The approval of the Chief of Engineers was necessary to the
legal consummation of the contract in this case.
A final reviewing and approving judgment was given to the Chief
of Engineers, by a covenant so expressed as to constitute a
condition precedent to the taking effect of the contract.
The contract was not approved, and the legal consequence of that
cannot be escaped.
The appellees brought suit against the United States in the
Court of Claims for the sum of $25,485.89, for expenses incurred
and for damages. The latter consisted of losses suffered by them by
the breach of a contract entered into by the United States through
W. S. Marshall, captain in the Corps of Engineers. The contract was
made in pursuance of an advertisement made by the United States
inviting proposals for constructing a canal, to be known as the
Illinois & Mississippi Canal, upon the terms, conditions, and
specifications set forth in an exhibit which was attached to and
made a part of the petition.
The contract contained the following clause: "This contract
shall be subject to approval of the Chief of Engineers, United
States Army." There was no averment that the contract had been so
approved, and the United States demurred. The demurrer stated:
"Not only does the contract itself, a copy of which is attached
as above, fail to show that the same was ever approved by the Chief
of Engineers, U.S.A. but the testimony in the
Page 184 U. S. 525
case fully and conclusively shows, and the same is not denied by
the claimant, that said contract has never been approved by the
said Chief of Engineers, U.S.A. in any manner whatsoever."
It was prayed that the petition "be quashed and the action be
dismissed accordingly."
The action of the court is expressed in the following order:
"Allowed in part and judgment for defendants on findings of fact
filed."
As a conclusion of law from the findings the court ordered the
petition dismissed and a formal judgment was entered accordingly.
35 Ct.Cl.199. This appeal was then taken.
The findings of fact are as follows:
On or about the 25th of May, 1892, the United States through W.
S. Marshall, a captain in its Corps of Engineers, advertised for
proposals for constructing a canal to be known as the Illinois
& Mississippi Canal. The claimants submitted a bid to do
certain parts of the work. The bid was accepted by Captain
Marshall, acting under an authority contained in a letter from the
Chief of Engineers of the United States army.
"On the 20th day of July, 1892, Captain Marshall forwarded to
claimants the formal contract annexed to and forming part of the
petition, and bonds to be executed within ten days thereafter, all
which claimants fully executed and returned to the said engineer on
the 28th day of July, 1892, which formal contract was duly signed
by Captain Marshall. The form of the contract had been prepared by
the Chief of Engineers and forwarded to Captain Marshall for use in
such cases."
"Immediately upon receiving notice of the acceptance of their
said bid, claimants began preparation for the commencement of said
work. They shipped their plant from Portsmouth, Ohio, to Rock
Island, Illinois; rented and furnished a boat and had the same
taken to Rock River, in the vicinity of the work, to be used as a
boarding house for men employed on the work, built stables for
their teams, hired men and teams, purchased a large amount of
plant, consisting of shovels, plows, scrapers, and the like, and
generally equipped themselves in a proper
Page 184 U. S. 526
manner to expeditiously perform the work, and commenced the work
with men and teams about the 1st day of August, 1892."
"On the 6th day of August, 1892, without fault on their part and
while the work was progressing, claimants were stopped by the
United States and their contract abrogated against their consent,
and the work that they had contracted to do readvertised, for the
alleged reason that, by the Act of August 1, 1892, no work could be
prosecuted by the United States without a stipulation in the
contract binding the contractor not to permit his workmen to labor
more than eight hours per day, and the United States refused to
permit claimants to continue the work either under the terms of the
contract or under the terms of the law of August 1, 1892, but
immediately, and against the protest of claimants, readvertised and
let the said work to other parties."
"In the prosecution of said work under said contract prior to
the abrogation thereof on August 6, 1892, claimants expended the
sum of $678.21, which has not been paid to them."
"By reason of the abrogation of said contract claimants lost the
following sums expended and were deprived of the following profits
which they would have made in the execution of said work:"
Expenses incurred . . . . . . . . . . . . . . . . . $ 678.21
Profits if they had been permitted to perform . . . 7,150.00
MR. JUSTICE McKENNA delivered the opinion of the Court.
We agree with counsel that the question in the case is a narrow
one. It is not denied that the approval of the Chief of Engineers
was necessary to the legal consummation of the contract. It is,
however, insisted that the approval was not required to be formally
expressed, but could and did consist of
Page 184 U. S. 527
acts preceding the written instrument, though the latter
contained the terms and covenants of the parties. In other words,
it is contended that the advertisement, claimant's bid made under
competition, which was submitted to the Chief of Engineers, who,
after some correspondence with the engineer in Chicago in relation
thereto, had in writing directed it to be accepted, the preparation
of the formal contract on a blank furnished by the Chief of
Engineers, its execution by both the officer in charge and the
claimants, in due form and in strict accordance with the provision
of section 3744 of the Revised Statutes, constituted an
approval.
We are unable to assent to this view. It is the final written
instrument that the statute contemplates shall be executed and
signed by the parties, and which shall contain and be the proof of
their obligations and rights. And it was such written instrument
that was to be approved by the chief or engineers. The approval was
to be a future act. The provision of the contract was: "This
contract" (that is, the instrument to which the contracting officer
and the claimants attached their signatures and seals) "shall be
subject to approval of the Chief of Engineers of the United States
army." The approval therefore did not consist of something
precedent, but was to consist of something subsequent. That which
preceded was inducement only, and contemplated an instrument of
binding and remedial form, and hence to contain covenants imposing
obligations and giving rights and remedies, containing provisions
for the time of performance and the manner of it; provisions for
changes and for extra work -- indeed, of the provisions which
prudence and necessity require and those which the statutes of the
United States might require. And the final right to see that this
was done, the parties agreed, should be devolved on the Chief of
Engineers, and it was not satisfied by prior instructions. In other
words, a final reviewing and approving judgment was given to the
Chief of Engineers, and was given by a covenant so expressed as to
constitute a condition precedent to the taking effect of the
contract. If the covenant did not mean that, it was idle. Construed
as prospective, it had a natural purpose. The engagement of the
parties
Page 184 U. S. 528
did not end with the bid and its acceptance. The performance of
the work was to be secured, and the final judgment of what was
necessary for that, as we have already said, was to be given by the
Chief of Engineers.
The case of
United States v.
Speed, 8 Wall. 78, cited by appellant, is not
apposite. In that case, the facts were that the Secretary of War,
through the Commissary General,
"authorized Major Simonds at Louisville, in October, 1864, and
during the late Rebellion, to buy hogs and enter into contracts for
slaughtering and packing them to furnish pork for the army. On the
27th of October, Simonds, for the United States, and Speed made a
contract by which the live hogs, the cooperage, salt, and other
necessary materials were to be delivered to Speed by the United
States, and he was to do the work of slaughtering and packing. The
contract was agreed to be subject to the approval of the Commissary
General of Subsistence. No advertisements for bids or proposals
were put out before making the contract, nor did the contract
contain a provision that it should terminate at such times as the
Commissary General should direct. After the contract was made,
Simonds wrote -- as the facts were found under the rules, by the
Court of Claims, to be -- to the Commissary General, informing him
substantially of its terms, but no copy of it nor the contract
itself was presented to the Commissary General for formal approval.
The Commissary General thereupon wrote to Simonds, expressing his
satisfaction at the progress made and adding: 'The whole subject of
pork packing at Louisville is placed subject to your direction
under the advice of Colonel Kilburn.'"
After reciting those facts, this Court said, by Mr. Justice
Miller:
"We are of the opinion that, taking all this together, it is a
finding by the court as a question of fact that the contract was
approved by that officer, and inasmuch as neither the instrument
itself nor any rule of law prescribes the mode in which this
approval shall be evidenced, that a jury would have been justified
in finding as the court did."
In
United States v. Speed, therefore, the acts which
were held to constitute an approval of the contract relied upon
were
Page 184 U. S. 529
subsequent to the contract, and referred to it. In the case at
bar, it is stated in the opinion of the Court of Claims that after
the contract was signed, it was mailed "to the Chief of Engineers
in Washington for his approval," and that "it was immediately
disapproved and returned to the officer (engineer in charge at
Chicago) with instructions to readvertise the work."
The declaration in the opinion of the Court of Claims that the
contract was disapproved is asserted to be incorrect by claimants,
and the findings are quoted to show that the contract was
abrogated, not disapproved. That is undoubtedly the expression of
the finding, but its meaning is manifest. An order to the officer
in charge to abrogate the contract was certainly a very definite
and unmistakable disapproval of it. At any rate, there was no
approval of it, and that was a necessary condition to its final
effect and obligation.
It is further urged that the terms of the contract were not
disapproved, and that the action of the Chief of Engineers was
"for the alleged reason that, by the Act of August 1, 1892, no
work could be prosecuted by the United States without a stipulation
in the contract binding the contractor not to permit his workmen to
labor more than eight hours per day."
It may be assumed that the Chief of Engineers considered that
the contract took effect by his approval, and that, if he approved
it, he would incur the penalties of the statute. But, however that
may be, the reasons for his action is not open to our inquiry. The
contract was not approved, and how can the legal consequence of
that be escaped? We could not have compelled the approval of the
contract, and we cannot treat it as approved and adjudge rights as
upon the performance of a condition which was not performed.
This case has some features of hardship. They are, however,
explained and somewhat lessened by the facts stated in the opinion
of the Court of Claims. It is there stated:
"The contract bears date the 19th July, 1892. It provides in
terms that the contractors 'shall commence work on or before the
1st day of August, 1892,' but it appears by evidence
aliunde that the instrument was not mailed to the
contractors for signature until the 20th July, 1892; that it was
returned for corrections,
Page 184 U. S. 530
that it was not finally mailed for signature until the 27th of
July, 1892, and that it was not signed by the contractors until
some day between the 27th of July and the 1st of August, 1892. On
the faith of the agreement executed by the contracting officer, but
without his knowledge or direction, the contractors proceeded to
make ready for their work and, indeed, performed, to some extent,
incurring thereby a loss of $678.21."
And further, that "the work was done without the knowledge or
direction of the officer in charge, and no benefit resulted thereby
to the defendants" (United States).
Judgment affirmed.
