This is an action at law, brought October 26, 1881, in the circuit court of the United States for the district of Indiana, by Richard Wood and others, partners, doing business as R. D. Wood & Co., in Philadelphia, Pennsylvania, against the City of Fort Wayne, a municipal corporation in Indiana, to recover damages for the alleged breach by the latter of a written agreement made between it and the plaintiffs, on the tenth of September, 1879, in reference to the construction by the latter of water-works in the City of Fort Wayne. The agreement was made between the city, by its 'trustees of water-works,' of the first part, and R. D. Wood & Co., of the second part, and bore the seal of the city, and the statement that it was 'approved by the city council, September 15, 1879,' signed by the clerk. By the contract, the party of the second part agrees, for the consideration mentioned in it, 'to do all the work and furnish all the materials called for by this agreement, and in strict accordance with the specifications and requirements as hereinafter set forth. And that the said city shall have the right to appoint such civil engineer, and inspectors under him, as the trustees of water-works may deem advisable; and that said engineer shall determine the amount of work and materials to be paid for under this contract, decide all questions relative to the execution thereof; and his estimate and decision shall be final and conclusive. The whole to be in accordance with the preceding proposal signed by the said second party, and conformably to the following specifications, both of which are to be mutually considered, as to all expressions, intents, and purposes, as a part of this contract.' The material parts of the agreement, out of which the questions involved in the suit arise, are as follows:
'Specifications. The work to be done consists in furnishing * * * cast-iron water pipes,' some 'of sizes ranging from 24 inches to 4 inches diameter; * * * also, in trenches, laying pipes, and special castings, including back-filling, setting valves, constructing and setting valve-boxes, vaults, and covers, and setting hydrants, including all crossings of rivers and canals. * * * The delivery of the pipe shall commence on or before the first day of October, 1879, and be continued with regularity until the completion of the contract, which shall be on or before the first day of June, 1880. Special castings shall be delivered as may be required by the engineer. * * * Pipe-laying will consist in excavating and refilling trenches; in taking up and replacing pavements or other surfaces; in hauling and laying pipes, setting special castings, stop-cocks, air-cocks, check-valves, hydrants, and all other appurtenances incident to the pipe distribution; in cutting pipes, making joints, preparing foundations, building brick or stone vaults, blowoff wells; in repairing damages caused to gas-pipes, sewers, drains, and cisterns; in clearing the streets or grounds of all rubbish or refuse caused by the above work; in furnishing lead and gasket for joints, fuel for melting lead, clay and rope for bands, blocks and wedges for use under pipes, wroughtiron straps for securing caps, reducers, and other parts liable to draw; in furnishing and setting or constructing boxes or vaults for stop-cocks, air-cocks, man-holes, including furnishing and fitting cast-iron frames and covers thereto; in furnishing sand and all other materials for masonry, and all tools and labor necessary for the complete fulfillment of this contract. * *