Case: GEORGE F. PAWLING & CO. v. THE UNITED STATES
Abbreviation: George F. Pawling & Co. v. United States
Decision Date: 1925-05-11
Docket Number: No. C-1016
Citation: 60 Ct. Cl. 699
Volume: 60
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: GEORGE F. PAWLING & CO. v. THE UNITED STATES
Judges: Geai-iam, Judge; DowNev, Judge; Booth, Judge; and Campbell, Chief Justice, concur.
Pages: 699–712

Head Matter:
GEORGE F. PAWLING & CO. v. THE UNITED STATES
[No. C-1016.
Decided May 11, 1925]
On the Proofs
fiontraet; extra services; loaiver of elakn. — Where a contract prescribes the method by which a claim for extra labor or material shall be presented and that a failure to follow said method shall be deemed a waiver of its claim, plaintiff can not be heard to complain of its failure to follow the method prescribed.
Same; protest. — A protest against signing a contract because of a certain provision therein, followed by its signing, does not entitle plaintiff to relief from said provision.
Same; finding of bureau. — The court will not review a finding by the Bureau of Yards and Docks, made in pursuance of a contract making its action final, except for fraud or error so gross as to imply bad faith.
The Reporter’s statement of the case:
Mr. James Oraig Peacoch for the plaintiff.
Mr. Percy M. Oox, with whom was Mr. Assistant Attorney General Kerman J. Galloway, for the defendant.
The following are the facts as found by the court:
I. On or about September 25, 1918, the Bureau of Yards and Docks, Navy Department of the United States, ‘called for sealed proposals for the construction of seven ordnance storehouses and one central heating plant at the Bellevue Magazine, Washington, D. C., according to specification No. 3435. The proposals were required to be submitted on or before October 14, 1918, and each proposal was required to be accompanied by a certified check for $10,000 “ as a guaranty that the bidder will not, without cause, approved by the Chief of the Bureau of Yards and Docks, withdraw his bid.” The specification No. 3435 also contained the following:
“ Eight-hour law. — Attention of bidders is directed to the Executive order dated March 22,1917, which authorized suspension of the limitation of eight hours’ work on Government contracts. The contractor will have the right, under this contract, to employ labor in excess of eight hours per day, in view of the present emergency conditions; such employment in excess of eight hours, however, shall be paid for at the rate of not less than time and one-half time.”
The plaintiff, a corporation organized under the laws of the State of Pennsylvania, submitted a proposal and a certified check for $10,000. On November 18, 1918, the plaintiff was awarded a contract for doing said work and was notified of said award by a telegram from the Bureau of Yards and Docks which reads as follows:
Washington, D. C., November 18, 1918.
George F. Pawlings & Co.,
1432 South Penn, Square, Philadelphia, Pa.:
Contract thirty-four thirty-five for storehouses and heating plant, Bellevue Magazine, awarded you under item one for four hundred thirty-three thousand two hundred ten dollars. Time hundred sixty days paragraph fifteen of specifications canceled.
Bureau Docks.
II. After the receipt of this telegram the plaintiff entered into a written agreement with the United States whereby it agreed to construct and complete at the Bellevue Magazine, Washington, D. C., seven ordnance storehouses and a building for use as a central heating plant, for which the United States agreed to pay the plaintiff the sum of $433,310, all of which sum, except the sums of $13,560 and $271, has been paid to the plaintiff.
Specification 3435 and the general provisions and drawings therein contained were appended to and made a part of the contract. A copy of said contract, together with the specification 3435, is attached to the petition and marked “ Exhibit A” and is made a part hereof by reference.
III. The contract contained the following clause: “ Paragraph 15 of the said specification No. 3435 is hereby canceled. Paragraph 23 of the General Provisions aforesaid shall apply to the work to be done under this contract.” The plaintiff was notified by telegram that paragraph 15 Avould be canceled, and afterwards signed the contract with the above clause in it. Plaintiff’s president, in his evidence in this case, says that he protested against signing the contract, but did sign because he feared the forfeiture of the plaintiff’s $10,000 check. Under the provisions of the contract the work was to be completed in 160 days. The work was not completed in the time agreed upon, and the plaintiff claims that by reason of the change in the contract it could only work 44 hours a week when it could have worked 60 hours a week under the time set out for work in the proposal, and it asked of the Bureau of Yards and Docks an extension of the contract time of 59 days. The request for this extension of time is contained in a letter from the plaintiff to the Bureau of Yards and Docks, a copy of which is attached to the petition marked “ Exhibit B ” and is made a part hereof by reference. To this letter the Bureau of Yards and Docks replied with a letter, a copy of which is attached to the petition marked “Exhibit O” and is made a part hereof by reference.
IY. The following is found in the special provisions of specification 3435 and is a part of the contract:
“Location. — The building shall be located at the Bellevue Magazine, Washington, D. C., approximately as shown on the drawings. The exact location will be indicated by the officer in charge. The Bellevue Reservation is in the District of Columbia on the east bank of the Potomac River, about 4y2 miles south of the Washington Navy Yard, ami may be reached, by the Baltimore c& Ohio Railroad or by good dirt and macadam road from Washington. There are no good facilities for large unloading from the river.”
Before submitting its proposal and before signing the contract the president of the plaintiff company visited the site, traveled over th'J road which led to it, saw that the tracks of the Baltimore & Ohio Railroad ran alongside of the reservation, and that there was a completed spur track running to the edge of the reservation. He made no inquiry from any officer of the Baltimore & Ohio Railroad as to whether or not the spur track could be used by his company, nor did he make any inquiry of the United States Railroad Administration as to whether or not the spur could be used by his company. After the contract was signed and the work on the site begun the plaintiff made repeated requests to the railroad company to be allowed to unload from the spur, but owing to the operating conditions on its line, which was single main track, the railroad would not permit the use of the spur until it had been extended within the reservation, which was not done until March 24, 1919. Regular car service was then begun. The plaintiff began work on the contract on December 16, 1918, the date of the delivery to it of the signed contract; The plaintiff asked an extension of the contract time of 97 days on account of the fact that it was not able to use the aforesaid spur from December 16, 1918, to March 24, 1919. Thi.s request was denied by the Bureau of Yards and Docks, but subsequently the said bureau did grant the plaintiff an extension of 15 days on this accopnt.
Whether the macadam and dirt road leading to the reservation was more than 4% miles long does not appear. The plaintiff used it and improved it with its own labor and materials, but how much was expended -by the plaintiff for this purpose does not definitely appear.
Y. Paragraph 18 of the specification provided that certain drawings accompanying the specification would form a part of the contract. Among them was Bureau Sheet No. 78913, showing location plan, contours, sewers, and water. A c'-rtain point thereon was marked “Water to this point by D. of C.” The District of Columbia would not allow water to be taken at this point for use at the reservation. There was nothing in the specifications which obligated the Government to supply water for the use of the plaintiff during tbe construction period. The plaintiff made no inquiry before it made its proposal or before signing the contract as to whether or not the District of Columbia would allow water to be taken from the point indicated to the reservation. The District of Columbia would not allow the water to be taken, and tlv plaintiff found it necessary to drill an artesian well, erect a tank and tower, and put in piping in ord r to secure the water necessary to be used in the construction of the buildings. This caused delay, and the plaintiff asked for an extension of time of the contract of 42 days on this account, which was refused by the Bureau of Yards and Docks.
YI. The delay in completion of each of the buildings, Nos. 1 to 8, inclusive, as determined by the Bureau of Yards and Docks, was 58, 74, 30, 36, 0, 3, 13, and 12 days, respectively, a total of 226 days, on which liquidated damages at $60 per day per building, aggregating $13,560, were with held.
The Bureau of Yards and Docks at various times during the performance of the work granted extensions of time to the plaintiff and finally fixed the delay with which the plaintiff is charged at 226 days as per the following table:
If the extension of time of 97 days asked for by the plaintiff had been granted all the buildings would have been completed within the contract time.
If the extension of 59 days had been granted all of the buildings except No. 2 would have been completed within the contract time and the delay on that, building would have been 15 clays and the liquidated damages $900.
If the extension of 42 days had been allowed all of the buildings except Nos. 1 and 2 would have been completed within the contract time, and the delay on those buildings would have been 16 and 32 days, respectively, and the liquidated damages $2,880.
Paragraph 12 of the specification, which is a part of the contract, provided as follows:
“Extension of time. — For causes of the character hereinafter enumerated extensions of time for the completion of the work may be allowed. Should the contractor at any time consider that he is entitled to an extension of time for any cause, he must submit in writing to the officer in charge an application for such extension, stating therein the cause or causes of the alleged delay. The officer in charge will refer the same at once, with full report and recommendation, to the Navy Department, Bureau of Yards and Docks, for consideration and for such action as the circumstances may warrant. The failure or neglect of the contractor to submit, as above provided, his claim for extension of time within 30 days after the happening of the cause or causes upon which his claim is predicated, shall be deemed and construed as a waiver of all claims and right to an extension of time for the completion of the work on account of the alleged delay, and the contractor agrees to accept the finding and action of the Navy Department, Bureau of Yards and Docks, in the premises as conclusive and binding.”
VII. The time for completion of the several buildings as extended by such extensions as were allowed by the Bureau of Yards and Docks expired on dates from June 6, 1919, to June 16, 1919. Change orders were-issued from time to time. The Chief of the Bureau of Yards and Docks approved for payment on account of these changes the net amount of $13,667.24, and the plaintiff accepted that sum in full satisfaction of his claim for compensation therefor and made no request for extension of time on account of said changes. The contract provides as follows:
“Changes.- — The Government reserves the right to make ■such changes in the contract, plans, and specifications as may be deemed necessary or advisable, and the contractor agrees to proceed with such changes as directed in writing by the Chief of the Bureau of Yards and Docks. The cost of said changes shall be estimated by the officer in charge, and if less than $500 shall be ascertained by him. If the cost of said changes is $500 or more, as estimated by the officer in charge, the same shall be ascertained by a board of not less than three officers or other representatives of the Government. The cost of the changes as ascertained above, when approved by the Chief of the Burean of Yards and Docks, shall be added to or deducted from the contract price, and the contractor agrees and consents that the contract price thus increased or decreased shall be accepted in full satisfaction for all work done under the contract: Provided, That the increased cost shall be the estimated actual cost to the contractor at the time of such estimate and that the decreased cost shall be the actual or market value at the time the contract was made, both plus a profit of 10 per cent.”
VIII. The plaintiff makes the following claims for losses which it alleges it incurred because it was not granted the extensions of time for which it asked:
1. From Dec. 9, 1918, to Mar. 24, 1919, the plaintiff was subjected to heavy overhead expenses consisting largely of salaries and wages of the general superintendent, bookkeeper, timekeeper, assistant superintendents, the efficiency of whose services was, however, for the reasons already set forth, so greatly reduced that the plaintiff in.urred a loss of_$5,161.66
2. The barracks were operated at a total loss of $3,084.18, which would, in the absence of the delays already set forth, have been reduced by at least_ 793. 08
3. The barracks cost the plaintiff $22,000, and for the reasons already set forth it was required to have this money invested two months longer than would otherwise have been necessary, resulting in a loss on account' of interest of_ 220. 00
4. Even after Mar. 24, 1919, when freight cars could be switched on the reservation, locomotives were not permitted to leave the main track because of the poor condition of the tracks and roadbed on the reservation. The plaintiff was therefore compelled to buy a Cleveland tractor for moving the cars, an expense which would have been unnecessary but for reasons already set forth. The tractor cost $1,310, and on completion of the work could be sold for only $280, leaving a loss of_ 1, 030. 00
5. The cost of trucking necessary as a result of lack of railroad facilities was_ 978. 75
6. For a considerable period immediately after Mar. 24, 1919, the plaintiff was compelled to unload large quantities of materials directly inside of the reservation line and to haul and drag the materials over • the rough and yielding soil, all of which added to the cost of handling the same to the extent of about_ 500. 00
7. During the progress of the work the plaintiff was compelled’ to repair and maintain the roadway connecting the reservation with the main road to Washington, the expense of which labor and material was about_ 429. 00
8. Because of delays for the reasons already set forth the plaintiff was unnecessarily subjected to car demur-rage paid to the Baltimore & Ohio Railroad amounting to- $429. 00-
9. Because of delays for the reasons already set forth the plaintiff’s contractor’s plant and equipment (consisting of 1 automobile truck, 2 automobiles, 2 concrete mixers, compete tower equipment, brick hoist, complete sawmill with table, scoops, graders, wheel- • barrows, concrete buggies, and a great number of small, tools) was tied up unnecessarily for 105 days at a loss of_ 6, 300. 00
10. The tank tower and well equipment installed by the plaintiff represented a cost of $3,399.62, for which the United States paid the plaintiff only $2,123.47, leaving a balance still due of_ 1, 276.15'
11. The tank and equipment had to be taken down and shipped to Philadelphia at a cost of (no salvage being received from sale of any of this equipment)_ 500. 00
17, 438. 64
The plaintiff also demands a profit of 10 per cent on the aforesaid amount of $17,438.64. None of these claims was asserted prior to the filing of the petition in this court, and only July 9, 1921, the plaintiff executed a qualified release-in which it accepted the sum of $21,856.51, and agreed to-remise, release, and forever discharge the Government of' and from any and all claims and demands whatsoever in law and equity that it had or may have under or by virtue of said contract, excepting only its claim for the refund of $13,560, deducted by the Government as liquidated damages.. The said release is as follows:
“ Under Contract No. 3435, dated November 15, 1918, with George F. Pawling & Co., for seven ordnance storehouses- and a building for use as a central heating plant at the-Bellevue Magazine, Washington, D. C.
“Whereas the contract of November 15, 1918, by and between George F. Pawling & Co., a corporation of the State of Pennsylvania, party of the first part, hereinafter called the contractor, and the United States, party of the second part, hereinafter called the Government, for the construction and completion of seven ordnance storehouses and a building for use as a central heating plant, together with plumbing, heating, and electric lighting systems and a radial brick chimney at the Bellevue Magazine, Washington, D. C., contemplates that final payment thereunder shall not be made until the contractor shall have executed and delivered a final release in such form and containing such provisions as shall be approved by the Navy Department of: claims against the Government arising under or by virtue of said contract; and
"‘Whereas the work under .said contract has been completed and accepted; and
u Whereas the contractor desires to be paid the balance admitted by the Government to be payable for said work.and at the same time to reserve its claim for the sum of $13,560 deducted by the Government from the contract price. as liquidated damages for delay in the completion of said work, and the Government is willing to pay said balance and permit the excepting of said claim from the operation of the release of claims contemplated by said contract, provided it receives adequate consideration therefor, which consideration it has fixed at 2 per cent of the amount of said claim, or $271.20;
“ Now, therefore, in consideration of the premises and for and in consideration of the sum of twenty-one thousand eight hundred fifty-six and 51/100 dollars ($21,856.51), lawful money of the United States (said sum being the balance admitted by the Government to be payable for said work, namely, $22,127.71, .less the sum of $271.20 deducted with the consent, hereby given, of the contractor as consideration moving to the Government for the present payment of said sum of $21,856.51, coupled with the exception from the operation of this release of claims of said claim for refund of liquidated damages), to the contractor in hand paid by the Government, the receipt of which is hereby acknowledged, the contractor does hereby, for .itself and its successors and assigns, remise, release, and forever discharge the Government of and from any and all claims and demands whatsoever in law and in equity that the contractor has or may have under or by virtue of said contract; expressly excepting, however, and excepting only, its said claim for the refund of the s\\m of $13,560 deducted by the Government as liquidated damages, which said claim the contractor hereby expressly reserves. It is, hoiyever, distinctly understood that nothing in this release shall operate as, or be construed to be, a recognition or admission by the Government of the-validity of said reserved claim or any part thereof.”
IX. At the time settlement ivas made under the contract the plaintiff declined to sign a general release in favor of- the Government because it had a claim then pending for the refund of $13,560 liquidated damages, and before the Government would pay the plaintiff the amount which the Government admitted to be due on said contract the plaintiff was compelled to consent to the withholding of 2 per cent of the amount of said claim; that is to say, the sum of $271.20, the Government stating that this 2 per cent deduction was made pursuant to a custom of the Bureau of Yards and Docks to require a contractor to consent thereto upon the Government paying over the balance without requiring a general release from such contractor. Such custom not being authorized by any statutory authority, plaintiff is entitled to recover the amount deducted.
■The court decided that plaintiff was entitled to recover, in part.
Appealed.

Opinion:
Hat, Judge,
delivered the opinion of the court:
The facts are very fully set out in the findings, and it is not necessary to recapitulate them here.
As to the claim of the plaintiff for the sum of $17,438.64 and 10 per cent thereof as profits, we do not think the plaintiff can recover in the face of the release which it executed on July 9, 1921, wherein it agreed to discharge the Government from any and all claims and demands whatsoever that it had or may have under or by virtue of its contract with the Government. The claims which make up the sum •of $17,438.64 were never asserted prior to the filing of the petition in this court; they were never brought to the attention of the department, and they were, not reserved or mentioned at the time of the release above referred to, which was nearly two years after the contract had been completed.
Chief Justice Campbell, speaking for the court in the case of Poole Engineering Co. v. United States, 57 C. Cls. 232, 234, says:
"When a contract has b:en performed and a stipulated consideration has been paid, the general presumption is that the transaction is a closed one. If there be claims on the part of the Government which should limit the amount of a stipulated payment necessary to close the transaction, they are asserted and, generally speaking,'are deducted if they are known at the time. If there are claims on the part of the contractor which affect the amount due and payable to him under the terms of the contract, or for an alleged breach of it, they should be asserted at or before the time a settlement is made. The Government is entitled to know, when it makes what it believes to be a final payment on its contract, what claims a contractor intends to assert against it on account of the contract. It is its right to know whether the supposed final payment is in fact final and conclusive. It should not be required to wait for this information until such time as it may .suit the convenience of the other party to bring his suit in the Court of Claims. If suit can be brought in two years, or even in less time, it may be brought in six years, the period prescribed by the statute of limitations. In the meantime the Government's witnesses may become .scattered or have failed to keep records they otherwise would preserve and its means of defense destroyed or greatly impaired. The doctrine implied in the plaintiff's theory of this case is that no settlement which the authorized agents of the Government having the contract in charge may make is final or conclusive on the contractor if he has kept silent about a claim for unliquidated damages growing out of what he conceives to be a breach of the contract. It ha.s been frequently said that if a party keeps silent when he ought to speak he will not be heard thereafter to speak when he ought to remain silent."
This reasoning is particularly applicable to the case at bar.
The first nine items of this claim are of such a character that they might have been claimed under paragraph 18 of the general provisions of the contract. This paragraph reads as follows:
"Extras. — The contract price shall cover all expenses, of whatever nature or description, connected with the work to be done under the contract. Should the contractor at any time consider that he is being required to furnish any material or labor not called for by the contract, a written itemized claim for compensation therefor must be submitted by him to the officer in charge, who will refer the same at once with full report and recommendation to the Nav.y Department, Bureau of Yards and Docks, for decision and formal order covering approved items, if any. The failure or neglect of the contractor to present as above his claim for material or labor alleged to be extra within 60 days after being required to furnish or perform the same shall be deemed and construed as a waiver of all claim and right to additional compensation for the furnishing or performance of the alleged extra material or labor, and the contractor agrees to accept the finding and action of the Navy Department, Bureau of Yards and Docks, in the premises as conclusive and binding."
The plaintiff failed to comply with this provision of the contract, and by so doing Avaived its rights, if it had any, and. can not now be heard to complain of its own negligence. The' other two items of this claim come under paragraph 17 of the general provisions of the contract and can not be allowed, as the plaintiff accepted, in full satisfaction, the sum of $2,123.47 as compensation for the change covered by these last two items.
We come now to consider the claim of the plaintiff for $13,560 liquidated damages which have been charged to it and deducted by the Government from the contract price.
The plaintiff alleges that the Government made certain misrepresentations relative to the accessibility by railroad and road of the reservation whereon the contract work was to be performed, and that by reason of these misrepresentations it was delaj^ed in the performance of the work 97 days, and that the Bureau of Yards and Docks illegally refused to grant this extension of time.
The specification upon which the plaintiff,-relies to show this alleged misrepresentation is found in Finding IY. The statement that the reservation " may be reached bjr the Baltimore & Ohio Railroad" is absolutely true; there is no misrepresentation about it and it will not bear the construction placed upon it by the plaintiff that the Government guaranteed that the railroad company would operate its road in such manner as to allow the plaintiff to haul its supplies over the road and into the reservation. Moreover, the president of the plaintiff company before submitting its proposal went upon the site of the work, saw the railroad tracks and the spur, and chose to assume that they could be used for its purposes. He made no inquiry of the railroad company or of any of its officers, something which a man of ordinary business prudence would have done, and signed the contract without ascertaining, as he could have done, the conditions under which his company would have to proceed with the work of getting its materials to the site. The Government concealed nothing, said nothing which was not true, and did not in any way deceive the: plaintiff. The cases cited 'by plaintiff's counsel to uphold this contention are not in point.
The same reasoning applies to the alleged misrepresenta-' tion as to water. Upon the drawings appeared the statement, "Water to this point by D. C." This statement was a true statement, and there was nothing in the contract to justify the inference of the plaintiff that the Government would extend the water system to the reservation or that it in any way controlled the use of the water. The plaintiff made no inquiry about it, either of the officers of the District of Columbia or of the Bureau of Yards and Docks, before it made its proposal or signed the contract.
When the plaintiff made its proposal the specifications provided that the contractor could employ labor in excess of eight hours per day in view of the emergency conditions then existing. When the proposal of the plaintiff was accepted the plaintiff was notified by telegram that this paragraph was canceled and that paragraph 23 of the general provisions of the contract " shall apply to the work to be done under this contract." The contract itself contained a provision canceling the provision in the specifications providing that labor could be employed in excess of eight hours per day. The plaintiff, knowing this, signed the contract. It now says that it protested against signing the contract, but finally did sign it because it feared the forfeiture of the $10,000 check which it had placed in the hands of the Government in accordance with the provisions of the specifications. The specifications, paragraph 199, provided that each proposal should be accompanied by a certified check payable to the Chief of the Bureau of Yards and Docks for the sum of $10,000 as a guaranty that the bidder would not, without cause approved by the Chief of the Bureau of Yards and Docks, withdraw his bid. The plaintiff, after being fully informed of the fact that the contract contained a clause which changed the specifications, elected to sign it and chose not to exercise its right to withdraw its bid. Certainly, if its present assertions are true with respect to what it has suffered by reason of this change in the contract, it had good cause to withdraw its bid; but, not having done so, it can hot now be heard to complain.
Moreover the contract provided that "extensions of time for the completion of the work may be allowed," and the plaintiff agreed "to accept the finding and action of the Navy Department, Bureau of Yards and Docks, in the premises as conclusive and binding." The Bureau of Yards and Docks acted upon the requests of the plaintiff for extension of time and allowed some extensions of time and disallowed others. This decision of the Bureau of Yards and Docks must be treated as final by this court, and we can not review it unless there has been fraud or such gross error as to imply bad faith or that there has been a failure to exercise an honest judgment in the premises. Brinck v. United States, 53 C. Cls. 170, 176, 177. It does not appear from the evidence in this case that there ivas any fraud, or that the action of the Bureau of Yards and Docks was based on such gross error as would imply bad faith, or that there was any failure to exercise an honest judgment in arriving at the decision in this case.
The petition of the plaintiff will be dismissed as to all the items of its petition except the item of $271.20, for which a judgment will be entered.
Geai-iam, Judge; DowNev, Judge; Booth, Judge; and Campbell, Chief Justice, concur.