
    THE UNITED STATES v. GEORGE B. SPEARIN and GEORGE B. SPEARIN v. THE UNITED STATES.
    [51 C. Cls., 155; 248 U. S., 132.]
    Judgment was rendered in favor of claimant in the court below. On appeal the judgment was affirmed, and the Supreme Court decided:
    Spearin agreed, for a lump sum, to build a dry dock in a navy yard in accordance with plans and specifications prepared by the Government and which provided, inter alia, for reconstructing a sewer which intersected the site, and prescribed the new location, dimensions, and materials tlierefor. Spearin rebuilt tbe sewer as so required, and it was accepted by tbe Government, but owing to a dam, unknown to both parties, existing in a connecting sewer, witbin tbe yard but beyond tbe limits of the operations, and to general conditions of drainage, known to tbe Government but not to Spearin, back waters burst the new sewer during heavy rain and high tide and flooded tbe dry-dock excavation, causing damage and menacing tbe work. Spearin, having declined to proceed unless tbe Government paid or assumed tbe damage and made safe tbe sewer system or assumed responsibility for future damage due to insufficient capacity, location, and design, tbe Government annulled tbe contract.
    
      IS eld: (1) The provision for reconstructing tbe sewer was part of tbe dry-dock contract and not collateral to it.
    (2) Tbe articles prescribing the character, dimensions, and location of tbe sewer imported a warranty that if so constructed tbe sewer would prove adequate.
    (3) Such warranty was not overcome by general clauses requiring tbe contractor to examine tbe site, check up tbe plans, and assume responsibility for tbe work until completion and acceptance.
    (4) Neither Revised Statutes, section 3744, providing that contracts with tbe Navy Department shall be reduced to writing, nor the parol evidence rule precluded reliance on such warranty, implied by law.
    (5) The contractor, upon breach of tbe warranty, was not obliged to reconstruct tbe sewer and proceed at bis peril, but, upon tbe Government’s repudiation of responsibility, was justified in refusing to resume work on tbe dry dock.
    (6) Having annulled tbe contract, tbe Government was liable for all damages resulting from tbe breach, including, the contractor’s proper expenditures on tbe work (less receipts from tbe Government) and tbe profits be would have earned if allowed fully to perform.
   Mr. Justice Brandeis

delivered the opinion of the Supreme Court December 9, 1918.  