City of Mobile v. Shea

McCORMICK, Circuit Judge, after stating the case as above, delivered the opinion of the court. : The questions presented on this writ of error depend upon the proper construction of the written contract entered into by the parties, the material parts of which are shown in the foregoing statement of the case. We have to gather from the rulings on the pleadings the construction placed upon this contract by the learned judge who tried the case in the Circuit Court. The record brought up does not show, as it was not necessary that it should show, any of the incidents of the trial or the action of the trial judge between the final rulings on the demurrers and •the entry of the final judgment. The first two lines of the judgment inform us that, “the evidence and argument being concluded, the jury is now charged by the court, and the case submitted to them.” In order to clearly see and fully present the views of the judge, we have thought it necessary, or at least proper, to state with unusual fullness the provisions of the written contract and the pleadings of the respective parties. It appears with sufficient clearness on the face of the contract, itself that it was made by the parties with full knowledge that the city of Mobile had been engaged, and was then engaged, in an effort to procure authority to issue bonds for a fixed amount to pay for a system of waterworks, and also for a system of sewers, and, in support of her application to the Legislature for that authority, had caused a survey to be made, and plans and specifications for the construction of a system of sewerage for the city to be prepared, and had received sealed proposals for the construction thereof, from the defendant in error, at least, if not from others, in advance of the Legislature’s action, and as inducement to the granting of the authority sought. This is shown by the eleventh section of the contract, read in connection with the terms of the three writings which evidence the agreement of the parties. The prices of all work, labor, materials, and transportation to be done and furnished in constructing the sewerage system, stipulated in Schedule A attached to the specifications, were the prices and figures on the approximate quantities as proposed by the defendant in error in his bid for the construction of the sewers and appurtenances thereto. It hears date October II, 1898. The specifications required that the bids for the construction of the system of sewers should be made on the form of proposal furnished by the engineer, and attached to the specifications. Bidders were advised that, before tendering proposals, they should visit the locality and acquaint themselves with the physical conditions, and that their tender of proposals should be understood as having been made with full and complete knowledge thereof, and that the engineer’s [528] estimate of quantities contained in the specifications should be understood to be approximate and might be increased or diminished. The written specifications which the contractor was required to sign, to evidence his full understanding of the definitions contained therein; the contractor’s bid, showing the prices and figures on the approximate quantities, for the sum of which he proposed to undertake and complete all of the work, set out in tabulated form, and authenticated by the due execution thereof by each of the parties, bearing date, as we have already said, October n, 1898; and the final writing, as shown in the statement of the case, dated October 21, 1898 — each duly executed by the respective parties — constitute the written contract, and fill more than 20 closely printed octavo pages. These writings all have relation to a complex system of public improvement of large extent, and it is difficult to believe that it was at any time in the contemplation of either of the parties that this projected improvement should be made without any written evidence of a contract to guide them in the construction of the work, and in making their partial and final settlement. The theory of the plaintiff’s pleadings appears to be that, notwithstanding all these elaborate preparations, and the solemn execution of these writings by the parties, when the work was about to commence, and the office of the writings to begin to have effect, they were wholly set aside, and the work, so far as any work was done, was prosecuted, and settlements therefor made, under a verbal contract, which did not stipulate for definite prices, but left the parties at large to settle on the basis of the reasonable value of the work, materials, labor, and transportation used, and that the writings retain efficiency only as to that, part of the work which was never done. The pleadings of the plaintiff do not state what amount of money he received from the city on this work of constructing the sewer system, nor does the record anywhere show the amounts paid him during the progress of the work, or at the conclusion thereof; and, in the absence of bills of exception, we have no record evidence of the testimony offered and admitted on the trial. In the brief submitted by counsel for the defendant in error, it is stated that the court overlooked the issue made in the replication to the second and third pleas to the first five counts of the complaint, so far as they related to the work and labor done and material furnished in making extra excavations as incident to the increased depths of the sewer system, and charged the jury that the plaintiff could not recover for such work and labor done and material furnished, and the amount of the verdict shows that the-jury responded to these instructions, and found for the plaintiff only under the sixth and seventh counts of the complaint. The sixth count of the complaint only claims $2,973.39 for extra work and material on the manholes required by the alleged changes of plan and specifications, and furnished by the defendant in error. The seventh count in the complaint claims only the sum of $13,990, alleged loss of profit on work alleged to have been contracted to be done, which the city afterwards, refused to have done. The verdict of the jury, with which the defendant in error appears to be satisfied, must embrace only these claims, and the interest that had accrued thereon, prior to the date of the verdict. • It would appear from these [529] undisputed features of the case that the changes in the proposed plan and specifications had not been radical. We have fully examined and considered the cases cited on the brief submitted for the defendant in error, and relied upon in support of his contentions. Our attention has been most carefully given to the cases of Wood v. Ft. Wayne, 119 U. S. 312, 7 Sup. Ct. 219, 30 L. Ed. 416; Henderson Bridge Company v. McGrath, 134 U. S. 260, 10 Sup. Ct. 730, 33 L. Ed. 934; Wyandotte & D. R. Ry. v. King Bridge Company, 100 Fed. 197, 40 C. C. A. 325; County of Cook v. Henry Harms, 108 Ill. 151; and Salt Rake City v. Smith, 104 Fed. 451, 43 C. C. A. 637. We do not deem it necessary to review these cases, and specifically point out wherein the contracts and work and pleadings of the contractor in each of them materially differ from the contract and work and pleadings of the parties involved in the case before us. We do not think that the contractor has brought his claims within the authority of the cases he has cited. ■ On the contrary, it seems to us that the case made by him does not vary materially from those before the Supreme Court in Kihlberg v. United States, 97 U. S. 398, 24 L. Ed. 1106; Sweeney v. United States, 109 U. S. 618, 3 Sup. Ct. 344, 27 L. Ed. 1053; and Chicago & Santa Fé Railroad v. Price, 138 U. S. 185, 11 Sup. Ct. 290, 34 L. Ed. 917. The observations made by Judge Harlan in the first of these cases, and repeated in the one last cited, are pertinent in the present case. Speaking for the court in those cases, he said: “We are to presume from the terms of the contract that both parties considered the possibility of disputes arising between them in reference to the execution of the contract. And it is to be presumed that in their minds was the possibility that the engineer might err in his determination of such matters. Consequently, to the end that the interests of neither party should be put in peril by disputes as to any of the matters covered by their agreement, or in reference to the quantity of the work to be done under it, or the compensation which the plaintiff might be entitled to demand, it was expressly stipulated that the engineer’s determination should be final and conclusive. Neither party reserved the right to revise that determination for mere errors or mistakes on his part. They chose to risk his estimates, and to rely upon their right, which the law presumes they did not intend to waive, to demand that the engineer should, at all times, and in respect to every matter submitted to his determination, exercise an honest judgment, and commit no such mistakes as, under all the circumstances, would imply bad faith.” If it is possible for parties negotiating with reference to the construction of such a system of public improvement as that involved in this case to bind themselves by express stipulations that the engineer’s determination should be final and conclusive, on possible disputes arising between them with reference to the execution of the contract, the parties to this action have so bound themselves. We conclude that the demurrers of the defendant to the second and third replications, and to the fourth replication as amended, should have been sustained. It is therefore ordered that the judgment of the circuit court is reversed, and this cause is remanded to that court, with directions to award the defendant a new. trial,