Opinion · Supreme Court of the United States
United States v. Gleason
175 U.S. 588
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1900-01-08
- Topic
- general
How later courts describe this case
- re-statirig test as requiring “allegation and proof of bad faith, or of mistake or negligence so great, so gross, as to justify an inference of bad faith”
Citator
UpLaw has not yet analyzed United States v. Gleason. The absence of a flag is not a finding that it is good law.
- Cited by
- 186 opinions
Headnotes
- Contracts Law — Impossibility A party who by contract assumes an obligation that is possible to perform is bound to perform it unless performance is rendered impossible by the act of God, by operation of law, or by the act of the other party; unforeseen difficulties, however great, will not excuse nonperformance, and where the parties have made no provision for a dispensation, neither law nor equity will supply one.
- Contracts Law — Finality of Engineer's Decision Parties to a government construction contract may agree that the decision of an engineer or other designated officer on specified matters of dispute arising during performance shall be final and conclusive, and in the absence of fraud, or of mistake or negligence so gross as to necessarily imply bad faith, that decision is not subject to the revisory power of the courts.
- Contracts Law — Extension of Time — Engineer's Discretion Where a construction contract provides that additional time may in writing be allowed for completion if the contractor is prevented by freshets, ice, or other force or violence of the elements, and by no fault of his own, the right or privilege of the contractor to a further extension of time depends upon the judgment of the engineer in charge when applied to; the engineer decides both whether the failure to complete was attributable to the excepted causes rather than the contractor's own fault, and, if so, what additional time is just and reasonable, and the words "may be allowed" are not to be construed as "shall be allowed," because the provision exists to prevent dispute and uncertainty and vests the determination in the officer's discretion. 175 U.S. 588 (opinion of the Court)
- Contracts Law — Engineer's Decision — Refusal of Extension Is Final Where the granting of additional time by the engineer under a government construction contract would be final and irrevocable, his refusal to allow it is equally final; the privilege of procuring an extension is conditional on the officer's action whether he grants or refuses it, and the contractor may not substitute an absolute right to have the question of prevention, whether by freshets or by fault, determined by the courts in place of an appeal to the officer's discretion and decision. 175 U.S. 588 (opinion of the Court)
- Contracts Law — Engineer's Decision — Conclusiveness Where a contract expressly provides that a matter shall be ascertained and fixed by a designated government officer, his action in the premises is conclusive upon the contractor as well as upon the government, and the contract, being free from ambiguity, permits no exposition contrary to its express words; his determination may be set aside only for fraud or such gross mistake as would necessarily imply bad faith or a failure to exercise an honest judgment.
- Contracts Law — Consideration In a bona fide exercise of the discretion conferred upon him, an engineer in charge, when applied to for a further extension of time under a government construction contract, may properly consider the conduct of the contractors through the entire scope of their past performance thereunder, including delinquencies during prior periods and the futility of extensions theretofore granted, in deciding what weight to give their promises as to the future and whether previous grants of extension had produced the efforts the circumstances required; an indefinite succession of extensions is not within the contemplation of such a contract. 175 U.S. 588 (opinion of the Court)
- Contracts Law — Implied Covenant of Good Faith In the absence of evidence of bad faith on the part of the engineer in charge, a court is required to presume that he acted with due regard to his duty as between the government and the contractors; a mere allegation that the engineer's refusal to grant an extension was wrongful and unjust, because he decided the submitted issue against the contractor, is insufficient to upset his judgment, and the courts may not revise that judgment by their own views except upon allegation and proof of bad faith, or of mistake or negligence so gross as to justify an inference of bad faith. 175 U.S. 588 (opinion of the Court)
- Contracts Law — Waiver Where no actual damage or loss is definitely shown to have been suffered by the government from the noncompletion of the work, and no forfeitures of retained percentages were declared at the time of the several extensions, the right to such forfeitures may be deemed to have been waived, and the contractor may recover the retained percentages of compensation for work actually done and accepted. 175 U.S. 588 (opinion of the Court)
UNITED STATESv. GLEASON,175 U.S. 588(1900)
20 S.Ct. 228
UNITED STATESv. GLEASON.
APPEAL FROM THE COURT OF CLAIMS.
No. 59.
Argued December 7, 8, 1899.
Decided January 8, 1900.
THIS appeal is from a decision of the Court of Claims covering
two suits in that court, Nos. 17,782 and 17,783, consolidated and
heard and decided as one suit, in which judgment was entered for
the plaintiffs.
The first suit was on a contract entered into August 4, 1885,
between Lieutenant Colonel W.E. Merrill, Corps of Engineers,
United States Army, for and on behalf of the United States, and
John R. Gleason and George W. Gosnell as partners, for the
excavation of 110,000 cubic yards, more or less, of rock, in the
improvement of the head of the Louisville and Portland Canal at
Louisville, Kentucky, which excavation was called, in this
litigation, the Upper Work.
The second suit was on a contract entered into January 13,
1887, between Major Amos Stickney, of the Engineer Corps of the
United States Army, for and on behalf of the United States, and
the firm of Gleason Gosnell, for the excavation of 124,000
cubic yards of earth and 13,000 cubic yards of rock, more or
less, for enlarging the basin near the lower end of the same
canal, and called herein the Lower Work.
Page 590
In the first suit, upon findings of fact and law, there was a
judgment in favor of the plaintiffs for retained percentage in
the sum of $3011.99, and for net profits which they would have
made if they had been allowed to complete the work in the sum of
$60,537.50. In the second suit there was a judgment for retained
percentage in the sum of $2401, and for net profits, if the
contract had been carried on to completion, in the sum of
$2827.50. The aggregate judgment in the two cases was for the sum
of $68,777.99.
There was a motion for a new trial, which was overruled, and
also for an amendment of the findings of fact, which was granted
in part. Thereupon this appeal was taken.
The findings of fact in the suit upon the first contract were
as follows:
"I. On August 4, 1885, Lieutenant Colonel William E. Merrill,
Corps of Engineers, United States Army, for and on behalf of the
United States, party of the first part, and John R. Gleason and
George W. Gosnell, partners, of the second part, entered into the
contract and specifications set out in full with and made a part
of the petition herein, whereby the claimants agreed to commence
work on or before August 20, 1885, and make `110,000 cubic yards,
more or less, of rock excavation in the enlargement of the
Louisville and Portland Canal,' as therein provided for, at the
rate of 85 cents per cubic yard, and to complete the same on or
before December 31, 1886.
"Said contract further, and among other things, provided that
—
"`If, in any event, the party of the second part shall delay
or fail to commence with the delivery of the material or the
performance of the work on the day specified herein, or shall, in
the judgment of the engineer in charge, fail to prosecute
faithfully and diligently the work in accordance with the
specifications and requirements of this contract, then in either
case the party of the first part, or his successor legally
appointed, shall have power, with the sanction of the Chief of
Engineers, to annul this contract by giving notice in writing to
that effect to the party or parties (or either of them) of the
second part, and upon the giving of such notice all money or
reserved percentage
Page 591
due or to become due to the party or parties of the second part
by reason of this contract shall be and become forfeited to the
United States; and the party of the first part shall be thereupon
authorized, if an immediate performance of the work or delivery
of the materials be, in his opinion, required by the public
exigency, to proceed to provide for the same by open purchase or
contract, as prescribed in section 3709 of the Revised Statutes
of the United States; provided, however, that if the party or
parties of the second part shall, by freshets, ice or other force
or violence of the elements, and by no fault of his or their own,
be prevented either from commencing or completing the work or
delivering the materials at the time agreed upon in this
contract, such additional time may in writing be allowed him or
them for such commencement or completion as, in the judgment of
the party of the first part or his successor, shall be just and
reasonable; but such allowance and extension shall in no manner
affect the rights or obligations of the parties under this
contract, but the same shall subsist, take effect and be
enforceable precisely as if the new date for such commencement or
completion had been the date originally herein agreed upon.'
"II. The season from August, 1885, to December 31, 1886, was
favorable in the main for the character of work provided for by
the contract, though the claimants were compelled by reason of
high water and freshets to suspend their operations a number of
times, and by reason of these difficulties, coupled with an
insufficient force of men and other means necessary for the
performance of the work, they only `completed 14 per cent of
their entire work' during the contract period, 1 1/2 per cent of
which was done in 1885.
"III. In consequence of the claimants' inability to complete
the work within the contract period, as aforesaid, they requested
an extension of their contract to December 31, 1887, which was
granted on conditions stated in a supplemental contract, as
follows:
"`Articles of Agreement.
"`Supplemental articles of agreement entered into this 21st
day of January, eighteen hundred and eighty-seven (1887),
Page 592
between Major Amos Stickney, Corps of Engineers, U.S. Army, of
the first part, and John R. Gleason and George W. Gosnell,
partners, doing business under the firm name of Gleason
Gosnell, of Louisville, of the county of Jefferson, State of
Kentucky, of the second part.
"`This agreement witnesseth that the said Major Amos Stickney,
for and in behalf of the United States of America, and the said
Gleason Gosnell, for themselves, their heirs, executors and
administrators, have mutually agreed, and by these presents do
mutually covenant and agree, to and with each other as follows:
"`That the time for completing the contract signed by the said
Gleason Gosnell, August 4th (fourth), eighteen hundred and
eighty-five (1885), for rock excavation in the enlargement of the
Louisville and Portland Canal, be extended to December 31st
(thirty-first), eighteen hundred and eighty-seven (1887), upon
the following conditions, viz.:
"`First. That the said Gleason Gosnell shall so arrange
their excavation on the line common to sections 2 (two) and 3
(three) as not to interfere with the government work of
contractor Molloy or the work of the contractor for the new wall
of the said Louisville and Portland Canal.
"`Second. That should the said Gleason Gosnell fail to
employ a sufficient force, not less than three hundred (300) men,
or its equivalent in machinery, to finish their work in the
required time, then the officer in charge shall be authorized to
perform any of the work in his discretion, and deduct the cost
from any money due or to become due the said Gleason Gosnell.'
"The foregoing agreement was made subject to approval of the
Chief of the Engineers, United States Army, and was thereafter
duly approved by the acting Secretary of War.
"IV. The claimants not having completed their contract during
the year's extension thereof as aforesaid, they, on December 31,
1887, requested a second extension of said contract to December
31, 1888, for the reasons set forth in their communication of
that date, which is as follows:
Page 593
"`LOUISVILLE, KY.Dec. 31st, 1887.
"`Major AMOS STICKNEY,
"`Corps of Engineers, U.S.A.
"`DEAR SIR: We respectfully ask an extension of time on our
contract for enlarging the Louisville and Portland Canal at the
head of the Falls of the Ohio River until the 31st of December,
1888, for the following reasons, to wit:
"`There was so much work being done upon railroads during the
last year throughout the State that labor was very hard to get.
"`We used every effort to secure the required amount of labor
on our contracts, but found it impossible to do so. We even
employed agents in New York and other cities to procure and ship
labor to us here, and then found it very difficult to hold the
labor we obtained, although we paid more than contractors paid
for labor on railroads. Besides, the summer season was
excessively hot; so very hot, that for sixty to ninety days, in
many instances, the men would work only two or three hours a day.
"`We propose to provide not less than ninety cars of the same
capacity as those now used, and a sufficient number of carts and
teams in addition, if necessary, to move not less than 640 cubic
yards (measured in place) of excavated rock per day of ten hours.
"`We propose to build an additional incline for depositing
excavated material, the minimum actual working capacity of both
inclines to be not less than 640 cars per day of ten hours.
"`We propose to provide, maintain and operate not less than
ten steam drills on the work and to provide and operate a
sufficient force of men to excavate and handle at least 640 cubic
yards of rock (measured in place) per day of ten hours.
"`The method of carrying on the work will be such as will be
approved by the officer in charge.
"`When practicable, during the summer season, we propose to
provide and operate an adequate force at night.
"`All additional plant will be obtained and available for use
by the time rock excavation can be commenced, and we propose
Page 594
to bear all extra cost to the United States occasioned by the
extension of time for completing our contract.'
"Which letter was forwarded to the Chief of Engineers with the
following communication:
"`U.S. ENGINEER OFFICE,
"`LOUISVILLE, KY.,December31st, 1887.
"`The CHIEF OF ENGINEERS, U.S. Army,
"`Washington, D.C.
"`GENERAL: I have the honor to forward herewith an application
of Gleason Gosnell for the extension of time for completion of
their contract on work of excavating for enlargement of the head
of the Louisville and Portland Canal.
"`The work of these contractors during the past season has
been exceedingly unsatisfactory. Whilst they have had some
difficulties to contend with in procuring labor, they have not
conducted their work in a manner to produce the best results, and
hardly seemed to comprehend the magnitude of their undertaking.
"`After a number of consultations with the contractors and
their principal bondsman, I have, however, concluded that the
interests of the government will be best served by an extension
of time with the provisions which they have inserted in their
application.
"`These provisions call for nearly double the plant heretofore
used and the adoption of method of work which will be approved by
the engineer in charge; also the bearing of all extra expense to
the United States occasioned by the extension of time. With these
provisions, I believe the engineer officer in charge will be able
to push the work more rapidly than if it were relet to other
contractors. I therefore recommend that the time for completing
of their contract be extended as requested to December 31, 1888,
on condition that the provisions in their application are
faithfully carried out.'
"The extension of the time of said contract to December
Page 595
31, 1888, as requested and recommended, was granted and approved
by the Chief of Engineers `on condition that the provisions in
their application are faithfully carried out,' of which approval
the claimants were notified by the following letter:
"`U.S. ENGINEER OFFICE,
"`LOUISVILLE, KY.,January9th, 1883.
"`Messrs. GLEASON GOSNELL,
"`Louisville, Ky.
"`SIRS: You are hereby notified that the time for completion
of your contract for excavation in enlargement of the head of the
Louisville and Portland Canal is extended to December 31, 1888,
on condition that the provision in your letter of December 31,
1887, a copy of which is inclosed, shall be faithfully carried
out. Any failure to carry out these provisions will terminate
your contract.
"`Very respectfully,
"`AMOS STICKNEY,
"`Major of Engineers, U.S.A.'
"V. The rock to be excavated under the contract was in the
river bed in an exposed situation, and was exposed to great force
of the river when the latter rose to stages above the top of the
government cross dam, which cross dam was 5 feet high, measured
by the canal gauge.
"VI. Before the contract aforesaid was entered into the
engineer in charge prepared specifications for the information of
bidders, which were exhibited to the claimants, and on the faith
of which they entered into the contract. These specifications (7)
contained the provision that the contractor `must begin work
within twenty days after notification that his bid has been
accepted, unless hindered by high water.'
"They were advised by the ninth specification so exhibited
that their contract would provide `that additional time may be
allowed to a contractor for beginning or completing his work in
cases of delay from freshets, ice or other force or violence of
the elements, and by no fault of his or their own.'
"VII. The condition of the Ohio River was during the season
Page 596
of 1888, the period of the last extension, unusual and
unprecedented for repeated and continued freshets and high water,
overflowing the cross dam aforesaid; in consequence of which
freshets and high water the working season of 1888, in the Ohio
River at Louisville, Ky., was limited to about thirty-five days,
mostly in July and August, as will more fully appear from the
official monthly report of the defendants' officers of the
progress of the work (known as section 3) from December, 1887, to
December, 1888, as follows:
"`DECEMBER, 1887.
"`On section 3, Gleason Gosnell, contractors, very little
was done in December, except the removal of loose material which
had been left above grade and in getting out machinery in
anticipation of closing for the season. The water is several feet
deep over both sections.'
* * * * *
"`MARCH, 1888.
"`The stage of the river has prevented any work being done on
the contracts of John Molloy, Gleason Gosnell, and the Salem
Stone and Lime Co.'
* * * * *
"`APRIL, 1888.
"`No work has been done by the contractors on account of high
water in the upper section.'
* * * * *
"`MAY, 1888.
"`No excavation has been made by the contractors for the upper
sections on account of high water.'
* * * * *
"`JUNE, 1888.
"`On section 3, Gleason Gosnell, contractors, a temporary
earth dam has been constructed, the pumps started, and drilling
on high points of rock begun. The first blasting was done June
30th.'
* * * * *
"`JULY, 1888.
"`On section 3, Gleason Gosnell, contractors, drilling on
high points of rock was continued and a temporary dam of
Page 597
earth finished. The pit was pumped out and tracks surfaced. The
contractors were run out by high water on the 11th instant and
have not resumed.'
* * * * *
"`AUGUST, 1888.
"`On section 3, Gleason Gosnell, contractors, excavation was
continued until the 18th of August, on which date the work was
flooded by high water.'
* * * * *
"`SEPTEMBER, 1888.
"`On section 3, Gleason Gosnell, contractors, no work has
been done since the contractors were run out by high water in
August.'
* * * * *
"`OCTOBER, 1888.
"`On section 3, Gleason Gosnell, contractors, a temporary
earth dam was begun on October 5th. The contractors' pump was
started on October 9th, and on the 11th the river washed away the
dam, since which time no work has been done.'
* * * * *
"`NOVEMBER, 1888.
"`On section 3, Gleason Gosnell have done no work since
October 11th. The river has been over their section since that
date.'
* * * * *
"`DECEMBER, 1888.
"`No work has been done by the contractors during the month.
The contract of Gleason Gosnell expired on December 31st.'
* * * * *
"VIII. During the working season of 1888 the claimants were
diligent in the prosecution of work embraced in the contract, in
preparing therefor, and in endeavoring to exclude the water and
freshets of the river.
"They provided for the additional plant mentioned in their
application for extension and had it ready for operation at the
beginning of the season of 1888. But there was insufficient
Page 598
working time to complete the work by December 31, 1888, at the
rate of 640 cubic yards for each practicable working day of
twenty-four hours, and this from no fault of the claimants during
the last extension of their said contract. No act or omission of
the claimants during the period of the last extension made it
impossible to complete the work by December 31, 1888.
"IX. The force of the defendants' officer in charge of this
same work after December 31, 1888, was, by reason of the overflow
of the river, compelled to cease the work of excavation, to wit,
in 1889 and 1890, at stages of water at from 6.1 to 6.10 feet,
and they did not complete the work in three seasons subsequent to
1888.
"X. After the working season of 1888 the claimants, through
the personal solicitation of their attorneys, Bodley Simrall,
applied to the engineer in charge for an allowance of additional
time for the completion of the work agreed upon in the contract
so extended for the reason that they had been, by freshets and
force and violence of the elements and by no fault of their own,
prevented from completing the work at the time agreed upon in the
contract, whereupon the engineer in charge refused to allow such
additional time.
"The defendants, nor the engineer officer in charge on their
behalf, did not annul or terminate the contract as therein
provided for by reason of any delay or for any want of
faithfulness or diligence on the part of the claimants in the
prosecution of the work thereunder during the period of the last
extension of said contract, but based his refusal to further
extend the contract, because, as he asserted, the claimants had
for a number of seasons failed to complete the work within the
times agreed upon.
"No judgment or decision was given by said engineer on the
question as to whether the (J.R.) claimants were prevented by
freshets and force and violence of the elements during the season
of 1888 from completing the work agreed upon within the period
limited by the last extension of the contract, nor did he find or
decide that the claimants were not so prevented.
Page 599
"XI. The amount of the reserved 10 per centum under said
contract is $3011.99, and has never been paid by the defendants
to the claimants.
"XII. The total amount of rock in the area covered by the
contract, as finally estimated by the defendants, was 118,935.22
cubic yards, of which the claimants had removed 35,435.22 cubic
yards, leaving unremoved at the end of the season of 1888, 83,500
cubic yards.
"XIII. The cost to the claimants of performing this remaining
work, 83,500 cubic yards, would have been $1.25 per cubic yard,
and their total loss thereon at the contract price there for
would have been 40 cents per cubic yard, or $33,400.
"XIV. Under the specifications (2), made part of the contract
and set out in the petition aforesaid, it is provided that `all
material excavated under this contract will be the property of
the contractor, and must be disposed of in such manner as not to
interfere with navigation, of which the engineer in charge shall
be the judge. The contractor is forbidden to deposit any
excavated material on canal property without permission.'
"Every yard of solid rock would have produced, by crushing, 1
1/2 yards of broken stone, and upon this basis the remaining rock
in the area covered by the contract at the end of the season of
1888 would have produced 125,250 cubic yards of broken stone.
"XV. The rock, when excavated and crushed, was a valuable
commodity, for which there was a ready market in Louisville at
$1.25 per cubic yard.
"XVI. The cost to the claimants of crushing and delivering the
rock for the market was 50 cents per cubic yard and the net value
to the claimants of the crushed and delivered rock was 75 cents
per cubic yard, or $93,937.50, less the loss of $33,400, as set
forth in Finding XIII, leaving $60,537.50 as the claimants' net
profit under the contract for the remaining work.
"XVII. From the foregoing official reports, as well as from
the other facts found herein, the court finds the ultimate fact
that the condition of the river was as herein set forth;
Page 600
and the time remaining for active work, after deducting the time
when it was impossible to do work by reason of the high water and
freshets, was insufficient for the completion of the work under
the contract within the period of extension, and that it was
impossible for the claimants to complete the work within the
working time thus remaining."
The findings in the second case were substantially similar.
The material questions are determinable by a proper construction of the following clauses contained in the contracts:
"If, in any event, the party of the second part shall delay or fail to commence with the delivery of the material or the performance of the work on the day specified herein, or shall,Page 601in the judgment of the engineer in charge, fail to prosecute faithfully and diligently the work in accordance with the specifications and requirements of this contract, then in either case the party of the first part, or his successor legally appointed, shall have power, with the sanction of the Chief of Engineers, to annul this contract by giving notice in writing to that effect to the party or parties (or either of them) of the second part, and upon the giving of such notice all money or reserved percentage due or to become due to the party or parties of the second part by reason of this contract shall be and become forfeited to the United States; and the party of the first part shall be thereupon authorized, if an immediate performance of the work or delivery of the materials be in his opinion required by the public exigency, to proceed to provide for the same by open purchase or contract, as prescribed in section 3709 of the Revised Statutes of the United States; provided, however, that if the party or parties of the second part shall, by freshets, ice or other force or violence of the elements, and by no fault of his or their own, be prevented either from commencing or completing the work or delivering the materials at the time agreed upon in this contract, such additional time may in writing be allowed him or them for such commencement or completion as, in the judgment of the party of the first part or his successor, shall be just and reasonable; but such allowance and extension shall in no manner affect the rights or obligations of the parties under this contract, but the same shall subsist, take effect and be enforceable precisely as if the new date for such commencement or completion had been the date originally herein agreed upon.
"The contractor must begin work within twenty days after notification that his bid has been accepted, unless hindered by high water; and within thirty days thereafter his working force must consist of at least 200 men, if working by hand, or the equivalent thereof in case excavating machines are used. If, at any time, the working force be reduced to 150 men or less, the engineer in charge shall have the right to terminate the contract; and in such case the retained percentage shall be forfeited to the United States.Page 602
"The contract will expire on the 31st day of December, 1886; but the right is reserved to annul the contract in January, 1886, in case forty per cent of the work covered by the same shall not have been completed on or before the 31st day of December, 1885. The annulment of the contract under the provisions of this paragraph will, however, involve no forfeiture of moneys previously earned."
While we are to determine the legal import of these provisions according to their own terms, it may be well to briefly recall certain well-settled rules in this branch of the law. 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.Dermottv.Jones, 2 Wall. 1;Cutterv.Powell, 2 Smith's Leading Cases, 1, 7th Amer. 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 of the contract 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 subjected to the revisory power of the courts.Martinsburg Potomac Railroadv.March,114 U.S. 549;Chicago, Santa Fe c. Railroadv.Price,138 U.S. 185.
We do not understand that these principles are now called into question, but their applicability is denied; and we are called upon to consider a very acute and ingenious argument, successfully urged in the court below, aiming to show that, in the present case, the controverted matter, to wit, whether the contractors were entitled to a further and additional extension of time, was not left to the determination of the engineer in charge of the work, but is open, under the language of the agreement and the facts as found, to be inquired into and determined by the court.Page 603
The material terms of the contract calling for construction are as follows:
"The said Gleason Gosnell shall commence work under this contract on or before the twentieth day of August, 1885, and shall complete the same on or before the thirty-first day of December, 1886. . . . Provided, however, that if the party or parties of the second part shall, by freshets, ice or other force or violence of the elements, and by no fault of his or their own, be prevented either from commencing or completing the work or delivering the materials at the time agreed upon in this contract, such additional time may in writing be allowed him or them for such commencement or completion, as, in the judgment of the party of the first part or his successor shall be just and reasonable."
Passing by, for the present, the fact that several extensions of time were granted by the engineer, and having regard only for the above language, what does it mean? The construction put upon it by the court below was thus expressed:
"In the cases at bar the contracts in terms provide that `additional time may in writing be allowed' for the completion of the work if prevented therefrom `by freshets, ice or other force or violence of the elements' and by no fault of their own; not that such additional time may or may not be allowed as the engineer in charge may determine, but that `such additional time may in writing be allowed' as in his judgment `shall be just and reasonable.' The language, taken together, leaves no discretion in the officer except in respect of the additional time to be allowed, and even that, the contract provides, `shall be just and reasonable.' The claimants in effect agreed that no additional time should be allowed them except on condition that they were prevented from the completion of the work (1) by freshets, ice or other force or violence of the elements, and (2) by no fault of their own; and to hold, when those conditions are present, that it is within the discretion of the engineer in charge to say whether any or no additional time may be allowed would be to eliminate that mutuality essential in conscionable contracts.
"Hence, taking into consideration the circumstances of thisPage 604case, and to effectuate the intention of the parties gathered from the contracts as a whole, we must hold that the word `may' should be construed to mean `shall.'
"As to what additional time would be just and reasonable he, as the engineer officer in charge, was to determine, not by the exercise of arbitrary power, but by the exercise of a just and reasonable judgment; and any additional time thus allowed would have been final."
We cannot accept this exposition of the language as sound. Rather do we interpret it to mean that, as between the United States and the contractors, the latter were to be relieved from their contract obligation to complete the work within the time limited, only if, in the judgment of the engineer in charge, their failure so to do was occasioned by freshets or other force of the elements, and by no fault of their own; and that, if and when, in his judgment, the failure to complete was, in point of fact, due to the extraneous causes, he was also to decide what additional time should be just and reasonable. In other words, the parties agreed that if the contractors should fail to complete their contract within the time stipulated, they should have the benefit of the judgment of the engineer as to whether such failure was the result of their own fault or of forces beyond their control, and, in the latter event, of his judgment as to what extension of time would be just and reasonable. Obviously the object of the provision in question was to prevent the very state of dispute and uncertainty which would be created if the present contention of the contractors were to prevail.
In support of its construction the court below points to a difference in the language between the clause respecting materials which provides that "the decision of the engineer officer in charge as to quantity and quality shall be final," and that used in the claim under consideration in which it is not said that the judgment of the engineer shall be final. But it is obvious that, from the very nature of the case, the decision of the engineer in the latter case must be final. The contract fixes the time within which the work must be completed, but provides that, in case failure to complete is providential andPage 605without fault, such additional time may be allowed as the engineer may judge to be just and reasonable.
As, then, his granting of additional time would be final and irrevocable, so his refusal to allow it was necessarily final. The privilege of procuring an extension of time is conditional on the action of the officer, whether he grant or refuse it.
By changing the phrase "such additional time may be allowed" into the phrase "such additional time shall be allowed," the court below substituted for an appeal to the discretion and decision of the officer, an absolute right to have the question of prevention, whether by freshets or by fault, determined by the courts.
The fallacy of such reasoning is obvious; and is pointed out in the case ofKihlbergv.United States,97 U.S. 398. That was a case of a contract between the United States and A, for the transportation by him of stores between certain points, provided that the distance should be ascertained and fixed by the chief quartermaster, and that A should be paid for the full quantity of stores delivered by him. It was not said in terms that the action of the chief quartermaster should be conclusive; and the distance, as ascertained and fixed by him, was less than the usual and customary route.
It was said by Mr. Justice Harlan, delivering the opinion of the court:
"The action of the chief quartermaster cannot, therefore, be subjected to the revisory power of the courts without doing violence to the plain words of the contract. Indeed, it is not at all certain that the government would have given its assent to any contract which did not confer upon one of its officers the authority in question. If the contract had not provided distinctly, and in advance of any services performed under it, for the ascertainment of distances upon which transportation was to be paid, disputes might constantly have arisen between the contractor and the government, resulting in vexatious and expensive, and to the contractor oftentimes, ruinous litigation. Hence the provision we have been considering. Be this supposition as it may, it is sufficient that the parties expressly agreed that distances should be ascertained and fixed by thePage 606chief quartermaster, and in the absence of fraud or such gross mistake as would necessarily imply bad faith, or a failure to exercise an honest judgment, his action in the premises is conclusive upon the appellant as well as upon the government. The contract, being free from ambiguity, no exposition is allowable contrary to the express words of the instrument."
It was further suggested by the court below, and has been vigorously pressed upon us in the argument, that the engineer in charge was improperly influenced in refusing the third extension asked for, by a consideration of delinquencies in previous years, whereas it is claimed that the extended contracts were, in respect of their several dates, new contracts, the performance or non-performance of which did not depend upon anything done or omitted to be done thereunder prior to the last extension.
It may be that, by granting the previous extensions, the right of the Government to forfeit the compensation already earned and withheld under the terms of the contract was abandoned. But to say that the engineer in charge, when applied to for a third extension, may not take in view previous delinquencies and the futility of the extensions theretofore granted, seems to us quite unreasonable. He might well think that his duty to the Government and to the public interested in the early completion of the work forbade a further experiment in that direction. An indefinite succession of extensions was surely not within the contemplation of the contract. We do not wish to be understood to say that it would have been competent for the engineer in charge, if in his judgment the contractors had been duly diligent during the period of the last extension and had acted up to the conditions upon which such extension was granted, to have based his refusal for a further extension upon thesoleground that there had been delinquencies during the prior periods of extension. We mean merely to say that, in abona fideexercise of the discretion conferred upon him, that officer might properly observe the conduct of the contractors through the entire scope of their past action, in deciding what weight to give to their promises as respected the future, and considerPage 607whether previous grants of extension had brought forth such efforts on the part of the contractors as the circumstances required.
But was it at all the case that the engineer, in refusing the last application for further extension, based such refusal wholly upon a consideration of prior condoned delinquencies? Even if we cannot take notice of the affidavit of Major Stickney, contained in this record, in which he states that his refusal to grant a further extension was based upon the failure of the contractors to make proper provisions during the period of the last extension for carrying on their work, and that they had not fulfilled the conditions upon which the time had already been extended, we are permitted, and indeed required, in absence of evidence of bad faith on his part, to presume that he acted with due regard to his duty as between the government and the contractors.
The fallacy, as we think, in the position of the court below was in assuming that it was competent to go back of the judgment of the engineer, and to revise his action by the views of the court. This, we have seen, could only be done upon allegation and proof of bad faith, or of mistake or negligence so great, so gross, as to justify an inference of bad faith. But in this case we find neither allegation nor proof. The only allegation in the petition which can be pointed to bearing on this subject is as follows: "That on or about December, 1888, the said Major Amos Stickney refused to plaintiffs the extension of time which they requested, and to which they were rightfully entitled under the contract, by reason of being prevented from completing the same within the time limited by the last extension and renewal thereof, by freshets and by the force and violence of the elements and by no fault of their own, and by reason of damages and hindrances from causes within the control of the United States; and the plaintiffs were thereby prevented from completing the work. And the plaintiffs aver and charge that the said refusal of the said Stickney to extend the time for the completion of the contract was wrongful and unjust, and a breach of the contract."
In other words, the plaintiffs allege that they were preventedPage 608from completing their work by force and violence of the elements and not by any fault of their own, and that the judgment of the engineer in refusing an extension was therefore wrongful and unjust. But as they had agreed, in the contract as we have construed it, that the engineer was to decide whether the failure to complete was due to the force of the elements or to their fault, their allegation now is that the determination of the engineer was wrongful and unjust, because he decided the submitted issue against them. Of course, such an allegation was wholly insufficient on which to base an attempt to upset the judgment of the engineer.
But, even if we pass by the insufficiency of the allegation, we perceive no evidence, or finding based on evidence, which would have sustained a stronger and more adequate allegation. Indeed, no evidence whatever would appear to have been offered to sustain a charge of bad faith or gross mistake equivalent thereto. The court below does indeed say, in the twenty-first finding, that "no judgment or decision was given by said engineer on the question whether the claimants were prevented by freshets and force and violence of the elements during the season of 1888 from completing the work agreed upon within the period limited by the last extension of the contract, nor did he find or decide that the claimants were not so prevented." But, as it was expressly alleged in the petition, and was found by the court, that, on an application for a further extension because of interruption occasioned by force of elements and not by any fault of the plaintiff, the engineer did refuse to extend, the statement of the court must mean either that it was necessary for the engineer, in order to give efficacy to his decision, to declare in terms that it was based on a finding of fault on the part of the contractors, or that the conclusion of the engineer did not amount to a decision or judgment, within the meaning of the contract, because the court reached a different conclusion.
These are propositions of law and not of fact, and we cannot assent to either of them.
Without protracting the discussion, our conclusions are that, under a proper construction of the contracts in this case, thePage 609right or privilege of the contractors, if they failed to complete their work within the time limited, to have a further extension or extensions of time, depended upon the judgment of the engineer in charge when applied to to grant such extension and that no allegation or finding is shown in this record sufficient to justify the court in setting aside the judgment of the engineer as having been rendered in bad faith, or in any dishonest disregard of the rights of the contracting parties.
These views lead to a reversal of the judgment of the court below in so far as it sustains the claim to recover damages for profits expected to inure to the plaintiffs if they had been permitted to complete the work.
As no actual damage or loss was definitely shown to have been suffered by the Government by reason of the non-completion of the work, and as no forfeitures were declared at the time of the several extensions, and may therefore be deemed to have been waived, we affirm that portion of the judgment of the court below allowing a recovery for the retained percentages of the compensation for work actually done and accepted.
Accordingly the judgment of the Court of Claims is herebyReversed and the cases are remitted to that court withdirections to enter judgment in accordance with this opinion.
MR. JUSTICE HARLAN, MR. JUSTICE BROWN and MR. JUSTICE WHITE do not agree with the construction of the contract on the subject of the power of the engineer officer, and therefore dissent.