
    BECKWITH AND QUACKENBUSH v. THE UNITED STATES.
    [No. 16618.
    Decided February 16, 1903.]
    
      On the Proofs.
    
    The suit is for work on the Washington Aqueduct tunnel upon contracts made by Major Lydecker of the Engineers in 1883. Retained percentage, extra work, and work niismeasured by the engineer in charge are the subjects of the action. A counterclaim, is in the case for defective work by the claimants’ subcontractors in the lining of the tunnel.
    I. Where a contract provides that “the decision of the engineer officer in charge as to quality and quantity shall he final” it refers to the final inspection and acceptance of the work.
    II.Where a contractor pays his subcontractors before the final decision of the engineer officer he pays at his own risk. If there are latent defects of which the contractor and the officer are equally ignorant when installments are paid, the loss should fall on the party who employed the subcontractors.
    III. Whether a contract is annulled for failure to prosecute the work or is suspended by the order of the defendants, is immaterial as regards their counterclaim for damages suffered by defective work.
    IV. Where, in the construction of a tunnel, it is necessary that the rock excavation be slightly larger than the outer perimeter of the brick lining the contractor is entitled to be paid for the rock necessarily excavated, and the engineer officer’s measurement stopping at the perimeter of the brickwork is not conclusive as to quantity.
    Y. Where brickwork is to be paid for by the foot and the engineer officer arbitrarily assumes what its thickness is instead of measuring and ascertaining its actual contents, his certificate of measurement is not conclusive.
    
      The Pejoorters’ statement of the case:
    The following are the facts of the case as found by the court:
    I. That on the 29th day of October, 1883, at the city of Washington, D. O., Maj. G. J. Lydecker, of the Corps of Engineers of the United States Army, acting for the United States, and the claimants, Clinton Beckwith and John V. Quaekenbush, entered into a contract for the extension of the Washington Aqueduct, set out as Exhibit A to the claimants’ petition.
    II. That in accordance with the provisions of said contract the claimants began work upon the excavation of the Washington Aqueduct tunnel, in the said District, in the month of December, 1883, and continued said work until the 31st da}r of January, 1886, when said work was suspended by the United States.
    III. That on the 18th day of October, 1886, at the same place, the same parties execiited the supplemental articles of agreement set out in Exhibit B to -the claimants’ petition.
    IV. The claimants resumed work under said original contract on August 30, 1886, and continued to prosecute the work under the said original contract and supplemental agreement until the 30th da}*- of September, 1887, when the work was suspended by the direction of the United States.
    V. That on December 6, 1887, at the same place, the said parties executed other supplemental articles of agreement set out in Exhibit C to the claimants’ petition.
    VI. At the time of the execution of said supplemental agreement the «work of packing behind the tunnel lining was defective, but the engineer, acting on behalf of the United States, in ignorance thereof, but without final inspection, accepted said work, after which the claimants made a final settlement with.their subcontractors, who had performed all of said masonry work and packing under said contract, and paid them in full therefor.
    The defective work was not known to Major Lydeclcer, or to the claimants, until September 24. 1888, when he was informed thereof by some of the workmen employed in the construction of said tunnel. On the information so furnished Major Lydecker commenced to investigate the matter, and on October 15, 1888, he reported to the Chief of Engineers, U. S. Army, that a part of said work was.defective.
    VII. That the work under said several contracts was suspended by the United States from the 5th day of December, 1887, until the 8th daj« of May, 1888, when at the same place the claimants and the United States executed another supplemental agreement set out as Exhibit D to the claimants’ petition, after which the claimants resumed 'work and con-tinned said work until the 31st day of October, 1888, when tbey were ordered to suspend all work except the pumping.
    The reason for suspending the work was that in the opinion of the engineer, after an investigation of the matter, a great part of the packing behind the tunnel lining was defective and not in accordance with the requirements of the contract. The result was that the work on the tunneLwas practically suspended for a number of years.
    YIII. On the 1st of March, 1889, the claimants were informed by Major Lydecker that the examination of the defective work had been completed, and that the necessity for pumping had ceased, and the3r were therefore ordered to stop pumping. That since March 1, 1889, the United States gave the claimants no notice, either accepting or condemning their said work other than as aforesaid, and they were never permitted to resume work under said contract or perform any act whatsoever.
    IX. On March 9, 1889, the claimants, after hearing that certain portions of the work which had been performed under said contract were defective, offered to the United States and tendered themselves read}'' and willing to make good any and every defect in such wo'rk, to which offer and proposal no response appears to have been made.
    X. Up to November 1,1888, there had been retained from payments due from the United States to the claimants $13,814.03, the same being percentages retained from payments due the claimants for work done and accepted under the contracts prior to December 5,1887, pursuant to the provisions of the “ specifications.”
    XI. Up to the same date, November 1,1888, there had been retained from payments due from the United States to the claimants the further sum of $10,605.60, the same being percentages retained from payments due to the claimants for work done prior to August 31, 1888, under supplemental agreement of May 8, 1888, pursuant to the specifications.
    XII. Up to said date, November 1, 1888, there had been retained from payments due from the United States to the claimants the further sum of $18,620 for excavation made; said sum was retained as a guarantj^ that the claimants would clear out the muck from the tunnel. The claimants did not clear out all of said muck, but left 153.51 cubic jurds of it, which the United States cleaned out at a cost of 90 cents per cubic jmrd, aggregating $138.21. This sum should be deducted from said $18,620, leaving a balance not paid to claimant of $18,481.79.
    XIII. During the months of September and October, 1888, claimants performed work and furnished materials for the enlargement of the tunnel and the construction of brick and stone masonry lining therein under supplemental articles of May 8, 1888, which at the contract prices amounted to $40,831.61, and which has not been paid for.
    Xiy. During the same months of September and October, 1888, under said supplemental articles of May 8, 1888, claimants built 166.4 cubic yards of stone masonry in constructing the side walls of the tunnel lining ahead of the completed arch. The price charged is $4.75 a cubic yard, amounting to $790.40, which has not been paid for, that being the price for similar work under the terms of the contract of October 18, 1886.
    XV. Under said contract of May 8, 1888, claimants did further work in enlarging the original rectangular cross sections of the tunnel, which had been 'driven, under the original contract, to a length of 5,423.2 linear feet, in order to obtain sufficient additional space to put in the rubble masonry side walls and brick arch required by said contract of May 8,1888. This work, at original contract rates — $8 per cubic yard — for rock excavation, would amount to $10.90 per linear foot, from which should be deducted $2.39 per linear foot which it cost the Government to make further necessary enlargement of the tunnel to put in said lining, when completed by the Government. A further deduction should also be made for clearing out 1,000 cubic yards of “muck” in this part of the tunnel, at 90 cents per cubic yard, which was the reasonable cost thereof to the United States.
    The net amount of this finding would be as follows:
    5,423.2 linear feet enlargement of tunnel, at cubic yards per linear foot, =7,431.8 cubic yards, at §8. §59,454.40
    Deduct, as above, 5,423.2 linear feet, at §2.39.§12,961.44
    1,000 culac yards mucking, at 90 cents. 900. 00
    ■-• 13,861.44
    Net amount 45, 592. 96
    
      XVI. Under the original contract,. 7,123.7 linear feet of the tunnel were enlarged beyond the rectangular cross section to make place for a lining of brick masoniy arch work. The claimants were allowed for this enlargement exactly to the outside perimeter, as then measured, of the brick masoniy arch of the lining there put in by them. They did enlarge by excavating a clearance-of from 1 to 6 inches beyond the perimeter of said arch, and have not been paid therefor. Five thousand and seventy-six cubic jrards of rock excavation were thus made beyond said perimeter in order to give said space for the workmen to put in-the brick arch, and the charge for this item of excavation is $8 per cubic jmrd — the contract price of tunnel excavation. Allowing this excavation to 6 inches beyond the perimeter of the arch, the amount therefor would bo $40,412.4:8. Allowing it to 4 inches beyond the perimeter, the amount would be $27,074.99. The average of these two amounts would be $33,743.73.
    XVII. Under said original contract the claimants''.built a 3-ring arch of brick masoniy lining in the tunnel, amounting to $11,058.62 cubic yards, which was measured and allowed by the Government engineer in charge of the work at 10,650.50 cubic jmrds. The difference in measurement arose by. allowing the thickness of the arch at 12|- inches, instead of 13,1 inches, as actually constructed. This difference amounted to 408.12 cubic yards of brick masoniy, which, at the contract price of $14 per cubic jrard, would amount to $5,713.68. But this space was allowed for as 408 cubic 3Tards of packing, at $4.75 per cubic jrard, aggregating $1,938, which sum deducted from said $5,713.68, leaves the sum of $3,775.68, which has not been paid to claimants.
    In order to put in this three-quarters of an inch' thickness of brick masoniy an additional excavation of the tunnel of a similar number of cubic yards was made by claimants, which, at excavation rates of $8 per cubic .yard, amounted to $3,264.
    XVIII. In excavating the tunnel under the original contract claimants encountered rock which slipped and fell into the tunnel and was removed therefrom by them, as required by the contract. For the removal of this rock claimants were to be paid a price to be fixed by the Government engineer in charge of the tunnel work. The latter fixed the price at $1.50 per cubic yard. • A reasonable estimate of the quantity of such rock that slipped and fell is 4,824.6 cubic yards, of which amount 637.8 cubic yards have been paid for to the contractors at .$1.50 per cubic yard, less 4,186.8 cubic yards not paid for, which, at $1.50 per cubic yard, would amount to $6,280.20.
    XIX. Under the supplemental .contract of May 8, 1888, claimants constructed rubble masonry side walls in excess of 4 feet in height — the contract requirement — on account of the unevenness of the bottom of the tunnel. In so 'doing they constructed 270.1 cubic yards of rubble masonry, which, at $4.75 per cubic yard — the contract price. — amounted to $1,282.97. This has not been paid to claimants.
    XX. Under the original contract claimants performed extra work in cutting a “skewback” to support a segmental arch, for which they rendered a bill of $888.88. The work embraced in said bill ivas measured and paid for by the Government.
    XXI. Under the original contract claimants performed work ordered by the Government engineer in charge of the tunnel, in changing the shape of the tunnel, which had been enlarged to receive a horseshoe-arch lining, so as to permit it to receive an arch with perpendicular side walls. Doing this required additional rock excavation of the sides of the tunnel to the extent of 1,265 linear feet; and a reasonable price therefor would bo 60 cents per foot, amounting to $759, which has not been paid.
    XXII. Under the original contract claimants cut a bench in Howard University shaft, by direction of the Government engineer in charge of the tunnel work, for which they charge $475.51. This work was included and paid for in the general excavation and masonry of the shaft.
    XXIII. Under the original contract an error occurred in driving the bottom grade of the tunnel. This was corrected by the claimants at a cost of $7,409.14, including 10 per cent protit. The contractors were responsible for this error.
    XXIV. That on March 2, 1889, there was due from the United States to the claimants the further sum of $1,288.45 for the cost of pumping the said tunnel during the month of February, 1889, and on the 1st day of March, 1889.
    
      XXV. That on March 2, 1889, there was due from the United States to the claimants the further sum. of 1883,34 for the value of iron railway belonging to the claimants which they were compelled to abandon in the tunnel, less cost of its removal, $186.61 (p. 521); balance, $706.73.
    COUNTERCLAIMS.
    XXYI. In recent^ repairing the defective work done in said aqueduct tunnel by claimants under their said contracts, as set forth in finding 6, the Government economically expended the sum of $48,980.97, and also the sum of $1,500 for unfinished mucking which the claimants contracted to do; in all. $50,480.97, no part of which sum has been reimbursed to the Government by the claimants.
    XXVII. The last articles of agreement, dated Maj^ 8,1888, provided that all the work contracted for in the construction of said tunnel shall be- completed on the 1st day of November, 1888, “unless the Secretary of War shall then determine that the time for completion * * * may be extended, and shall thereupon expressly authorize payment to be made, in the usual manner, for the work done during the period of extension.”
    On October 31,. 1888, Major Lydecker addressed the following letter to the claimants:
    “GeNtlemen: I have just received the following instructions of this date from the honorable Secretary of War, viz:
    “‘In view of the joint resolution of Congress, approved October 19,1888, in regard to the Washington Aqueduct tunnel, and of the provisions therein, and especially of the pi-o-vision in relation to the future construction and management thereof, it is ordered that the work under existing contracts be suspended on and after this day, except so far as relates to keeping the tunnel free from water and the removal of muck, and the protection and preservation of the work already done on the tunnel.’
    “You are accordingly hereby notified to confine your operations on the tunnel to the limits above indicated from this time until the receipt of other instructions from this office.
    “Very respectfully,
    “G. J. Lydecker,
    ‘ '■Major of Engineers, O. 8. Army.
    
    “Received this day, November 1, 12.30 p. m.
    “Beckwith & Quackekbusii,
    “ Cot i tractors.”
    
    
      Since the writing of said letter none of the contracts above-mentioned have been extended by the Secretary of War, and all work in the tunnel was stopped from November 1, 1888, until August, 1898, when, on last-named month, the Government resumed the work of finishing the tunnel, and completed it in the year 1902.
    
      Mr. John Ü. Fay for the claimant:
    There is no dispute but that the United States abandoned the project. To make the tunnel a success numerous modifications and changes never contemplated had to be resorted to, aside from the repairing of the defective work,-that was comparatively a small item of the expense, less than $50,000. While the authorities are to the effect that before undertaking the repair work by the United States the claimants should have been called upon or permitted to remedy the faulty work, as is held in United States v. Gorwin (129 U. S., 381), in view of the fact, however, that the amount expended is not unreasonable and is practically the amounts estimated by the claimants and by Lieutenant Townsend’s first estimate, the claimants do. not urge the want' of opportunit}7 to repair the work, but they do insist that the cost only of that part of it that was done under the supplemental contract of May 8, 1888, should be deducted. ■
    The contract provides that workmanship shall be satisfactory in eveiy respect to the United States engineer. His decision is binding alike on the United States and the claimants. When in the most formal manner the United States engineer declared, December 5, 1887, over his hand and seal, that the work already done was to his satisfaction and paid over the guarantj^ fund which had been withheld until final acceptance of the work, and thereby induced the claimants to pay in full their subcontractors who had done the faulty work, the claimants contend that the United States is estopped to surcharge their account with the cost of repairing work thus formally and finally accepted under the terms of the contract.
    Never was the doctrine of estoppel invoked in a more equitable case than this. The claimants could in no way have pi'ofited by defective work. They paid their subcontractors for exactly the number of yards that the United States engineer measured, and furnished them with the cement and the stone; if the work was not clone there might have been less cement used, and for every yard omitted a barrel of cement worth 80 cents might have been saved. The stone came from the enlarging of the tunnel, and every yard of stone not used the claimants were obliged to remove from the tunnel at a cost of $1.50 a jrard; so for every yard of masonry not put in there was a net loss to the claimants of 80 cents a yard. The inspection of the work was committed to the United States inspectors, to whose satisfaction the work was to be done, and it was useless for the claimants to employ inspectors, for, no matter how satisfactory the work was to them, it would go for nothing. The claimants had a right to rely on the Government inspectors, and if they were unfaithful it should not be charged against the claimants. It was not the intent of the contract that the claimants should personally do the work; they had to employ mechanics and pay them either bjr the day or by the yard.
    They employed them b^y the yard and fixed the acceptance of their work by the engineer as the criterion for their final payment. When this acceptance was obtained, the claimants were legally bound to pay and did pay; they could not have defended a suit against them for the balance due. The doctrine invoked is a familiar one. He who by his acts or declarations intentionally or negligently has induced another to believe certain facts, and that other person has rightfully acted on this belief to his pi’ejudice, is conclusively estopped to deny the existence of such facts. (Best on Evidence, sec. 362; 21 organ v. R. R. Co., 96 IT. S., 720; Brant v. Va. Coal Co., 93 U. S., 336; Bigelow on Estoppel, 481 et seq.; Am. & Eng. Ency. of Law, Yol. II, sec. ed., pp. 420, 431.)
    And it is immaterial whether the doing the act or making the representation was intentionally or negligently done. (Calhoun v. Richardson, 30 Conn., 210; Smith v. Newton, 38 111., 230; Odlin v. Cove, 41 N. H., 465; Bigelow on Estop-pel, 476.)
    
      
      Mr. Felix Brannigan (with whom was Mr. Assistant Attorney-General Pradt) for tho defendants:
    The case is a simple one. The claimants on March 9,1889, expressed a willingness to repair the defective work in tho tunnel, and were prevented from so doing and proceeding with that work by the United States engineer in charge of the tunnel, because the contract time had expired. The question arises as to the measure of damages to which in law they would now bo entitled. If the claimants had a right to make good the defective work, the most favorable rule of law that wre know of in regard to their right of recovery in this suit is laid down by the Supreme Court in United States v. Behan (110 U. S., 339).
    But the principle laid down in Behan’s case applies only whore the contract was stopped without fault of the contractors, or where the contractors rescind tho contract because of the default of the Government, and the latter was not in default. In the present case the record shows that the work was suspended by direction of the Secretary of War, and he alone could have extended the last contract. The action is now brought upon the theory that the Government is responsible for an alleged breach of the contract in refusing to pay as stipulated, and the suit is for the recovery of contract prices for the work alleged to have been done by the claimants under all the contracts. There is no rule of law which authorizes that measure of damage, even though the work was stopped by the Government. This case is governed by the English principle stated in Chapel v. Hides (2 Cromp & M., 214), which is cited by the Supreme Court in Van Burén v. Diggs (11 How., 461, 475, 476).
    This principle was carefully considered by the Supreme Court in Withers v. Greene (9 How., 213), and it then “received the concurrence of all tho judges.” (11 How., 476.)
    Taking the most favorable view for the claimants, their measure of damage comes under the principle above cited, viz, upon a quantum, 'meruit, that is to sajq “the real value of the work done and materials supplied. ” Therefore, it is contended that even if all moneys alleged to be due them can not be forfeited under the provisions of the contracts, the claimants can not recover contract prices. They are only entitled to recover for real value, if they have proven such value, arid of that value not a word of evidence is offered.
   Peelle, J.,

delivered the opinion of the court:

This action is to recover for certain work performed b}^ the claimants for the United States in the extension of the Washington Aqueduct and for money retained for like work under their contract, dated October 29, 1883, with the defendants, through Maj. G. J. Lydecker, Corps of Engineers, U. S. Army, approved by the Chief of Engineers November 19, 1883, and sundry supplemental agreements hereinafter referred to, all being made part of the petition in this case.

Under the original contract the claimants obligated themselves to furnish the materials, to do the work, and to construct a tunnel about”twenty thousand eight hundred and twenty-six (20,826) feet in length, eleven (11) feet wide, and seven and one-half (7i) feet high, from the distributing reservoir above Georgetown to the proposed new reservoir east of Howard Universit3T, in consideration of which the United States agreed to payr therefor (on monthty estimates approved by the engineer, less 10 per cent to be retained until the final completion and acceptance of the work) as follows:

“For excavation in tunnel, eight (8) dollars per cubic yard.
“For earth excavation in shafts, six (6) dollars per cubic yard.
“ For rock excavation in shafts, ten (10) dollars per cubic juird.
“For brick masonry in tunnel, fourteen (14) dollars per cubic j-ard.
“For concrete masomy in tunnel, five (5) dollars per cubic 3rard.
“For dry stone packing in tunnel, two (2) dollars and fift3r (50) cents per cubic yard.
“For brick masonry in shafts, eighteen (18) dollars per cubic 3rard.
“For concrete masonry in shafts, five (5) dollars per cubic 3Tard.
“For dry stone packing in shafts, two (2) dollars and fifty^ (50) cents per cubic 3rard.
“For air shafts, complete, fifteen (15) dollars per lineal foot.”

The work was to be commenced on or before the 20th day of November, 1883, and to be completed on or before the 30th day of June, 1885.

The contract, among other things, provided that—

“All materials furnished and work done under this contract shall, before being accepted, be subject to a rigid inspection by an inspector appointed on the part of the Government, and such as does not conform to the specifications set forth in this contract shall be rejected. The decision of the engineer officer in charge 'as to quality and quantity shall be final.”

The specifications made part of the contract provided fox-dry stone packing for filling large void spaces wherever the same could be advantageously done to save concrete masonry.

II nder the terms of that contract the claimants began work in December, 1883, and continued until the 30th day of January, 1886, when work thereunder was suspended by the United States.

Thereafter, on October 18,1886, the same parties executed a supplemental agreement, whereby it was, among other things, in substance provided that, as the Congress had by the general deficiency act of August 4,1886, in making appropriations for the completion of the tunnel, instructed the Secretary of War “to submit to the board of engineers for fortifications and for river and harbor improvements whether any changes are demanded for reasons of safety or economy in the method of lining said tunnel heretofore adopted and pursued; ” and as said board had, as. recited in said supplemental agreement, made a report August 24, 1886, requiring ‘ ‘ rubble laid in cement mortar or with fine concrete packed solidly around larger stone,” in lieu of the dry stone packing provided for m the original contract, thereb}^ necessitating a modification in the original project, increasing the cost of the work, it was for that reason agreed:

“That the said party of the second part, iri consideration of the extension of the original contract to include the work of lining that may be done under the appropriation made by the act approved August 4, 1886, hereinbefore referred to, and of payment to be made as hereinafter provided, shall furnish all material for, and place rubble laid in cement mortar wherever required in the tunnel, all as directed by and to the entire satisfaction of the party of the first part.
“ In consideration of the material being- furnished and the rubble laid as provided for in the foregoing- paragraph, the said party of the first part shall pay to the said party of the second part at the rate of four (4) dollars and seventy-five (75) cents per cubic yard; all payments being subject to the conditions named in the original contract.”

It was therein further provided that the original contract should “ apply to the work and materials provided for by the supplemental articles of agreement so far as the provisions are deemed applicable by the party of the first part.”

The claimants resumed work August 30, 1886, and continued under the original and supplemental agreement aforesaid until September 30,1887, when the work was again suspended by the United States.

Thereafter, December 5, 1887, the same parties entered into a second supplemental agreement wherein, among other things, it was in substance provided that in furtherance of and supplemental^ to the aforesaid original and supplemental contracts, and by reason of the exhaustion of the appropriations theretofore made for the work, it became necessary to suspend active operations, and for that reason it was deemed for the mutual interest of both parties:

“First. That in consideration of the work already done to the satisfaction of the party of the first part, and of the further consideration that the entire work in contemplation can not be completed under any contract in which the parties of the second part are now concerned, the party, of the first part shall surrender and pay to the parties of the second part the sum of seventy-eight thousand two hundred and seventy-nine dollars and fifty-one cents ($78,279.51), such sum being eighty-five (85) per cent of the percentage heretofore retained and •withheld from the parties of the second part as a guarantee for the faithful performance of their work as provided in the original articles of agreement.”

Further provision was made therein for delay in the removal of the machinery, rubbish, and refuse material until after an appropriation should be made for the resumption of operations and for keeping the pumping machinery in proper order for use when needed, the Government to pay the expenses of operating the same in the meantime and to compensate the contractors for the use thereof.

It was further provided tnat nothing therein contained should “be construed to release from or add to any obligation, liability, right, or duty devolving on either partjr under the operations of the two several articles of agreement to which the foregoing are supplemental.”

Thus active operations in the construction of the tunnel were suspended until May 8, 1888, when the same parties entered into a third supplemental agreement, whereby, among other things, it was, in substance, provided that an appropriation of $355,000 had been made by the Congress for the completion of the Aqueduct tunnel, and • giving to the Secretary of War authority to complete the work under the foregoing-contracts, or to relet the work, in his discretion, at prices not exceeding those fixed, as aforesaid. And after the Secretary had determined that it was promotive of the interests of the United States to complete the work under tlie foregoing contracts, it was agreed between the parties that the claimants should continue the work to completion so far as the appropriation therefor should suffice, and that the work should be completed by November 1, 1888, as provided in the act of appropriation aforesaid. And in further specification of the work said supplemental agreement provides:

“It is also understood that the tunnel lining to be done under these supplemental articles of agreement will include three classes, viz: 1st. Brick arch, side wall, and invert — such as has heretofore been applied to the work — substantially as shown on tracing hereto attached, in section marked ‘A.’ 5>d. Nubble masonry side walls, and two-ring brick arch, substantially as shown on tracing hereto attached, in section marked ‘B.’ 3d. Rubble masonry side walls, and three-ring brick arch, substantially as shown on tracing hereto attached, in section marked ‘C.’ The backing in all cases to be of rubble masonry, such as called for in previous articles of agreement. The rubble masonry side walls contemplated herein will not be-less than eighteen (18) inches in thickness, and constructed throughout in accordance with the following:
Specifications for nJMe side walls. — The rubble side walls provided for in these articles will be constructed of clean, sound, and durable stone, selected for the purpose; the;v must be carefully laid, in cement mortar, in such manner as to fit approximately, being roughly shaped with the hammer, if necessary to make such fit. Mortar must be freely used, so as to solidly fill all spaces between stones, and to bulge out beyond the face joints when the stone is placed in position, the object being to make the wall as nearly water-tight as possible. The face of the wall must be laid true to the linos given and so that projections shall not extend more than one and one-half (1£) inches beyond the designated plane of the face; the facing joints shall bo neatly outlined and finished, and the top of the wall shall be truly leveled to the spring of the brick arch.
“It is further agreed that payment for the aforesaid work of lining shall be as follows: For full lining of 1st class, forty dollars (§10) per linear foot of tunnel so lined; for lining of 2d class, twenty-four dollars and fifty cents (§21.50) per linear foot of tunnel so lined; for lining of 3d class, twenty-eight dollars and fifty cents (§28.50) per linear foot of tunnel so lined. The prices aforesaid. being no greater than those allowed under the contract under which work has heretofore been done on the tunnel, and such as will insure the completion of the work within the limits of the-sum appropriated therefor. It is expressly understood that the prices paid, as above, include compensation for all work and material necessaiy for the solid lining of the tunnel in the several classes, as well as the work of enlarging the tunnel from the normal cross section to that required for placing the designated lining.
“It is further stipulated and agreed .that all brickwork in the lining of the tunnel shall be done by expert brick masons, and that the stonework of said linin g shall be done by expert stone masons.
“ In consideration of the first proviso of the urgent deficiency act hereinbefore named, it is also understood and agreed that if work on the tunnel is not completed by the 1st day of November, 1888, the parties of the second part may, at their option, continue to prosecute the work within the limits provided for by the appropriation of §355,000 made by Congress in the act herein named, but no payment for such work done or material furnished after said date shall be made until Congress shall have extended the time for the completion of the work, unless the Secretary of War shall then determine that the time for completion under these articles of agreement may be extended, and’shall thereupon expressly authorize payment to be made in the usual manner for the work done during the period of extension.”

It was further provided that “nothing therein contained shall be construed to release or add to any obligation, liability, right, or duty involved in the original contract of October 29, 1883, or any articles of agreement supplemental thereto, so far as concerns the parties in interest, except as specifically provided in these final supplemental articles,”-when approved bjr the Chief of Engineers, U. S. Army, which was done Ma}' 9, 1888.

Under that supplemental contract the claimants resumed work and continued in the prosecution thereof until suspended bjT order of the Secretary of War, October 31, 1888, and no work was done thereon until the year 1898, when the Government resumed work on the tunnel and the defective work and finally completed the same in the year 1902.

The claimants brought their action in this court April 13, 1889, claiming that the United States were indebted to them for the work performed under said contracts in the sum of $223,303.02, with interest, less the sum of $15,892.67, which they estimated as the probable cost of repairing the defective work. Their petition was subsequently amended, changing the.amount of their demand to $298,162.61.

No claim is made by the claimants for damages in consequence of the suspensions of the work, but their demand is for the retained percentages and other money withhold as set forth in findings x, xi, and xn, amounting to $42,901.17, and for the further sum of $138,315.68 for work and labor actually performed under the supplemental contract of May 8, 1888, and for further and additional work and labor performed under the original contract as set forth in the findings, the pajmient of all of which was withheld from the claimants until the extent of the damages caused by the defective work in packing behind the tunnel, as set forth in finding vi, had been ascertained by the United States and the work had been finall}” completed and accepted.

This defective work was repaired and completed at the necessary and economical cost to the United States of the sum of $50,480.97 — a much less sum than had been estimated by the engineer officers of the Gqvernment — -and. for the inonejr so expended the defendants have interposed their counterclaim, and upon that the principal controversy in the case arises'.

By reference to finding vi it will be observed that the work in the lining of the tunnel was, without final inspection, accepted by the engineer officer in charge, in ignorance of the defective character of the work; that the claimants had sublet the work as therein set forth, and did not, in fact, know that their subcontractors had violated their contract with them.

The work not having been done according to claimants’ contract with the defendants, thej", and not their subcontractors, must respond in damages for'whatever loss the defendants have sustained in the completion of the defective work, unless the acceptance of the work, in the manner indicated, b}r the engineer officer operates to estop the defendants therefrom.

The specifications made part of the contract, among other .things, provide that—

“All work and workmanship must be of the best of its kind, satisfactory in every respect to the United States engineer.” * *

Another provision of the contract is that—

“The decision of the engineer officer in charge as to quality and quantity shall be final.”

Upon these provisions of the 'contract the claimants contend that, though the engineer officer did not make final inspection of the work, his acceptance thereof operates in law to bind the United States.

If there had been final inspection of the work and the engineer officer in charge had decided and certified that the work had been done as to quality and quantity according to the requirements of the contract, it might be held that this bound the defendants. But here those facts are not shown. The “acceptance” of the work was not the final decision contemplated by the contract; and if the contractor, upon the faith of it, paid his subcontractors, he paid them at his own risk. Furthermore, had the claimants, through their subcontractors, performed the work according to their contract with the defendants, no injury could have resulted to the claimants bjr reason of the omission or neglect of duty of the Government officer to make proper inspection before accepting the work. Therefore, upon the assumption that both the claimants and the defendants were in fact equally ignorant of the defective work when it was so accepted, they who employed the subcontractors, and not the defendants, should suffer.

It is no answer to say that upon the faith of the acceptance of the work the claimants settled in full with their subcontractors, when in law the default and negligence of the subcontractors were, as between the claimants and the defendants, the default and negligence of the claimants, and there having been no final inspection of the work, the claimants can not relieve themselves from responsibility, because the defect-tye work was ■ in fact caused by their subcontractors, with whom the Government had no privity. If they had exercised reasonable diligence in that respect they would have possessed themselves of the facts in relation to the defective work and would thereby have been enabled to correct the same as the work progressed. Good faith on their part required this.

It follows that the claimants are not in a position to take advantage of the neglect of duty on the part of the engineer officer to inspect the work, the character of which the claimants were bound to know.

The contract provides in substance that if the contractors shall delay or fail to commence work, or shall, “in the judgment of the engineer in charge, fail to prosecute faithfully and diligently the work in accordance with the specifications and requirements” of their contract, then—

“In either case, the party of the first part, or his successors legalty appointed, shall have power, with the sanction of the Chief of Engineers, to annul this contract by giving notice in writing to that effect, and upon the giving of such notice, all money or reserved percentage due or to become due * * * by reason of the contract shall be and become forfeited to the United States.”

■ The contracts, however, were not formally annulled, but, as set forth in finding xxvxi, the claimants were on October 31,1888, pursuant to instructions from the Secretary of War, informed that the work had been suspended, “except so far as relates to keeping the tunnel free from water and the removal of muck and the protection and preservation of the work already done on the same;” and to that end the claimants were notified to confine their operations within the limits indicated, thus showing that although the time for the completion of the contract had expired and the claimants were in default, yet the defendants elected to suspend the work (except as indicated) instead of formally annulling the contract.

The suspension of the work, however, proved as effectual, so far as the further prosecution of the work by the claimants was concerned, as though their contracts had been formally annulled.

The defendants, however, contend that whether the work was suspended or the contracts annulled, their rights are the same in respect to their counterclaim for the actual damages sustained.

They do not contend'that all the money withheld or otherwise due the claimants under the contracts has become forfeited to the United States by reason of the claimants’ failure t) complete the work within the time spécified, but their contention is that the reasonable damag'es sustained by them for the necessary work and labor performed and for the materials furnished in the completion” of the defective work, are proper charges against the claimants, and to that extent should be recouped against any sum found due for the work performed by the claimants under their contracts.

In this view we concur and hold that the counterclaim is well pleaded.

■ Another item of contention arises on the facts set forth in finding xv, because of the reduction made in the amount there found due.

Under the supplemental contract of May 8,1888, the defendants performed certain work in enlarging the original rectangular cross sections, which had been driven under the original contract to a length of 5,423.2 linear feet in order to obtain the necessary additional space to put in rubble-masonry. side walls and brick arch required by the terms of the supplemental contract aforesaid. That work at the contract rate, amounted to §59,454.40, but, as under the terms of the contract the work was to be completed by November 1,1888, and was not done, the Secretary of War stopped the work before the cross sections had been lined as required by the contract.

The defendants, to conform the work to the contract requirements, made further enlargement of the tunnel and put in the rubble-masonry lining, the reasonable cost of which.was §12,961.44. At the same time, in order to do that work, the defendants were compelled to clean out and remove a thousand yards of muck at the reasonable cost of $900, or, in all, $13,861.44, which latter amount the court holds is a proper-charge against the claimants, and, deducting that sum from the $59,454.40, leaves due the claimants on this finding the sum of $45,592.96'.

On the facts set forth in finding xvi the defendants contend that the measurements of the engineer in charge should control, because the original contract under which the work therein set forth was done provides that “the decision of the engineer officer in charge as to the quality and quantity shall be final.”

In that finding it will be noted that the claimants, in order to make space to enable them to.put in the lining and brick masonry required by the contract, necessarily excavated 7,123.7 linear feet, being a clearance along the perimeter of the arch of from 4 to 6 inches, the average cost of which, at the contract rates set forth in the findings, was $33,743.72.

This work was done under the original contract, and it -was necessaiy to be done in order to enable the contractors to perform their contract; and being a partof the work required to be .done under the contract, the same should have been measured by the engineer in charge of the work. He, however, measured only to the outer perimeter of the brickwork, making no allowance for any space beyond that within which to work. There is no controversy about the quantitjT of work done, and as the defendants have received the benefit thereof, the claimants are entitled to be paid the contract rates therefor, which are represented in the allowance of $33,743.72 as the average cost of the work.

A like question arises on the facts set forth in finding xvii, where the claimants under the original contract built a three-ring arch of brick and masonry lining in the tunnel, amounting to 11,058.62 cubic yards, which was measured bjr the engineer at 10,650.50 cubic yards.

In making the measurements the engineer allowed onty 123-inches,, for the thickness of the arch instead of 13-& inches, as actual^ constructed. For this work the claimants were allowed for 408 cubic yards at $4.75 per cubic yard, amounting to $1,938, when they should have been allowed for 408.12 cubic yards at the rate specified in the original contract of $14 per cubic yard, or $5,713.68, from which latter sum there should be deducted the $1,938 heretofore allowed, leaving due the claimants the sum of $3,775.68.

Furthermore, in order to put in that thickness of brick masonry, it became necessary for the claimants to make an additional excavation of the tunnel of a similar number of cubic yards, which at the contract rate of $8 per cubic yard therefor, amounted to $3,264. As the defendants have received the benefit of the work, and the rates therefor are as provided in the contract, the claimants are entitled to recover on this finding the two sums last stated.

The other work set forth in the findings appears to have been necessaiy under the original or supplemental contracts under which the work ivas done, or was required to be done by the engineer in charge, for which the contract rates for similar work in connection with the tunnel are charged; and so, -whether the work performed comes strictly within the terms of the contract or is additional work of like character required by the contract, the measure of damages therefor, whether under the contract proper or on quantum meruit, is the rates fixed in the contract; and as the defendants have received the benefit thereof, they are in no condition to complain.

The money retained from the payments due to claimants from time to time were, in accordance with the terms of the contract, withheld until the final completion and acceptance of the work, and as that has now been done, and the defendants are to be recouped for the expenses incurred bjr them in the completion of the defective work, the claimants are entitled on the whole case, after deducting the amount of the counterclaim, to recover judgment for the sum of one hundred and thirty thousand seven hundred and thirty-six dollars and eighteen cents-($130,736.18), which is accordingly ordered.

Weight and Howry,' JJ., did not sit in this case and took no part in the decision.  