Reporter's Statement of the Case

profit, it being understood that said percentage for profit shall include the use of any and all equipment necessary for the accomplishment of the work ordered, without any further charge whatever, and 122 per cent profit shall be allowed to the vendees for any and all material that the vendor may order from the vendees for use in the construction of said battleship, excepting iron, brass, or other castings."

After the sale of plaintiff's plant the Moran Company performed work in connection with the completion of the Nebraska at a cost to plaintiff of $36,140.81.

XII. The total period of construction of the Nebraska from the date of the execution of the contract, March 7, 1901, to the date of its completion, May 31, 1907, was 74 months and 24 days, 38 months and 24 days over and beyond the period limited by the contract for its completion and delivery to the Government. Deducting from this total period of delay 18 months and 16 days, determined by the Secretary of the Navy in the first extension of the contract time, to September 23, 1905, on account of delays caused by strikes of workmen leaves a period of 20 months and 8 days, comprising 615 days, which, less 99 Sundays and holidays, makes 516 working days, from September 23, 1905, to May 31, 1907.

The number of days' delay caused by the Government's failure to deliver armor and armament amounted to 412 days, and this number, less 67 Sundays and holidays, amounted to 345 working days. None of the additional delays were caused by the Government.

The additional cost to plaintiff by reason of the delays of the Government was as follows:

(1) The proportional part of the Moran Brothers Company's plant (and including after said sale the part of the Moran Company's plant) employed by plaintiff in the construction of the Nebraska, and consisting of real estate, tools, equipment, and all other plant charges and facilities (except berth or wharfage occupied by said vessel, and space as Government offices), for 345 working days, was of the reasonable value of $32,792.72.

(2) The maintenance of Government offices and the occupation of plant space or berth and wharfage for 412 days

Opinion of the Court

was of the reasonable value of $416.04 and $20,482.45, respectively, a total of $20,898.49.

(3) Protection of the vessel, cleaning, painting, etc., was of the reasonable value of $32,150.10 for 345 working days. (4) Continued insurance and cost of surety bond for 412 days was $5,372.21, and $1,822.86, respectively, a total of $7,195.07.

XIII. On the preliminary acceptance of the Nebraska a special reserve of $70,000 was retained by the Government under the second paragraph of the eleventh clause of the contract. A further sum of $3,987.09, also retained, was paid on June 15, 1908, to plaintiff and is immaterial so far as the question in this finding is concerned. After considerable negotiations between the plaintiff and the Secretary of the Navy in relation to its refusal to execute a final release under paragraph 7 of clause 19 of the contract, the plaintiff was paid $45,000 of the special reserve of $70,000 on April 11, 1911, leaving a balance of $25,000 unpaid, to await the signing of said release by plaintiff.

The court decided that plaintiff was entitled to recover, in part. Counterclaim dismissed.

CAMPBELL, Chief Justice, delivered the opinion of the

court:

The plaintiff entered into a contract with the United States for the construction of a battleship designated "Battleship No. 14, Nebraska." A copy of the contract, which bore date as of March 7, 1901, is attached to the original petition. It refers, for authority for the construction of this and other battleships, to the appropriation acts of March 3, 1899, and June 7, 1900 (30 Stat. 1024, 1044, and 31 Stat. 684, 706), and both of these, by appropriate references, adopt the provisions of the act of August 3, 1886 (24 Stat. 215), which, in section 7, prescribes certain conditions relative to changes authorized in the plans and specifications, to the effect that where the cost exceeded $500, changes could only be made upon the order of the Secretary, "and if changes are thus made, the actual cost thereof and the damage caused thereby shall be ascertained, estimated,

Opinion of the Court

and determined by a board of naval officers to be provided for in the contract; and in any contract made pursuant to this act, it shall be provided, in the terms thereof, that the contractor shall be bound by the determination of said board, or a majority thereof, as to the amount of increased or diminished compensation said contractor shall be entitled to receive, if any, in consequence of such change or changes." This language has important bearing upon the contract provisions relative to changes made the basis of numerous contentions in this case.

The contract called for the completion of the vessel in 36 months, that is, on or before March 7, 1904, but it was not delivered and preliminarily accepted until May 31, 1907, or 74 months and 24 days after the date of the contract. The delay between March 7, 1904, and May 31, 1907, amounted to 38 months and 24 days. Whether the one or the other of the parties was responsible for the delay is a fact to which much testimony is directed. The plaintiff seeks to charge the Government with 20 months and 8 days of it. It is clear that the Secretary of the Navy made an initial extension of the time of 18 months and 16 days for completion of the vessel because of strikes of workmen, and that he granted five separate extensions covering the whole period of delay.

The changes in plans and specifications were many and important. The provisions of the contract authorized these changes. In the second clause it is provided as follows:

"No omission in the drawings, plans, or specifications of any detail, object, or provision necessary to carry this contract into full and complete effect, in accordance with the object and intent of the acts of Congress above referred to, shall operate to the disadvantage of the party of the second part, but the same shall be satisfactorily supplied, performed, and observed by the party of the first part, and all claims for extra compensation by reason of, or for, or on account of such extra performance, are hereby, and in consideration of the premises, expressly waived; and it is hereby further provided, and this contract is upon the express condition, that the drawings, plans, and specifications aforesaid may be changed, and that such alterations as are not contrary to law may be made in this contract by the party of the second part, but no such changes shall be made in any respect when the cost thereof shall, in the execution of the

Opinion of the Cour

work, exceed five hundred dollars ($500), except upon the written order of the Secretary or Acting Secretary of the Navy; that, if changes are thus made, the actual cost thereof, and the damage, if any, caused thereby, shall be ascertained, estimated, and determined by a board of naval officers, appointed by the Secretary of the Navy, and that the party of the first part shall be bound by the determination of said board, or a majority thereof, as to the amount of increased or diminished compensation the said party of the first part shall be entitled to receive, if any, in consequence of such change or changes."

The statute of 1886 required the provision and all of the parties had notice of the statute. Its meaning went into the contract. The action of the parties in dealing with the question of changes shows that in the beginning, and for a long time after work was begun, the question of the right to make changes was undisputed. Indeed, later still, such a right appears to have been conceded, because in the original petition it is averred that the Secretary of the Navy, from time to time, "in the exercise of the right reserved to the United States by the condition of said contract hereinbefore set forth," by written orders changed the drawings, plans, and specifications for the vessel. Other provisions of the contract contemplating changes may be cited as follows:

Clause twelfth provides: "The party of the second part having approved, as foundation for this contract, drawings, plans, and specifications of a vessel which it has reason to think would, if properly carried out, result in the production of a speed of not less than nineteen (19) knots an hour, assumes no responsibility with reference thereto, and will consider any changes suggested by the party of the first part either as to hull or machinery, and, as the responsibility is with the party of the first part will feel it to be its duty to deal liberally with any proposed changes, so long as the size, strength, and character of the vessel shall remain substantially the same; changes in plans or specifications involving increased or decreased expense to be dealt with as provided for in the second clause of this contract.'

And clause twentieth provides: "If any doubts or disputes arise as to the meaning of anything in the drawings, plans,

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or specifications, or if any discrepancy appear between said drawings, plans, or specifications and this contract, the matter shall be at once referred to the Secretary of the Navy for determination; and the party of the first part hereby binds itself, and its successors and assigns, and its legal representatives, to abide by his decision in the premises."

These provisions, as well as the statutory provision, clearly show that it was not intended to limit the authorized changes to specific ones, but, on the contrary, to recognize that it had not been definitely decided what would go into the final make-up of a battleship. Stipulating that any changes suggested by the contractor "either as to hull or machinery" would be considered and assuming "no responsibility with reference to its plans," as stated in clause twelfth, the defendant contracted for the right to make changes and secured that right. The contract was sufficient consideration for it. In clause second it is stipulated that no omission in the drawings, plans, or specifications of any detail should operate to the defendant's disadvantage and that the same would be supplied by the contractor, who expressly waived claims for extra compensation by reason of such extra performance. We are dealing with a written contract, which was made upon express condition that changes could be made in drawings, plans, and specifications, and that the method of determining compensation therefor was definitely fixed.

In the case of Wells Bros. Co., 254 U. S. 83 (54 C. Cls. 206), the contract authorized changes, and the claim was for damages occasioned by certain delays. The question for decision was whether the terms of the contract authorized the Government to require such delays without becoming liable to the contractor for damages. The contract also provided that no claim should be made by or allowed to the contractor for any damages caused by delays. The Supreme Court say: "We are dealing with a written contract, plain and comprehensive in its terms," and they gave full effect to the stipulations and upheld the contract. It was further said: "Men who take million-dollar contracts for Government buildings are neither unsophisticated nor careless. In