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Opinion of the Court

experience and inattention are more likely to be found in other parties to such contracts than the contractors, and the presumption is obvious and strong that the men signing such a contract as we have here protected themselves against such delays as are complained of by the higher price exacted for the work."

It is clear that both parties in the instant case contemplated that changes would be made. It may not be said that they appreciated just what the changes would be. But made they were, and a board of naval officers authorized by the act and the contract was duly appointed by the Secretary of the Navy to ascertain the increased or diminished compensation arising from the changes. Upon the question of whether this board's action was conclusive a large part of the plaintiff's claims depend. As already stated, the contract provided that plaintiff should "be bound by the determination of said board, or a majority thereof, as to the amount of increased or diminished compensation" it would be" entitled to receive, if any, in consequence of such change or changes." The stipulation is a valid one. Wells Bros. case, supra. The contention that the board was not created as provided by the statute, and was therefore "unlawful," is not tenable. The statute does not require that the board be named in the contract. It does require that it "be provided for in the contract." Its appointment was in the usual way. The suit is upon a contract which implies a valid, not an invalid, one. The authority to make it was conferred by statute and it is to be presumed that both parties intended that the language used should be in consonance with and not contrary to the statute. We think there is no conflict between the two.

It is well established that where the contract provides, as in this case, for a determination by a board of the compensation to be paid because of changes, the decisions of the board are conclusive, in the absence of fraud or of such gross error as may imply bad faith, amounting to fraud. See Ripley case, 223 U. S. 695, 704; Gleason case, 175 U. S. 588; Brinck case, 53 C. Cls. 170, 176, and cases there cited. There is a practical admission of this principle in the fact that

Opinion of the Court

plaintiff's petition, as finally amended, contains the following belated averment: "The rulings, decisions, and instructions of the Secretary of the Navy and of the Bureau of Construction and Repair and the acts and omissions of the various boards and officers and representatives of the United States, as hereinbefore set forth, constitute and amount to bad faith in the execution of said contract on the part of the United States." It was appositely said in the Gleason case, supra: "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 or 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 essential averment, though somewhat vaguely made, is unsupported by the evidence. The application of the rule stated removes any necessity for considering whether, in view of the statutory requirement that the contract should provide for a board whose decisions should be final, Congress intended to exclude all review of the board's action. The plaintiff assails the action of the board and says the Secretary or the board or some of them were guilty of bad faith. The defendant says that the Secretary in granting extensions of time or failing to deduct liquidated damages exceeded his authority and made a "mistake." The wide realm of detailed investigation with its attendant uncertainty, and the testimony adduced which two such contentions invite, is apparent from a short history of the case.

The original petition was filed September 10, 1909. Amended petitions, increasing the ad damnum, have been filed, some amendments being as late as 1921. In October, 1911, the plaintiff filed its bill of particulars, comprising nearly 100 printed pages, in which it classified its claims as based (1) upon insufficient allowances by the board of costs of changes, (2) upon deficiencies of amounts allowed in changes involving increased costs, (3) upon alleged extra work, (4) upon general damage for delays. In the first of these headings appear some 18 separate items, involving claims varying from less than $100 to many hundreds of

Opinion of the Court

dollars, and aggregating over $100,000. In the second heading appear many separate items, varying in amounts from a few dollars to many thousands, and aggregating approximately $229,000. In the third heading appear, many items aggregating over $106,000, and under the claim for general damages are claims aggregating over $450,000. Substantially all of these items, except probably damages for delay in furnishing armor, had been passed upon by the board of naval officers or by the Secretary of the Navy under one of another of the contract provisions. It does not appear that a ruling of the court was invoked under the provisions of section 165, Judicial Code, which enables it to limit testimony to claims that may be recoverable. The plaintiff has taken testimony upon these items, or most of them, and the defendant has examined many witnesses. A printed record of nearly ten thousand pages has been built up involving over eighteen hundred pages of briefs.

When the case was ready for trial it was referred to a commissioner for a report of the facts. He gave much time to a study and analysis of the testimony, briefs, and requests for findings, and has made an elaborate report containing many detailed findings, which in turn have been made the subject of numerous exceptions by both of the parties. While an application of the controlling rules of law renders a large part of the commissioner's work apparently unnecessary, this application following the work did not diminish the extent of it or the care with which he looked into the details of the construction of a battleship. We are asked nearly twenty years after the authorized board has acted to review its action and to substitute for its conclusions those of the court, to be based upon testimony of witnesses given ten years and more after the event, and consisting in large measure of estimates, opinions, and conclusions of the witnesses themselves. Whatever of tribute the record may be to the industry of counsel, it also furnishes a good illustration of the wisdom of the rule just stated. The contract did not contemplate that the opinion of the court should be substituted for that of the board. "In the absence of fraud, or gross mistake implying fraud, his decision (that of an engineer) on all these matters was conclusive."

Opinion of the Court

Ripley case, supra. In its statement of the case plaintiff says its claim consists of the following items: (1) Damages by delays due. to the United States, (2) insufficient compensation for certain changes made in the work, (3) admitted balance unpaid. The second of these items is controlled by what we have already said-the board's action is conclusive. The item of damages for delays may be divided into (1) a claim for damages caused by delays resulting from changes in the plan and specifications, and (2) a claim for damages caused by the Government's failure to supply in proper time armor or things it agreed to furnish. The entire delay, covered by both of these contentions, amounts to 20 months and 8 days. The finding shows that the delay of the Government in supplying the armor and ordnance amounted to 412 days, including Sundays and holidays, or 345 working days.

The contract provides that "all delays that the Secretary shall find to be properly attributable" to the Government should entitle the plaintiff to a corresponding extension of time. The Secretary, granting extensions, recited that the delays were beyond plaintiff's control, and in one or more of his extensions recognized that the delay was caused by the Government's failure to supply armor or ordnance. The provision that delays attributable to the Government would entitle the contractor to a corresponding extension of time protects him against the deductions for liquidated damages during such period but does not contemplate immunity to the defendant for delays caused by its failure to observe its own obligations. Changes were authorized, and this implied that they would, or at least might, produce delays. The board's determination settled any compensation due on this account. It was never contemplated either by the statute or by the contract that delays incident to changes would subject the Government to damage beyond that involved in the changes themselves. The appropriation for the vessel was limited. It had to be constructed, if at all, within definite limits of amount. But the right to make changes was a right expressly contracted for and if the defendant were made liable for consequential and other damages attributable to delays resulting from changes,

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Opinion of the Court

the result would be either that the stipulated right to make changes was not effective or that the cost of the vessel might be vastly increased. In the McCord case, 9 C. Cls. 155 (95 U. S. 61), the contract for the construction of a battleship of the monitor type provided that alterations in the plan could be ordered by the Government and if they caused additional expense they would be paid for; if they effected a reduction in cost the price would be correspondingly reduced. This court said: "This privilege of the United States to make alterations on the terms stated being expressly provided for in the contract, the contract price related to that privilege as much as to any other provision in the contract, and therefore it must be taken as included in that price, and paid for in it. And the United States can not be held liable for exercising a privilege they had purchased, but only for abusing it; and the fact is found that they did not abuse it, but made the alterations shown without unreasonable delay. And this has reference, as the parties must have had, to the nature of the undertaking." In the same case the Supreme Court say: "It is very clear that both parties contemplated the probability that the work would not be completed at the precise period of eight months from the date of the contract. They also contemplated that changes would be made in the construction of the battery. They made such provision for these matters as they deemed necessary for the protection of each party." An additional day for each day's delay thus caused was provided and if this was not satisfactory to the plaintiff the question should have been raised before the contract was signed.

The cases of Moore, Receiver, 46 C. Cls. 139; United Engineering & Contracting Company, 47 C. Cls. 489; and the Freel case, 186 U. S. 309, are not contrary to these conclusions. The Freel case presented the question of a surety's continued liability when changes were made by the principal and the other party to the contract, not assented to by him. The changes relied upon by the surety to justify his release were held by the court to have introduced substantially new work, "at an increased expense and gave an increased time for performance." The familiar rule was applied that

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