Northern Pac. Ry. Co. v. Goss

VAN VALKENBURGH, District Judge (after stating the facts as above). For convenience the several causes of action will be taken up in their inverse order: — 909 — [1] 1. It is agreed that upon the completion of the work defendant owed the plaintiffs a balance of $2,220.84 on contract price and for extra work. This was due and payable March 30, 1909; therefore, legal interest should run from that date, unless circumstances intervened which justified the railway company in withholding payment. The defendant coupled its tender with insistence upon a receipt releasing defendant from all claims of every kind and description arising out of or connected with the contract or its obligations. It based this demand upon the following provision of the contract: “When in the opinion of the chief engineer this contract shall have boon performed, he shall so certify in writing and give a final estimate and a statement of the balance unpaid; and the company will within thirty days thereafter pay the full amount so found unpaid. The contractor will at final payment execute, acknowledge and deliver to the company under his hand and seal a valid discharge from all claims and demands growing out of or connected with this contract.” The contract had been performed, and the engineer made the required certificate February 28th. While the language of the receipt conforms 'to the contract requirement, nevertheless the claims for damages, arising out of the collapse of the building, were then pending and unadjusted. In view of that situation, plaintiffs might well have declined to sign a receipt so sweeping in its terms. We agree with the court below that these claims, although in a sense arising out of the contract, were not connected with the performance of the work, and were not intended to be covered by the clause requiring a release as a condition to payment of the final estimate. For this reason interest from March 30, 1909, was properly allowed. 2. The second and third causes of action present the same questions, and will be considered together. The liability of an owner for damages incidental to the erection of buildings upon his property varies according to the circumstances of the case and the relationship of the parties. This has led to confusion and apparent conflict in the decided cases. The English rule, as stated by M<r. Hudson in his late work on Building Contracts, is that the contractor has no remedy against either architect or employer if the plans and specifications turn out to be unworkable, unless he has obtained some express warranty as to their nature and quality. Both parties must make their own calculations, and if one does not inquire into the matter, or runs the risks, he must take the consequences. While this statement is probably too broad to be accepted as the rule in the courts -of this country, it must be said to embody the basic principle involved, and departures must be in the nature of exceptions arising under special circumstances; otherwise great instability and confusion would be introduced into all building transactions, great or small, public or private, atid the doctrine thus announced would be constantly invoked to repair losses due to incompetency and improvidence. Certain it is that the contractor must be held to the exercise of reasonable care and the employment of reasonably essential and recognized methods of work. He must make such examination and assume such risks as, the general nature of the work and the situation of the parties impose upon him. The law does not raise in his favor such — 910 — an implied warranty as will excuse the contractor from all practical responsibility. [2] In this connection it will not be unprofitable to restate the general principles to be deduced from a careful examination of the American decisions. An owner through his architect or engineer cannot erect upon his own property a structure so frail as to be a menace to life and limb of the public, and hence a nuisance, and avoid responsibility upon the ground of having taken counsel of those supposed to be skilled in that field of knowledge. This rule, though .harsh, is sustained by reasons of public policy. Wilkinson v. Steel & Spring Works, 73 Mich. 405, 41 N. W. 490. So an owner who presents plans and specifications which contain serious defects not patent to an ordinary mechanic, and not discoverable by ordinary diligence upon inspection, is liable to the contractor for damages resulting from such latent defects, where the plans are complex and involved, where the contractor is held to strict performance of specifications, and where the owner through his architect or engineer retains a controlling direction and supervision exclusive of direction in the contractor. In such cases the guaranty raised by the law is that the architect or engineer has sufficient learning, experience, skill, and judgment properly to perform the work, and that such plans, drawings, and specifications are suitable and efficient for the purpose designed. If they fall short of this, the owner is liable, and cannot shield himself behind the presumed skill and the advice of his agent, but such agent may be liable to his employer for shortcomings in the nature of malpractice. Bentley v. State, 73 Wis. 416, 41 N. W. 338. Where the contractors build according to the prescribed plan furnished by the employer, they are not responsible for consequences resulting from any defect in the plan in a suit against them by the owner, as for a cistern that is not water tight (Porter v. Wilder & Son, 62 Ga. 520); or for insufficient strength in steel designed and specified (Murphy et al. v. Liberty Nat. Bank, 184 Pa. 208, 39 Atl. 143), or for a leak^ reservoir (Filbert v. City of Philadelphia, 181 Pa. 530, 37 Atl. 545); if the contractor follows the plans and uses good material (MacKnight Flintic Stone Co. v. City of New York, 160 N. Y. 72, 54 N. E. 661; Bush v. Jones, 75 C. C. A. 582, 144 Fed. 942, 6 L. R. A. [N. S.] 774). Nor are contractors responsible for what may happen afterwards to a building if they have followed the plans and used proper material and good workmanship. Clark v. Pope et al., 70 Ill. 128. This would include the case of a building completed, but not formally turned over, if it collapsed from its own , inherent weakness due to defective plans. [3] A contractor, however, owes the duty to examine the plans and judge of their sufficiency, and may be bound by his contract even if parts specified be insufficient; especially is this true if he has made full examination and guarantees that the work can be done. Giles et al. v. Foundry Co. (Tex. Civ. App.) 24 S. W. 546. He is bound to discover defects that are reasonably discoverable or patent. Siebert v. Leonard, 17 Minn. 433 (Gil. 410). He is not excused by misunderstanding plans, as his entering into the contract implies that he understands. Clark v. Pope et al., 70 Ill. 128. All this is true if he — 911 — has experts at his command by whom the plans could be inspected and passed on (Thorn v. Mayor & Commonalty of London L. R., 1 Appeals Cases, 120); or has large experience and presumed competency, or holds himself out to have such, and the contrary is not known to the employer; or if the work is so simple that it cannot be presumed to have defects not readily discoverable to one who would undertake the work. Unforeseen difficulty, however great to the performance of a building contract, will not excuse a breach by the contractor. Dermott v. Jones, 2 Wall. 1, 7, 17, 17 L. Ed. 762; Simpson v. U. S., 172 U. S. 372, 19 Sup. Ct. 212, 43 L. Ed. 482. Bearing in mind the general principles thus laid down, what situation do we find presented by the case at bar? A contract with the usual powers of inspection and discretion in acceptance of work and material, but with neither implied nor assumed control of the construction by the railroad company. Plans concerning the ultimate efficiency of which there is a conflict in the testimony, with an apparent preponderance in favor of the conclusion that they were not adapted to the erection of an exceedingly stable building of such dimensions. Practically a concensus of opinion that the building could have been erected by the contractors in full satisfaction of the terms of the contract by the employment of such braces as were actually used in the earlier stages of construction. Plaintiffs had had years of experience as building contractors. They employed no engineers, and relied on their own judgment and the reputation of the defendant’s engineering department; but they undertook in competitive bidding to dó this specific work, and held themselves out as understanding it and able to perform it. The structure was as simple in plan as can well be conceived, and required no more than ordinary carpenter’s skill to understand it. No fraud appears on the part of the defendant. The building, like a shed, was not intended to withstand severe strains, and it is practically conceded that its condition at the stage of collapse could not determine and fix the measure of its stability at completion. We are not concerned with whether it might have stood for a longer or shorter period in actual use, whether it might then have collapsed and injured third parties, or whether if it had collapsed after completion defendant could have recovered damages from plaintiffs, or plaintiffs could have recovered under the contract from defendant. No such questions are in this case, and the rules applicable thereto are not controlling here. This is a case of a contractor who has undertaken to erect a structure of simple plan, which concededly could have been built in safety by the employment of no extraordinary methods of construction, upon whom was imposed the duty of using reasonable precaution, and of keeping safe during the progress of the work what must at that stage have been less stable than at the period of completion. It appears almost conclusively that the contractors did not themselves exercise due care; and there is presented in the record an adjudication to that effect. In a case like this the question of latent defect, and therefore implied guaranty, is not present. The plaintiffs when they contracted must be presumed to have known what methods of con — 912 — struction essential to safety must be employed, and whether they could afford such for the price at which they announced themselves willing to undertake the work. It remains to consider whether the court in its charge correctly submitted the issues. Respecting this phase'of the controversy it instructed in substance as follows: ' (1) That there was an understanding or guaranty on the part of-the defendant that the plans and specifications were suitable and efficient for the purposes designed. (2) If the jury should find that the plans and specifications were not suitable and efficient' for the purposes designed, then the following questions must be answered: (a) Did the plaintiffs know, or in the exercise of ordinary care should they have known, that the plans were not suitable or efficient ? (b) Was the work prosecuted by the contractors -in the exercise of ordinary care? (c) Was the collapse caused solely by defective plans and specifications ? (3) If all these propositions were resolved against the defendant, then the verdict must be for the plaintiffs upon the second and third causes of action for the amounts therein claimed, with interest. From the viewpoint of the trial judge the charge was clear and unexceptionable, but we are of opinion that the conditions did not justify the application of the principle -first stated in so broad and absolute a sense. Whether the plans were suitable and efficient for the purposes — that is, of course, the ultimate purposes — designed, is not the crux' of this case. The question is, Could this building have been safely erected in accordance with contract by the use of known or ordinary methods of construction? If it could have been, and the testimony is unanimous to that effect, then we are not concerned with the extent to which experts may differ as to the ultimate virtues of the plan and efficiency of the structure. The original premise was wrong as applied to the facts in this case, and was distinctly prejudicial, because the jury may have been, and probably was, influenced by the .fact which clearly appears that the building was not and was not intended to be one of stanchest resistance. This erroneous direction was several times repeated. (4) The action of the court in directing a verdict on the first cause of action was correct. This claim was founded upon the same assurhptión as those embraced within the second and third counts, nameljq that the defendant was responsible for all injuries resulting from the collapse of the building, because of alleged defects in plans and -specifications. Apart from any consideration of the soundness of this proposition, no competent evidence was offered in.support of the claim asserted in this first count. The judgment in the state court founded upon a petition charging negligence of the contractors, of a nature which was not and could not be negligence on the part of the railway company, was not binding upon the latter. Nor was the record evidence in that case admissible, either in form or substance, to sustain the issues in this case. The testimony of the other witnesses offered was clearly incompetent. — 913 — It follows from what has been said that the judgment of the trial court must be affirmed as to the first and fourth counts or causes of action; that as to the second and third causes of action the judgment must be reversed and the cause remanded for further proceedings in harmony with the views herein expressed. The costs in this court, in both cases, will be taxed equally against the parties. It is so ordered.