Arthur Bros Co v. United States, 97

• Decision Date: 27 February 1922
• Docket Number: No. 97,97
• Citation: 42 S.Ct. 225,66 L.Ed. 433,258 U.S. 6
• Parties: MacARTHUR BROS. CO. v. UNITED STATES
• Court: U.S. Supreme Court

258 U.S. 6

42 S.Ct. 225

66 L.Ed. 433

MacARTHUR BROS. CO.

v UNITED STATES.

No. 97.

Argued Jan. 20, 1922.

Decided Feb. 27, 1922.

Messrs. Wm. B. King, George A. King, William E. Harvey, and George R. Shieds, all of Washington, D. C., for appellant.

Mr. W. D. Riter, Asst. Atty. Gen., for the United States.

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, Mich., 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 bider 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.

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...