Case: P. H. McLAUGHLIN & Co. v. THE UNITED STATES
Abbreviation: P. H. McLaughlin & Co. v. United States
Decision Date: 1901-03-25
Docket Number: No. 18941
Citation: 36 Ct. Cl. 138
Volume: 36
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: P. H. McLAUGHLIN & Co. v. THE UNITED STATES.
Judges: 
Pages: 138–193

Head Matter:
P. H. McLAUGHLIN & Co. v. THE UNITED STATES.
[No. 18941.
Decided March 25, 1901.]
On the Proofs.
The subject-matter of this suit is a contract for building the Naval Observatory on Georgetown Heights, District of Columbia. The questions involved relate to delays caused by the defendant’s interference with the work by their officers; to unreasonable illegal exactions by the engineer in charge; to a release given by the contractors on receiving final payment, and to numerous minor matters of controversy.
I.Where a statute provides (Eev. Stat., § 3744) that a contract with the Government must he reduced to writing, the preliminary „ advertisements, specifications, and proposals, and acceptance of proposals, must be viewed as only a part of the negotiations looking to a formal contract. ■
II.If, after accepting claimants’ proposals, the defendants unreasonably neglect to execute the contemplated contract, but the contractors subsequently execute it, no action will lie for their losses incident to this delay.
III.The parties to a contract may agree that the decision of an engineer or other officer as to matters of dispute that may arise during the execution of the work shall be final and conclusive, and in the absence of fraud or gross mistake, his decision will not be subject to review.
IY. Where a building contract provides that changes in excess of a certain amount can only be authorized by the written order of the Secretary of the Navy, the architect of the work is without authority to order such changes. -No contract can be implied therefor, even though the defendants have reaped a benefit.
Y. Where payments are not made and the contractor has to borrow money and pay interest thereon, it can not be regarded as an extra expense.
VI. An account rendered and not objected to within reasonable time, must be regarded as prima fade correct. Five months after settlement is an unreasonable time for one of the parties to object.
VII. A provision in a contract vesting title in the Government to all suitable material on hand at the time of forfeiture, if the contract should be forfeited, does not include material which the defendants have previously rejected.
Till. A receipt in full, or release, must be construed in connection with those provisions of the contract which relate to its subject-matter.
IX. Where a contract provides that in case of annulment the contractors shall be charged with all extra expense, the provision embraces-all expenses which would not have been incurred by the defendants if the contractors had complied with their contract.
The Reporter’s statement of tbe case:
The following- are the facts of the case as found by the court:
I. That Patrick H. McLaughlin, of Washington, I). C., Augustus Davis, jr., of Ballston, Va., and John G. Craig, of Concord, N. H., are citizens of the United States; have at all times yielded true allegiance to the United States; are copartners doing a contracting and building business under the firm name and style of P. H. McLaughlin & Co., in the District of Columbia; and, as such copartners, are sole owners of the claims herein sued on, never having sold or assigned the same to anji- person or persons. That as such copartners and under said copartnership, and in the name of P. H. McLaughlin & Co., the}»- entered into a written contract with the United States, October 2, 1888, wherein and whereby the said P. H. McLaughlin & Co., at and for the sum and price of <5)307,811.00 (and, by authorized additions thereafter made under subsequent agreements, an additional sum of $4,539.57), agreed to-furnish all tbe materials and labor necessary to construct the New Naval Observatory in the Naval Observatory Grounds on Georgetown Heights, in the District of Columbia, within the period of eighteen months from said date, consisting of nine buildings, according to copy of the contract, with plans and specifications.annexed to and made paid of the contract, as set forth in exhibits to the petition. That the bid of said contractors for said work was accepted by the Government June 29, 1888.
II. That immediately thereafter said P. H. McLaughlin & Co. arranged for the expeditious prosecution of the work; yet, notwithstanding the said acceptance of their bid at the- time aforesaid, the contract was not executed until October 2, 1888. It does not appear that during the time between the acceptance of their bid and the formal execution of the contract in October that plaintiffs made anjr demand for the signing of the contract or that they tendered any bond for that purpose until a few days before the agreement was finally ratified in writing. The contract and bond were approved bjr the Secretary of the Navy October 5, 1888; that the3r began work soon after the execution of the contract. It does not appear what work, if any, was done during the month of October, nor does it appear how much material was placed upon the grounds. The building lines were furnished the contractors November 2, 1888. It does not appear that the contractors made any request in October to be furnished with building lines.
III. On December 17, 1888, the Government architect officially reported to the Secretary of the Navy that the exact location of the several buildings had been fixed; the site cleared of trees; building materials delivered, and a water supply for building purposes secured, and sheds had been built. That excavations were about completed, except foundations of instrument piers not included in the contract. That In Anew of the risk of doing such important work at that season he would recommend that the work be deferred until more suitable weather, but the season should not delay work on the boiler house and duct from same to main building. The ■Secretary of the Navy thereupon declared that work would have to stop with an allowance of time to the contractors. On February 23, 1889, the discontinuance of the work had not been formally directed. On the same day the Secretary of the Navy, referring to the recommendation of the architect, declared that the foundations for buildings ought not to be laid in the winter months and that he had verbally authorized a delay of about four months. That delajr had ensued in making an award until legislation was had authorizing the Department to do a part of the work separately. Appropriation act of 1888 was referred to in this connection (and previous legislation) as contemplating that all of the work should be under contract before any of it was begun. The Secretary declared that as these delays were caused by the Government the contractors were entitled to an extension of time.
IV. In January, 1889, the contractors addressed a communication to the Secretary of the. Navy stating that bids, were opened June 12, 1888, and that on June 29, 1888, they had been notified that they were the successful bidders, and that owing- to delay on the part of the Government the articles of agreement were not entered into until October 2,1888, and •on October 9,1888, one copy of the contract had been returned to them. That they were not able to start active work on the buildings until November 2,1888 (as on that day the Government engineers had furnished them with building lines), and in view of the fact that they had lost the working season of 1888 through delay on the part of the Government, the foregoing stated matters should be taken into consideration that credit should be given to them for anjr unavoidable deky.. No damages were stated on account of any delaju
In granting the extension the Secretary of the Navy replied to the contractors on March 1,1889, that in view of the recommendation of the superintending architect and opinion froni him that the foundations for the buildings to be erected under the contract ought not to be laid during the winter months, the department authorized a delay in the commencement of the work upon the buildings. The Secretary-further stated that, it appealing from a report of the superintending architect that the contractors had been subjected to various other delays arising from the acts of the Department but beyond contractors’ control, the extension of time requested was a reasonable one and that the period of time allowed by the contract for the completion of the work was thereby extended to October 1, 1890.
Y. A special contract was let to P. H. McLaughlin & Co. May 3, 1889, for the foundations of instrument piers. A special independent contract was let September 5, 1889, fox-instrument piers to the equatorial building to O’Conner & Purcell.
YI. On January 2, 1889,. the contractors were notified by the architect and assistant architect that their attention had been repeatedly called to the fact that they were delivering-brick not in accordance with the terms of the contract and specifications and that the architect had pointed out to them the prominent objectionable brick, but notwithstanding those objections the contractors had continued to deliver brick of mixed quality containing a considerable proportion of the objectionable character; that the work of construction could not be commenced with the brick in this condition.
VII. The National Press Brick Company, of V7 ashington, on February 21, 1889, annulled its contract with plaintiffs for the delivery of 2,500,000 red and hard brick, because of a contention that the Government inspector required red brick burned hard of good shape and finest quality. On December 9, 1889, the assistant arthitect complained to the contractors that they had not men enough employed to remove rejected brick. It appears from the evidence that up to that time there had been delivered at the site of the Observatory some 285,000 brick by the National Press Brick Company.
VIII. An order was giver» January 11, 1889, to the contractors by the assistant architect to proceed without delay with the excavations provided for in the original contract, especially for the transit-circle buildings, clock, and observer’s rooms, to be carried down to the level indicated on plans, so as to be prepared for the foundations of the different instruments. This notice was accompanied with a statement that the lot of Bound Top cement delivered by the contractors on the grounds was not giving satisfactory results upon a test of 15 different barrels of the lot. A prominent defect in its quick-setting properties was pointed out.
IX. On January 22, 1889, the Secretary of the Nary appointed a board to ascertain, estimate, and determine the amount of increased or diminished compensation that the contractors were entitled to receive, if any, in consequence of anjr change or changes in the drawings, plans, or specifications of the Observatory which should be duly authorized. Authority was given to the board to meet at the Observatory on notification from the Chief of the Bureau of Navigation from time to time, where the contractors were required to furnish the board with all necessary facilities for the discharge of its duties. On January 31, 1889, the contractors were notified of the appointment of the board, indicating that in case of changes in the plans and specifications the following course of procedure would be followed:
“ If any changes are proposed by the contractors they will address a letter to the Chief of this Bureau, stating in detail the nature, extent, and effect of such changes and the estimated cost thereof. Whenever it is necessary to a full understanding of the changes thus proposed the contractors’ letter must be accompanied by suitable drawings, plans, or specifications, which, together with the letter, must be forwarded to this Bureau through the architect superintending the work, who will examine the subject carefully, and on forwarding the papers to the Bureau will accompany them with a statement of his views, and such recommendations in the premises as he shall deem proper, together with his estimate of the probable cost of the changes thus proposed. If after due consideration such changes are deemed desirable and proper by the Chief of this Bureau he will transmit the papers to the board of naval officers appointed by the Secretary in pursuance of the provisions contained in the third. clause of the contract (of which board Captain Phythian is the chairman) for immediate examination and report as to the actual cost of such changes and the amount of increased or diminished compensation which the contractors shall be entitled to receive in consequence thereof. Should the estimate of the board as to the actual cost of such changes not exceed $500 the Chief of the Bureau will issue the necessary instructions for carrying the proposed changes into effect, but if the estimate of the board shall exceed $500 the Bureau will submit the same to the . Department for its action thereon.
“In the case of changes suggested by the architect superintending the work, he will, after estimating the cost of such changes and before reporting thereon, ascertain for the information of the Bureau the views of the contractors respecting such changes, and in case the contractors concur with the architect as to the necessity or propriet3r of the same they will be allowed, if they so desire, to submit for the further information of the Bureau an estimate of the cost of such changes, or, if they do not concur in the change so suggested, their reasons for objecting to the same. The architect will thereupon report fully to the Bureau, stating the reasons for the changes suggested by him, accompanied when necessary by suitable drawings, plans, or specifications, and at the same time transmit the views of the contractors.
“On .the receipt of the architect’s report and the papers accompanying it, this Bureau will consider the propriety of such changes, and if disapproving of the same will inform the architect accordingly; but if the changes so suggested shall be approved by the Bureau the papers will be transmitted to the board for examination and report, as above provided in the case of changes proposed by the contractors, and if the estimate of the board shall not exceed $500 the Bureau will issue the necessary instructions for carrying such changes into effect, but if 'the estimate of the board shall exceed $500 the Bureau will in like manner submit the same for the consideration and action of the Department.
“ In all cases where it shall appear by the architect’s report and the estimates submitted therewith that the cost of the changes suggested by him or proposed by the contractors will exceed $500, the Bureau will, before taking action thereon, submit the same to the Department for its decision.
“In all cases where changes proposed by the contractors shall be disapproved by the Bureau, or where the contractors object to changes suggested by the architect, whether the cost, of such change or changes shall or shall not exceed $500, the Bureau will submit the same to the Department for its action. ”
X. Plaintiffs were interrupted from March 19, 1889, to May 3, 1889, in the -work of excavating foundations under certain buildings which under their principal contract they were required to build, and in commencing work on the walls thereof, by the neglect and failure of the Government to locate foundations for instrument piers to said buildings, to their damage in the sum of $2,855. Plaintiffs were also interrupted from time to time during the summer of 1889 and until September 5 of that year in the work of excavating foundations under a certain other building which under their principal contract they were required to build, and in commencing work on the walls thereof, by the neglect and failure of the Government to locate foundation for instrument piers to said other building, to their damage in the sum of $948.
XI. On July 29, 1889, the contractors referred the Secro-retary of the Navy to their previous letter of July 9 respecting delays on the work, but especially to the great equatorial building, at the same time making charges against the assistant architect and requesting that his management of the work be investigated. The charges were as follows: (1) Incompe-tenejq owing to the architect’s unfamiliarity with the work and a lack of knowledge governing the rules and' laws of mechanism. (2) That he was entirely ignorant of construing the plans and specifications and incapable of giving or directing an order without first consulting some of the engineers, architects, or superintendent of public buildings. (3) That in the beginning he accepted a brand of cement known to the trade as Round Top, and after asking the architects to get it on the grounds the said architect rejected it, theipgiving a list of cement known as the Rosendale, from which the contractors selected the Bridge brand, the kind of cement used in the construction of the piers for the Brooklyn Bridge. The contractors stated that they had ordered a cargo of the latter brand; that after delivery of 104 barrels of the Bridge brand the architect condemned the lot, and after the rejection they were permitted to substitute the Round Top cement which he had first rejected. (4) That he was insulting and overbearing in manner and gave orders to the contractors’ workmen over their heads. (5) That he purposely delayed making estimates for work done or material furnished, resulting in the postponement of payments that were due. (6) That through his action they had been compelled to annul a contract with the National Press Brick Company of Washington, D. C., for the delivery of brick, resulting in a loss to the contractors of $2,800.
On August 2, 1889, the Secretary’s attention was called to this complaint of the contractors (by their counsel), who asked that an opportunity be given to file proof in support of the general complaints made by the contractors of the assistant architect.
And on that day Captain Phythian, of the United States Navy, and Architect Hunt, the principal architect in charge of the work, investigated the charges, with the following result:
“U. S. Naval Observatory,
“ Washington, August 8, 1889.
“Sir: In compliance .with the directions contained in the indorsement upon the letter of P. H. McLaughlin & Co., preferring charges against Wm. H. Grant, assistant to the architect of the New Naval Observatory, we have the honor to report:
“ Charges I and II. — As bearing upon these charges, we called upon Mr. Grant for a statement of his professional experience. This statement is hereto appended, marked A. If it be correct, he has certainly had sufficient experience of a technical nature to suggest his fitness for the position which he now holds by the authority of the Navy Department.
“While we have no means of ascertaining how he performed the duties of the several positions which he has held, we believe it is fair to assume that he would not have remained' for such long periods of time in charge of important works, nor would he nave been appointed successively to so many responsible positions, if he had not at least enjoyed an excellent, widespread reputation.
“We-can personally testify that we believe, on the part of Mr. Hunt, that Mr. Grant has a clear and intelligent understanding of the duties of his office; and, on the part of Captain Pliythian, that he is zealous in the performance of these duties, carefully and watchfully guarding the interests of the Department. The opinion of the former is based upon official correspondence and frequent interviews with Mr. Grant on matters pertaining to the construction of the Observatory; of the latter, upon personal observation of his systematic methods of making tests, and of recording, in minute detail, the daily .occurrences on the grounds, by means of which he is at all times fully informed upon the progress and character of the work.
“Charge III — The portion of this charge which makes allegations concerning the brand of cement known as Round Top is so worded as to convey to our minds the impression that the contractors intend to charge that Mr. Grant has at one time rejected, and at another time accepted, cement of the same quality. The facts.of the case, as shown by the official records of tests, are these: The first lot of Round Top cement (about 200 bbls.) was subjected to the usual tests, found satisfactory, and accepted. The second lot (about 200 bbls.) failed to meet the requirements as to time of setting and was rejected. The next lot was delivered in sacks. The tests upon samples of it for time of setting showed that it generally reached the standard. The first tests for strength showed an average of 113$ lbs. to the square inch, the requirements being 90 lbs. to the square inch. Subsequent tests on large lots of cement of this brand gave strengths ranging from 150 to 200 lbs. per square inch. These lots were accepted. We find no inconsistency in rejecting the lot of 200 bbls. and accepting the other lots.
“Of the Rosen dale cement referred to in this charge 104 bbls. were delivered at the grounds. The official - record of tests to which this lot was subjected shows that the cement is defective in strength. Not a single sample was satisfactory, and the average is about 50 per cent of the required strength. Upon these tests, the above 104 bbls. were rejected. Mr. Grant asserted to us, in the presence of the contractors, that he had not, as charged, officially rejected any other portion of this cargo; that on the contrary he had been requested by the contractors to pronounce the whole rejected, and that he had declined to do so. This assertion was not denied by the contractors; it was virtually admitted. In the course of conversation on this point it appeared that Mr. Grant had expressed his belief that, if tested, this lot would fail, but he would not officially pass upon so large an amount as 2,800 bbls. on the number of tests made. It is practically admitted b3^ the contractor that so much of the charge as asserts that Mr. Grant rejected the whole cargo of 2,800 bbls. on the results of tests of 101 bbls. is erroneous, and no part of the charge is proven by the evidence we have been able to elicit on the subject.
“ Charge IV — This charge was not touched upon. It opens the question as to the right of the architect, his assistant, or the inspectoi’s to give orders to workmen directly, and not through the contractors.' The settlement of this point involves the legal construction of certain phrases in the contract, to which the attention of the Department will be called by the architect, and its decision asked for. Pending this decision, we do not feel authorized to express an opinion.
“ Charge V. — An exhaustive discussion of this charge in the presence of the contractors, in which they freely participated, was had. The official correspondence between Mr. Hunt and Mr. Grant, as well as the contractors’ records, was carefully examined.
“The result of this examination and discussion was a full and frank admission by the. contractors that Mr. Grant is in no way responsible for delays in payments.
“ Charge VI — Mr. Hunt states that he — not Mr. Grant — ■ directed the rejection of the bricks referred to in this charge, thereby relieving Mr. Grant from all responsibility in the matter.
“It is due to the contractors to state that they take exception to our conclusions upon Charge III on the ground that the tests to which we refer are not reliable. As these are the official tests made by Mr. Grant in the performance of his duties as assistant architect, which tests the contractors give no specific reason for calling into question, and as the contractors have presented no other tests, we are inclined to accept them as authentic.
“It may also be due to the contractors to state that they were not called upon for any testimony in support of Charges I and II. To have pursued such a line of investigation it would have been necessary, owing to the general terms in which these charges are couched, to require the contractors to submit more specific charges, giving dates and events. The reference of these charges to us for a report does not seem to contemplate such a course, nor to confer the authority to adopt it. Under these circumstances we feel that our duty in this connection is ended by allowing Mr. Grant to submit a statement, and by expressing such individual opinions of his competency as our opportunities have enabled us to form.
“Messrs. McLaughlin & Co.’s letter is herewith returned.
“Very respectfully,
“R. L. Phythian, Captain, U. S. Navy.
“R. M. HUNT, Architect.
“The Chief of the Bureau of
Equipment AND Recruiting,
liNwy Department.”
“Statement of Wm. II. Grant, as'sistcmt to architect, New Naval Observatory.
“The following are some of the principal public works upon which I have been engaged:
“The survey of the Erie Railroad, as assistant engineer; on the Erie Canal in same capacity; for several years in charge of construction of new locks, aqueducts, &c., which are admitted to be some of the best masonry in this country; on the Hudson River Railroad, as assistant engineer, in charge of several large sections of the road; as chief engineer of the Cleveland, Zanesville and Cincinnati Railroad in Ohio, in charge of location and construction and designing of all appurtenances, station and depot buildings, &c. (Refer for the character of this work to a report of Hon. J. C. B. Davis on the subject.)
“As acting chief engineer of the Metropolitan Railroad between Georgetown, D. C., and Hagerstown, in charge of location and construction. (The road failed of completion.)
“As superintending engineer of Central Park, N. Y., from the commencement to the completion of the work; had charge of the bureau of civil and topographical engineering, N. Y., for about four years, in making surveys and mapping the portion of Westchester County which has been annexed to the city of New York, and laying out a portion of the system of new streets; had charge of the bureau of construction, N. Y., which embraced the improvement of streets, reconstruction of Harlem River bridges, and surveys for the improvement of the navigation of the Harlem River.
“Was engaged on the location of the eastern portion of the N. Y., Ontario and Western Railway; also on the location of the N. Y. and Albany Railroad (now West Shore Railroad); rebuilt a reservoir in connection with Poughkeepsie Waterworks; designed and superintended the work; built a reservoir for private waterworks at Newburgh, N. Y.; was chief engineer of Yonkers Waterworks, and was chief engineer of the New York and Northern Railroad; was engaged on river and harbor work in Virginia and Maryland, under Mr. S. T. Abert, U. S. engineer, Washington.”
“Office of Richard M. Hunt, Architect,
“New York, Sept. %5th, 1889. “To the Honorable B. F. Tracy,
u Secretary of the Navy,
uN<my Department, Washington, D. O.
“Sir: In view of the charges made by the contractors of the new Naval Observatory against Mr. W. H. Grant, ass’t architect, I deem it my duty, and only fair to Mr. Grant, to state that the contractors have continuously shown a disposition to violate their contract. Among other evidences I would cite the following:
“1st. Attempt to bribe an inspector.
“2nd. Quality of brick hauled to the grounds after they had been warned that it could not be used.
“3rd. The large quantities of poor material (notably cement) that they have presented for inspection.
“4th. Refusing to discharge a man (Fink) after they had been directed to do so, and allowing him to interfere with the work.
“5th. Attempts by Messrs. Craig and Davis to slip an undue proportion of stone and sand into concrete and mortar.
“Besides which the contractors, resenting Mr. Grant’s •determination to see the work carried out to the letter of the contract, have used threats of personal violence toward him and his inspectors.
“These matters have not been officially reported before, because by strict supervision these attempts to evade-the contract and other matters have not interfered with the interests of the Department.
“They are not reported now as a complaint against the contractors, Mr. Grant feeling sure that he can protect the Government’s interests and compel the contractors to comply strictly with the contract.
“The attention of the Department is invited to them, as showing a probable motive on the part of the contractors, when such weight as the Department may choose to give •them in considering the complaints of the contractors.
“I have the honor to remain, very respectfully,
“R. M. HUNT, Architect.”
“Office of Richard M. Hunt, Architect,
“New York, Oct. 10th, 1890.
“ Commodore Geo. Dewey, U. S. N.,
“ Ohief of Bureau of Equipment,
uEmy Department, Washi/ngton, D. O.
“Sir: Owing to the limited amount remaining available of the appropriation for the construction of the new blaval Observatory at Washington, D. C., not already contracted for, and the necessity for retrenchment in order to comple e the structure as authorized by Congress, together with the fact that the stone and brick work is nearly finished, I respectfully request that the services of Assistant Architect Grant and Inspector Lyddam be dispensed with after November 15th, 1890, or as much sooner as can be found practicable.
“Should the Bureau approve of their discharge, I would recommend the appointment of Harry E. Donnell as assistant architect (who has had an active part in the preparation of the drawings of the new buildings and is more active than the present incumbent) to supervise, under my directions, the work of the new Naval Observatory, provided that the Bureau will direct the watchman there stationed to assist the new appointment in minor matters within his capacity.
“ In addition, I majr state that, while the work on the buildings is equal to any in Washington in point of construction and material, there has been and is now considerable friction between Mr. Grant and the contractors, resulting, unfortunately, in some delay.
“This may be, or may not be, entirely the fault of the contractors, Messrs. P. H. McLaughlin & Co., and is a matter upon which it is not necessary to enter; but in view of the fact that the contractors have been awarded an extension of time to complete their contract, and as a change is, in my opinion, expedient, I offer the only practical solution.
“I can not part with Mr. Grant without testifying to his integrity and his fearless discharge of his duties.
“The salary, I understand, to be paid Mr. Donnell would be one hundred and seventy-five dollars ($175.00) per month. “I have the honor to remain, sir, very respectfully, ■
■ “R. M. HUNT, Architect.
“Forwarded.
“F. V. McNair,
“Captain, U. 8- AT., Superintendent.”
XII. On August 31, 1889, the contractors acknowledged receipt of a notice from the principal architect in regard to the slow progress they were making on the work, to which they replied that the assistant architect would not allow them to push the s'ame as fast as they would like, on the claim that time was wanted to test the cement.
XIII. On December 21,1889, the contractors again acknowledged receipt of notice from the principal architect, under date of December 18, 1889, referring to their delays, stating that while the architect “ may have some cause and complaint that the work is not progressing as fast as you (he) would wish, yet they most emphatically denied the assertion that it was not proceeding in conformity to the contract and specifications.”
XIV. On July 17, 1889, the contractors were requested by the principal architect to discharge one bricklayer named Joseph Fink on complaints that said employee had refused to take down a portion of his bad work when directed to do so, was careless in his work and otherwise objectionable. Notice was given with the request (by the architect) that he had heard that threats of personal violence had been made, but that the Department would find means to protect its representatives. The contractors denied that Fink was doing bad work or that they had knowledge of threats of personal violence having been made against anyone, but stated a willingness to comply with the request to discharge Fink and hoped they would be able to convince the architect that an injustice was being done.
On July 19, 1889, the architect informed the contractors that he would give them an opportunit)'- to substantiate their statements relating to Fink. This opportunitjr was not made use of by the contractors.
On July 23, 1889, the architect gave notice to the contract-tors that Fink was still about the works interfering with the orders of the inspector, the assistant architect supplementing this notice with a peremptory call upon the contractors to discharge this person as objectionable. .
On August 3, 1889, the architect officially reported to the Secretary of the Navy that the contractors had not complied with the request made of them to remove Fink, and that this person as an objectionable employee remained on the premises, daily interfering with others engaged on the work, and interfering with the work of the inspectors.
The contractors paid Fink $250 for the cancellation of their agreement with him.
It does not appear to the satisfaction of the court from the evidence that the contractors were subjected to other expense on account of Finias discharge.
* # * * * *X-
XV. On October 3,1889, the architect complained that the work was proceeding with dilatoriness through the fault of the contractors because material needed, such as cement, was not being furnished in adequate quantities to admit of timelj' inspection; that labor, such as brick masons, were not employed in sufficient force; that much valuable time had been lost in preparing adequate means for setting stones on the main building, and that intimidation was being used toward the inspectors to such an extent as to affect their efficiency.
Answering complaints of the architect, the contractors on October 9, 1889, stated to the Chief of the Bureau of Equipment that they were not responsible for the delays because of the impossibility to get cement, which was the only material of which thejr stood in need; that the only cement which the assistant architect would accept was the Round Top brand, and that they had been getting every barrel that could be had.
In connection therewith the contractors stated that in justice to themselves they would say that delays had been caused by the Government on account of changes made in the several buildings, which would be enumerated as soon as they could collect the proper data.
It does not appear from the evidence that any further notice was taken of these alleged changes, or that any further complaints were made until the institution of this action.
XYI. On November 14, 1889, it appears that the decision of a civil engineer had been obtained in settlement of a controversy between the architect and the contractors relating to the tests which the architect had applied to a part of 2,800 barrels of cement furnished by the contractors. The architect’s rejection of the cement was sustained 'by the opinion of the engineer appointed by the Navy Department to make the examination.
XVII. On December 7, 1889, complaint was made to the contractors by tbe assistant architect that they had not complied with his directions to supply a large quantity of brick (which directions had been given previously), because their supply was too scant for the proper execution of the work to advantage. The assistant architect stated to them that brick were being delivered in quantities only sufficient for the work from day to day; that these were dumped in scattered piles about the ground unsheltered and frequently in the mud; that they persisted in bringing brick to the work contrary to his daity remonstrances and that the inspectors were unable to prevent them from doing bad work. The contractors were notified to desist from carrying on anjr further brick work until they should compty with orders to provide brick of the qualitj' required by the contract, and to remove immediately all brick on the grounds that did not comply with the contract.
XVIII. On December 12, 1889, in consequence of the methods adopted by Augustus Davis, jr., one of the contractors, in laying brick on one of the buildings, differences arose between the said Davis and an inspector named Purcell. While the said inspector was in the discharge of his duties the contractor made a violent personal assault upon the inspector. The attack upon the inspector was reported to the Chief of Bureau of Equipment by the assistant architect. Correspondence on this subject resulted in a letter from P. H. McLaughlin & Co. to the Chief of Bureau of Equipment regretting the occurrence. McLaughlin & Co.’s letter concluded with this statement, to wit, “We sincerely hope that the Bureau will see fit to place the whole responsibilitj'- with Mr. Davis, who accepts the same as a personal matter. ” In consequence of the assault by Davis upon the inspector (which grew out of insulting language used the inspector to Davis) the said Davis was excluded from active participation in the management of any work under the contract on the grounds. No protest was made to the Secretary of the Navy against the order excluding Davis' from active participation in the management, but in consequence of the order the contractors employed an extra foreman at $5 per da3^ for each working dajr during the time Davis did not particpate in the management, aggregating the sum of $2,250. It does not appear that Davis endeavored to find other employment during the time he did not participate in the active work on the grounds.
XIX. On April 21, 1890, the Chief of the Bureau of Equipment notified the contractors that proceedings with work on the marble facings of the main building did not conform to the specifications and were in defiance of the orders of the architect in charge. To which, on April 24, 1890, the contractors responded that the matters therein referred to had been attended to 'by them, they trusted, to the satisfaction of the Department.
XX. On July 25, 1890, the architect officially complained of the contractors because óf the insufficient supply of brick and cement of proper quality, which delayed the work.
XXI. Under date of May 18, 1890, the contractors stated that work on the Observatory was at a standstill for want of cement that would come up to the requirements of the assistant architect. In that connection they stated that they had ordered the very best cement in the market, paid the highest prices for it, and that it was extensively used on all public and private works of any importance in this part of the country. Complaints were made of the assistant architect and his methods in the matter of inspecting cement.
On May 21, 1890, the Chief of the Bureau of Equipment replied to the contractors that the trouble complained of was mainly due to their bringing to the work cement not up to the standard in quality and to their delays in removing from the work rejected cement; that in the absence of proof that the tests were unusual and too severe the contractors were expected to proceed vigorously with the work of construction and to comply with the requirements of the architect and his assistant, and that if it could not be shown that the inspection was unreasonable the complaints of the architect in that respect must be held to be not well founded.
XXII. Under date of May 26, 1890, the contractors stated their complaints in full respecting the rejection of the cement. The result of this correspondence was that on June 12, 1890, the architect stated that in order to facilitate work he bad directed the standard applied to testing cement to be lowered to nearly one-half the results of the tests obtained at the office of the Commissioners of the District of Columbia and Wash ington Navy-Yard or the best tests obtained by his assistant at the Observatory. In this connection the architect stated anew that the cement question had not been the only cause of delajr, as the very slow delivery of brick had been repeatedly pointed out to the contractors.
XX1TT. Under date of September 23,1890, the contractors asked for a second extension of time for the completion of the work beyond October 1, 1890, (1) because during the two years limited for the execution of the work the weather had been unfavorable, especially in the spring and summer of 1889, when valuable time was lost; (2) because on May 30, 1889, destructive floods had entirely destroyed the Chesapeake and Ohio Canal, which was their main channel of supply for the Pound Top cement, the preferred brand. This request was accompanied with a statement that for days at a time they had been unable to procure a single barrel of the cement, but to avoid great delay they had obtained a number of well-known brands from responsible dealers, including Rosendale cement. Very little of any cement, except Round Top (they stated), was accepted by the assistant architect in charge, in consequence of which their work was entirely stopped several times in the middle of the most favorable building season; (3) because the unusual demand for .brick and the very small supply had caused them great annoyance; (4) because the contract called for Tuckahoe marble, and having contracted with the New York Quarry Company for that stone, it had been so badly cut the assistant architect would not accept it until they had recut a great deal of it, which caused considerable delay. In many cases, they stated, the stones arrived broken and chipped so that they could not be used. The superintendent of the Observatory objected to a further extension, because, in his opinion, the principal cause in the failure of the contractors to fulfill in the time required was due to financial embarrassment of the contractors. The superintending architect likewise, in an official communication under date of September 20, 1890, stated that he felt extremely reluctant to recommend an extension of time, because of the persistent disregard and apparent inability of the contractors to promptly carry out orders and directions emanating from him or his assistant. Under date of October 4, 1890, the Chief of the .Bureau of Equipment of the Navy Department recommended the second extension, notwithstanding the adverse report of the architect, because the contractors had suffered hardships, one of which was the continued prevalence of rain}*- weather during the year 1889, there having been, according to the official report received from the United States Signal Office, 153 rainy days in that year, when outdoor work had to be excepted. Upon these reports the time for the completion of the work was extended to July 1, 1891.
XXIV. On November 11, 1890, one of the large pieces of cornice for the library was condemned on account of its bad ■color and quality. In consequence of this, the contractors .stated that its condemnation would probably prevent them from getting the roof on the library that season.
XXY. On November 25, 1890, the contractors were requested by the Chief of the Bureau of Equipment to employ without delay a sufficient force to carry on the work properly and expeditiously. The contractors, in response to this request, stated that until a short time ago they had been unable to proceed with some of the minor details for want of proper instructions what to do and 'how to do them in a satisfactory manner, and stating that hundreds of similar things had been deferred for want of a man with a practical knowledge of the plans and building work generally.
XXY1. Under date of June 23* 1891, the contractors asked fór a third extension of time on the ground of delay in getting stone the preceding fall and because of the great amount ■of work that had to be done on this stone after the delivery to the grounds, and because they had found it impossible to ■complete the buildings until the domes were constructed for the great and small equatorial buildings, which work was outside of their contract. On June 29, 1891, the Secretary of the Navy extended the time for the completion of the work to September 1, 1891.
XXVII. Under date of August 28, 1891, the contractors asked for a fourth extension of time, chiefly owing (they said) to the condition of two equatorial buildings, they being unable to do anything further in those buildings until the contractors for the domes had completed their work. On September 1, 1891, the Chief of the Bureau'of Equipment of the Navy De partment informed the contractors that their request for an extension of sixty days from that date had been granted. On September 3, 1891, the claimants discontinued work on the observatory buildings and abandoned the premises, and five days thereafter the Secretary of the Navy declared the contract forfeited. The buildings were left in an unfinished condition, and a new contract was thereafter made with another party (in which Augustus Davis, jr., had an interest) to complete the work.
XXVIII. The estimates of the architect in charge for the amount of work as it progressed were prepared in accordance with instructions from the Navy Department dated January 31, 1889. These instructions required that the architect should “state from time to time, when such payments were applied for by the contractors; with the proportionate amounts and values, which will be estimated upon the total contract price of the new naval observatory.” The form prescribed for the payments was followed by the architect in all of the twenty-three estimates made by him, except in the third and fourth estimates, which were not subdivided as were the others. After the eleventh estimate the architect changed the method of computing marble from quantities in cubic feet to quantities in tons weight. In the twenty-third and final estimate the architect stated that the proportionate amount and value estimated upon the total contract price of all labor and material of- every kind used in and about the buildings, or ready for use, was $299,338.80.
This final estimate was made August 12, 1891, and is recapitulated as follows:
Total value of materials expended to date... $217,844.30
Total value of labor expended to date.'. 77,525.00
Total value of materials on hand to he used... 3,964.50
Total.. 299,333.80
XXIX. The evidence does not establish to the satisfaction of the court the appropriation by the defendants when the contract became forfeited of any condemned cut marble belonging to the contractors. The evidence does not establish to the satisfaction of the court the appropriation by defendants of any condemned materials or other property (except that which was subsequently returned to plaintiffs), as alleged in the petition. The evidence does establish to the satisfaction of the court that after the contract became forfeited certain condemned material on the site of the work was sold by the marshal of the District of Columbia for the sum of $100 under legal proceedings instituted against plaintiffs in the supreme court of the District of Columbia, and that at the marshal’s sale the property sold by that officer was bid off in plaintiffs’ interest.
XXX. After the forfeiture of the contract, and upon the account stated by the Secretary of the Navy, the defendants charged to the claimants the salary of the assistant architect of said buildings from September 21, 1891, to December 3, 1891, and from January 5, 1892, to August 23, 1893, the sum •of <¡¡>2,187.50, and also the traveling expenses of the architect from September 8 to December 31, 1891, and for the years 1892 and 1893, 1377.30, making a total on this account of $2,564.80.
XXXI. When the contract was declared forfeited the Chief of the Bureau of Equipment was directed by the Secretary ■of the Navy to take and file a full and complete statement and inventory of all work done or commenced in, upon, or about said buildings, and of all materials on hand applicable thereto.
XXXII. On September 16,1891, the Superintendent of the Observatory, Commander Bishop, United States Navy, and Ensign Hoogewerff, also of the United States Navy, and Assistant Architect Donnell submitted a full and complete statement and inventory of all work done or commenced in, upon, or about the buildings at the Observatory, with an inventory of all material on hand applicable thereto; also an inventory of the several buildings on the grounds and of the material thereon, and machinery, tools, and appliances appertaining to the work used or to be used in or about the completion of the same. This inventory does not include the marble claimed in the petition.
XXXIII. On September 21, 1891, the Secretary of the Navy, under the fifteenth clause of the contract and in consequence of the failure of the contractors to proceed with the work, appointed a board for the purpose of ascertaining the value of the work and materials in and about the construction ■of the Observatory, with instructions to consider such evidence as it should deem proper which might be submitted on the part of the contractors with reference to any question ■concerning the proper valuation of work and materials embraced in the statement or inventory.
The contractors were informed that they might attend in person and bjr counsel and submit such evidence as the board might deem proper.
On October 22,1891, in compliance with the order appointing it, the board made a report, stating that they had ascertained and declared the fair market value of the buildings and materials on hand, together with appurtenances and fittings, including a reasonable and customary margin of profit upon the work, as follows:
Prime vertical building. $2,503.50
East and west transit houses. 11,413. 89
Clock room. 7, 866.31
Two observers’ rooms.-. 2, 375.01
•Great equatorial. 25, 894. 33
Main building. 236,082.56
Boiler house. 17,353.38
Duct from boiler house to main building.-. 1,787.59
Drainage and sewerage. 1,932.84
Available material on hand. 1,236.95
Total. 308,446. 36
All joiners’ material fitted for use, together with the steam-heating and gas-lighting plants, is included in the cost of the •several buildings.
The board further desires to state that it has received and •duly considered such evidence as it deemed proper which was submitted on the part of the contractors with reference to ■questions concerning the proper valuation of work and material embraced in the above-mentioned statement or inventory.
XXXTV. On November 9,1891, the Secretary of the Navy returned to the board for revision its report because the board had included in its estimate of the valuation of the work certain items of work, extra to the contract, required by changes in the plans and specifications and had omitted other items of such work. The board was directed in its amended report to include a careful and thorough estimate in detail of the cost of the material and labor necessary to complete the Observatory and all work required under the original contract and the authorized changes therein, and then ascertain and declare the fair market value, based upon the contract price, including a reasonable and customary margin of profit of all work done or commenced in, upon, or about the buildings, appurtenances, and fittings, and of all materials on hand applicable thereto.
XXXV. On November 21, 1891, the board returned its revised report, as follows:
Main building.. §223, 947.91
Great equatorial building. 25,588. 51
Clock room. 7,632.02
Two observers’ rooms. 2,375. 01
Passageways connecting clock room and observers’ rooms_ - 855. 76
East and west transit buildings. 9, 817.17
Prime vertical building.. 2,267.49
Boiler house.. 17,873. 36
Duct from boiler house to main building.1. 1, 787.59
Drainage and sewerage. 1,547.84
Materials available. 3,135. 34
Total. 296,828. 00
* * * * * * *
XXXYI. Following is a statement of the account with P. H. McLaughlin & Co. (in connection with their entire undertaking), after the completion of the work, to wit:
Original contract. §307, 811.00
Additions authorized (Exhibit A).. 7, 891.13
315,702.13 ■
Reductions authorized (Exhibit A). 2,537. 78
Maximum limit of cost under McLaughlin & Co. 313,164. 35
Cost to Government to complete.
Contract with Mr. Plumley, Feb’y 16,1892. 25,940.00
Reductions authorized. 50.00
25,890.00
Extra expenses incurred in completing, chargeable to contract McLaughlin & Co. (Exhibit B). 3, 759.52
29. 649.52
Appraised value of work done by McLaughlin & Co. and materials on hand to complete, as per report of board, approved by Secretary of the Navy, Dec. 12, 1891.§284,422.47
Cost to complete under Plumley. 29,649. 52
Total cost to Government to complete. 314,071. 99
Maximum limit of cost under McLaughlin & Co. 313,164. 35
Excess of cost chargeable to McLaughlin & Co. 907. 64
McLaughlin & Co., Dr.
To advanced payments on account of contract, 23 installments at §11,542.91 each. 265,486.93
To advanced payments on account of authorized changes (Exhibit B) . 4,539. 57
Excess of cost to complete under Plumley. 907. 64
270,934.14
Or. '
By appraised value of work, etc. 284,422.47
Statement of account.
By appraised value of work, etc. 284,422. 47
To charges as above.'. 270,934.14
Due McLaughlin & Co. 13,488. 33
Less amount deducted from the contract of Mr. Plumley for omission of sash fasteners, which were a part of the incom-pleted work under McLaughlin & Co. 50.00
Net amount due McLaughlin & Co. 13,438. 33
The foregoing account was submitted to plaintiffs in February, 1894, and the net amount shown by the account to be due was paid to them in July, 1894, upon vouchers prepared by. order of the Secretary of the Navy and executed by plaintiff's without protest or objection to any of the items.
XXXVII. None of the changes (if any were made) upon which the items set forth in the amended petition for alleged work and material extra to the contract are based involving an expenditure in excess of $500 were made upon the order, written or verbal, of the Secretary of the Navy. The actual cost of said changes (if any were made) and the damage caused thereby in no instance where the alleged cost exceeded $500 were ascertained, estimated, or determined by a board of naval officers as provided by the third clause of the contract. None of the changes (if any were made) upon which the items set forth in the amended petition for alleged work and material extra to the contract are based involving an expenditure of less than $500 were agreed upon in writing by the contractors and the architect as required by the third clause of the contract. Nor were any such changes approved by the Secretary of the Navy. The evidence does not establish, except as the findings otherwise show, any reference to the Secretary of the Navjr of aity matters of doubt or dispute as to the meaning of the drawings, plans, or specifications or of any discrepencies appearing therein. When work was regarded as extra to the contract by the designated authority such extra work was charged to the Government in favor of the claimants and was subsequently paid to them as extra; or was at the time of such extra work, or subsequently, balanced bjr omissions from the work set forth in the original contract, drawings, plans, and specifications.
XXXVIII. No compensation was made to the contractors for extra work except as set forth in the account rendered to the plaintiffs as hereinafter set forth. It does not appear to the satisfaction of the court that the Secretary of the Navjr had any knowledge that work now claimed as extra was being done by the contractors at the time they claim to have done said work or that the Secretary ever had knowledge of any claim for said extra work until the commencement of this action.
XXXIX. December 15, 1891, the contractors addressed to the Secretary of the Navy the following communication:
“WASHINGTON, D. C., December 15th, 1894-“To the Hon. H. A. Herbert,
“ Secretary of the Nmy, Washington, D. G.:
“Your petitioners beg leave respectfully to ask your attention to an error in the statement of account with P. II. McLaughlin & Co. in connection with their contract of October 2nd, 1888, for building the new Naval Observatory, to the end that the same may be corrected and the amount erroneously charged against the said petitioners be refunded to them.
“Among the items of extra expense, as set forth in Exhibit B of the detailed statement submitted by Geo. Dewey, Chief of Bureau of Equipment, to the Secretary, of date March 2, 1893, which, in the opinion of said Bureau, should be charged against said firm on account of their failure to complete'-the Observatory within the time prescribed in their contract, there appear various charges for the salary of an assistant architect and travelling expenses of B>. M. Hunt, architect, amounting in the aggregate to $2,561.80.
“Your petitioners are advised and believe that these -charges are without precedent in settlements of like character made by the Government with contractors who have failed for any cause whatever to complete their contracts; that they are likewise unauthorized bj’- the terms of the contract between said firm and the Secretary of the Is'avy, and are moreover a great hardship and injustice to said petitioners.
“The seventeenth clause of said■ contract of October 2nd, 1888, provided that ‘ In case the Secretary of the Navy .shall proceed, under the foregoing clause, to complete the work, •sirch procedure shall be without unnecessary delay, and shall be at the risk and expense of the parties of the first part, who shall be chargeable with any increase in the cost of materials or labor incurred by reason of their failure to perform the contract.’ Upon the final settlement of the liability of the parties of the first part an account shall be stated substantially as follows:
“ 4 The parties of the first part shall be charged—
“ ‘ 1. with all advanced payments.
“‘2. With the extra cost, if any, of materials and labor •and all other extra expenses, if anjr, over and above the contract price incurred in the completion of the work.
“ ‘They shall then be credited with the value of the work •done up to the time of suspension and of the materials on hand as ascertained by the board and approved bjr the Secretary of the Navy under the provisions of the fifteenth clause •of this contract, and with such advance payments, if anjr, as may have been refunded. If a balance shall thereupon appear in favor of the parties of the first part the same shall be paid to and accepted by them in full discharge of all claims under this contract; but if a balance shall appear in favor of the United States the parties of the first part hereby covenant .and agree as aforesaid to pay and discharge the same on demand.’
“No question is here raised with regard to any of the items •of Exhibit B, except the assistant architect’s salary and the traveling expenses of R. M. Hunt, architect, and these items, it is respectfully submitted, are improperly embraced in said statement. It will not be claimed that they are any part of ‘the extra cost of materials and labor,’ and the contract does not contemplate anjr other extra expenses unless the same are over and above the contract price.’
“The exact language is, ‘and all other extra expenses, if any, over and above tbe contract price, incurred in the completion of the work.’
“The account as of this date, it is respectfully submitted, should bo stated as follows:
The contract price, with authorized additions and reductions. ¡5313,164.35-
Advanced payment on account of contract.§265,486.93
On account of authorized changes. 4,539.57
Contract to complete with Plumley. 25,940. 00
Extra expense, exclusive of salary of asst, architect, and R. M. Hunt’s travelling expenses... 1,194.72
Reduction on account of templates. 100.00
Paid on order of McLaughlin & Co., by order of
July 12,1894 . 13,338.33
■ - 310,599.55
Balance due McLaughlin & Co. 2,564.80
“ The contract with Plumley relieved the firm of McLaughlin & Co. from all liability for expenses in connection with the completion of the Observatory under the well-settled principles of the doctiine of estoppel.
“It is proper to add in conclusion that your petitioners wore in no way responsible for the delays in the execution of this contract, as will be shown by the correspondence with the Department; and, furthermore, that all extensions of time were duty authorized by the Department.
“We file herewith a statement of erroneous charges, as given in Exhibit B, and respectfully ask that this matter may receive your attention at the earliest date practicable.
“Very respectfully, ■
“P. H. McLaughlin & Co.”
In the statement of account rendered to P. H. McLaughlin & Co., on February 16, 1894, they are charged with expenses that should not be charged against them, to wit, in Exhibit B of statement as follows:
1891.
Sept. 21, asst, architect’s salary from Sept. 8 to 15. §40. 83
Oct. 23, “ “ “ “ 15 to Oct. 15. 175.00
Nov. 3, .“ “ “ “ Oct. 16 to Oct. 31. 87.50
Dec. 3, “ “ “ for November. 175.00
1892.
Jan. 22, R. M. Hunt, travelling expenses from Sept. 8th to Dec. 31st, 1891.. 77.25
Jan. 5, asst, architect’s salary for December. 175. 00
Feb. 4, “ “ “ “ January. 175.00
Mch. 4, “ “ “ “ February.:_ 175.00
Apr. 4, “ “ “ “ March. 175.00’
May 4, “ “ “ “ April. 175.00
June 7, “ “ “ “ May. 175.00
July 8, “ “ “ “June. 175.00
Aug. 4, asst, architect’s salary for July. §175.00
Sept. 16, “ “ ■ “ “August. 175.00
Oct. 4, “ “ “ from 1st to 23 Aug. 134.17
1893.
Jan. 17, R. M. Hunt, travelling expenses for year ending December 31st, 1892. 282.10
Due R. M. Hunt for travelling expenses, 1893 . 17. 95
2,564.80
“WASHINGTON, D. C., December 20, 1894,.
“Hon. H. A. HERBERT,
“ Secretary of the Mavy, Washington, D. G.
“Sir: 1 have the honor to enclose herewith the petition of P. H. McLaughlin & Co. for a correction of the statement of the account between said firm and the Navy Department in ■connection with their contract of date of October 2nd, 1888, for the building of the new Naval Observatory.
“ It is respectfully submitted that the charge for the assistant architect’s salary and the expenses of R. M. Hunt, architect, do not properly come under the head of ! extra expenses,’ :as provided in the seventeenth section of said contract, inasmuch as said expenses were not ‘ over and above the contract price for the completion of the work.’
“The excess of cost to complete the work under Plumley, according to the statement, is given at 1907.64; but this ‘ excess ’ is arrived at by including the salary of the assistant architect and Mr. Hunt’s travelling expenses among the extra expenses of $3,759.00, for which there is no authority under the terms of the contract.
■ “ It is not known what contract was made with Mr. Hunt, the architect, nor what amount was paid to him, but it seems clear that it was not contemplated that any part of the money due to the contractors should be taken from them and paid to him.
“ The contractors are prepared to show that all delays up to the time of the forfeiture of the contract were caused and authorized by the Department.
“Very respectfully,
“R. W. Hunter,
“Atty. for P. II. MoLaughlim, (& Go.”
[3d endorsement.]
“U. S. Naval Observatory, Dec. 31, 1894-
“Subject: Petition of Messrs. P. H. McLaughlin & Co., for correction in statement of account in connection with contract for construction of new Naval Observatory.
“1. Respectfully returned to the Chief of the Bureau of Equipment.
“2. By terais of the contract between the Navy Department and McLaughlin & Co. dated Oct. 2, 1888, the date for the completion of the new Naval Observatory was fixed as April 2, 1890; but this date was, upon application of the contractors, extended from time to time by the Department.
“3. The contract was annulled the Department on September 8, 1891, the contractors having reported that they-were unable to continue the work.
“1. Section five (5) of the contract provided for the appointment of an architect and of inspectors; also, that the duties of the architect may be performed by an assistant. The salary of the assistant architect was paid byr the Government, and was one of the expenses beyond the contract price of the buildings, incident to their construction.
“5. By the failure of the contractors the period of the employment of the assistant architect was lengthened and extra expenses thereby incurred.
“6. The rules established by the Architects’ Association require that, in addition to a fixed fee, architects shall be paid actual traveling expenses if any are incurred. This established practice was agreed to by the Department, and in conformity to it the expense of necessary travel performed by the architect during the .construction of the buildings was paid by the Government.
‘4 7. The trips of the architect between New York and Washington, made necessary by the failure of the contractors to complete the work within the contract time, involved additional expenses to the Government.
“ 8. The contract contemplated that the Government should pay the salary of the assistant architect and the traveling expenses of the architect during the eighteen (18) months allowed for the work. By extending the contract time for the completion of the work the Department assumed the obligation of paying these expenses during the period of such extensions; and it did pay them up to the date of annulling the contact (September 8, 1891).
“ 9. The seventeenth section of the contract provides that, in case of annulment, the contractors shall be charged “with the extra cost, if any, of materials and labor, and all other-extra expenses, if any, over and above the contract price, incurred in the completion of the work.”
4 410. In the statement submitted by the Bureau of Equipment, upon which the Department based the final .settlement, the salary of the assistant architect and the traveling expenses of the ai'chitect, paid after the annulling of the contract, are charged as ‘ other extra expenses,’ to which the Government Avas subjected by the failure of McLaughlin & Co. to comply Avith the conditions of the contract.
“R. L. Phythian,
“ Commodore, TJ. 8. ISf., Superintendent Nmol Observatory.” •
[4th endorsement.]
“Navy Department, Bureau of Equipment,
“ January 5, 1895. - “Subject: Petition of Messrs. P. H. McLaughlin & Co. for correction in statement of account in connection ivith contract for construction of new Naval Observatory.
“Respectfully returned to the Department, inviting attention to the 3rd endorsement, with Avhieh this Bureau concurs, and in vieiv of Avhieh it is of the opinion that the statement submitted to the Department contains no error, and that every item of charge therein stated and herein complained of was and is a proper charge against the original contractors.
“The Government was in no wise responsible for any delay in the fulfillment of the contract, and no extension was ever made except upon the written application of the contractors.
“ It is clearly shown by the 3rd indorsement that the charges complained of Avere authorized by the contract; therefore all expenses of that character made necessary by the failure of the original contractors to complete, and the consequent necessity of the Government to abrogate the same and enter into a neAV contract with another party, became a proper charge against the original contractors under the seventeenth section of the contract as other extra expenses over and above the contract price incurred in the completion of the work, and should be so considered in the final settlement.
“F. E. Chadwick,
‘ ‘ Chief of Burean,. ”
“RAVY DEPARTMENT,
“ Washington, January 8, 1895.
“Sir: Referring to the petition of P. PI. McLaughlin and Company, dated the 15th ultimo, asking that they be paid the amount, $2,564.80, charged against them under their contract for the construction of the new Naval Obseiwatory on account of the traveling-expenses of the architect and the salary of the assistant architect, and to the letter of their attorney accompanying said petition, the Department desires to be informed as to whether, in the completion of the Observatory after the forfeiture of McLaughlin and Company’s contract, ainr extra expenses were incurred over and above the contract price within the meaning of the 17th clause of said contract, and as to what part of the appropriation for building the Observatory remains unexpended.
. “The papers referred to herein are enclosed and will be returned with the bureau’s answer to this letter.
“ Very respectfully,
“H. A. HERBERT,
“ Secretary.
“The Chief of the Bureau of Equipment.”
[New Naval Observatory — Claim of Messrs. P. H. McLaughlin and Company that an error was made in settlement with them under contract.]
“ The Department does not admit the contention of Messrs. P. H. McLaughlin and Company, made in their communication of the 15th ultimo, that an error was made at the time of the settlement with them under their contract for building ' the New Naval Observatory, in charging- against them the traveling expenses of thé architect and the salary of his assistant during the period consumed in the completion of the work after the forfeiture of their contract, and their request that the sum of $2,564.80, deducted on that account, be refunded to them can not, therefore, be favorably considered.
“H. A. Herbert,
“ Secretary of the Navy.
“January 30, 1895.”
XL. The documentary evidence, taken in connection with all the other testimony, establishes to the satisfaction of the court—
(1) That the defendants delayed the actual commencement of the work of building foundations during the winter ensuing the date of the execution of the contract on October 2, 1888.
(2) That work on the boiler house and duct from same to main building could have proceeded had the contractors desired to go on with it.
(3) That no' complaints were made and no requests to be allowed to proceed were preferred by the contractors in the progress of the work, except as the findings hereinbefore stated show, and no pecuniary damages were specifically stated or claimed by the contractors on account of any delays or interruptions.
(4; Ii does not appear that the contractors objected to the suspension of the work during the winter of 1888-89, nor does it appear that thejT requested at any time to be released from their agreement unless the work could go on during that winter.
(o) It does not appear to the satisfaction of the court that the contractors had progressed with' the work sufficiently to. be entitled to payments of the percentages provided to be paid by the contract on the value of the work as it progressed at an earlier day than said payments were actually made under the decision of the architect.
(6) The evidence does not establish to the satisfaction of the court that plaintiffs objected to the suspension of the work, so far as the same was suspended, during the month of December, 1888, and during the months of January and February, 1889, and the first nineteen daj^s of March, 1889.
(7) Through an error of judgment (which did not involve the good faith of the inspectors or architects) in directing the. formula of the concrete of which, the-piers for instrument • foundations was to be composed, plaintiffs suffered loss and damage in the progress of the work to the extent of $668.
Mr. John G. Ohcmey and Mr. Robert W. Hunter for the claimants:
1. In the Kelly case (31 C. Cls. R., 361) it was held that—
“Where contractors lose their own time in waiting for the defendants to procure and prepare a site for a building, contrary to the intent of the contract, they may recover the reasonable value of their services.”
Upon this principle this item is founded.
It may be insisted that this item is for the value of services which antedated contract under which they might be earned.
But we hold that the contract was actually made when the War Departmentacceptedthe proposals of petitioners, namely, June 29, 1888. The specifications upon which the work was to be done were complete when submitted for bids for the work. Every element of the- matter was accepted June 29, 1888.
The execution of a formal contract to which both parties attach their names is wholly irrelevant. A contract is complete when the minds of all the parties meet. This contract was therefore executed June 29, 1888.
Of course by section 3744 of the Revised Statutes the Sec retary of the Navy is bound to reduce the contract to a formal writing. But he must do it within a reasonable time. It is not his province to delay such formal writing to the damage of a contractor.
By accepting petitioners’ proposal the Government became obligated to petitioners to put them in full possession of the privileges necessary to the work to be done.
Advertisements and specifications with the proposals may constitute a contract, though a formal instrument is contemplated. (See McOolloirfs case, 17 C. Cls. B., 92; Speeds case,. 7 C. Cls. B., 93; 8 Wall., 77.)
The work was a gigantic one and all their time and means would be required in it. Bealizing fully the responsibilities involved, they made themselves ready for the prosecution of the work immediately upon the acceptance '-of their proposal and held themselves in readiness to begin the great work as soon as possible.
But the Navy Department delayed, and delayed them — did not execute a formal contract until October 2, and furnished no building line until November, 1888. (See Boettinger’s case, 26 C. Cls. B., 392; Stout, Hall and Bangs'1 case, 27 C. Cls. B., 385; Ferris1 case, 27 C. Cls. B., 542; Ga/rfield’s case 93 U. S., 242; Mueller'’s case, 113 U. S., 153.)
Where defendants neglect to fix a location and to furnish working plans, as required by the contract, the rule of damages is the same protanto as in cases where they wrongfully put an end to the contract, i.e., the direct and natural loss which the conti’actors have sustained. {Harvey and Live-Bey’s case, 7 C. Cls. B., 502; see also Jones and Brown)s case, 1 C. Cls. B., 266.)
2. If items are extra to the contract, and petitioners have-not been paid for the same, these items should be allowed. “Where additional work was necessary and the officer in ■charge directed that it be done and the Government received the benefit of it, the combination of circumstances brings the claim for extras within the case of Ford’s (17 C. Cls. B., 60),” 'as held in the Ilaliday case (33 C. Cls. B., 453). See also United States v. Otis, 120 U. S., 115.
When men enter into contracts to do certain things at a fixed price they know precisely what to calculate upon, and how were petitioners to know what would be required of them from any other source than that of the drawings and the plans and specifications ?
The price they named was for the work shown by the same. They were not estimating upon anything which might, by some far-fetched imagination, be interpolated into matters and things not risible or recognizable therein. Simply because the architect found that to make a good job of the work he must have certain other work done does not warrant him in saying that said work must have been intended by the plans, etc., and therefore to require the petitioners to do such other work as part of the original contract.
The petitioners were able to read the plans and understand the specifications. There should have been placed in said plans- and specifications all the work to be done. Whatever was not embraced therein was not bid for by petitioners. ■ The plans and specifications should have been so plain that there was no mistaking the meaning or the intention thereof. If said plans- and specifications were gotten up to fool the petitioners, and made to mean what the contractors might not understand-them to mean, and to require certain work which was not understood by them to be contained therein, still they did not bid for such work.
3. If the delays of the Government caxised petitioners extra employment of men ana--means, it is such an “extra” as should be paid for. These were expenses not contemplated by the plans and specifications when they bid on the wox-k,, and were in no sense embraced in the formal contract.
The contract required petitioners to do two things, namely, furnish the labor and also the materials necessary for the work set out in the plans and specifications covered by the contract. Nothing but the necessary labor was considered. Only necessary labor was required bjr the contract. They could not have contemplated a condition- of things which would cause them to employ men and teams for an extra period of time like this.
This extra labor is as much extra work as that of building cellars or putting on an extra angle iron. The same authorities which sanction those items will include this extra labor. See the cases hereinbefore cited.
4. The Government was entitled to petitioners’ services and tbeir time for eighteen months from October 8,1888, and for the time in addition thereto which was required to do the extra work the}7- undertook to do, for which they were paid, and no more. The Kelly case supports these items and justifies their .allowance.
Upon a renouncement of a contract the measure of damages is the clear profit the parties would have realized. {McKee's •case, 1 C. 01s. R., 336; Wooman's case,' 4 C. Cls. R., 258; Figh's case, 8 C. Cls. R., 319.)
Two elements of damage are contemplated — losses sustained and gains prevented. (.Buckley's case, 7 C. Cls. R., 24; 6 Wallace, 543.)
5. Contractors not only have a right to superintend and manage their own business, but it is absolutely necessary that they should do so in the very nature of things.
In this case the contractors were especially obligated, by the sixth article of their contract, “to give their general personal superintendence and constant attention ” to the work. The unwarranted interference with the contractors, which resulted in such loss to them, ought to be paid for to the last cent thereof.
The Government has not even the privilege to require the contractor to take one extra step in the performance of the work under his contract, let alone exclude him altogether from the work.
Clarltls case {7 C. Cls. R., 24; 6 Wall., 543) gave the contractor a compensation for being required bj7 the agents of the Government to go to his duties in a roundabout way. Petitioners’ rights were violated. They suffered great damage thereby. The law implies damages. {Ilood v. Palm, 8 Penn. St. R., 239.)
An act which naturally results in the injur}7 of another, or in the violation of his legal rights, the actor must expect to respond in damages therefor. (Georgetown, etc., R. Co. v. Eagles, 9 Colo., 545.)
The person injured shall receive a compensation commensurate with his loss. (1 Sutherland, Damages, p. FT; Folie v. Ames Mfg. Co., 112 Mass., 492; Balter x. Bralte, 53 N. Y., 216; FoHhrav v. McGill, 27 Mich., 234; Peltz v. Eichelle, 62 Mo., 171; Buckley v. Buckley, 12 Nev., 123; United Staten v. Smith, 1 Otto, 211.)
In civil actions the law awards to the party injured a just indemnity for the wrong which has been done him, either in contract or tort. (Brewster v. Van Liar, 119 Ill., 551.)
The conduct of the agents of the Government amounted to a breach of the contract upon the part of the defendant, for the contractors were entitled to be personalty present and to personalty direct the work.
Indeed, the terms of the contract required them to give to the work their personal direction and superintendence.
It may not have been a total breach, but it was a breach nevertheless. The Government-is held, in law, for the direct consequences of that breach. (1 Sutherland on Damages, 71; Woods' Mayne on Damages (ed. 1880), sec. 11; WaVrath v. Whittekind, 26 Kans., 182.)
It is presumed that the parties contemplated the usual and natural consequences of a breach when the contract was made. {Boothv. Sjot'nDay, B. 2£. Go., 60 N. Y., 192; Millers. Mariners' Church, 7 Greel. (Me.), 55; Frohreich v. Gammon, 28 Minn., 176.)
The measure of damages in a contract for personal services is the value of the services in a suit for a breach thereof.
In the case of United States v. Behan (110 II. S., 338) it was held that where a party is prevented from performing by the other party he can always recover his outlay and expenses; and, also, if not too remote, the profits he might have realized.
6. It is in evidence that some §13,000 of earned money in the progress of this work was withheld from petitioners, which necessitated their borrowing money with which to carry on the work; that if this money had been paid to petitioners in accordance with the express provisions of the contract, this money would not have had to be borrowed by them.
They paid for the use of this borrowed money §1,655.01.
This is claimed as an extra expense to the claimants; an expense to which petitioners were put, as potent as that of the employment of an extra foreman on bricklaying after Davis was excluded from the work.
It is not interest on money in the sense in which the Gov- •eminent is prohibited from paying interest on a Government claim. True, as between petitioners and the party who loaned him the money, it is interest, but as between the petitioners .and the Government it is an element of extra expense.
Under this head we ask for-the sum of Si,655.04 only.
It is believed that this item stands upon the same footing as that of the State of New York v. United States (160 U. S., 598; 31C. Cls. R., 276).
Although McLaughlin & Co. paid that sum as interest on the money they borrowed to carry on the work, it is not a charge for interest, as such, against the United States.
In the New York case, the State, during the years 1861 and 1862, paid, on account of interest that accrued on its bonds issued in anticipation of the tax for the public defense, the sum of $91,320.84.
In addition to this the State used the principal of the canal fund, which, up to the time of such use, was on interest at 5 per cent. While this canal fund was so used the' interest thereon, in the sum of $39,867.18, was lost to the State, and, like the • $91,320.84, above named, was a defined item of expense to the State. ’
This court found in favor of the State on the $91,320.84 item, but. found against the State on the other interest item.
Judge Nott, in his dissenting opinion, held that the canal fund interest matter was not interest, as such, and the Supreme Court sustained this view. Neither of said items was interest on a claim against the United States. Although interest paid on the bonds issued for public defense, and loss of interest on a principal used for the same purpose, they were, nevertheless, items of legitimate expense incurred by the State of New York on account and in behalf of the Government.
The failure of the United States to pay to McLaughlin & Co. $13,000 at the time they were entitled to receive it caused them to. resort to the money lender to get the wherewith to carry on the work in behalf of the United States. They were compelled to borrow money on account of the conduct of the agents of the Government, which cost them $1,655.04.
It is as clearly an extra expense to the petitioners, in this amount, as the putting in of cellars, charged for, which were no part of their original contract.
(See also London v. Taxing District, 101 U. S., 771.)
Mr. John G. Gapers (with whom was Mr. Assistant Attorney-General Pradt) for the defendants.

Opinion:
Howry, J.,
delivered the opinion of the court:
Authority was conferred by an act approved March 3,1887, upon the Secretary of the Navy to have constructed a new Naval Observatory on Georgetown Heights, in the city of Washington, D. C.
Pursuant to that authority, the Secretary invited proposals for tbe construction and erection, by contract, of nine buildings. The specifications, with plans (except certain details of work and materials relating to the construction of floors, piers for instruments, and equatorial domes), were to be had on application, and proposals were to be made in accordance with forms to be furnished. It was required that each proposal should be accompanied by a satisfactory guaranty that the bidder would', within twenty days after receipt of notice of acceptance, execute the required contract and give a bond, with satisfactory surety, conditioned for the faithful performance of the contract within eighteen months after it was made.
A bid by plaintiffs for this work was accepted June 29, 1888, but the contract between the parties was not actually executed until October 2, 1888. It does not appear whether anjr unusual preparation for the undertaking was made by plaintiffs between those dates.
The building lines not having been designated until November 2, 1888, active work on the buildings was not begun until that time. Because of delay in the execution of the contract .and the omission of the engineers to designate building lines, the contractors applied for and obtained an extension of time for the completion of the work to October 1, 1890. Three extensions of time to complete were subsequent^ granted on the application of the contractors.
With an extension of time to their credit of nearly two months, plaintiffs abandoned the work September 3, 1891, before it was finished,- and thereupon the contract was by proper authority declared forfeited.
After forfeiture the buildings were completed under a new contract to which one of plaintiffs was a party. The cost of completion was charged to plaintiffs, and an account was rendered to them showing the debits and credits to which each party to this action was entitled under the original contract with the authorized additions. A balance appearing in plaintiffs' favor, the amount of it was paid to them on the order of the Secretary of the Navy. Subsequently, plaintiffs suggested an error of $2,564.80 with a view of having the same corrected. The Secretary declined to refund the amount asked, whereupon the plaintiffs brought this action.
The claims, tabulated from the amended petition, areas follows:
1. Delay until October 2, 1888, in the execution of the contract. §4,500.00
2. To extra expenses incurred on account of enforced delays of the work by the. Government, April 22,1890, to September 8, 1891, for enforced idleness for said period of watchmen, drivers to teams, a foreman and engineer, blacksmith and helper, a clerk, timekeeper, office boy, teams, and feed of horses, cost of maintaining separate office for assistant Government architect, making a total of 813,714.50; loss of time and opportunity to each member of the firm for eighteen months at 8200 per month, §10,800; profits lost which might have been made if other contracts could have been taken during these eighteen months, §6,150; amount paid general laborers not above enumerated, §10,000; total of these items. 40,673.50
3. Materials furnished and work done by the contractors on the buildings and appurtenances on account of mismanage- ment and delays of defendants, which cost the contractors §374,059.96, upon which a commission of 20 per cent profit is claimed. 74,811.99
4. Materials furnished and work done extrato the contract_ 29, 371.35
5. Materials at the site at the time of forfeiture and appropriated by defendants. 24,478.35
6. Exclusion of Davis, one of the contractors, without just cause, from the management and direction of the work for a year and a half during the life of the contract (necessitating the employment of an extra foreman at §5 per day). 27, 250.00
7. Failure to pay the full amount of 90 per cent of the value of the work at the times specified by the contract, but withheld, to the embarrassment of the contractors in aranging payment for materials and labor, compelling them to borrow money and to pay interest. 2,588. 77
8. An improper charge against the contractors on account of salary of the assistant architect of said buildings, and traveling expenses of the architect. 2,564. 80
These demands are so inconsistent with an apparent adjustment of the matter after the completion óf the work, and are so earnestly urged as just, the items will be considered upon their merits irrespective of the supposed settlement.
Respecting delay'in the execution of the contract, it is argued for the plaintiffs that the advertisement and specifications were complete when submitted for bids, and that the acceptance of the proposals for doing the work constituted a contract without the formalities of a subsequent written agreement; and although it is conceded that the Secretary of the Navy was bound by law to make a formal contract, nevertheless it is insisted that it was his duty not to delay doing so to the damage of the bidders.
The defense is rested upon the ground that plaintiffs did not complete the execution of the bond conditioned for the faithful performance of the work until a few days before the contract was formally executed; and, secondly, that the matter of delay was subsequently submitted to the Secretary of the Navy with a view of securing an extension of time only, which was granted.
The statutes relating to public contracts, some directory, but others mandatory, are not interposed by way of defense to this branch of the case (secs. 3744-3747); but section 3744 of the Revised Statutes provides that "it shall be the dut)*- of the Secretary of War, of the Secretary of the Navy, and of the Secretary of the Interior to cause and require every contract made by them severally on behalf of the Government, or by their officers under them appointed to make such contracts, to be reduced to writing and signed by the contracting parties with their names at the end thereof." This statute is mandatory. (Clark v. United States, 95 U. S. R., 539; South Boston Iron Company v. United States, 118 U. S. R., 37.) Operative as a statute of frauds it makes contracts not reduced to writing and signed by the contacting parties void.
The preliminary advertisements, specifications, and proposals, and acceptance of proposals must be viewed as becoming a part of the statutory contract when a contract was exe cuted as required by statute, but until then onty a part of the negotiations looking to a formal contract. The exception noted in the books that a parol contract wholly or parity executed on one side entitles the party performing' to recover the fair value of his property or services as upon an implied contract for a quantum meruit has no application hero. The findings do not establish either the loss of property or the rendition of service by plaintiffs pending the acceptance of their bid and the formal'execution of .the agreement.
Independent of the statute, while the contractors were no doubt waiting on the Secretary, they were quietty doing so and presumably engaged in business profitable to themselves. They made no effort to complete the preliminaries. It does not appear that any demand was made for the formal execution of the contract or that anjr request was preferred by them to be permitted to proceed, or that they tendered any bond in advance of the time the matter was actually closed. They seem to • have begun work without protest or even an intimation that they had been subjected to an unfair delajq and under these circumstances we must presume that the failure to submit the formal contract for execution at an earlier time did not materially prejudice the interests of the contractors.
Soon after beginning work the contractors asked credit for an unavoidable delay, stating that they had not been able to .start active work on the buildings until November 2, 1888, as on that day the Government engineers furnished them with building lines. The foundation ivas thus laid for an extension of time to complete, but no complaint was made of pecuniary injury resulting from delay to that time. As neither the oiiginal nor amended petition claims anything for failure to •designate building lines in October, this matter will be passed as immaterial.
Extra expenses incurred "on account of enforced delays of the work by the Government, April 22, 1890, to September 8, 1891," are next alleged. This part of the petition is' Indefinite (for which a motion by defendants to make more definite and certain could have been made) in not stating whether the delays complained of were before or after the day first mentioned. Interpreted bjr the proof, however, 'we find the allegation to mean that but for the fault of the Government before April 22, 1890 (and not between the dates given), the contract could have" been completed by that time, and because of inability to complete as -stated, the expenses of plaintiffs subsequently incurred should be charged to the United States.
Though these extra expenses are meant to be charged for the faults of the Government anterior to the date first given, a larger item yet appears partly on the same account, but not limited to any portion of the time of plaintiff's undertaking.
The sum of §74,811.99 is claimed by way of profits lost on. expenditures forced on plaintiffs "on account of mismanagement and delays of defendants." These profits are figured upon an alleged outlay of §374,059.96 in attempting to carry out the contract. Should these be allowed, plaintiffs would thus recoup their alleged losses.
Assuming that the contractors did lose money on their general undertaking, the proof yet must show such fault on the other side as to have caused unnecessary expenditures by plaintiffs before profits or' damages can be given.
The alleged mismanagement of the Government agents is necessarily interwoven with the causes of the alleged delays; but here again we deal with an indefinite complaint, because the pleadings do not show specific acts of mismanagement. Defendants might well have relieved the court of the unnecessary labor of investigating the entire record by a motion to compel plaintiffs to be more definite and certain on this point. Failing in this, however, we- gather the following from the briefs:
First. There is a complaint of the failure of the Secretary of the Navy to make at an earlier time special contracts for the construction of piers for instruments under those buildings where instrument foundations were not covered by the general contract.
Second. A general complaint against the architect and his assistant (more particularly the latter) because of methods adopted in making changes in the buildings.
Third. The abuse of authority in the inspection of work and material.
Fourth. Complaint of the enforcement of the rule provided for .in the contract fot the maintenance of order during the progress of the work.
The rules which govern contracts like this are settled. One is that if a party by his contract charge himself with an obligation possible to be performed, he must make it good, unless his performance is rendered impossible by the act of God, the law, or the other party. Difficulties, even if unforeseen, and however great, will not excuse him. If parties have made no provision for a dispensation, the rule of law gives none, nor; in such circumstances, can equity interpose. (Dermott v. Jones, 2 Wall., 1; Cutter v. Powell, 2 Smith's Leading-Cases 1, 7 Am. ed.)
Another rule is that it is competent for parties to a contract of the nature of the present one to make it a term that the decision of an engineer, or other officer, of all or specified matters of dispute that may arise during the execution of the work shall be final and conclusive, and that, in the absence of fraud or of mistake so gross as to necessarily imply bad faith, such decision will not be subject to the revisory power of the courts. (Kihlberg v. United States, 97 U. S. R., 398; Martinsburg and Potomac Railroad v. March, 114 U. S. R., 549; Chicago and Santa Fe Railroad Co. v. Price, 138 U. S. R., 185; United States v. Gleason, 175 U. S. R., 602.)
The third, fifth, tenth, and twentieth paragraphs of the contract give the Secretary of the Navy, or persons ap-. pointed by him, the power to finally determine "any doubts or disputes arising as to the meaning of anything in the drawings, plans, or specifications," and the contractors bound themselves to abide by his or their decision in the premises.
Paragraph 3 provides for a board of naval officers who had authority to pass upon changes involving an expenditure in excess of §500, and the contractors bound themselves to abide by its determination. Such changes could not be made except upon, a written order of the Secretary of the Navy. For changes involving an expenditure of less than the amount stated an agreement in writing was necessary between the contractors and the architect, but subject to the approval of the Secretary.
Paragraph 5 makes the decision of the architect upon all questions concerning material and workmanship final.
Paragraph 10 provides that no delay attributed b}r the contractors to the Navy Department, its officers, or agents, could be considered by the Secretary of the Navy unless the contractors should at the time of the occurrence of such delay notify the Secretary in writing of the facts and circumstances in each case and of the extent.that the final completion of the work was therebj' delayed.
Some two months after the execution of the principal agreement plaintiffs submitted a bid for a part of tlm work relating to the construction of piers for instruments. This bid was subsequently accepted, but not until the winter was over. In the meantime plaintiffs applied for an extension of time to complete the general undertaking. Their application was made some time in January, 1889, and was rested upon the delaj!" of the Government in deferring the execution of any contract until October, 1888, upon the bid accepted June 29, previously, and because active work on the buildings had been retarded for want of building lines. These two considerations, they stated, lost to them the working season of 1888. This January letter was followed by another, dated February 18, 1889, declaring the impossibility of completing the work within the time first fixed. The extension was formally granted March 1, 1889, the Secretary of the Navy referring in granting the extension to a recommendation of the architect, made in the early part of the winter, that foundations for the buildings ought not to be laid during the winter months, in consequence of which the Secretaiy stated he had "authorized" a delay in the commencement of the work on the building's.
The report of the architect upon which the Secretary based his statement as to the causes for an extension was not made until after the contractors had hied two applications for more time. It bears date Februaiy 27, 1889, and must be read in connection with other findings relating to the situation from the middle of December, 1888, to the close of the ensuing winter. Though the Secretary of the Navjr, on December 19, 1888, indorsed the report of the architect (recommending on December 17, 1888, that work on foundations for instrument piers be deferred until more suitable weather) that work would have to stop and an allowance of time be made to the contractors, and though by indorsement^ February 23, 1889, the Secretary declared that before that time he had verbally authorized a delay of about four months, the findings establish that up to February 23,1889, no formal order had been given to the contractors to discontinue work.
- It is fairly inferable that the contractors accepted the official views of the superintendent of the observatory that the ground was not in suitable condition to proceed with the foundations for instrument piers during the first winter of the undertaking. In neither application for the first extension did they state that they were then being delayed. It nowhere appears that they complained of delay in the acceptance of their bid for the special work relating to foundations for the instrument piers. Their conduct during the first winter indicates a willingness, if not a desire, to wait for the advent of spring to begin the active woi'k of building.
Plaintiffs' progress with the work was unquestionably interrupted from March Í9, 1889, to May 3, 1889, because of the neglect and failure of the Government to locate foundations- for instrument piers to buildings which, under the first contract, plaintiffs were obliged to build. Their work was also interrupted from time to time during the summer of 1889, and until September 5 of that year, because of the neglect and failure of the Government to locate foundations for instrument piers to another building. Finding- x discloses facts which justify the assessment of damages on this account in the'sum of §3,803.
On account of an error in directing the formula of the concrete to be used in the construction of the foundations for instrument piers plaintiffs also had their work interrupted. Finding xl establishes the amount at §668 for this delay and interruption to plaintiffs.
The complaints of mismanagement relate to changes in the plans and the methods adopted for the inspection of work and material. Those complaints involve charges against the architect or his assistant, and really constitute the gravamen of this entire proceeding.
Under the rules stated ante, fraud or failure to exercise an honest judgment must appear in the conduct of the officer involved. The burden of proof is upon plaintiffs to establish such fraud or dishonesty.
The contract is free from ambiguity as to the right of the Government to make changes and to direct inspection of work and .material. It is surprising that charges so grave as those directed against the architects should not appear by specific allegation of fraud or mistake in the pleading. The petition contains a general charge of " mismanagement and delaj^s on the part of defendants," but does not specify a single act of mismanagement except in the most general terms.
The requests for findings of fact are equally general and deficient. They ought not to be taken more seriously than plaintiffs themselves estimate them as grievances. In none of these requests, except bjr implication, can be found charges of fraud or dishonesty against the Government agents. Where, then, are we to begin to upset the decisions of the architects?
Waiving the insufficiency of the allegations, however, the findings show the rejection of brick, the condemnation of marble, a requirement to discharge a careless employee, and,, finally, a complaint against one of the contractors for failure to preserve order himself. It also appears that on May 26, 1890, there was a complaint of the severity of the tests applied to the cement used on the work. On June 7 thereafter, through the Chief of the Bureau of Equipment, the standard was agreed to be lowered. This order, however, was against the advice of the assistant architect. The time consumed in the discussion that led to the modification of these tests did not interfere with operations on other parts of the buildings. As the findings do not establish any substantial pecuniary injury, and as the tests first demanded by the architect seem to have been the result of a desire to get first-class cement used on the work without any desire to injure the contractors, there are no damages to be assessed because of the controversy over these tests.
We have carefully considered everything presented relating to the hindrances caused by the conduct of the 'Government agents, and especially to those relating to the conduct of the assistant architect against whom the complaints are principally directed. But taking the entire proof, we are unable to adopt the views of the aide counsel who have presented this cause so earnestly for plaintiffs. That the architect and his assistant were rigorous in the discharge of their duties; that they require',d the contractors, in the materials and workmanship used and applied, to use and apply that which was "firstclass and of the very best quality unless particularly set forth in the drawings, plans, and specifications," and that the architect's assistant may have been personally disagreeable and sometimes too exacting is probable, but we feel sure that out of the facts found no conclusion of fraud or gross mistake can arise sufficient to necessarily impty bad faith or failure to exercise an honest judgment.
As to the damages claimed for the causes leading to annulment of a contract with an employee named Pink, it maj^ be observed that with an opportunity to show that an injustice had been done in the order directing the discharge of Pink the contractors did not avail themselves of the privilege at that time. The contract provides that " only skilled, competent, and fit Avorkmen shall bo employed on the work, and the arclii-tect may by written notice require the parties of the first part to dismiss any employee he may deem incompetent, careless, or otherwise objectionable on the work." Though the contractors denied that Pink was doing bad work or that they had knoAvledge of threats on his part of personal violence to the inspectors, they expressed a Avillingness to comply Avith the request to discharge him and hoped they would be able to con vince the architect that an injustice was being done. The record does not show that any other effort was made by them to have Fink remain, and having acquiesced in the order of the inspector we must take it for granted that his action was proper.
The eighteenth finding discloses conditions under which one of the contractors was. excluded from active participation in the management. Differences arising between this contractor and an inspector in the methods adopted b}^ the contractor in laying brick, an.altercation ensued, resulting in the use of insulting language of and concerning Davis (the contractor) by the inspector, who' in turn was violently assaulted by Davis. From this occurrence, after some correspondence, an order resulted excluding Davis from active participation in the management. The contractors made no objection to the order at the time, and no intimation of inconvenience or damage appears beyond the emplojTment of a foreman to superintend the laying of brick. Reference to the finding will disclose the circumstances in full.
With the merely personal features of the controvers}' which led to the order we have nothing to do. Disobedience of the proper orders of the inspector did not justify the use of language by him personally insulting. On the other hand, as a subordinate giving orders under a written agreement, he was entitled to protection from the attack of the contractor. The means of protection taken, however, was unenforceable had Davis chosen to resist the order, because of his right to continue in active management of work which he had bound himself wfith others to do within the time fixed bjT the agreement. True, the provision which made the contractors responsible for good order about the structure operated upon them as well as upon their men, and they were bound to observe that provision as well as the other obligations of their agreement. But the}r were not emplojmes within the meaning of that term of the contract which authorized the architect to dismiss employees deemed objectionable.
The contractors did not, however, resist the order. Their letter seems to be something of an admission that Davis was at fault. They made no effort to have him retained in active charge. They made no effort to have him reinstated. He may have proved useful elsewhere in advancing the work. No account is offered as to what use he made of his time in the period of his absence. It was his duty to diligently endeavor to find employment during the time damages are claimed from defendants if he was not actively useful on their own undertaking. Failing to show that.he reasonably exerted himself to prevent or diminish damages, the claim can not be allowed.
On the item on account of interest alleged to have been paid by plaintiffs for defendant's neglect to pay promptly the percentage required by the contract on the value of the work as it progressed it does not appear that these payments were unlawfully withheld. But even if they were, there can be no recovery under the statute for interest paid in borrowing-money to carry on the work. (Rev. Stat., sec. 1091.) Interest presented in the guise of an extra expense or damage in some other form can not be collected. (Myerle, executor, v. United States, 33 C. Cls. R., 1.).
The extra work and material (exclusive of amount claimed for annulment of the Fink contract) for which payment is demanded is fixed at $25,121.35. This and items aggregating $21,178.35 for condemned materials alleged to have been appropriated and used by the Government without compensation to plaintiffs can be considered together, in view of the proceeding taken subsequent to forfeiture of the contract.
If forfeited, the contract provides—
"The Secretary of the Navy shall thereupon cause to be taken and filed a full and complete statement and inventory of all work done or commenced in, upon, or about the buildings, appurtenances, and fittings, and of all materials on hand applicable thereto, and shall cause the same to be duly valued by a board, consisting of not less than five persons qualified by knowledge and experience for the discharge of their duties, to be appointed by the Secretary of the Navy, which board shall proceed, without unnecessary delay, to examine such work and materials and ascertain and declare the fair market value thereof, including a reasonable and customary margin of profit upon so much of the work as shall have been, at the time such forfeiture is declared, satisfactorily performed; and upon such an examination the parties of the first part may attend in person and by counsel and submit such evidence as the board may deem proper.
"In case the Secretary of the Navy shall proceed to complete the work, such procedure shall be without unnecessary delay, and shall be at the risk and expense of the parties of the first part, who shall be chargeable with any increase in the cost of materials or labor incurred by reason of their failure to perform the contract. Upon final settlement of the liabilit}*- of the parties of the first part an account shall be stated substantially as follows:
"The parties of the first part shall be chargeable—
" 1. With all advance payment.
" 2. With the extra cost, if any, of materials and labor and all other extra expenses, if any, over and above the contract price incurred in the completion of the work.
"They shall then be credited with the value of the work done up to the time of suspension, and of the materials on band as ascertained by the board and approved by the Secretary of the Navy under the provisions of the fifteenth clause of this contract, and with such advance payments, if any, as may have been refunded."
An inventory was taken and an appraisement was made by a board duly appointed. The report of the board was approved by the Secretary of the Navy. Upon completion of the buildings an account w'as rendered showing a balance to plaintiffs under their original contract, with authorized additions, of §13,338.88. A statement of the account was approved by the Secretary of the Navjr, and was, on February 16,1891, submitted to plaintiffs. The balance shown by the account was paid to them on the order of the Secretary July 12,1894. Plaintiffs executed vouchers for this payment without protest or claim of any kind that the amount was incorrect.
No penalties for failure to comply with the terms of the contract were assessed against plaintiffs, nor were any claims, of any kind presented to it for allowance. No exceptions were filed to the return of the board before the Secretary of the Navy.
An account rendered and not objected to within a reasonable time is to be regarded by the party charged as prima, facie correct. But five months after the settlement plaintiffs, objected to one of the items only. If this objection is deemed to be within a reasonable time and the other items considered unobjected to, the latter items are to be regarded as covered by the admission (Wiggins v. Burkham, 10 Wall., 129). This authority holds that reasonable time becomes a matter of law when the facts are clear. By acquiescence, then, we think the account rendered became stated for all items in it except the one to which objections were made, and as to that one item the account was also stated if not objected to within reasonable time. It thus devolves upon plaintiffs to impeach the account as far as it may be considered stated by proof of unfairness or mistake in law or in fact.
It is argued that the board erred in basing its estimates of the value of the work done and materials on hand by ignoring the current prices of the cost of the work to plaintiffs; and inasmuch as the labor and materials cost the contractors an amount alleged by them to equal §374,059.96, plaintiffs insist that the estimate of the board, made under the fifteenth clause of the contract, proceeds upon a misinterpretation of its terms.
If this proposition be true, then, assuming the cost to be as stated by plaintiffs and allowing thereon the claim of 20 per cent commission, plaintiffs would receive in return, on account of expenditures and profits alone, a total of §448,870.95. Thus, on contracts entered into by the Government for the sum of §313,164.35 (which includes authorized additions), plaintiffs would have the Government pay §135,706.60 more than it agreed to pay.
Again, on the statement of Avhat they paid out and what they admit to have received, plaintiffs ask the Government to refund their loss, if, in any event, profits on their alleged outlay can not be paid. These would be remarkable results on .a forfeited contract and a handsome premium to pay for work abandoned and failure to meet obligations voluntarily assumed in view of the remission of penalties for abandoning the undertaking.
Next, it is argued that the board erred in basing its estimates of the value of the work done and materials on hand by ignoring the value of the extra work and material.
No findings appear to establish the plaintiffs' losses, because, in the view we have, of the rights of the parties, the cost of the undertaking can not enter into the final calculation. If the cost of the undertaking exceeded the contract price, with authorized additions, any finding based on this excess cost would rest on an immaterial issue, unless by some act or fault of the Government the contractors were defrauded. Such we do not think was the case.
If the cost of labor and material in the open market fixed the fair market value of the labor and material required to be appraised, then the contract price became inapplicable to the work in an incomplete condition. According to this reasoning, for completing the work the Government would pay 8313,164.35, while for not completing it the Government would be liable, if plaintiffs' allegation of current cost be true, for 8374,059.96. If this was the kind of a contract the parties made, plaintiffs'took no risk, but the Government assumed it all in the beginning. If the contract price was profitable, the plaintiffs got the benefit of it; if unprofitable, they lost nothing. This reasoning, however, will not do. The Government did not intend by its contract to hold out inducements to be availed of at any stage of the proceedings for a forfeiture. The fair market value of labor and material subject to appraisement was the contract price for doing certain work into which the labor and materials were put. Plaintiffs understood the contract to mean what the Secretary of the Navy understood it to mean, for they agreed to refund in case of forfeiture, as for liquidated and ascertained damages, a sum equal to the aggregate amount on account of the work to enable the Government to complete the job within the contract price.
The claims for extra work and material rest upon what plaintiffs term the arbitrary disregard of their rights in the orders given by the architect's assistant. It is asked that these items be enforced upon an implied contract for a quantum meruit, and they are discussed by both sides upon their merits irrespective of the apparent disregard of the terms of the contract excluding them from consideration unless the extras were duly authorized.
The architects were without' authority to order changes which increased the cost to the defendants where the expenditures were less than 8500, unless an agreement .setting forth fully the reasons and stating the quantities and prices was first approved by the Secretary of the Navy. The plans could not be changed when the cost exceeded 8600, except upon the written order of the Secretary; and changes involving ex penditures in excess of said sum, with the actual cost, had to be first determined by a board on changes. If extra work was done on the order of a subordinate having no authority to give the order, which increased the cost to plaintiffs,' it is their misfortune. No contract can bo implied, even though defendants may have reaped a material benefit, without proof of an order from the proper authority showing a waiver of the express provisions of the agreement. Extra work done on the order of the local assistant architect who supervised the work was prohibited. The contract could neither be enlarged nor changed by a subordinate, and even in the case of an assurance that additional compensation would be allowed such an agreement is inoperative and void. (Hawkins v. United States, 96 U. S. R., 689; Farris v. United States, 28 C. Cls. R., 332; Driscoll's case 34 C. Cls. R., 624.) The doctrine of qxmntvm mendt applies only when the defendant has derived a benefit from a partial performance of the agreement which he could have abandoned or rejected and which exceeded in value the damages sustained b}r him when the failure to perform is the fault of the plaintiffs.
Various explanations are now given for complying with the orders of the arckitect'in doing the work, now claimed to be extra, without conforming to the requirements of the contract. These explanations are not necessary to be considered to properly determine the cause, but are adverted to to show how little there is in them to excuse failure to follow the express terms of the original agreement.
It is said that at the time of the order for excavating cellars the board on changes had not been appointed. This is true. The excavations for cellars were ordered January 11, 1889, and the board was appointed eleven daj's thereafter. . But plaintiffs' acceptance of the decision of the architect that the cellars were covered by the specifications is conclusive that the decision of the architect at the time was correct. In any event they were not relieved from appealing to the Secretaiy of the Navy if the work was deemed by them extra at the time it was ordered. No pretense of an appeal was made to the board on changes, or to the Secretary, for the alleged changes in the system of ventilation or for plastering ceilings. Eor putting copper on the balcony of the main building the plaintiffs s&j they were denied the right to have the matter brought before the board on changes. The proof is insufficient to establish this. In the matter of changes in the staircase and elevator, though plaintiffs say thej^ were intimidated l\y the architect, the proof is insufficient to establish anjr intimidation. Bespeoting the floor connecting corridor between the small equatorial and main transit rooms, there seems to have been a reference of a difference to the board on changes, but no contract was made between the parties, nor did the Secretary of the Navy have any knowledge of any controversy respecting these two small items. In the matter of extra tile, plaintiffs state that had this matter been submitted to the board on changes the decision would probablj7- have been in their favor. And yet there was no appeal. The other small items are in the same condition.
The findings dispose of claims for the value of material owned by plaintiffs and alleged bj' them to have been appropriated by defendants. The provision investing title in the United States to all suitable material on hand at the time of f orf eiture did not include condemned material. That belonged to plaintiffs. But without clearer proof of the appropriation by defendants of condemned material on the site of the structure at the time of forfeiture we are bound to assume that the process against plaintiffs under which certain material on the ground was sold (and purchased in plaintiffs'interest) included •all they had.
If plaintiffs have shown any merit in the items considered, a material question remains to bo finally determined as to the. effect of the execution of the vouchers and the receipt of the money in supposed final- settlement of claims under the contract.
After reciting that upon final settlement of the liability of the parties an account should be stated, the contract provides: "If a balance shall thereupon appear in favor of the contractors the same shall be paid to and accepted by them in full discharge of all claims under this contract." Whatever, then, was agreed to must be taken and held to be a matter of voluntary adjustment, in its nature final and conclusive, irrespective of any judicial power possessed by the board which made the report; and in this respect the case is not unlike those of United States v. Adams, 7 Wall., 479; Mason v. United States, 17 Wall., 73.
With knowledge of what the board had done, plaintiffs presented no claims for extra work or material, and offered no objections before the Secretary of the Interior to any part of the account. This, we think, they were obliged to do under the contract, for purposes of adjustment, before executing the vouchers and receiving the balance stated to be due in final settlement.
It is true, in general, that payment of part of an admitted sum forms no consideration for the release of the residue. But here plaintiffs executed vouchers which induced the settlement and created the impression that other claims of a like character were voluntarily relinquished. It has been held that a certificate given under such circumstances operated to reléase demands which might have been considered. (Coulter v. Board of Education, 63 N. Y. Rep., 365.) The receipt should be construed in connection with those provisions of the contract which authorized an inventory and an appraisement of all authorized work inclusive of materials on hand and the statement of an account which should include all proper charges against the contractors in default in completing the work. The contract did not contemplate a partial investigation of some of the matters of which the board had jurisdiction nor an approval by the Secretary of part, leaving the other demands on account of the same work open to further investigation and adjustment upon the installment plan. It was the intention of both parties to release all claims for work done under the contract, and if other claims for work existed at that time they were disputable.
The transaction became an accord and satisfaction for the subject-matter considered. (Murphy v. United States, 14 C. Cls. R., 508; 104 U. S. R., 464.) This includes the charge against plaintiffs on account of the expenses of the architects.
It is true that after the settlement plaintiffs took exceptions to the correctness of the charge against them for the assistant architect's salary, and traveling expenses of the architect. But these exceptions were presented to the Secretary of the Navy some months after the close of the transaction, which was an unreasonable time. Plaintiffs predicate their exemp tion from these charges upon the ground that they were not a part of the extra cost of materials and labor and the further ground that the contract did not contemplate any other extra expenses unless the same were over and above the contract price.
The seventeenth paragraph of the contract provides that "in case of annulment the contractors shall be charged with the extra cost, if any, of materials and labor, and all other extra expenses, if any, over and above the contract price included in the completion of the work." These charges were extra expenses. They would not have been incurred had the plaintiffs complied- with their contract. The work was not completed until Februarjr 11, 1893. It was plaintiffs' fault that caused the necessity to keep an assistant architect on the grounds until completion. It is not to be expected that the Government should dispense with the supervision of the principal architect, who was under the necessity to leave his office in New York from time to time to supervise the work of his assistant and the last contractor.. If the alleged overcharge was open for consideration it should not be deducted from the account on plaintiffs' theory that they were not responsible for the extra time consumed to complete. This in effect would make the Government responsible for their default, which was not the case.
The award of the board and the settlement thereunder not being successfully impeached for either fraud or mistake, the settlement became final as to the subject-matter covered by it.
It can not be said, however, that the vouchers were intended to cover those matters not within the province of the board to consider or the jurisdiction of the Secretary to allow. The parties are presumed to have understood their rights and remedies enough to know that claims for damages on account of hindrances and interruptions in the prosecution of the work could not be entertained by the Navy Department. The Secretary was restricted in his approval of the board's award to those matters only appearing upon the face of the account. If plaintiffs have now shown merit in their claims for these hindrances and interruptions, they are entitled to judicial redress. The findings establish the amount of these claims in the sum of §1,471, and for this amount judgment will be entered for plaintiffs. •