Claimant contracted with the government to construct a portion
of a canal, both parties assuming that part of the work could be
done "in the dry," and the specifications so providing, but, owing
to leakage through an adjacent pier constructed by a different
contractor, all the work had to be done "in the wet" at increased
cost. The conditions were as open to claimant as to the government;
claimant was expected to and did visit the site and inform itself
before making its bid, and its contract provided that the
quantities in the specifications were approximate only, that no
claim should be made against the United States on account of any
excess or deficiency, absolute or relative, thereof, nor any
allowance be made for failure of the contractor to estimate the
difficulties correctly, that the expense of coffer dams, pumping
plant, and pumping to unwater all areas to be worked "in the dry"
should be an incident of the general work, and no special payment
be made therefor, and that the United States assumed no liability
whatsoever for loss of property or time due to failure of any part
of the coffer dams, dikes, or pumping plant.
Held that
there was no misrepresentation by the United States that any part
of the work could be done "in the dry," and that claimant could not
recover. P.
258 U. S. 9.
55 Ct.Clms. 181 affirmed.
Appeal from a judgment of the Court of Claims dismissing
appellant's second amended petition upon demurrer.
Page 258 U. S. 7
MR. JUSTICE McKENNA delivered the opinion of the Court.
This is an action to recover damages for a breach of contract
growing out of an alleged misrepresentation.
The appellant essayed recovery upon a petition to which a
demurrer was sustained; it then filed an amended petition which was
subjected to a like disposition, and then a second amended
petition. Demurrer by the government being sustained to that,
appellant declined to amend again, and judgment was entered
dismissing the petition. From the ruling this appeal is
prosecuted.
The last petition is, as the others were, a very voluminous
paper. It is enough to say that it sets forth a cause of action
based upon a contract entered into by appellant with the United
States September 23, 1910, for the construction of the west end of
the new canal at Sault Ste. Marie, Michigan, which was authorized
by the River and Harbor Act of March 2, 1907, c. 2509, 34 Stat.
1073, 1098. The petition details the specifications, but the
misrepresentation is alleged to be that they and the contract
represented that a portion of the work would be done in the "dry"
and a portion in the "wet," whereas it was impossible to do any of
the work in the "dry," and it was all done in the "wet," at a cost
greatly exceeding what it would have been had it been done the
other way.
For the purposes of permitting the work to be done in the dry,
it was necessary to construct certain cofferdams, and this was
especially provided for by the specifications. One of the
cofferdams was known as the West Cofferdam, and was to be built as
a contract item, and connected the rock spoil bank (extending along
the north side of the work) with the old Northwest Pier. The latter
pier was constructed by another contractor partly before and partly
after the date the company entered into its contract with the
United States. The company was a bidder
Page 258 U. S. 8
for the work, the specifications of which were published and
accessible. When the contract in suit was entered into, that prior
contract was in progress, but not completed, and was not completed
until after the company had begun work on its contract.
The company, it alleges, made all reasonable inquiries and
investigations upon the site of the contract between the date of
advertisement and the date of submitting its bid, and by its
president and chief engineer inspected the conditions. The work
under the previous contract of March 23, 1908, was then in
progress.
The company estimated and believed, as it had a right to do, is
its allegation, that the specifications of that contract had been
and were being duly and properly performed. If they had been so
performed, is the further allegation, the company would have been
able to perform, under its own contract, in the dry such portions
of the work as were required by the contract to be done in the
dry.
It was only during the progress of the work that the company
discovered that the previous contract and not been carried out, and
that the work was defective. In consequence, extraordinary and
expensive means had to be resorted to for a continuance of the
work, and the work was greatly delayed beyond the time that the
company would have had to take if the conditions had been as shown
by the specifications of the previous contract, and had the work
been performed by the previous contractor according to the
specifications.
This expense continued until July 3, 1913, and the description
as dry work in the specifications was, by reason of the conditions
existing at the site of the work, a misrepresentation of the
character of the work to be done, and induced on the part of the
company a lower bid than would have been made if the conditions had
been properly described.
Page 258 U. S. 9
Owing to the leakage coming through the old Northwest Pier, it
was not practicable for excavation to be made in the dry.
Notwithstanding, the engineer in charge compelled the work to be
done as contracted for, and the company sustained damages in the
sum of $366,052.67, for which it prayed judgment.
It is contended that the circumstances detailed amount to a
representation by the United States that the work could be done in
the dry, but that it was impossible to so perform it, and that
therefore the resulting expense should be discharged by the
government, and that the Court of Claims erred in dismissing the
petition.
To these assertions the government opposes denials: (1) there
was no misrepresentation; (2) if there were, it is not available to
the company, since it had investigated conditions before entering
into the contract; (3) there was no misrepresentation as to the
method by which the excavating could be done.
In considering the opposing contentions, there must be taken
into account certain provisions of the contract. It is therein
provided that
"it is understood and agreed that the quantities given in these
specifications are approximately only, and that no claim shall be
made against the United States on account of any excess or
deficiency, absolute or relative, in the same. No allowance will be
made for the failure of a bidder or of the contractor to estimate
correctly the difficulties attending the execution of the
work."
"It is expected that each bidder will, prior to submitting his
bid, visit the site of the work, examine the local conditions,
inform himself as to the accessibility of the work, ascertain the
character of the material to be excavated, consult the plats on
file in the United States engineer's office at Sault Sainte Marie,
Michigan, and obtain such available information as will assist him
to make an intelligent bid, and the failure of a bidder to make
such examination
Page 258 U. S. 10
may be held to be sufficient reason for rejecting his bid."
"The contractor must construct and maintain all the necessary
cofferdams, furnish suitable pumping plant, and do all the pumping
required to unwater all areas where work is to be done in the dry,
and no special payment will be made therefor, the above work and
expense being considered as incident to the general work covered by
the contract prices of other items. . . ."
"The United States assumes no responsibility whatsoever for loss
of life, property or contractors' time due to the failure of any
part of the cofferdams, dikes or pumping plant."
In supplement of these provisions of the contract, the following
provisions of the company's proposal upon which the contract was
awarded is pertinent: "We make this proposal with a full knowledge
of the kind, quantity, and quality of the plant, work, and
materials required. . . ."
The repellent effect of those provisions and the contentions of
the company would seem to need no comment, and the effect is
reinforced by other considerations. The contract of the company was
made September 23, 1910, and at that time, according to the
averments of the petition, work on the prior contract was in
progress, and had been in progress two years. And it is averred
that the company
"made all reasonable inquiries and investigations upon the site
of the contract between the date of advertisement, July 30, 1910,
and the date of submitting its bid, August 29, 1910, by the
president and chief engineer of the company personally inspecting
the conditions. The work under the previous contract of March 23,
1908, was then in progress, and uncompleted."
The company was undoubtedly impelled to this investigation by
the requirement of its contract to inform itself of the conditions,
and that no allowance would
Page 258 U. S. 11
be made for the failure to estimate correctly the difficulties
attending the execution of the work. Its investigation may or may
not have been adequate. It, however, took its chances on that. But,
in reality, there was no representation by the government, nor is
it alleged that the government had knowledge of the conditions or
means of knowledge superior to the knowledge of the company. The
latter acquired knowledge only by the aid of divers as its work
progressed. Such being the situation, does not the case present one
of misfortune, rather than misrepresentation? It is true that the
government's proposal was for a certain part of the work to be done
in the dry, but it made no representation of the conditions that
existed enabling it to be so done or precluding it from being so
done. The company had no relation with the government through the
other contract. The company assumed that it had been properly
performed, but the government did nothing to create or direct the
assumption or induced confidence in it.
Such being the situation, the company insists, nevertheless,
that the government is liable, and cites, among other cases,
Hollerbach v. United States, 233 U.
S. 165;
Christie v. United States, 237 U.
S. 234;
United States v. Atlantic Dredging Co.,
253 U. S. 1;
United States v. Smith, 256 U. S. 11, and
insists that, though the asserted representations of fact in the
present case differ somewhat from those made in the cited cases,
they are the same in principle, and that the provisions in
paragraph 23 that
"the work required to be done to complete this portion [the
portion of the proposed canal lying between certain cross-sections]
of the canal should be performed in the dry"
was not only a mandate, but was necessarily a representation
that conditions would be encountered which would enable the work to
be done in the dry.
A systematic explanation of the cases would extend this opinion
to too great a length. They all declare the principle
Page 258 U. S. 12
that the government will be liable in the same circumstances
that private individuals would be liable, but, necessarily, neither
is liable if neither makes representations.
In
Hollerbach v. United States, 233 U.
S. 165,
233 U. S. 172,
the government was held liable because "the specifications spoke
with certainty as to a part of the conditions to be encountered by
the claimants," and of those, it was said, "the government might be
presumed to speak with knowledge and authority."
In
Christie v. United States, 237 U.
S. 234, "there was [we quote from the opinion] a
deceptive representation of the material, and it misled." The
claimants in the case, it was said, were forced to rely upon the
information furnished them by specifications which were untrue and
known to the officers of the United States to be untrue. To the
extent that they were untrue, claimants recovered. As to other
conditions which might or might not have been foreseen, it was to
be supposed, it was said,
"that contemplation and judgment were exercised not only of
certainties, but of contingencies, and allowance made for both at
the time of the bid, with provision in the bid."
In
United States v. Atlantic Dredging Co., 253 U. S.
1, the representations made by the government were
deceptive in that the test borings gave information to the
government not imparted to bidders, of materials more difficult to
excavate than those shown by the maps and specifications. The case
is instructive, as it considers other cases and the grounds of
their decisions.
The elements which existed in each of the cited cases are absent
from the case at bar. In the case at bar, the government undertook
a project and advertised for bids for its performance. There was
indication of the manner of performance, but there was no knowledge
of impediments to performance, no misrepresentations of the
conditions, exaggeration of them, nor concealment of them,
Page 258 U. S. 13
nor, indeed, knowledge of them. To hold the government liable
under such circumstances would make it insurer of the uniformity of
all work, and cast upon it responsibility for all of the conditions
which a contractor might encounter, and make the cost of its
projects always an unknown quantity. It is hardly necessary to say
that the cost of a project often determines for or against its
undertaking.
Judgment affirmed.