Baltimore & Ohio Railroad v. Stewart

| Md. | Jun 21, 1891

Robinson, O. J.,.

delivered the opinion of the Court.

This is an action by the appellees, plaintiffs below, against the Baltimore and, Ohio Railroad Company to recover damages for the breach of a contract made by them with the company for furnishing the materials and doing the masonry-work in the construction of a bridge across 'Wheeling Creek, in West Virginia, and also to recover a balance due them for work at Caldwell’s Run.

The defendant company being about to build the bridge in question, its chief engineer, Col. Douglas, submitted the plans for the bridge to the plaintiffs and requested them to make a bid on the masonry-work. Having made the necessary inquiries in regard to the cost of materials, labor, &c., the plaintiffs, on the 19th July, 1890, submitted their bid to Col. Douglas. After some bargaining the prices to be paid for the various kinds of masonry were agreed upon, and without waiting for a written contract, the plaintiffs immediately began their preparations for the work, and began moving them plant and machinery from Lancaster, Pennsylvania, to Wheeling. Afterwards, on the 13th August, the plaintiff, Charles E. Stewart, came to Baltimore, and the following written contract, prepared by Col. Douglas, was signed by the parties:

“ Baltimore, August 13th, 1890.

“Messrs. Charles E. Stewart & Co.

“'Gentlemen: — Your proposal to do the work at Wheeling for masonry, Bridge Yo. 190, W. P. & B. R. By., is accepted. Baltimore and Ohio specifications to govern, at the following prices:

Coping, per cubic yard,..........................$15.00

2d class bridge masonry, per cubic yard............ 7.00

Bubble walls, per cubic yard...................... 5.50

Concrete, per cubic yard......................... 3.50

“For timber, iron and workmanship on coffer dams, and excavation in coffer dams, cost and ten per cent., not to include any cost of pumping. Any cost required to be done in taking care of trestles now in place to be paid for at cost.

“Yours truly,

“ (Signed) EL T. Douglas.

Chief Engineer.

“Accepted: (Signed) Charles E. Stewart & Co.”

In pursuance of this contract the plaintiffs began work at once upon the excavation for the abutments, and had been engaged upon it nearly two months when, by the direction of Col. Douglas, they suspended work for that season, owing to the rainy weather and high water. At the time of the suspension of the work, says Col. Douglas in his testimony, there was no intention of abandoning the building- of the bridge. “ It was suspended for the reason that the season and the water rendered it both advantageous to the company as well as to the contractors, that the work should be suspended.”

Early in September, the plans for the bridge were changed by omitting the piers, which would have been built in the middle of the stream, and to this change the plaintiffs made no objection.

In the following spring, when the weather was again open, the plaintiffs, after waiting, as they thought, a reasonable time, notified the defendant company of their readiness to proceed with the work. They were told that the company was not ready at that time to have the work resumed, and things went on in this way for several months, the plaintiffs in the meantime being engaged upon other work for the company at “ Caldwell’s Run ” and Grafton. Being put off from time to time, with first one excuse and then another, the plaintiffs, having come to thei conclusion that the company did not intend to have the work completed, by letter of January, 1892, demanded of it compensation for the losses which they had suffered from the breach of the contract by the company. In reply to this demand, Col. Douglas took the ground that the company had a right, under its contract with the plaintiffs, to abandon the work at pleasure, without incurring any liability to them for the loss which they might thereby suffer. In the regular form of construction contract used by the company — a carefully prepared instrument, with a number of provisions, limitations, and the most minute and detailed specifications, descriptive of materials, manner of work, &c., occupying no less than twenty pages of the record — we find an agreement by which the company may, at any time, suspend the execution of, or annul, the contract, upon giving-days’ notice, without being liable for any loss or damage to the contractors. And the plaintiffs, it appears, about five years ago signed a contract of this kind with the company, and the contention is, that the words “Baltimore and Ohio specifications to govern” completed and made definite the contract now sued on, by importing into, and making a part of it, all the provisions of the regular contract. And the question is whether, looking to the terms of the contract itself, and the subject-matter to which it refers, and the circumstances under which it was executed, there was any evidence from which the jury could find an agreement between the parties, that the defendant might, at its pleasure, annul the contract, or abandon the work without incurring any liability to the plaintiffs for the losses which they might thereby suffer. It can hardly be contended that any such right on the part of the defendant can be implied from the words “ Baltimore and Ohio specifications to govern.” The term “ specifications ” as thus used in contracts of this kind, ordinarily means a detailed and particular account of the structure to be built, including the manner of its construction, and the materials to be used. And the -words “ Baltimore and Ohio specifications to govern ” would in themselves be construed as meaning that the parties to the contract were to be governed, as to such matters, by the specifications to be found in the regular form of construction contracts used by that company. Aor is it pretended there was any mutual agreement or understanding, outside of the written contract in regard to this point. The plaintiffs assert most positively that there was no such agreement, and that they would not have undertaken the work but for the most positive assurance, given to them, that it would be completed. The plaintiff, Mr. Charles E. Stewart, says it was not so understood, and that he never heard that the term “ specifications ” was intended to give the defendant the right to abandon the work at pleasure, until he got Col Douglas’ letter of January 20, 1892, after the company had finally stopped the work. He further says he was entirely familiar with the specifications of the Baltimore and Ohio work, in the ordinary sense, having-done work for the company before, and knew what kind of materials were ordinarily required by it for its bridges, and therefore had no difficulty in knowing what was meant by “Baltimore and Ohio specifications.”

Col. Douglas, it is true, in answer to the question as to what was understood between the plaintiffs and himself by “specifications,” &c., when the contract was signed, says “the terms and conditions of the regular form of the construction contract used by the company.” But he goes on to say: “My reason for so stating” is, Mr. Stewart was “ entirely familiar with that form of contract, and the specifications of the Baltimore and Ohio Railroad, having-worked under them, and having been governed by them under my directions.” And in reply to the question whether the provisions of the regular contract were recognized by the plaintiffs and himself, in their dealings during the progress of the work, says: “They were most distinctly recognized by me, and I assumed that they were recognized by Mr. Stewart, as I believe they were.” Col. Douglas no doubt meant by the words “ Baltimore and Ohio specifications to govern,” not only the specifications, but all the conditions of the regular form of the contract used by the company, so far as applicable, and he assumed that the plaintiffs so understood these words. The latter, however, are in no manner bound by the assumptions or belief of the witness. They are bound by the contract itself, construed by the same rules of law which govern all other contracts. And, besides, the right of the defendant to annul or abandon the contract at its pleasure, under the agreements to be found in its regular construction contracts, depends upon certain notice to be given to the contractors, the length of the notice having been agreed upon by the parties. And, in this case, it is not pretended that any such notice was given, or ever agreed upon by the plaintiffs and defendant. So, it does not seem to us that there Avas any evidence from avMcIi the jury could find that by the words “ Baltimore and Ohio specifications to govern,” that the parties meant to import into the contract the reservation, to be found in the regular construction contracts of the company, of the right to annul the contract at its pleasure, without incurring any liability to the plaintiffs. As to the instruction of the Court in regard to the measure of damages, namely, that the plaintiffs are entitled to recover such an amount as the jury may find will compensate them for the loss, if any, which they may have suffered by reason of the stopping of the work by the defendant, the measure of damages being the difference between the amount which they would have been paid for the said work when completed, at the contract price, and what it would have cost the plaintiffs to do and complete the same, we ido not understand there is any real objection. This is the rule recognized by the current Aveight of authority. As was said by Mr. Justice Curtis in Phila. Wilm. & Balto. Railroad Co. vs. Howard, 13 Howard, 307, “in case of a contract like this, that loss is, among other things, the difference between the cost of doing the work and the price paid for it. This difference is the inducement and real consideration which causes the complainant to enter into the contract. For this he expends his time, exerts his skill, uses his capital, and assumes the risks which attend the enterprise.”

Or as stated in the still later case of United States vs. Behan, 110 U. S., 339, “the prima facie measure of damages for the breach of a contract is the amount of the loss which the injured party has thereby sustained; if the breach consists in preventing the performance of the contract, without the fault of the other party, who is willing to perform it, the loss of the latter will consist of two distinct items or grounds of damages, namely: First, what he has already expended towards performance (less value of materials on hand); secondly, the profits that he Avould realize by performing tbe whole contract. * * * If be goes also for profits, then tbe rule applies in Speed’s case, and bis profits will be measured by tbe difference between tbe cost of doing tbe work and wbat be was to receive for it.”

Tbe defendant, however, insists that if tbe plans for tbe bridge were subject to alteration at tbe will of its chief engineer, and that such alterations might essentially change tbe quantity of work to be done, and tbe profits of doing it, and that such alterations were liable to occur, then tbe plaintiffs are not entitled to recover any profits calculated upon tbe amount of masonry-work to be done, and tbe costs of doing it under said plans, and so asked tbe 'Court to instruct tbe jury.

Now, in tbe first place, there is no evidence to show, in tbe language of tbe instruction, that “such alteration was very liable to occur.” Tbe plans bad been prepared with great care, and tbe classification of tbe masonry— that is, tbe quantity of each kind of masonry to be used in tbe various parts of tbe bridge — were made by tbe local engineer. Col. Douglas says tbe plans “ might have been changed,” but be does not say there was &nj probability that they would be changed. And, besides, even if tbe plans were changed, tbe possibility that such alterations might affect tbe profits of tbe plaintiffs would not disentitle them from recovering profits estimated according to tbe plans agreed upon. They might not be able to prove with absolute certainty wbat their profits would have been. But tbe law does not require them to prove such profits with absolute certainty. All they were required to prove was that tbe profits claimed were reasonably certain to have been realized but for tbe wrongful act of tbe defendant. Where tbe completion of a work, like tbe one, tbe subject-matter of this contract, has been prevented, tbe profits to be realized cannot in tbe nature of things be proved with absolute certainty, and no greater degree of proof is required in such cases than in other civil actions. In this case the plans had been changed once, with the consent of the plaintiffs, and their estimate of profits was based upon the alteration thus made. And, in the absence of other changes likely or probably to be made, the jury had the right to estimate the damages, or in other words, the profits, upon the basis that the masonry-work would be built according to the plans agreed upon.

The defendant’s special exception to the instructions granted by the 'Court on the ground that there was no evidence legally sufficient to prove a loss of profits, was also, we think, properly overruled.

The plaintiff Stewart testifies that they made an estimate of the cost of the work at contract prices, if completed, according to the plans furnished them by the chief engineer; that they calculated the number of cubic yards, according to the plans, and then multiplied the yards by the price in the contract, and that this result would give what it would have cost the company if the work had been finished. He got at the quantity of the different sorts of masonry by calculating each different part of the masonry, according to the plans. The witness then gave in detail the number of cubic yards of each kind of masonry — that is, of coping, of second-class masonry, and of rubble — and the cost of each at the contract price, making the cost $42,870.04. He then gave the estimated cost of the different kinds of masonry to the plaintiffs — first, building the masonry-work, that is, cost of labor, and then cost of materials, &c., amounting to $19,576.91, and, deducting this amount from the contract price, he estimated the profits would have been $23,293.13. A very liberal profit it may be. These estimated profits were liable to be affected, it is true, by many causes — bad weather and losses by freshets. There might be room for argument as to the amount of profits, which the plaintiffs would have realized, but the 'Court could not say to the jury, in the face of all the evidence npon this point to be found in the record, that there was no evidence to show that they would have made any profit. The verdict of the jury was in favor of the plaintiffs for $13,600, and whatever ground of complaint the defendant may have as to the amount of the verdict, we have been unable to find any error in the several instructions granted and refused by the Court.

(Decided 21st June, 1891.)

Judgment affirmed.