United States v. Johnson

• Citation: 153 F.2d 846
• Decision Date: 16 April 1946
• Docket Number: No. 11026.,11026.
• Parties: UNITED STATES v. JOHNSON.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

153 F.2d 846 (1946)

UNITED STATES v. JOHNSON.

No. 11026.

Circuit Court of Appeals, Ninth Circuit.

February 15, 1946.

Rehearing Denied April 16, 1946.

Carl C. Donaugh, U. S. Atty., and J. Robert Patterson, Asst. U. S. Atty., both of Portland, Or., for appellant.

John Lichty, of Portland, Or., for appellee.

Before GARRECHT, DENMAN, and HEALY, Circuit Judges.

HEALY, Circuit Judge.

Appellee, plaintiff below, was awarded damages growing out of a contract with the United States for the construction of some 16 miles of highway.

The facts are these. In April 1937, the United States called for bids for the construction of the highway and furnished plans and specifications upon which bids might be based. Paragraph 2.2 of the specifications was as follows: "Sources of Supply. Gravel for crushing is available approximately 0.5 mile right of Station 870 and rock for crushing is available approximately 0.3 mile right of station 1239. Unless otherwise specifically approved in writing by the engineer only materials from the above sources shall be used for crushing. Additional filler that may be necessary to meet the required grading shall be obtained from sources approved in writing by the engineer." On receipt of the specifications appellee examined the surface of the site of the projected rock quarry. His bid, later submitted, was accepted and a written contract was entered into for the doing of the work.

Upon coyoting the quarry in preparation for shooting it appellee discovered that there was soft rock beneath the surface. He notified the resident engineer of the difficulty, and after further investigation by the government it was decided to proceed, making the best of what was there. The quarry was shot and a dragline to the rock crusher installed. In passing through the crusher the soft rock tended to adhere to the rolls with the result that the roll shaft was thrown out of line and eventually broken. This occurred several times, each occurrence being followed by a shutdown for three or four days. There was evidence that the government inspectors who checked the loads of material as they were carried out would hold up the trucks or order the material dumped on occasion because of the presence of the soft material. The diary of the resident engineer bears witness to the delays encountered both from the breaking of shafts and the presence of poor rock. Finally a new quarry was opened some distance from the first, but this proving unsatisfactory appellee moved to the gravel pit located near Station 870 at the opposite end of the road. These operations resulted in further loss of time and an increase in appellee's costs. He was unable to complete the road before bad weather forced cessation of operations for the winter, and when work was resumed the following summer it was necessary to reshape the roadways and gutters for the second time — an expense that would have been avoided save for the delays of the previous year. For appellee's failure to complete the contract on time the sum of $1,575 as liquidated damages was assessed against him.

The theory of the suit is that Specification 2.2 constituted a representation or warranty that satisfactory materials could be produced from the designated quarry for all the work required under the contract, and that the shortcomings of the quarry both as respects quality and quantity of materials amounted to a breach of the warranty. Damages were sought for the increased costs growing out of the breach, these added costs being for the change in location, for opening a new quarry, for longer hauls, costs growing out of shutdowns and delays, from repairs to machinery, for expense of shipment of machinery because of the winter cessation, and for the liquidated damages assessed by the government. The damages alleged in the amended complaint aggregated in excess of $14,000, but the prayer asked for judgment for $10,000. Judgment was granted in the latter amount less one cent.

1. Jurisdiction of the district court was predicated on the Tucker Act, 28 U.S. C.A. § 41(20).¹ It is argued by the United States that the court erred in retaining jurisdiction after the complaint was amended in the course of the trial to present claims exceeding $10,000. Counsel for the government concede that where there is a single claim to damage the excess above $10,000 may be waived, in which event the district court retains jurisdiction, cf. Hill v. United States, D.C., 40 F. 441; W. E. Hedger Co. v. United States, D.C., 42 F.2d 553; Hammond-Knowlton v. United States, 2 Cir., 121 F.2d 192; Oliver v. United States 9 Cir., 149 F.2d 727. The argument assumes that several different claims were asserted by appellee. We think the assumption is incorrect. While the damage sought was a composite of several items, there was but one claim or cause of action, namely, a claim for damages arising out of the alleged breach of warranty. Several of the cases cited above, notably the leading case of Hill v. United States, supra, support the view that the aggregate excess of the items over $10,000 may be waived. No authority to the contrary is cited.

2. It is argued that Paragraph 2.2, taken as a whole, was not a deceptive representation or warranty upon which appellee was entitled to rely as an assurance that there was an adequate supply of suitable rock at the source designated. Attention is called to a general provision contained in the specifications to the effect that "bidders must make their own estimates of the facilities and difficulties attending the execution of the proposed contract, including local conditions, uncertainty of weather, and all other contingencies". The cases of MacArthur Brothers Co. v. United States, 258 U. S. 6, 42 S.Ct. 225, 66 L.Ed. 433, and Simpson v. United States, 172 U.S. 372, 19 S.Ct. 222, 43 L.Ed. 482, are relied on as presenting analogous situations.

The contracts before the Court in those cases are readily distinguishable. More nearly akin to the present are those involved in Sheridan-Kirk Contract Co. v. United States, 53 Ct.Cl. 82, Hollerbach v. United States, 233 U.S. 165, 34 S.Ct. 553, 58 L.Ed. 898, and Christie v. United States, 237 U.S. 234, 35 S.Ct. 565, 59 L.Ed. 933.² In the Sheridan-Kirk case the government was held liable for misrepresentations honestly made as to the depth of bedrock. The doctrine there announced was approved by the Supreme Court in the Hollerbach and Christie cases. In the Hollerbach decision it was held that a positive statement in the contract for repair of a dam to the effect that the dam was backed up with broken stone, sawdust and sediment to a designated height must be taken as true, and that upon the government rather than upon the contractor must fall the loss resulting from the mistaken representations; and this despite the contractual requirement that the contractor make an independent investigation of the facts. The Court said that 233 U.S. 165, 34 S.Ct. 556 "it would be going quite too far to interpret the general language of the other...