintiff to protect itself by mere observation, so that the warranty at the time it was made became operative upon the right of the parties. Atlantic Dredging Co. v. United States, 35 C. Cls., 463.
As to the plant which was brought upon the work by the plaintiff, it was approved by the defendants as efficient, and had the character of the material been such as was described in the specifications it was sufficient to have handled the work efficiently, and it does not seem that the defendants have any right to complain.
The plaintiff refused to go on with the work after it had dredged 1,437,469 cubic yards, claiming that the specifications only called for the dredging of 1,340,000 cubic yards. Under the specifications the number of cubic yards to be dredged was, while stated in the specifications to be 1,340,000 cubic yards, only approximate and estimated as a basis for canvassing bids, and if the plaintiff did not do the dredging contemplated in the contract, and failed to excavate the material in that section of the river embraced in its contract, it could not for that reason alone excuse itself for refusing to fulfill its contract. But if the plaintiff had been induced to enter into the contract by representations as to the character of the material to be dredged, and upon which it was entitled to rely, and which turned out to be untrue, then at any stage of the work it had the right to stop work and to sue to recover for whatever amount might be justly due it for the work which it had already performed. Canal Company v. Gordon, 6 Wall, 561, 569; Atlantic Dredging Co. v. United States, 35 C. Cls., 463, 484; Lee v. United States, 4 C. Cls., 156, 163.
Upon the whole case the plaintiff has the right to recover the sum of $211,050.09, and for that amount judgment will be entered.
BarNet, Judge, and Booth, Judge, concur.