Case: AMERICAN DREDGING CO. v. THE UNITED STATES
Abbreviation: American Dredging Co. v. United States
Decision Date: 1914-02-16
Docket Number: Nos. 30538 and 30539
Citation: 49 Ct. Cl. 350
Volume: 49
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: AMERICAN DREDGING CO. v. THE UNITED STATES.
Judges: 
Pages: 350–379

Head Matter:
AMERICAN DREDGING CO. v. THE UNITED STATES.
[Nos. 30538 and 30539.
Decided February 16, 1914.]
On the Proofs.
The plaintiff originally brought two actions to recover certain sums deducted by the defendants in final settlements on two separate contracts as well as for reimbursement for expenses incurred for the benefit of the defendants. The contracts were for dredging work in the Delaware River and were identical in terms except as to the location of the work. Under both contracts the work was to be completed by June 30, 1908. The delay in completion under one contract was 50 days, under the other 60 days, >and the deductions made by the defendants were for the eost of superintendence and inspection during these delays.
I.Where time is the essence of a contract and the Government by its delay prevents performance within the contract time, such delay will operate to waive the time limit and give the contractor a reasonable time within which to perform. An extension of time coaxtensive with the period of delay will be assumed reasonable in the absence of proof to the contrary.
II.Where the Government official takes an unreasonable time, after the receipt of the contract duly executed by the contractor, • to approve the same, the time limit will be extended for such time.
III.Section 3744 of the Revised Statutes and -the practice of the departments to which it is applicable makes the kind of contract here involved sm generis, and the ordinary rules of law as to waiver of rights by signing the contract and beginning work thereunder should not be applied.
The Reporter's statement of the case:
The following are the facts of the case as found by the court:
I. Claimant is a corporation organized and existing under and by virtue of the laws of the State of Pennsylvania.
II. On October 17, 1907, the .United States, by and through the United States Engineer office at Philadelphia, Pa., advertised for and invited sealed bids and proposals for the performance of certain dredging in the Delaware Diver in sections 4 and 5, ás therein named, such bids to be opened at noon, November 15, 1907, and such work to be done in accordance with specifications therefor prepared and issued by the Government.
In its description and requirements of the work to be performed the Government gave notice that, to facilitate bidding, section 5 had been divided into two subsections, denominated 5A and 5B, and bidders were requested to submit bids on said subsections separately.
III. Pursuant to said advertisement and requirements the claimant made a proposal for doing said dredging, and all of the bids therefor were opened said November 15, and by a letter dated Philadelphia, Pa., December 4, 1907, and re ceived by claimant December 6, 1907, the claimant was notified that its said proposal to do the dredging upon said subsections 5A and 5B had been accepted. Separate contracts for the work on each of said subsections were afterwards executed ; and separate suits were brought in this court by the claimant upon each of said contracts; but by order of the court, upon motion of the claimant, said suits were consolidated, and in these findings they will be considered substantially as one contract. A copy of each of said contracts and the specifications thereto belonging were attached to the petitions in each of said suits and made a part thereof, and the said contracts are the same in every respect, except that one directs the work to be done upon subsection 5A and the other upon subsection 5B.
The bid of the claimant was accompanied by the usual guaranty bond to enter into a formal contract for the completion of the work if its bid was accepted.
IV. On January 2, 1908, the claimant received contracts for the work from Maj. Sanford, the Army engineer in charge locally in Philadelphia, signed by him for the Government, and claimant executed them on its part and together with the necessary bonds required to be executed in connection therewith returned them to said Maj. Sanford at Philadelphia on January 6, 1908. They were finally approved by the Chief of Engineers on January 23, 1908, and on January 27, 1908, the claimant received notice of such approval.
V. On January 28, 1908, the claimant submitted to the engineer officer in charge plans for a proposed dumping basin and requested approval thereof and authority to use the same, and on February 26, 1908, said plans were approved by said engineer and the necessary permission given.
VI. On March 19,1908, the claimant, in order to facilitate the operation of its dredges during cloudy and foggy weather, requested of Maj. Sanford, engineer officer in charge, permission to place range buoys and piles along the lines of the areas wherein the work was being done. In a letter dated March 26, 1908, Maj. Sanford informed the claimant that their proposal was unobjectionable, but that the permission requested could not be granted until the exact location of the buoys and piles had been charted and approved by the lighthouse inspector. Nothing further was done in this matter by the claimant until April 20 following, when it wrote to the Lighthouse Establishment to get information as suggested by Maj. Sanford, and on May 6 thereafter, through a telephone conversation with the lighthouse authorities, was informed that they had no jurisdiction in the matter; but the claimant was given said permission very shortly thereafter by the engineer officer in charge.
VII. June 23,1908, the claimant addressed a letter to Maj. Herbert Deakyne, then the Government engineer officer in charge of the work, saying, in substance, that it would not be able to complete the work by June 30,1908, and requesting an extension of time for completing the contracts until August 31, 1908. June 27, 1908, said Maj. Deakyne addressed letters to the claimant waiving the time limit for the completion of such contracts for a reasonable period, but stating that the contractor must bear such expenses due to such waiver as were properly chargeable under the terms of the contracts. The work under the contract for subsection 5A was completed August 19, 1908, and on subsection 5B August 31, 1908, on which dates, respectively, said work was accepted by the United States.
VIII. In making final settlement with claimant for the work done under said contracts the defendants deducted from moneys otherwise due the claimant under the contract for work on subsection 5A the sum of $1,207.82 and on account of subsection 5B the sum of $2,100.01, such sums so deducted representing the additional expenses to the defendants for the superintendence and inspection to which the Government had been put during the period of extension mentioned in the previous finding.
TIT. During the period from July 1, 1908, to August 31, 1908, the claimant furnished the defendants’ employees a total of 1,652 meals and 503 lodgings, as provided by article 39 of the specifications, and for which no payment has been made.
X. In normal years no dredging work is possible in the Delaware River during the latter part of December, the months of January and February, and the early part of March, but during the winter of 1907-8 dredging work could have been done during the whole months of December and January but none in the month of February, nor during the first ten days in March.
XI. The dumping basin heretofore referred to had been formerly used by the claimant under other contracts and as late as the preceding autumn, and required very little preliminary work to prepare it for use under the contracts in question, and work for its preparation could have been begun by the claimant February 27 and completed by March 10.'
XII. The delay in granting permission to claimant to place extra and close-range piles and buoys delayed the claimant only during thick and foggy weather and not more than three or four days.
XIII. The court finds, as an ultimate fact, so far as it is a question of fact, that the defendants took 30 days more time than was reasonably necessary in getting the contracts to the claimant with notice of approval, and that in consequence the time for the completion of the contracts was thereby extended for the period of 30 days; from which it follows that the claimant should only have been charged the sum of $386.14 for damages on account of its failure to complete the contract on subsection 5A within the time limit specified in the contract, and on account of its failure to complete the work on subsection 5B within the time limit specified in the contract the sum of $1,146.23, making in all the sum of $1,532.37; and that the claimant is entitled to compensation for the meals and lodgings furnished the defendants during said 30 days extension of time, amounting to $162.62; and that the other delays in the prosecution of the work under the contracts in question were not occasioned by any fault on the part of the defendants.
CONCLUSION OE LAW.
Upon the foregoing findings of fact the court decides, as a conclusion of law, that the claimant is entitled to judgment of and from the United States in the sum of one thousand nine hundred and fifty-four dollars and eleven cents ($1,954.11).
Mr. G. G. Galhoun and Mr. F. L. Newbech for the plaintiff. Mr. John Mason Brown was on the brief.
The negotiations in these cases were with the War Department and therefore the provisions of section 3744, Revised Statutes, were not only applicable but controlling. By said section 3744, R. S. it is expressly provided that:
“It shall be the duty of the Secretary of War, * * * to cause and require every contract made by them severably on behalf of the Government or by their officers under them appointed to make such contracts, to be reduced to writing and signed by the contracting parties, with their names at the end thereof * * (Italics mine.)
This statute is imperative and mandatory in its requirements, and not merely directory to the contracting parties. Steele v. United States, 19 0. Cls., 181; also, 22 Opp. Atty. Gen., 98.
As between the Government and the contractor it is a statute of frauds. It does not prohibit the making of contracts, but regulates the manner of making them Ganoid's case, 5 C. Cls., 68. A contract not so reduced to writing and signed as required by 3744, R. S., is absolutely void. (Mark v. United States, 95 U. S., 539.
In Monroe v. United States, 184 U. S., 527, it was held:
“It is the final written instrument that the statute contemplated shall be executed and signed by the parties and which shall contain and be the proof of their obligations and rights.
“To bind the United States a contract by the Navy Department must be in writing and signed by the contracting parties. The preliminary memoranda made by the parties for use in preparing a contract for execution in form required by law are not sufficient.
“The negotiations, correspondence, proposals, acceptance, etc., in writing, signed in part by one party, and in part by the other, do not constitute sufficient compliance with the provisions of this section to constitute a valid contract.”
To the same effect is the case of McLaughlin v. United States, 36 C. Cls., 177, wherein this court held that:
“The preliminary advertisements, specifications, and proposals and acceptance of proposals must be viewed as becoming a part of the statutory contract when the contract was executed as required by this statute, but until then only as a part of the negotiations looking to a formal contract case.”
In view of the statute above quoted and the cases just cited, surely it will not be seriously argued that the “acceptance of the bid” constituted and completed a binding contract between claimant and the Government.
Mr. L. G. Bissell, with whom was Mr. Assistant Attorney General Huston Thompson, for the defendants.

Opinion:
BarNey, Judge,
delivered the opinion of the court:
This suit was originally brought in two separate actions to recover, respectively, the sums of $1,207.82 and $2,100.01, which were deducted by the defendants in its final settlement with the claimant on two separate contracts, as well as for meals and lodgings furnished the defendants' employees during the delay period hereinafter mentioned. These deductions were made for the cost of superintendence and inspection during the period of delay on one of the contracts for 50 days and on the other for 60 days.
Both of the contracts were for dredging work on the Delaware River on sections adjoining each other, one called " subsection 5A" and the other " subsection 5B." The contracts were identical in every particular except as to the location of the work to be performed. Copies of these contracts were attached to the petition in these suits and made a part of the same. They both provide that the work was to be completed by June 30, 1908. These two suits have been consolidated by order of the court and, except as to the date of final completion of each of them, are treated in this opinion as one contract.
The bids for this work .were submitted by the claimant pursuant to advertisement theretofore published on the 16th day of November, 1907; on the 6th of December following the claimant received notice from Maj. Sanford, the Government engineer, and who is located in the city of Philadelphia, Pa., in charge of the work, that its bid had been accepted. January 2, 1908, the claimant received from Maj. Sanford the contracts for the performance of this work signed by him for the defendants and dated December 31, 1907; the claimant executed them on its part and returned them to Maj. Sanford on January 6, together with the bonds required. They were approved by the Chief of Engineers at Washington on January 23, and on January 27 the claimant received notice of such approval.
June 23, 1908, the claimant addressed a letter to Maj. Deakyne, the Government officer then in charge of the work, stating in substance that it would not be able to complete the contracts within the time limit and requested an extension of time for such completion till August 31, 1908. On June 27 Maj. Deakyne addressed letters to the claimant waiving the time limit for a reasonable period, but stating that the claimant must bear such expenses due to such waiver as were properly chargeable under the contracts. The work under the contract for subsection 5A was completed August 19, 1908, and on subsection 5B August 31, 1908, and accepted by the defendants. Upon final settlement with the claimant the defendants deducted all of their expenses for superintendence and inspection during the whole of such delay period under one contract for 50 and the other for 60 days.
It is contended by the claimant that no such deductions should have been made, as it claims that the extension of time above noted was required to complete the work under the contracts because of delays on the part of the defendants which retarded the work more than the period of extension.
The court has found as an ultimate fact that the defendants took 30 days more time than was reasonably necessary in getting the contracts to the claimant with notice of approval.
The statement of the case hereinbefore made gives the history of this whole question from the submission of the bids till the final approval of the contracts, and the decision upon the point in question is doubtless one of law rather than of fact. It seems, however, proper to call attention to some of the admitted facts in the case, which have led the court to make the ultimate finding of fact mentioned. The bids were opened November 15, 1907, but the contract, duly approved, never reached the claimant before January 27, 1908, or 73 days thereafter. None of this delay was chargeable to the claimant. On the contrary, the findings show that it was unusually diligent in doing its part in expediting matters, as it received the contracts executed on the part of the Government January 2, 1908, and within four days executed them on its part and forwarded them to the proper officer of the Government, together with the bonds required. Time was of the essence of the contract, and there is nothing in the record showing any lack of diligence on the part of the claimant in executing the contracts after it was permitted under their terms to begin the work, which shows that it needed every day allowed to complete the work within the time limit. Taking these facts into consideration, we think that the finding that the defendants took 30 days more time than was reasonably necessary to get the contracts to the claimant, with notice of approval, is justified.
The findings show that dredging work in the Delaware River can not usually be done in the month of January, and the Government contends that this fact excused it for its delay, though the findings show that in the winter of 1907-8, when this work should have been in progress, dredging work on the Delaware River could have been done during the whole month of January. We do not think this contention is sound. If Providence favored the claimant by bestowing an open winter, during a part of which this work could have been carried on, we do not think the Government could by its negligence deprive it of this advantage. The claimant had the time limit named in the contracts, which was some time between November 15, 1907, and June 30, 1908, within which it was to do this work, and not of some other year or the average of years. How would the case stand if the opposite contention was made? Suppose the findings showed that in normal years dredging work could be done on the Delaware River during the whole winter, but that the winter in question was an abnormal one and the river was frozen so solid that no work of this kind could be done during the months of January and February. In such a case would the .Government not rightfully contend that the unnecessary time taken in approving the contracts did not delay or injure the claimant ?
Some evidence was introduced by the Government tending to show that the claimant was not so situated as to begin work under these contracts before it actually did, because of the fact that it had its dredges employed elsewhere. While such evidence was so obscure as to hardly justify a finding upon that subject, we do not think such evidence was material under the circumstances of this case. A similar question was involved in Pickney v. United States, 46 C. Cls., 77, 90, and this court said: " What right have we to assume that if the notice had been given in time to require completion within the terms of the contract the claimant would not have employed a sufficient force for that purpose? "
A similar question arose in the case of Morse Dry Dock & Refair Co. v. Seaboard, &., Co., 161 Fed. Rep., 99, and the court said: " The respondents' contention is based upon an assumption which it had no right to make . It can not assume that its failure to perform its obligations made no difference. It is imposible to say what might have happened had the conditions been different." In the case at bar what right have we to assume that the claimant would not have purchased or hired other dredges even if all it then owned were employed elsewhere®
It is now settled, at least in this court, that when time is of the essence of the contract and the Government by its delay prevents performance within the contract time such delay will operate to waive the time limit and give the claimant a reasonable time within which to perform. Ittner v. United States, 43 C. Cls., 336; Little Falls Knitting Co. v. United States, 44 C. Cls., 1; Callahan Construction Co. v. United States, 47 C. Cls., 229; Laidlaw-Dunn-Gordon Co. v. United States, 47 C. Cls., 271. And an extension of time coextensive with the period of delay will be assumed reasonable in the absence of proof to the contrary. Callahan Construction Co. v. United States, supra.
In the Callahan Construction Co. case, as well as the Laidlaw-Dunn-Gordon Co. case, the delays caused by the Government, and for which an allowance was given, were identical in character with those in this case.
It might, perhaps, be urged that by signing the contracts January 6, 1908, the claimant thereby waived any right to take advantage of the delay of the Government; also, that by undertaking the completion of the work after the contracts had been approved January 23, 1908, it waived such right. In answer to this it may be said that the claimant had the right to assume that if the Government was reasonably diligent after the contracts were sent to it January 6, 1908, in notifying it of their approval it would still have had nearly the whole month of January within which to begin the work. Further than that, the claimant was under bonds to sign the contracts and was also under bonds after the contracts were signed to perform them. It would have been a hazard which we do not think the claimant was bound to incur, if it had either refused to sign the contracts when they were received or to perform them after receiving notice of their approval. We believe rather it had the right to assume that the time limit for their execution would be reasonably extended.
Had it not been for section 3744, Eevised Statutes, requiring contracts with the War Department to be in writing, signed by the parties at the end thereof, the bid of the claimant and its acceptance by the Government would have constituted a valid contract. Harvey v. United, States, 105 U. S., 671. In lieu of that manner of making contracts, the statute cited provides that contracts with certain departments of the Government shall be executed in the manner stated, and the Supreme Court has held that that statute is mandatory and that contracts made with such departments are absolutely void unless so executed. The Government secures itself, however, by compelling the party bidding to enter into a bond to execute the contract as provided by section 3744, if his bid is accepted. The bidder is without any remedy in the event the Government should refuse so to do. He must bide his time till the Government sees fit to act, and when it does act he must acquiesce or take his chances to have his bond sued. The statute referred to and the practice of the departments to which it is applicable makes this kind of contract sui generis, and the or dinary rules of law as to waiver of rights by signing and beginning the work under a contract should not be applied. That to do so would be harsh, oppressive, and unjust needs no argument to show. We do not think the Government demands, or has any right to demand, any such construction.
If the contract in this case was to have been performed within a stated time designated as a certain number of days, months, or years after the. execution of the contract, it would present a different question, but it was to be performed before a certain day named. In cases arising under the first class of contracts mentioned, it might well be said that by undertaking to perform the contract the contractor had waived any delay in its execution. Where, however, as in this case, the contract is to be performed before a certain day stated, it would seem reasonable that where there is unreasonable time taken by the Government in its execution and approval after the acceptance of the bid, the day before which performance was required should be set forward for a time corresponding with this delay. In other words, when a contractor has made a bid to perform work before a certain day, he has a right to presume that the contract will be executed and approved within a reasonable time, and if this is not done, that the time limit will be correspondingly extended:
It may be both interesting and important to note that in the Callahan Construction Co. case, supra, the work was to be performed before a day certain; and in the record in that case it appears that the Government engineer in charge of the work recommended that the time limit be extended, in the following language: "As a matter of justice, also, the time of completion of the contract should be extended to compensate for delay in approval of the contract," and accordingly the time was extended.
No distinction between delays on the part of the Government occurring during the execution of a contract, as in this case, and delays occurring during its performance, has ever been made by either party in the presentation of these cases. That question has been presented for the first time in conference upon this case, and we realize its seriousness and importance, but do not feel called upon at this time to overthrow the doctrine of so many cases in this court, especially in view of the fact that the Government has never appealed from our decision in any of them.
We shall enter into no extended discussions of the other delays complained of by the claimant. We believe the findings clearly show that they did not impede the claimant to any appreciable extent in the. prosecution of the work. Some unforeseen circumstances causing obstruction are to be anticipated in any considerable undertaking and particularly in work of this character. We do not think the Government officers in charge of the work were properly chargeable with any neglect or unreasonable conduct of which the claimant can complain.
It follows from the foregoing that the claimant is entitled to recover for the deductions made from the contract price on account of cost of inspection and superintendence for a period of 30 days, together with the agreed price of meals and lodgings furnished during that time, being in all the sum of $1,964.11, and it is so ordered.