City of Ironton v. Harrison Const. Co., 212 F. 353

City of Ironton v. Harrison Const. Co.

212 F. 353 | 6th Cir. | 1914

DENISON, Circuit Judge

(after stating the facts as above). [1, 2] 1. The city complains that this suit was not abated, or, at least, stayed, because of the prior suit in the state court. Of this claim it is sufficient to say that there had been no final judgment in the state court; that the plea was therefore, in effect, not one of prior adjudication, but one of prior suit pending, and that a prior suit pending in a state court will not abate a later suit in a federal court, even if between the same parties upon the same issue, and even if the two courts are in the same district of the same state. City v. Clark (C. C. A. 6) 62 Fed. 694, 10 C. C. A. 591; Bank v. Stone (C. C.) 88 Fed. 383, 398. The request that this suit be stayed until the termination of the other case was, at most, an appeal to the discretion of the trial court, and the inability of the company to recover its damages under the existing issues in the state court would properly influence that discretion; but it is not easy to see why the company did not have an absolute right that its case in the federal court should proceed to judgment. McClellan v. Carland, 217 U. S. 268, 282, 30 Sup. Ct. 501, 54 L. Ed. 762.

[3] 2. It is urged that the laws of Ohio forbid a city to install wá-terworks until the State Board of Health has approved the plan, and that, for lack of this approval, the contract was invalid. It is by no means clear that the State Board of Plealth did not give to this plan all the approval which the statutes contemplate; however that may bé, the rules of pleading in Ohio clearly require that if a matter of this nature is to be urged in defense, it should be pleaded, and neither the answer nor the amended answer presents any such issue. It was therefore properly disregarded.

*356[4] 3. This brings us to the real question in the case, — which party broke the contract? The provisions for engineering supervision do not amount to that delegation of power which is forbidden to a municipal corporation; they are fairly incidental to the making of such a contract; but they are very broad; they make it clear that the personality' of the engineer was a material element in inducing the contract, and sharply distinguish this case from those where the engineer had only to see that the specifications were satisfied. City of Brooklyn v. Brooklyn Ry. Co., 47 N. Y. 475, 7 Am. Rep. 469; Burke v. Kansas City, 34 Mo. App. 570. Under this contract, the engineer had broad power to construe every provision, and final power to arbitrate all the technical disputes that might arise (see Memphis Co. v. Brown [C. C. A. 6] 166 Fed. 398, 403, 93 C. C. A. 162); he could direct work to be omitted, or added, and could fix the price of each; he could determine how fast the work should be pushed,'and how many men should be employed; he could make “changes in the line, grade, form, plan, position, dimensions or material.” It is not too much to say that under this contract, the manner in which’the engineer exercised his powers would determine whether there would be profit or loss, and it is clear to us that .the contractor was entitled to have the supervision of that engineer who was named, or of his successor, appointed in the manner agreed.

If, after the making of tire contract, the city had discharged Mr. Potter and appointed Mr. Oliver, troublesome questions would arise. The rightfulness of Mr. Potter’s discharge might have to be litigated, as best it could, in a suit to which hé was not a party, and whether such discharge was a “disability,” and who would then have the power to appoint a successor, would have to be determined. The present case does not present these embarrassments. The city, by its pleading, deliberately, and doubtless for what seeemed to it good reasons, adopted the position that Mr. Potter never had been employed and was not employed at the date of the contract. It never has relied upon the position that he was rightfully discharged, and that his successor was appointed pursuant to the contract. It never has tendered that issue. It “avers that said Potter never was at any time employed for the purpose of supervising or constructing said waterworks improvement”; therefore, we have only this defense to consider.

[5, 6] The city cannot be heard to make this defense. Section 10 of the contract is, in effect, a recital and representation" that Mr. Potter has been employed. The city had unquestioned power to employ him. It is to be presumed that the company entered into the contract in reliance upon this representation; and for the city'now to deny its truth is an act of bad faith which cannot be permitted. Where a municipal corporation has power to make a contract, and has power to do the preliminary acts upon which the contract rests, and which are recited in the contract, it is estopped to deny the truth of the recitals ; and that a sufficiently thorough examination of the corporate records would have shown the recital to be inaccurate is no defense. This, court has-frequently so held. Cadillac v. Woonsocket, 58 Fed. 935, 940, 7 C. C. A. 574; Defiance v. Schmidt, 123 Fed. 1, and cases cited on *357page 7, 59 C. C. A. 159; Bradford v. Cameron, 145 Fed. 21, 23, 76 C. C. A. 21.

[7] 4. It is urged that this is giving the company the benefit of an estoppel against the city, though an estoppel is not pleaded, and that this benefit cannot otherwise be claimed. The company’s pleading here does fully state the facts out of which the estoppel arises, and that is enough; to claim the estoppel in so many words is merely to state a conclusion of law. This is not required.

[8] 5. It is insisted that the company was not entitled to recover lost profits, and that the charge was erroneous on this subject. Further and more specific instructions on this subject might well have been given, and doubtless would have been given upon request; but the city made no request or exception, except to raise the'point that no lost profits could be awarded. We find no sufficient reason for this position. True, the .profits were unusually contingent in their character. If there had been high water in the river during all the period provided for the work, performance would have been impossible; abnormally high water or storms would have increased the expense and lessened the profits; but difficulties of this class are attendant on most construction work, and they do not make the profits so speculative as to he no proper basis for damages. When the suit was brought, the contract period had passed, and the physical conditions had become matters of history instead of conjecture. The recovery permitted was not beyond the rule. Philadelphia Co. v. Howard, 54 U. S. (13 How.) 307, 344, 345, 14 L. Ed. 157; U. S. v. Behan, 110 U. S. 338, 346, 4 Sup. Ct. 81, 28 L. Ed. 168; Anvil Co. v. Humble, 153 U. S. 540, 549, 14 Sup. Ct. 876, 38 L. Ed. 814; Farmers’ Co. v. Eaton (C. C. A. 8) 114 Fed. 14, 17, 51 C. C. A. 640.

[9] 6. Errors are assigned on the admission and rejection of evidence. We find no prejudicial error. The most plausible objections-urged upon the oral argument were not mentioned in the city’s brief; and it is not clear enough that in view of the whole record there was any error, or, if there was, that it materially affects the result, to justify us in disregarding our practice to consider as waived errors not argued in the brief, which by our rule 20 is required to specify the questions involved. Ireton v. Pennsylvania Co. (C. C. A. 6) 185 Fed. 84, 86, 107 C. C. A. 304.

The judgment is affirmed, with costs.