United States v. Cramp & Sons Co. - 206 U.S. 118 (1907)
U.S. Supreme Court
United States v. Cramp & Sons Co., 206 U.S. 118 (1907)
United States v. William Cramp & Sons
Ship & Engine Building Company
Nos. 263, 264
Argued April 18, 19, 1907
Decided May 13, 1907
206 U.S. 118
In a contract made between a building company and the United States for the construction of a battleship at a cost of over three millions of dollars, it was provided that a special reserve of sixty thousand dollars should be held until the vessel had been finally tried, and then paid to the company
"on the execution of a final release to the United States in such form as shall be approved by the Secretary of the Navy, of all claims of any kind or description under or by virtue of said contract."
The vessel having been built and the final trial had, all moneys were paid on the execution by the company of a stipulation to
"remise, release, and forever discharge the United States of and from all and all manner of debts, dues, sums and sums of money, accounts, reckonings, claims and demand whatsoever, in law or in equity, for or by reason of or on account of the construction of said vessel under the contract aforesaid."
In the absence of anything to the contrary, it will be assumed that the release which was executed was the one stipulated for in the original contract
and was intended to include all matters which, according to its terms, were to be released by the company as a condition of final payment. The words in the release "by reason of" are equivalent to those in the original contract "by virtue of," and include all claims which grew out of the performance of the contract, although not arising from the actual construction of the vessel.
41 Ct.Cl. 164 reversed.
On November 19, 1890, the William Cramp & Sons Ship & Engine Building Company entered into a contract with the United States to construct what was called "Coastline Battle Ship No. 1," afterwards known as the battle ship Indiana, for the sum of $3,020,000, the ship to be completed and ready for delivery to the United States within three years from the date of the contract. As a matter of fact, the vessel was not completed and delivered until November 19, 1895, but, as the delay was occasioned by the United States, no damages were recoverable from the building company on account thereof. On August 10, 1897, the company commenced this action in the Court of Claims to recover the sum of $480,231.90. The elements of its claim are thus stated in its petition:
For time of organization and plant lost
in waiting for armor, materials, etc.,
to be furnished by United States . . . . . . . $144,379.50
For special wharfage, 730 days at 1
cent per ton per day . . . . . . . . . . . . . 74,825.00
For general care and maintenance of
vessel, including coal, firemen,
engineers, watchman, canvas awnings,
wooden covers, keeping clean, removing
snow, dust, etc., extra painting, tug
hire, moving derrick, etc., 730 days,
at $135 per day. . . . . . . . . . . . . . . . 98,550.00
Additional cost of insurance . . . . . . . . . . 34,462.55
Interest on money borrowed caused by
delays of United States which
prolonged final settlement . . . . . . . . . . 60,499.91
Extra trial trip made necessary by
construction and completion of
vessel being delayed by United
States . . . . . . . . . . . . . . . . . . . . 17,514.94
For loss due to running the official
trial of "Indiana" with a foul
bottom, as, owing to the delay caused
by the completion of the vessel, it
was impossible to clean and paint
the bottom . . . . . . . . . . . . . . . . . . 50,000.00
Total . . . . . . . . . . . . . . . . . . . $480,231.90
On May 10, 1894, as appears from the findings made by the Court of Claims, an agreement was made between the parties
by which moneys not then due by the terms of the original contract were paid, the stipulation in this new agreement being:
"But such payment shall not be made until the party of the first part has given bond with approved security conditioned for the return to the party of the second part of the amount so paid, upon demand being made by the Secretary of the Navy therefor, for indemnity of the party of the second part against loss or injury by reason of such payment, and, in consideration of such advance payment, the party of the first part hereby releases the party of the second part from all and every claim for loss or damage hitherto sustained by reason of any failure on the part of the party of the second part to comply with its contract, or on account of any delay hitherto occasioned by the action of said party of the second part."
The time intervening between this agreement and the final completion and delivery of the vessel was one year, six months, and nine days, and that time was made the basis for the computation of damages, as will appear hereafter.
On May 18, 1896, after the completion and delivery of the vessel, the balance of the money due on the contract was paid, and a release and receipt executed by the building company in the following terms:
"Whereas, by the eleventh clause of the contract dated November 19, 1890, by and between The William Cramp & Sons Ship & Engine Building Company, a corporation created under the laws of the State of Pennsylvania, and doing business at Philadelphia, in said state, represented by the president of said company, party of the first part, and the United States, represented by the Secretary of the Navy, party of the second part, for the construction of a seagoing coastline battle ship of about 10,000 tons displacement, which, for the purpose of said contract, is designated and known as 'Coastline Battle Ship No. 1,' it is agreed that a special reserve of sixty thousand dollars ($60,000) shall be
held until the vessel shall have been finally tried; provided that such final trial shall take place within five months from and after the date of the preliminary or the conditional acceptance of the vessel; and"
"Whereas, by the sixth paragraph of the nineteenth clause of said contract, it is further provided that, when all the conditions, covenants, and provisions of said contract shall have been performed and fulfilled by and on the part of the party of the first part, said party of the first part shall be entitled, within ten days after the filing and acceptance of its claim, to receive the said special reserve or so much thereof as it may be entitled to on the execution of a final release to the United States in such form as shall be approved by the Secretary of the Navy, of all claims of any kind or description under or by virtue of said contract; and"
"Whereas the final trial of said vessel was completed on the eleventh day of April, 1896; and"
"Whereas all the conditions, covenants, and provisions of said contract have been performed and fulfilled by and on the part of the party of the first part;"
"Now therefore in consideration of the premises, the sum of forty-one thousand one hundred and thirty-two dollars and eighty-six cents ($41, 132.86), the balance of the aforesaid special reserve ($60,000), to which the party of the first is entitled being to me in hand paid by the United States, represented by the Secretary of the Navy, the receipt whereof is hereby acknowledged, The William Cramp & Sons Ship & Engine Building Company, represented by me, Charles H. Cramp, president of said corporation, does hereby, for itself and its successors and assigns, and its legal representatives, remise, release, and forever discharge the United States of and from all and all manner of debts, dues, sum and sums of money, accounts, reckonings, claims, and demands whatsoever, in law or in equity, for or by reason of or on account of the construction of said vessel under the contract aforesaid."
"In witness whereof I have hereunto set my hand and
affixed the seal of The William Cramp & Sons Ship & Engine Building Company this eighteenth day of May, A.D. 1896."
"[Seal.] Chas. H. Cramp, President"
"Attest: John Dougherty, Secretary"
The Court of Claims found for the claimant in the following items and amounts:
The reasonable value for the use of
the claimant's yard, machinery, and
tools, and for superintendence in the
construction of the vessel, including
the general upkeep of the yard
chargeable to the Indiana, $3,000
per month, making. . . . . . . . . . . . . . . $54,887.67
The reasonable cost of the proper care
and protection of the vessel during the
two years' delay, including expense
of cleaning the bottom, furnishing
material and painting, temporary
awnings and tents over caps left for
the introduction of turrets, additional
scaling to remove rust before painting,
electric lighting, keeping up steam to
prevent freezing of valves, wetting
down decks going over machinery, and
keeping vessel free from snow, dust,
ice, and debris, from May 10, 1894 . . . . . . 36,591.78
Wharfage from May 10, 1894, including
the dredging of a basin to accommodate
the vessel . . . . . . . . . . . . . . . . . . 17,808.00
The proportionate expense for the
period from May 10, 1894, of the cost
of insurance during the two years'
delay. . . . . . . . . . . . . . . . . . . . . 26,272.55
and rendered judgment against the government for $135,560. From this judgment, both parties appealed.