TERM OF 1917-18.


[No. 31520. Decided December 3, 1917.]

On the Proofs.

Contract; what constitutes restrictions to access of site of work.-In a suit for damages for alleged breach of specifications providing that the plaintiff shall be allowed "reasonable space at the site of the work; proof that passes were issued to plaintiff's workmen and a requirement that the same be exhibited to sentries; that the hours for the entrance of laborers seeking work were regulated, with a requirement that certain streets should be used by plaintiff for the hauling of supplies and materials, does not constitute a breach of such specifications where it does not appear that the commandant of the Navy Yard in performing a military function acted unreasonably or unduly interfered with plaintiff's work.

Fraud, what constitutes; burden of proof.—Even though the engineer officer in charge act in an arbitrary and overbearing manner on occasions involving some trivial things, the burden is upon the plaintiff to establish that his conduct is chargeable to bad faith on the officer's part, and that plaintiff's loss was directly caused thereby.

The Reporter's statement of the case:

Mr. George A. King for the plaintiff. King & King were on the briefs.

The general principle governing this case is that stated by the Supreme Court of the United States in Anvil Mining Co. v. Humble, 153 U. S., 540, 552:

"A party who engages to do work has a right to proceed free from any let or hindrance of the other party, and if

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Argument for the Plaintiff.

such other party interferes, hinders, and prevents the doing of the work to such an extent as to render its performance difficult and largely diminish the profits, the first may treat the contract as broken, and is not bound to proceed under the added burdens and increased expense.'

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The contractor, however, is not limited to the remedy pointed out above as treating the contract as broken and refusing to proceed further. He may proceed and complete the contract and sue for the damages occasioned by the unreasonable requirements of the other party.

In Axman v. United States, 47 C. Cls., 537, the syllabus, par. 1, states the rule:

"Where the circumstances of the case and the situation of the parties characterize the rulings of an engineer in charge as an arbitrary and unreasonable exercise of his discretionary power, the damages thereby caused the contractor may be recovered."

In Erickson v. United States, 107 Fed., 204, damages were allowed where an "inspector assumed the role of a master, and was meddlesome and tyrannical, so that the contractor's employees were irritated to such an extent that good men refused to continue on the work."

In Spaulding v. Coeur d'Alene Ry., 5 Idaho, 528, the contract contained a provision similar to that in this case, making the engineer the umpire to decide the amount and quantity of work performed and material furnished. The court held "under that stipulation the company was bound to employ a competent, upright, and trustworthy person as such engineer, and to see to it that he performed the services expected of him at a proper time, and in a proper manner.'

The court said, pp. 535 and 536:

"The estimated cost of said road was $35,000, and the actual cost appears to have been not far from $100,000. That fact alone would indicate that it actually took about three times the amount of work to complete it that was at first estimated."

A similar startling discrepancy appears in this case between the amount estimated for the performance of the work and that which it actually cost, with nothing to account for it but the unreasonable requirements of engineering and other supervision.

Argument for the Defendants.

In a later case, Nelson Bennett Co. v. Twin Falls Land and Water Co., 14 Idaho, 5, the same court further held that it was a breach of contract for the owner of a work to retain as supervising engineer, an officer known to be unreasonable and unjust in his rulings.

The syllabus, par. 8, says:

"Where the chief engineer of a defendant company who has been selected as umpire for the purposes of making a final determination of controversies and differences in reference to the work, material, measurements and classifications, retains in his service an assistant engineer who is manifestly prejudiced and biased against the contractor, and where, after such chief engineer has been advised of the animus, bias, and prejudice of his assistant against the contractor, he causes such assistant engineer to make the measurements, estimates, and classifications of the work done by such contractor, and it manifestly appears that such estimates and classifications have been unfair and unjust and discriminating against the contractor, the court, when appealed to, will set the same aside, and ascertain from the evidence submitted the true amount of work done or material furnished, and the proper measurements and classifications thereof, and order judgment accordingly."

Mr. George M. Anderson, with whom was Mr. Assistant Attorney General Huston Thompson, for the defendants.

This court in the case of Barlow et al. v. United States, 35 C. Cls., 514, held that

"Where a contract provides that the architect or engineer in charge shall determine the quantity or the fitness of the material or the sufficiency of the work, it is the reference of a matter in dispute to a person fitted by special knowledge to determine the facts and it is for the benefit of both parties that such facts be settled as the work proceeds. Agreements for such arbitration will be upheld."

The court, however, in the Barlow case did not stop here, but held invalid "an agreement which binds one party to abide as to every matter of fact and every legal right by the decision of the other party." In deciding the Barlow case the court appears to have overlooked the case of the United

Argument for the Defendants.

States v. Gleason, 175 U. S., 588, 602, decided four months before, where the Supreme Court said:

"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 a mistake so gross as to necessarily imply bad faith, such decision will not be subjected to the revisory power of the courts."

The court further said in the Gleason case, at p. 607:

"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 a mistake or negligence so great, so gross, as to justify an inference of bad faith."

The Supreme Court in Ripley v. United States, 222 U. S., 144, required this court to "make a direct and unequivocal finding as to the good or bad faith of the inspector" in his inspection of the work in question.

This case is on all fours with the case of Gearing v. United States, 48 C. Cls., 12, in which a bitter attack was made on the local engineer and the inspectors engaged in superintending the construction under the contract, who were charged with being incompetent in the performance of their duties, prejudiced and unfair in their inspections of work and materials, and much testimony was taken upon those charges. The claim and charges relating to inspection were almost identical with those in the case at bar, and in every instance this court decided in favor of the defendants.

In the instant case as to the two principal items of the claim, there was no protest whatever. There was but one protest really made by the plaintiff and that was, as we have already stated, concerning the strictness of inspection of work and material. On final settlement he received his compensation without having made a final protest as to anything else. It appears that he refused to sign a final release, and $2,000 was retained. After the decision of the board appointed to determine whether the inspections were

Argument for the Defendants.

in accordance with the stipulations of the specifications had been made against the contention of the plaintiff, he appears to have proceeded with his work without further complaint and to have acquiesced in the interpretation of the officers in charge thereof. We think that in this view of the case it comes clearly within the decision of the Gearing case, supra, as to protest and acquiescence of the contractor until the completion of the work, and the decision of the court in the Zimmerman case, 43 C. Cls., 525, where the court at p. 564 said:

"As it is shown that this interpretation was accepted without objection by the contractors and acted upon by them throughout, they can not now be heard to complain.'

In Plumley v. United States, 226 U. S., 545, the court held that where a contract provides that all disputes between the contractor and the architect shall be submitted to the Secretary of the Navy, whose decision shall be final, the contractor can not recover for additional work which the architect compelled him to do if he did not submit the matter to the Secretary.

Certainly the claim for the extra work in the removal of the head of the old dry dock which was not made in the original petition, and the increase in the cost of excavation stated in the original petition at $3,986.15, and increased in the amended petition to $25,828.09, come within the decision of this court in the case of Joyce v. United States, 51 C. Cls., 439, where the court on p. 446 said:

"It is therefore plain that the interpretation he now puts on his contract is an afterthought and is not the interpretation put upon it by the parties when it was executed, or when it was performed."

If the plaintiff had established his right to recover on any one of the items of his claim, the court would nevertheless be unable to render judgment in his favor, as he has failed to lay a proper foundation for the admission of his evidence to show the cost of construction of the extension to the dry dock, or any of the items claimed as extra work, and has therefore utterly failed to prove any damages.

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