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MARYLAND DREDGING AND CONTRACTING COMPANY v. UNITED STATES

May 8, 1916

MARYLAND DREDGING AND CONTRACTING COMPANY
v.
UNITED STATES



APPEAL FROM THE COURT OF CLAIMS

White, McKenna, Holmes, Hughes, Van Devanter, Pitney, McReynolds

Author: Holmes

[ 241 U.S. Page 186]

 MR. JUSTICE HOLMES delivered the opinion of the court.

This is an appeal from a judgment of the Court of Claims dismissing the claimant's petition upon demurrer. On August 15, 1908, the claimant made a contract with Captain Brown of the Engineers, acting for the United States, to excavate a channel from Beaufort Inlet to Pamlico Sound through Core and Adams Creeks in conformity with specifications made part of the contract. It was approved on September 10 and required the work to be begun within forty-five days after date of notification of approval, September 14, and to be completed within eighteen months. The work not having been finished on time $7,320 of the agreed compensation was withheld as liquidated damages and $210.50 as additional costs of superintendence and inspection, $7,530.50 in all, for which sum this suit is brought.

The petition alleges that after getting through Core Creek to and through the headwaters of Adams Creek to a point on tide water about five miles from its mouth, where for a mile and a half it averages more than 1200 feet wide and for the next three miles and a half 2500 feet, the stumps and roots of a submerged forest were encountered at about eight feet below the bottom of the water, which made it impossible to do the work with the ordinary machinery and in the ordinary way, or to finish the work by the time agreed. It is alleged that the forest was submerged by some abnormal force and violence of the elements, and that it could not have been discovered by the ordinary methods of inspection and was not discovered in fact, although the claimant and others and the Government had exercised every known precaution and had made exhaustive examinations with the utmost care and skill. The petition sets up that this was a prevention 'by abnormal force and violence of the elements' within

[ 241 U.S. Page 187]

     the contract and that the claimant also was entitled to an allowance of time under a clause in the specifications stating that the time is considered sufficient 'unless extraordinary and unforeseeable conditions supervene.' It also sets up that an extension of time was recommended by Captain Brown although disallowed by the Chief Engineer. Finally the petition alleges that it was known by the Government officials when the contract was made that the portion of the canal excavated by the claimant could not be used to any practical extent for commercial purposes until adjoining portions of a proposed line were completed and that the additional work was not provided for or seriously contemplated within the time of the claimant's work. It is concluded that although the contract purports to provide for liquidated damages fixed at $20 a day, yet in the circumstances it really imposed a penalty and that the Government has no right to retain the sum.

As has been implied already the contract agreed "that time shall be considered as an essential feature of this contract, and that in case of the failure upon the part of the party of the second part to complete this contract within the time as specified and agreed upon that the party of the first part will be damaged thereby, and the amount of said damages being difficult, if not impossible of definite ascertainment and proof, it is hereby agreed that the amount of said damages shall be estimated, agreed upon, liquidated, and fixed in advance, and they are hereby agreed upon, liquidated, and fixed at the sum of twenty (20) dollars for each division for each and every day the party of the second part shall delay in the completion of this contract" and the claimant agrees to pay that amount 'as liquidated damages, and not by way of penalty.' It is agreed further that the United States shall have the right to recover all costs of inspection and superintendence incurred by it during the period of delay, and that it may

[ 241 U.S. Page 188]

     retain all the above-mentioned sums from any moneys falling due under the contract.

There is a proviso that if the claimants 'shall by strikes, epidemics, local or state quarantine restrictions, or by the abnormal force or violence of the elements, be actually prevented from completing the work . . . at the time agreed upon' without contributory negligence on his part 'such additional time may, with the prior sanction of the Chief of Engineers, be allowed him'. . . 'as, in the judgment of the party of the first part, of his successor, shall be just and reasonable.' As we have intimated, the specifications also state that the time allowed is considered sufficient 'unless extraordinary and unforeseeable conditions supervene.' The claimant further thinks that he finds some support for his argument in a provision that 'solid rock, large boulders, and compact gravel will not have to be removed at the prices bid for ordinary excavation. If such materials should be encountered their removal, if required by the engineer, will be done under special agreement and paid for as extra work.' On the other hand the claimant was required to remove all trees and "The channel must be cleared of all snags, logs, roots, stumps, or wreckage that project into or encroach in any way upon the cross section, . . . the cost of same being included in the unit price bid for excavation." The claimant invokes a provision that the engineer's decision as to quality, quantity and interpretation of the specifications shall be final; and this ends the statement of his case.

It is hopeless to argue against the provisions that we have recited, and the further express warning that each bidder 'is expected to examine and decide for himself, as no allowance will be made should any if it prove to be otherwise than as stated,' except as above recited with regard to solid rock, &c. It is ...


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