Ayers v. City of New Castle

Opinion by William W. Poktbb, J., On May 12, 1896, the plaintiff entered into a contract with [563] the defendant, a city of the third class, to furnish the materials and perform the work necessary in the grading, paving, and curbing of a part of Highland avenue in the said city according to the plans, specifications, conditions, notice to bidders, proposals, and ordinances, and street committee report, copies of which were attached to and formed a part of the contract. The plaintiff was engaged in the work on August 1, 1896, when the councils of the city defendant passed an ordinance giving consent to the New Castle Electric Railway Company to lay tracks on Highland avenue. The railway company thereupon began to lay the tracks and, as the plaintiff contends, thereby seriously obstructed, delayed, and rendered more expensive his work upon the' street. Eor this he claims that the city is liable as well as for certain extra work, required by reason of the laying of the said tracks, performed pursuant to a written notice from the city engineer. Assuming the act of the city in giving consent to the construction of the railway to be a direct interference with the performance, by the plaintiff, of his contract, the latter might have set it up as a breach; retired from further attempt at performance ; recovered for the work done and perhaps damages for the breach. His other course was to proceed with luis contract under the new conditions created by the act of the city, and by thus accepting them put himself in position to demand the consideration to be paid for full performance. He did not rescind the contract. He went forward, but, at the same time, gave notice that he proposed to hold the city liable for damages and for the extra work required to be done by the written order of the city engineer. Liability on the part of the city for this claim was not in contemplation when the original contract was made. It was created, if at all, by the act of the city in passing an ordinance authorizing the railway company to enter upon the street, then in course of improvement. The change in the contractual obligation was, as the plaintiff shows, material. By the very form of the ordinance giving consent to the railway, it is evident that the interference was considered likely to cause an increased cost to the contractor for which the city stipulated the railway company should pay. The change in the work and in the liability to pay for it, is as fundamental, by the plaintiff’s own showing, as if [564] the city had, subsequent to the execution of the contract, passed an ordinance, changing the grade. If this had been done and the plaintiff had then gone on with his contract at the new grade he could not have recovered the additional expense, even though the city engineer had given him assurance that he would be paid for it by the city. This was settled by Addis v. City of Pittsburg, 85 Pa. 879. Upon just such facts, Mr. Justice Sharswood says 5 “ The plaintiff would clearly have had the right to rescind the contract, recover for the wort he had done, and it may be damages for the breach. The proper course for the city undoubtedly was to advertise and relet the work. But the plaintiff preferred to go on with the work under his contract. He relied, it was offered to prove, on the assurance of the city engineer and the street committee that he should be compensated for the extra work. But the city itself, much less any of its subordinate officers or committee, had no power to make an agreement to pay for such work on the rule of a quantum meruit.” Thus the plaintiff, in this case, would be unentitled even had he the assurance of payment from the city officials. This results, as said by Mr. Justice Sharswood, from the necessity that requires “all municipal work of this character to be done by the lowest and best bidder.” It may, however, be said that in the contract before us there is provision made for notice to be given of claim for damages and for the doing of extra work by the contractor on notice from the city engineer. These clauses do not comprehend damages or extra work occasioned (as alleged here) by an intervention by the city’s own act. There is, in the municipal officer superintending a public work, done under a contract legally executed, a certain margin of discretion in directing the work. Conditions arise which were not in contemplation or in the knowledge of the contracting parties which require incidental changes and involve trifling items of increased cost which must be passed upon by the municipal officer promptly and with authority during the progress of the work. Such are the subjects covered by the clauses of this contract. They do not purport to extend to important changes or to the result of interference by municipal action and if so intended they are not sustainable under the law. Were it otherwise, a contract might [565] be lawfully made by the city for one thing and, through the discretionary powers given an engineer, be held for a work wholly different in cost and construction and beyond the design submitted to bidders as required by law. In this view of the case, the fact that the city stipulated that the railway company should, as a condition to the laying of its tracks on Highland avenue, assume any increased cost to the contractor, cannot be construed to be an admission of liability to the contractor so as to aid him in his claim. The question of the liability of the railway company to the contractor, for interference with his contractual rights, in the exercise of its powers derived from the state, do not properly come before us in this inquiry, although adverted to in argument. Our judgment in this case is based upon the authority of Addis v. City of Pittsburg, supra, which has not been overruled by the case of The City of Harrisburg v. Saylor, 87 Pa. 216. We believe the former to be a binding precedent directly in point but which, while sound in principle, is in the present case, seemingly, harsh in application. The sixth assignment of error is sustained and the judgment is reversed.