Board of Improvement Water & Light Improvement Districts v. Galbraith

WOOD, J., (after stating the facts). I. Among other provisions in the contract is the following: ‘ ‘ The board shall have the final decision in all matters of dispute involving the character, quality and the amount of work and the-compensation to be paid therefor in eases not directly provided for in this contract or the plans and specifications, or any other question arising under this contract. ’ ’ Appellants contend that under this provision the decision of the board and the engineer as to the amount that should be deducted from the original contract price was final. The improvement districts in entering upon the. contracts with the appellee could do so only through their' board of commissioners. No authority is found in the above provision of the contract for constituting the board a final arbiter to settle all matters of dispute that might arise between the improvement districts and the appellee. There was no attempt upon the part of either party to the contract to have the matters in dispute submitted to the board as an arbiter. Such a provision in the contract, if made, was uninforceable, as evidenced by this lawsuit. Hence Hatfield Special School District v. Knight, 112 Ark. 83, and Boston Store v. Schleuter, 88 Ark. 213, cited by appellee to the effect that where a dispute arose between the parties to the contract as to the performance of the same in certain particulars that the decision of the architect should be binding, has no application here, for there is no such provision in this contract. The above provision, however, must be considered as reflecting the intention of the parties in making the contract, and in determining the questions now at issue between them we must weigh the evidence in the light of the above provision. But such provision can not be invoked by the appellants as a settlement of this lawsuit in favor of their contention. There are provisions in the contract requiring all work to be inspected by the engineer, Albert O. Moore, and giving him the right to reject all work that was not in compliance with the contract, and requiring the contractor to furnish all material and labor, and to execute the work in accordance with the plans and specifications prepared by the consulting engineer, and making these plans and specifications a part of the contract. When all of these provisions are considered together it is manifest that the board, in rejecting the itemized account presented by the appellee did so because it conceived that the items charged for were not in accord with the provisions of the contract as shown by the final estimate made by Moore, the consulting engineer. The testimony shows that the appellee and Moore went over this estimate, and that there was a considerable difference between them. ' The court found that the appellants were entitled to a credit for the sum of $2,340.23, for the value of the work and material which the board omitted, under the terms of the contract; whereas the appellants contend that the court should have allowed them on this account the sum of $3,838.24. The contention of appellants is in accord .with the clear preponderance of the evidence. The testimony of Moore, the consulting engineer, shows that the total value of the deductions that should be made for work and materials that were omitted, under the terms of the contract, amounted to $3,838.24, and that the total value of the work, labor and materials furnished for the increased work was $1,836.32, which made a net reduction of $2,001.92, to which appellants were entitled. The testimony shows that appellee had been paid $16,-792.15. Appellants were entitled to have the amount of this net reduction and these admitted payments taken from the contract price of $19,161, which would leave a balance due appellee of $366.93, instead of the sum of $1,710.52, as found by the chancellor. There was also, according to the testimony, “some old material left over which the board agreed to take, worth about $200, for which appellee should be paid. The chancellor found that the appellants had expended the sum of $159 in repairing certain defects wherein appellee had'failed to comply with his contract, and for which appellants should have credit. See Hatfield v. Knight, supra. So far as this record discloses these items are correct, and this would leave the sum of $107.93 due appellee on the contract, which sum should bear interest at the rate of 6 per cent, per annum from October 6, 1913, the date upon which appellants refused to make the settlement with appellee for the amount claimed to be due him under his contract. The testimony of Moore, the consulting engineer, shows that he allowed appellee the contract price for the items. The testimony of appellee himself shows that he arrived at the amount claimed to be due on the unit basis. On this point he was asked, “How did this difference arise between the total of the aggregate sum here and the lump aggregate sum of the contract?” and answered, “It was by the difference in the allowances that was made, as on the basis of $100 for that smoke stack. This difference comes in a unit basis. The difference would be what it would be on a unit basis and what it would be under the original contract.” Appellee’s testimony tended to show that there was an oral understanding at the time the changes were made which warranted him in charging for the increased work on the unit basis. The consulting engineer and each member of the board testified that there was no change made in the written contract. Besides the contract itself provides that any important changes should be agreed upon in writing by the parties prior to performing the work or furnishing the material, and that no extra charge should be made unless such provision was complied with. It also provides that such changes should be on the basis of the contract. The court therefore erred in adopting the basis of account established by the testimony of the contractor instead of the basis as established by the testimony of the engineer, and the written contract. II. The court found that the appellee had not complied with the contract in the manner in which he dug the ditches and laid and calked the pipes, but that the appellants were, estopped by their acts and conduct from recovering any sum on the cross-complaint on account of such breach of the contract. The finding of the court that the contractor had not complied with his contract in the matter of digging ditches and calking the pipes is sustained by a preponderance of the evidence. The appellants set up in their cross-complaint that to do this work so as to make it conform to the requirements of the contract would cost the sum of $2,035.05. The chancellor refused to allow the appellants to recover against the appellee for this sum, on the ground that they were estopped by their conduct. The statute, Kirby’s Digest, section 5719, provides that all contractors “shall be required to give bond for the faithful performance of such contracts as may be awarded them, with good and sufficient securities, in double the amount of the contract work, and the board shall not remit or excuse the penalty or forfeiture of said bond or the breaches thereof. ’ ’ . Under this provision the board of commissioners could not, by its conduct, excuse any failure on the part of the contractor to perform his work according to the contract, after the work had been done. This provision, however, would not prevent the board, during the progress of the work, from making changes therein by agreement with the contractor, and if the board, during the time the work was progressing, acquiesced in or consented to certain changes, the district would be precluded by such acts on the part of the board from recovering against the contractor for damages based upon these changes as alleged breaches of the contract. The .contract gave the engineer the right, as we have seen, at any time during the progress of the work or after its completion, to refuse, or reject any of the work done or material funished, that were not in strict compliance with the contract, and the contract provided that such defective work and material “must be removed from the work at once and suitable material furnished.” The contract further provided that “the first party shall correct any imperfections whenever discovered before the final acceptance of the work. ’ ’ The appellee contends that the board, through its engineer having immediate supervision of the work, and individual members of the board who were present at different times while the work was under way, observed the manner in which the appellee was digging the ditches and calking the joints and made no objections thereto. Bnt, on the contrary, that they acquiesced in what was being done by accepting the work and paying the 80 per cent, provided by the contract, and even more. The appellee himself testified that the work was completed before he left the job, and that Roth, who had immediate charge of the work for the board, did not require him to do anything further; that nothing was said about the work not being completed; that Moore, the supervising engineer, came down and inspected the plant and made an examination and test of the pipe fine and found no leaks; that he fixed up all that Moore required fixed; that Williams, one of the members of the board, made no objection as to the construction of the plant in any way. Oliver Galbraith was superintendent of the work for the appellee, and he testified: “Mr. Moore came down and complimented me on the progress I had made with the work. He complimented me on the depth of the pipe leading down to Williams’ addition. I'had it down about four feet. This was soon after we commenced. ’ ’ Sykes, the foreman, testified that he did not know ‘ ‘ of Mr. Williams, or Roth, or Slatton objecting to the work or to the depth.” 'Williams was there often, but he did not know of his making any objections. Slatten, one of the members of the board, testified that he “was on the job and made objections to the depth they laid them (the pipes), and was given to understand that they would be 'fixed up in proper depth and made right; ’ ’ that he went to both Roth and Galbraith and complained about the manner in which the pipes were being laid and the joints calked, and that they gave him to understand that they would have it made right; that their wages would be held out, and that they would make it right. He stated that the appellee was not on the job at the time these ditches were being dug and the pipes laid, and that he went to.where Both and appellee were and spoke to them about it; that the appellee was not at Sul•phur Springs very much. He made objections a number of times to the calking and to the depth of the trenches. - Williams, another member of the board, testified that “at times there seemed to be work done that I did not think was right, and I called the engineer’s attention to it and called Galbraith’s attention to it, and he said, ‘You have our bond; it is good for it;’ ” that he made objections to young Mr. Galbraith’ who was in charge for his father, as to the pipes being laid too shallow in certain places that he saw; that he'made objections at the time they were digging the ditches as to the depth. He reported it to young Mr. Galbraith, and also to the engineer, Both; that Galbraith said they would fix it up. The testimony of Both was to the effect that he made objections to the superintendent, Galbraith, and also to the foreman, Sykes, that the work was not being done according to the plans and specifications; that the trenches were not being dug or the pipes calked as the specifications required. They would say that the work was all right the way they were doing it, and that if it was not all right that-we had their bond which would require them to make it all right. There was testimony on behalf of the appellants also tending to show that appellee was not present much of the time the work was in progress. Without further setting out and discussing the evidence in detail, it suffices to say that the preponderance of the evidence shows that neither the board nor the engineer having the work in charge consented at the time the trenches were being dug and the pipes laid and calked to the manner in which this was being done; but, on the contrary, that they protested against it and notified those having the work in hand at the time that the contract was being violated. The testimony of the engineer, on behalf of the appellants, shows that the cost of -repairing and completing this work in the manner required hy the contract would amount to the aggregate sum of $2,035.06, specifying the items. The court erred, therefore, in finding that the district was estopped and precluded hy the conduct of the hoard from claiming damages on account of the failure to dig the ditches and calk the joints as the contract required, and erred in dismissing the cross-complaint as to damages for failure to comply with the contract in these particulars. . The decree will therefore be reversed and judgment will he entered here in favor of the appellants for the sum of $2,035.06, less the sum of $407.93, with interest thereon at 6 per cent, per annum from the 6th day of October, 1913.