receive and receipt for, on account of the Navy | the steamer, when the Secretary of the Navy Department, all materials delivered therein for was authorized to withhold from future payconstructing said steamer; which materials, ments such deductions as might be necessary when so received and receipted for, should be to meet the probable excess of cost. It was furdistinctly marked with the letters U. S., and ther provided, that when the said Stevens should should become the property of and belong to have fully completed the said war steamer, and the United States; and it should be his further when she should have been duly delivered to duty to certify all accounts, presented and cer- and received by the agent of the United States, tified by Stevens, for materials and labor, which according to the terms of the contract, the full should form the evidence on which payments amount of the price remaining unpaid and to beshould be made; but the authority of such in- come due when the said war steamer should be specting officer, it was understood, should not fully completed and accepted, was required to extend to a right to judge of the quality or fit- be paid and the mortgage security canceled and ness of the materials or workmanship, but mere- returned. ly as to the cost thereof; "It being understood," the contract proceeds, "that the quality and fitness thereof, with other matters concerning the performance of the contract, are to be inspected and determined in the manner hereinafter provided for."

In pursuance of his contract to that effect, Robert L. Stevens executed and delivered a mortgage on the premises therein described, being the basin, dock, shops, etc., wherein the war steamer was to be constructed, conditioned to be void, in case he fully performed his contract in relation thereto, with a power of entry and sale, on the part of the mortgagee, in case default should be made in the completing and delivery of the said war steamer at the expiration of four years from that date, according to the conditions and stipulations of the contract; and out of the proceeds of such sale to retain any dues that might have accrued by reason of the failure to perform the contract, or so much thereof as should be necessary to complete any deficiencies on the part of the said Stevens.

It was thereupon further stipulated, that before the final payment for the said war steamer should be made, a certificate should be rendered to the Navy Department, that, in her construction, armament and equipment, all the provisions of the contract had been fully performed by Stevens, which certificate should be given and signed by persons appointed to examine the vessel; one by Stevens, one by the Secretary of the Navy and, in case of disagreement, a third by the other two, the decision of the majority to be conclusive. It was also agreed that Stevens, in lieu of other security for the faithful performance of the contract on his part, should make to the United States a mortgage, which should be a first lien on all the land, docks, wharves, slips and all their appurte-account of the vessel $500,000. nances belonging to and embraced within the establishment at Hoboken, New Jersey, at which the war steamer was to be constructed, with ample power to enter upon and sell the same in case of failure on the part of the said Stevens to fulfill his part of the contract, or so much thereof as should be necessary to complete any deficiencies on his part.

The time for the performance of the contract was, by a subsequent agreement, extended for four years from September 9, 1848.

The Secretary of the Navy agreed to pay, as the price of the said war steamer, when fully completed and delivered at the Navy Yard at Brooklyn, in conformity with the contract, the sum of $586,717.84, the supposed mean cost of the steamers Missouri and Mississippi, or any additional sum that might afterwards be ascertained as properly included in that cost, to be indorsed on the contract "As the price which is to be paid for the said war steamer when fully completed, delivered and accepted."

Payments were to be made, from time to time, upon bills certified by Stevens and the agent of the United States, for not less than $5,000 each, and approved by the Navy Department, until the sum of $500,000 should have been paid; at which time, it was stipulated, that an examination should be had of the war steamer by persons to be appointed, as before agreed, for final examination, and if a majority of them should certify their opinion that the vessel could be fully completed according to contract for the remaining balance which might then be due, then payments of further bills in full should continue, not exceeding the full amount of the whole agreed price; but otherwise, the examiners were required to certify the amount which in their opinion would be required to complete

From January 5, 1845, to December 14, 1855, there was paid out by the Navy Department on

Robert L. Stevens, prior to his death, in 1856, had, in addition, expended in its construction, of his own means, $113,579.

The Naval Appropriation Act, approved August 16, 1856, 11 Stat. at L.,48, contains an appropriation" for Stevens' war steamer, eighty-six thousand seven hundred and seventeen dollars and eighty-five cents," being the remainder of the contract price, but no portion of this was ever paid.

In the meantime, Edwin A. Stevens took possession of the work upon the death of his brother, as executor and residuary legatee, and expended thereon, prior to September 5, 1857, of his own money, the sum of $89,185.37.

Nothing further appears to have been done until Congress passed an Act, approved April 17, 1862, 12 Stat. at L., 380, making an additional appropriation for the naval service for the year ending June 30, 1862. The 2d section of that Act is as follows:

"And be it further enacted, That the sum of $783,294, being the amount necessary to be provided, as estimated by a board appointed for that purpose, to pay for and finish the Stevens Battery now partially constructed at Hoboken, New Jersey, be and the same is hereby appropriated out of any money not otherwise appropriated for the immediate construction of said battery; Provided, That, in the contract for the completion of said vessel, it shall be stipulated that no part of the money claimed by Edwin A. Stevens to have been heretofore expended by him upon said vessel shall be refunded un til the amount of said claim shall be established to the satisfaction of the Secretary of the Navy

and the payment of the said sum shall be con- | ecutors to offer the same to the State of New tingent upon the success of said vessel as an Jersey as a present, to be disposed of as the said ironclad, sea-going war steamer, to be deter- State shall deem proper; and if not accepted mined by the President, and such contract shall by the said State, I direct my executors to sell stipulate the time within which the vessel shall the same, and the proceeds thereof shall fall be completed; Provided, nevertheless, That said into the residue of my estate." money shall not be expended unless the Secretary of the Navy is of opinion that the same will secure to the public service an efficient steam battery."

"I empower my executors to apply, not exceeding the sum of one million dollars, to finish, on my general plans, as near as may be, in the discretion of my said executors, the battery known as the Stevens Battery, and for the ac- [supra], as interpreted by the English courts, complishment of the said object I give to them according to Clarke v. Spence [supra], is "Foundthe use of the dock and yards and basin hereto-ed on the notion that provision for the payment, fore appropriated to the said battery, and all the material provided for said battery. When said battery shall be finished, I direct my ex

work for the money he is to pay, and is equiva- | are not conclusive evidence of an intent that the lent to an express provision that on payment of property in the ship should vest in the United the first installment, the general property in so States prior to final delivery. Indeed, in refmuch of the vessel as is then constructed shall erence to the latter circumstance, it is noticeable, vest in the purchaser." This dictum from Woods as indicating a contrary intention, that the auv. Russell, according to Benjamin on Sales, 246, thority of the inspecting officer was expressly 2d ed., was deliberately adopted as a rule of limited, so that it should not extend to a right construction by which, in similar ship building to judge of the quality and fitness of the macontracts, the parties are held to have, by im- terials or workmanship, such matters and all plication, evinced an intention that the property others concerning the performance of the conshall pass, notwithstanding the general rule to tract being reserved for determination after the the contrary, and adds: "The law thus estab- completion of the work, as a condition of aclished has remained unshaken to the present ceptance and final payment. time.

Much stress is laid, in argument, upon that Nevertheless, in Wood v. Bell, 5 El. & Bl.,791, provision of the contract which required all maLord Campbell, Ch. J., said: "When a man con- terials received at the yard for use in constructtracts with another to make any article for him ing the steamer, to be distinctly marked with for a given price, the general rule is, in the ab- the letters U. S., and declared that they should sence of all circumstances from which a con- become the property of and belong to the Unittrary conclusion may be inferred, that no prop-ed States. But it does not follow, because the erty passes in the chattel until it be completed materials provided for that use were declared and ready for delivery; on the other hand, where to be the property of the United States, it was a bargain is made for the purchase of an exist- intended that they should remain so after being ascertained chattel, the general rule, in the coming part of the structure. Such a precausame absence of opposing circumstances, is that tion might well have been suggested, as a sethe property passes immediately to the vendee; curity against a diversion of the materials to any that is, that there is at once a complete bargain unauthorized use, or to preserve the materials and sale. But these general rules are both and to the United States, in case, by reason of the equally founded on the presumed intention of failure of the work or from any other cause, the parties. If, in the first, there are attendant they should not be used in the vessel. Indeed, circumstances from which the intention may as is remarked by the learned Judge who debe inferred that the property shall pass in the livered the opinion of the Court of Errors and incomplete and growing chattel as the manu- Appeals in this case, the express declaration that facture of it proceeds, or even in ascertained defined the property in the unused materials, materials from which it is to be carried to per- seems to exclude the implication sought to be fection, that intention will be effectuated; and raised as to the property in the unfinished ship; equally, in the latter, if it appear that the par- for the inference is obvious, from the particuties intended to postpone the transfer of the larity of such a provision, that the larger interproperty till the payment of the price or the per-est would not be left to mere intendment. formance of any other condition, such intention will be upheld in the courts of law." "This principle," he added, 'we believe to be well settled;" and referring to the cases of Woods v. Russell, Clarke v. Spence, Laidler v. Burlinson et al., cited in argument, he remarked, that "Previous decisions, therefore, are mainly useful as serving to guide our judgment in estimating the weight of circumstances as evidence of intention;" and concluded by saying: "Still it must be remembered, after all, that what we have to determine is a question of fact, namely: what, upon a careful consideration of all the circumstances, we believe to have been the contract into which the parties have entered."

It is, perhaps, worthy of remark, that this passage from the judgment of Lord Campbell has been incorporated into the text of Abbott on Merchant Ships and Seamen, 4, by the editors of that treatise.

The courts of this country have not adopted any arbitrary rule of construction as controlling such agreements, but consider the question of intent, open in every case, to be determined upon the terms of the contract, and the circumstances attending the transaction. 1 Pars. Ship. and Adm., 63. And such seems to us to be the true principle.

Accordingly, we are of opinion, that the fact that advances were made out of the purchase money, according to the contract, for the cost of the work as it progressed, and that the government was authorized to require the presence of an agent to join in certifying to the accounts,

There are two other provisions of the contract, which seem to us conclusive of the question and, in a sense, adverse to the construction of the plaintiffs in error.

The first of these is that which required Stevens to execute and deliver a mortgage, in lieu of other security, for the faithful performance of the contract on his part, on all the land, docks, wharves, slips and all their appurtenances belonging to and embraced within the establishment at Hoboken, New Jersey, at which the war steamer was to be constructed, with power to the mortgagee to enter upon and sell the same in case of failure on the part of Stevens to fulfill his part of the contract, or so much thereof as should be necessary to complete any deficiencies on his part.

The taking of this security, as an indemnity to the United States, assumes the anticipated possibility that the failure might be total, so that the vessel, when offered for delivery, might be altogether rejected. And it does not detract from the force of this conclusion, that the alternative provides for completing deficiencies, if they should prove to be remediable; for, in that case, the United States, at its option, might accept the vessel, thus becoming invested with the title, and make good its deficiencies out of this security.

The other feature of the contract, which corroborates this view, is that which provides that final payment for the steamer shall be made only upon the certificate of examiners, to be appointed for that purpose, that in her construc

tion, armament and equipment all the provis- contract, together with the securities, by way ions of the contract have been fully performed of mortgage and lien, it held as indemnity. We and completed, which requires that the steamer see no ground for a construction that leads to so shall be fully completed and delivered at the remarkable a result. The plain meaning of the Navy Yard at Brooklyn, and fixes the gross Resolution is limited to a relinquishment on the amount which is to be paid for it when fully part of the United States of any interest it might completed, delivered and accepted. The fact be supposed to have in the vessel, in which the that advances are to be made in the mean- heirs of Robert L. Stevens are mentioned, probtime is expressly stated to be in consideration ably, because it was with him that the building of the security to be given by Stevens for the contract was made; and if it could operate at faithful performance of his contract, and that all as a release, would be to them, for the benecompensation for his time and services must be fit of those who, by law, had become his succeswholly deferred until the final completing and sors in the title; and that release would necesdelivery of the vessel. sarily convey with it, as an incident, an extinguishment of the obligation of the contract for construction, and all the securities taken for its performance. It was, in effect, and was doubtless intended as a declaration, on the part of the United States, for the benefit of whom it might concern, of its entire abandonment of all further connection with the battery and the contract for its construction. The subsequent assent on the part of Congress to its acceptance by the State of New Jersey, as a bequest from Edwin A. Stevens, while it could not operate to affect any rights vested in the interval, is, at least, a legislative interpretation of its previous release. This Resolution expressly recites that Edwin A. Stevens was the owner of the battery in his lifetime, and is scarcely more explicit in the recognition of his title than was the conduct of all the parties, including the present plaintiffs in error.

It is thus apparent, as we think, from these stipulations that the vessel was in all respects to be at the risk of the builder until, upon its completion, the United States should accept it, upon final examination and certificate, as conforming in every particular with the requirements of the contract, and answering the description and warranty of an efficient steam battery for harbor defense, shot and shell proof.

And looking at the situation of the parties, and the objects they must have had in view, all doubt is removed as to their intention. Mr. Stevens was an ardent and sanguine inventor, who had convinced himself that his unique design of a naval structure was practicable and of great value, and that, if adopted, it would prove to be of immense public utility. He succeeded also in persuading the government to make the experiment, and give him the opportunity of realizing his theories. But it was understood to be merely an experiment, and evidently, by the Navy Department, naturally conservative and inclined to adhere with some tenacity to its own traditions, regarded, at best, as of very doubtful success. The steamer, when built, was to constitute a part of the naval establishment of the United States. Can it be supposed that this was to take place except upon condition that, after completion and sufficient examination, it should be found fit for the service? This is the view, as it seems to us, which Congress, by its legislation, and the Navy Department, in all its dealings with the subject, con

We are of opinion, for the reasons stated, that there is no error in the decree complained of, and it is accordingly affirmed.

True copy. Test:

James H. McKenney, Clerk, Sup. Court, U. S.

ARTHUR R. RICHARDSON, Appt.,

v.

BENJAMIN C. HARDWICK.

(See S. C.. 16 Otto, 252-255.)

stantly entertained and acted upon, and which Parol evidence to vary written contract--obligation

of contract.

1. Where a written contract is free from ambiguity, it is not competent to show by parol that payment was to be made in some other way than therein specified.

both Robert L. Stevens and his brother, Edwin A. Stevens, did not hesitate to accept, the latter not shrinking from a further investment of $1,000,000 in an enterprise which he still cherished with confidence of ultimate success, after it had become to almost everyone else a dem-where the defendant has had the benefit of the con2. In suits upon unilateral contracts, it is only onstrated failure, and after the government, sideration for which he bargained that he can be for whom it was originally intended, had re- held bound. fused to it all further subsidies.

We find, therefore, that on July 17, 1862, the date of the Joint Resolution of Congress, under which the plaintiffs in error make their claim, the United States had no title to the Stevens Battery; but that the property in it had continued in Robert L. Stevens until his death, and passed, by his will, to Edwin A. Stevens, as residuary legatee. It follows that it did not

pass to the heirs at law of Robert L. Stevens by

virtue of the Joint Resolution.

It is urged, in argument, that, if the right to the vessel itself did not pass, then the Joint Resolution must be construed as a transfer to the heirs of Robert L. Stevens, of the right of action of the United States to recover against his estate damages for his non-performance of his See 16 OTTO. U. S., Book 27,

3. Where one has, by contract, the privilege or option of buying an interest in lands by paying a certain sum within a limited time, the contract itself does not vest him with any interest or estate in the lands, and by his failure to pay the money or any part of it within the time limited, the privilege accorded him by the contract is at an end, and his rights under it cease.

[No. 83.]

Argued Nov. 16, 1882. Decided Nov. 27, 1882.

A States for the Eastern District of Michigan. The history and facts of the case appear in the opinion of the court.

PPEAL from the Circuit Court of the United

Messrs. D. C. Holbrook, H. H. Wells and Theo. Romeyn, for appellant.

Messrs. Henry M. Campbell and Alfred Russell, for appellee,

Mr. Justice Woods delivered the opinion of the court:

This was a bill in equity filed by Richardson, the appellant, to compel the specific performance of a contract relating to lands between him and Hardwick, the appellee.

The contract opened with a description of the lands to which it related, and then proceeded as follows:

"The above described lands have been purchased by me under an arrangement with Arthur R. Richardson, as follows: it is understood that said Richardson may become equally interested in the above lands by paying to me one half the purchase price of the lands, together with an equal share of all expenditures made by me for taxes or any other purpose, and also ten per cent interest on all capital furnished by me in connection with his half interest. It is further understood that the purchase price of the lands bought of T. H. Eaton is to be reckoned at $10 per acre, and the terms of the above agreement are limited to two years from this date. Said Richardson is to pay one half his share in one year, and the balance in two years. ALPENA, Oct. 1st, 1868.

Arthur R. Richardson may cut timber on the within described lands on the following terms: he is to pay ($1.50) one dollar and a half per thousand feet, board measure, for all timber cut by him, and he further agrees to cut not less than twelve (12) thousand feet from each and every acre on which he may cut any, or in the event of his not doing so, he agrees to pay for twelve thousand feet, the same as though that amount had been cut by him. The logs are to be holden for the stumpage and to be his when paid for, it being understood that payment is to be made for the same when they come into market.

B. C. HARDWICK,

ARTHUR R. RICHARDSON.

ALPENA, Oct. 1st, '68."

in the proceeds of the timber and lands, and is entitled to a conveyance of an undivided half of the lands remaining unsold.

But it was not until May or June, 1874, that Richardson ever intimated to Hardwick that he claimed an interest in the lands, and his claim was then peremptorily denied by Hardwick; and it was not until he filed the bill in this case, December, 10, 1875, that Richardson ever made any definite demand on Hardwick for an account of the proceeds of the sales of timber and lands, or for a conveyance of the undivided half of the lands remaining unsold.

Upon final hearing, upon the pleadings and evidence, the circuit court dismissed the bill, and the complainant appealed.

The rights of the parties must be governed by their contract in writing entered into on October 1, 1868. All their previous negotiations resulted in that contract, and it was never subsequently changed, except by the verbal agreement to extend for one year the time allowed by it to Richardson to refund to Hardwick one half the purchase money, expenditures and taxes paid by him.

We cannot give any weight to the assertion of Richardson that it was one of the unexpressed terms of the contract that one half of the proceeds of timber sold from the lands should be indorsed upon the contract as payments made by him thereon. It is a matter in dispute between the parties whether any such understanding existed.

If it were competent to prove such an understanding by parol, the burden of proof would be on Richardson to establish it. Richardson, in his testimony, affirms the existence of this understanding, and Hardwick, in his testimony, denies it. We think the other testimony in the case leaves the preponderance of evidence on this point with the defendant.

But evidence to establish this understanding is clearly inadmissible. In respect to this matter the contract is free from ambiguity. Its plain meaning is that Richardson was to make payment directly to Hardwick, in money, of one half the amount paid by the latter on the lands. It is, therefore, not competent to show by parol that payment was to be made in some other way than that specified in the written instrument. Sprigg v. Bank, 14 Pet., 201; Specht v. Howard, 16 Wall., 564 [83 U. S., XXI., 348]; Forsythe v. Kimball, 91 U. S., 291 [XXIII., 352]; Brown v. Spofford, 95 U. S., 482 [XXIV., 510].

Looking, therefore, at the contract as reduced to writing by the parties, we are clear that Richardson is not entitled to the relief prayed for by his bill.

It is not disputed that before the date of this contract, Hardwick, the appellee, had purchased the lands described therein, had paid for them in full out of his own means, and had received a deed therefor in his own name. Prior to October 1, 1870, the date at which the two years mentioned in the contract expired, Richardson had cut timber on the lands on the terms mentioned in the contract, and had paid to Hardwick for "stumpage" $4,050, and, unless this was to be considered a payment on the contract, he, up to the date mentioned, had made no payment whatever thereon. On or just before October 1, 1870, by a verbal contract between Richardson and Hardwick, the time for the payment by Richardson of the half of the price of The written contract gives him the privilege, the lands was extended to October 1, 1871; but, or, as counsel call it, an option," to become up to that time, he made no payment on the equally interested in the lands by paying one lands, and never made any payment at any sub-half the purchase money, etc., written two years sequent time and never tendered any. In the after its date. The contract, of itself, did not meantime, Hardwick was selling timber off the vest him with any interest or estate in the lands. lands to other parties, and in the year 1872 sold It merely pointed out the mode in which he all the lands themselves except 160 acres. The might acquire an interest, namely: by paying a contention of Richardson now is, that, after certain sum of money within a certain time. He crediting upon the contract one half the amount did not pay the money within the time limited by received by Hardwick for timber sold and for the contract, and has never paid it or any part lands sold, the half of the purchase money and of it, and eighteen months before the comother expenses, which he was to pay in case he mencement of this suit, Hardwick gave him nobecame equally interested in the lands, has been tice that his option to purchase had been lost, satisfied, and that he is entitled to share equally and told him that he had no interest in the lands.

66