Nos. 498, 499.

223 U.S. 695 (1912)


Supreme Court of United States.

Decided March 11, 1912.

Attorney(s) appearing for the Case

Mr. William H. Robeson, Mr. Benjamin Carter and Mr. F. Carter Pope for appellant.

Mr. Assistant Attorney General John Q. Thompson and Mr. Philip M. Ashford for the United States.

MR. JUSTICE LAMAR, after making the foregoing statement, delivered the opinion of the court.

The plaintiff sued the United States in the Court of Claims for damages sustained by him while carrying out a contract to build a jetty in the harbor of Aransas Pass, Texas. There were nine items in his claim which aggregated $45,950. The court rendered judgment in his favor for $14,732.05. Both parties appealed — the contractor on the ground that he was awarded too little, and the United States on the ground that he was not entitled to recover anything whatever. The principal contention related to the right of the plaintiff to recover damages occasioned by the refusal of the inspector to permit blocks to be laid on the jetty as the work progressed. The contract provided that these blocks should be put in place when "in the judgment of the United States agent in charge" the core or mound had sufficiently consolidated. Until the agent determined that the core had settled, the contractor had no right to do this part of the work. No matter how long the delay or how great the damage, he was entitled to no relief unless it appeared that the refusal was the result of "fraud or of such gross mistake as would imply a fraud." Martinsburg & P.R. Co. v. March, 114 U.S. 549; United States v. Mueller, 113 U.S. 153.

But the very extent of the power and the conclusive character of his decision raised a corresponding duty that the agent's judgment should be exercised — not capriciously or fraudulently, but reasonably and with due regard to the rights of both the contracting parties. The finding by the court that the inspector's refusal was a gross mistake and an act of bad faith necessarily, therefore, leads to the conclusion that the contractor was entitled to recover the damages caused thereby.

The defendant claims that the plaintiff lost his right to recover because he failed to appeal to the Engineer in Charge, at Galveston, or to the Chief of Engineers, in Washington. But there was no requirement or provision for appeal in the contract. The clause relied on by the Government relates to the duty of inspection and acceptance, making the decision of the Engineer in Charge conclusive as to the quality and quantity of work and material. That part of the agreement had no reference to the settlement of the core. Whether it had sufficiently consolidated involved the determination of a matter of fact, varying from day to day. The contractor had to act or refrain from acting when the decision was made. That matter was expressly left to "the judgment of the United States agent in charge." The contractor in submitting to his decision did not lose his right to recover damages occasioned by the refusal to permit the crest blocks to be laid, when, as found by the court, this refusal was gross error and an act of bad faith.

The court, therefore, declared in plaintiff's favor on this issue. He appeals, however, on the ground that the court only allowed him $11,908.90, being for expenses and loss of time for sixty days, insisting that he was entitled to recover $28,953 as damages directly caused by this delay.

This claim is based on the fact that there were 392 days between the beginning and the completion of the work. But on account of Sundays, holidays and storms, there were only 131 working days. Of these, 58 were after April 30, 1904 — when, for the first time, the inspector permitted the crest blocks to be laid. The contractor contends that as it only took him 58 days after May 1, when the permission was given, to complete the work, and, as the court finds, that he was delayed for 60 days before the permission was given, it is evident that he could have finished the work before May 1, and is therefore entitled to recover the value of his own time and all the expenses for inspection and labor which were incurred after that date.

The findings of fact do not require any such conclusion. Prior to May 1 the contractor worked 73 days out of 247. But it does not appear how many of these workings days there were between August 18, 1903, when he began construction, and December, 1903, when he first applied for permission to lay the crest blocks. Neither is it shown how many workings day there were between the date of the first refusal and the first permission to lay the blocks; nor on how many of such working days the contractor was able to do labor of another character on the jetty. In the absence of such data it is impossible to verify plaintiff's calculations. The burden was on the contractor. If the evidence would have sustained his present claim he was bound to have applied, in due season, for additional findings of fact by the court. Our decision must be predicated on what appears in the present record. Inasmuch as the court found that $162.70 was the average daily expense, and assessed plaintiff's damage at 60 times that amount, it is evident that it considered that the contractor had been delayed for 60 average days, and not for 60 working days. He is, therefore, entitled to judgment for $9,762 expenses, $646.92 inspection charges, and $1,500 found to have been the value of his own time for that period of sixty days.

The other findings in his favor for items aggregating $2,822 must be reversed, and the cross appeal of the Government sustained.

The greater part of this sum was for loss and delay arising from the inspector's rejection of 90 large blocks as not complying with the specifications. The fact that the court gave judgment in Ripley's favor indicates that it was of opinion that the agent had made an improper decision. But so far as appears his only error was in construing the contract strictly, according to its terms, instead of adopting a method of mean or average measurement for which the contractor contended. The supplemental agreement was not retroactive so as to give the plaintiff a cause of action for the prior rejection, even though thereafter a different method of measurement was permitted.

The balance of the amount allowed the plaintiff was by way of returning the expenses of inspection which had been charged against him, during the suspension of the work while the tug was grounded on the bar and the contractor's force disorganized on account of the yellow fever epidemic. The contract provided that the expenses of inspection might in some cases be remitted but this could only be with the prior consent of the Chief of Engineers. There is no finding that such consent was given.

But the error in entering judgment in Ripley's favor as to any of these items, and the propriety of disallowing the others for which he sued arises from the fact that the officer's decision was binding. All these claims relate to matters which under the contract were submitted to the engineer. There is no finding that he acted in bad faith. Indeed, it is not even found that the decisions were erroneous, though that is implied. But the contract did not contemplate that the opinion of the court should be substituted for that of the engineer. In the absence of fraud, or gross mistake implying fraud, his decision on all these matters was conclusive.

On the findings of fact the plaintiff is entitled to recover $11,908.90, with interest as provided in Rev. Stat., § 1090. The judgment of the Court of Claims must be so modified and



1. See order on p. 750, post.


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