Maryland Dredging Contracting Company v. United States

• Decision Date: 08 May 1916
• Docket Number: No. 310,310
• Parties: MARYLAND DREDGING & CONTRACTING COMPANY, Appt., v. UNITED STATES
• Court: U.S. Supreme Court

241 U.S. 184

36 S.Ct. 545

60 L.Ed. 945

MARYLAND DREDGING & CONTRACTING COMPANY, Appt.,

v UNITED STATES.

No. 310.

Argued April 25, 1916.

Decided May 8, 1916.

Messrs. C. C. Calhoun, D. B. Henderson, and J. Barrett Carter for appellant.

Assistant Attorney General Thompson for appellee.

[Argument of Counsel from page 185 intentionally omitted] Mr. Justice Holmes delivered the opinion of the court:

This is an appeal from a judgment of the court of claims dismissing the claimant's petition upon demurrer. On August 15, 1908, the claimant made a contract with Captain Brown of the Engineers, acting for the United States, to excavate a channel from Beaufort inlet to Pamlico sound, through Core and Adams creeks, in conformity with specifications made part of the contract. It was approved on September 10, and required the work to be begun within forty-five days after date of notification of approval, September 14, and to be completed within eighteen months. The work not having been finished on time, $7,320 of the agreed compensation was withheld as liquidated damages, and $210.50 as additional costs of superintendence and inspection, $7,530.50 in all, for which sum this suit is brought.

The petition alleges that after getting through Core creek to and through the headwaters of Adams creek to a point on tide water about 5 miles from its mouth, where for a mile and a half it averages more than 1,200 feet wide, and for the next 3 miles and a half 2,500 feet, the stumps and roots of a submerged forest were encountered at about 8 feet below the bottom of the water, which made it impossible to do the work with the ordinary machinery and in the ordinary way, or to finish the work by the time agreed. It is alleged that the forest was submerged by some abnormal force and violence of the elements, and that it could not have been discovered by the ordinary methods of inspection, and was not discovered in fact, although the claimant and others and the government had exercised every known precaution, and had made exhaustive examinations with the utmost care and skill. The petition sets up that this was a prevention 'by abnormal force and violence of the elements' within the contract, and and that the claimant also was entitled to an allowance of time under a clause in the specifications stating that the time is considered sufficient 'unless extraordinary and unforeseeable conditions supervene.' It also sets up that an extension of time was recommended by Captain Brown, although disallowed by the Chief Engineer. Finally the petition alleges that it was known by the government officials when the contract was made that the portion of the canal excavated by the claimant could not be used to any practical extent for commercial purposes until adjoining portions of a proposed line were completed, and that the additional work was not provided for or seriously contemplated within the time of the claimant's work. It is concluded that although the contract purports to provide for liquidated damages, fixed at $20 a day, yet, in the circumstances, it really imposed a penalty, and that the government has no right to retain the sum.

As has been implied already, the contract agreed 'that time shall be considered as an essential feature of this contract, and that in case of the failure upon the part of the party of the second part to complete this contract within the time as specified and agreed upon that the party of the first part will...