M. E. GILLIOZ, Appellant, v. STATE HIGHWAY COMMISSION
Division One, Supreme Court of Missouri
July 11, 1941
153 S.W.2d 18
The judgment should be reversed and the cause remanded, and it is so ordered. Hyde, C., concurs; Dalton, C., not sitting.
PER CURIAM:—The foregoing opinion by BRADLEY, C., is adopted as the opinion of the court. All the judges concur.
M. E. GILLIOZ, Appellant, v. STATE HIGHWAY COMMISSION.—153 S. W. (2d) 18.
Division One, July 11, 1941.
Plaintiff‘s assignments of error go to defendant‘s instructions and to rulings on admission of evidence. Defendant contends that any such errors are immaterial because its instructions, in the nature of demurrers to the evidence as to Counts I and II, should have been given on account of plaintiff‘s failure to comply with the conditions of the contract relating to arbitration. It also contends that a verdict should have been directed as to Count II because of failure to comply with conditions of the contract requiring the filing of an itemized written claim.
As to this latter matter, the contract provision was, as follows:
“H-12. Claims and Legal Rights. As a condition precedent to the filing, by either party in any court, of any action arising out of the contract, notice of claim shall be given the other party as follows: Within sixty (60) days after the release of the retained percentage, the complainant shall file with the other party a full, complete, and itemized written statement of all claims of any character which he may have against the other pаrty arising out of the contract and, within sixty (60) days after such claims are filed, said other party shall mail to the complainant a full, complete, and detailed statement of any claims of any character which he may have against the complainant; and any claim not included in said notices of claim, or any claim so included but not specifically set forth and itemized, shall be deemed waived and shall neither constitute the basis of,
nor be included in, any legal action between the parties, nor in any counterclaim or set-off in any such action.”
Plaintiff‘s claim for damages in Count II is based on extra labor cost and additional time of use of machinery. Such provisions for notice of claim by express agreement of the parties have been generally upheld as valid. [1 Am. Jur. 428, sec. 35; 1 C. J. S. 1067, sec. 26; use developed in carrier‘s contracts, 9 Am. Jur. 914-929, secs. 796-812; 13 C. J. S. 461-495, secs. 234-241; Insurance Contracts, 29 Am. Jur., sec. 1099 et seq.] Plaintiff does not claim invalidity or non-applicability of this provision. He did give timely notice thereunder of his claim for return of the amount withheld for liquidated damages, sued for in Count I. Plaintiff, however, claims waiver of this provision, by reason of a conversation between his general superintendent, Mr. Maring, and defendant‘s construction enginеer, Mr. Corbett. Mr. Maring testified that, at a conference soon after the completion of the viaduct, Mr. Corbett said the only way plaintiff could get the liquidated damages refunded was to sue defendant and get a judgment. Mr. Maring then said: “We told Mr. Corbett that if we were forced to have this additional delay on receiving our liquidated damages that we would also in our lawsuit be forced to include a claim for damage, other than liquidated damages, which we had suffered through their delay. Mr. Corbett advised that the state would not and could not pay that, and we would have to include that in our lawsuit.”
There is nothing to show that Mr. Corbett was infоrmed as to the details or items of any such claim, as required by provision H-12 of the contract, or even the amount to be claimed. Moreover, there is nothing to in any way indicate that he had authority to waive the filing of such a statement of the claim for defendant. The contract provided that defendant‘s “assistants and representatives shall not be authorized to revoke, alter, enlarge, relax or release any requirements of the special provisions, specifications, or contract.” Plaintiff cites insurance cases holding there could be waiver by an agent‘s denial of liability, or by deniаl or breach of the contract, but cites no cases applying such rules of waiver to public contracts. As we said in Sandy Hites Co. v. State Highway Commission, 347 Mo. 954, 149 S. W. (2d) 828: “We are here dealing with a public contract, and under the law of this State such a contract must be definite and specific as to what is authorized to be done and compensation to be received. This contract could only be made in accordance with the authority granted by the Legislature. (Citing statutes.) The inspectors and engineers had no authority to vary its terms and it specifically so stated.” [See also Hawkins v. United States, 96 U. S. 689, 24 L. Ed. 607; American Sales Corp. v. United States (C. C. A.), 32 Fed. (2d) 141; Carter-Waters Corp. v. Buchanan County (Mo.), 129 S. W. (2d) 914, and cases therein cited.] We hold that there
Concerning the demurrer to the evidence as to Count I (based on conditions as to arbitration) defendant relies upon the following provisions:
“H-13. Disputes to be Arbitrated. Whenever a dispute or controversy arises between the parties on any matter involving compensation to the Contractor for work actually performed by him but not allowed for payment by the Engineer, or involving the amount or rate of payment under the contract, or concerning claims for extra payment filed by the Contractor and for any reason not allowed by the Engineer, then the same may, by either party, be referred to a board of arbitration for decision and award.
“H-13(a). Demand for Arbitration. Either party desiring to submit a claim for arbitration shall not do so until a detailed statement of said claim containing an exact enumeration of the items claimed together with the reasons therefor shall have been submitted in writing to the adverse party in accordance with section H-12. . . . After (compliance with certain other conditions) then he may within thirty (30) days, by directing to the adverse party a written demand have the dispute referred to a board of arbitration for decision and award. Should the complaining party fail to demand arbitration within the thirty (30) days stipulated, all rights to arbitration hereunder shall cease.”
This provision does not make arbitration (in whole or in part) a condition precedent to the filing of an action as is true of the notice required under H-12. (Which is likewise a condition precedent to obtaining arbitration.) It is difficult to see what usual legal action there could be on or arising out of a contract after a complete arbitration. [See Pope Construction Co. v. State Highway Commission, 337 Mo. 30, 84 S. W. (2d) 920.] Our statutory plans for arbitration (
This leaves plaintiff‘s assignments as to instructions and rulings on evidence to be decided as they relate only to his right to recover under Count I. Since defendant does not contend that plaintiff did not make a jury case on Count I, it is not necessary to set out the evidence in detail; but only such specific facts, which the evidence tended to prove concerning delays, as will make clear the issues to be covered by instructions. Plaintiff claimed delays caused by fault of defendant which prevented the completion of the viaduct for traffic within the specified time, as follows:
1.—Defendant failed to promptly determine and furnish to plaintiff the grade line to which the new completed structure was to be built and the levels of the various parts thereof necessary for making shop drawings required for fabrication of new [REDACTED] steel parts to be used in the reconstruction of the steel work of the viaduct to the grade to be fixed.
3.—Defendant failed on many occasions to have an inspector on hand to inspect the steel after it was fabricated so that delivery thereof was delayed and plaintiff was prevented from continuously working on rebuilding the steel work of the viaduct.
4.—Defendant unreasonably refused to approve welders who qualified under tests given and arbitrarily required qualification by other tests not specified, which delayed the progress of the work.
5.—Defendant condemned certain beams plaintiff was to use under the plans, but unreasonably delayed in deciding whether to use them so that plaintiff was caused delay in obtaining new beams to replace them.
6.—Defendant made several changes in grade, elevation and design of various parts of the structure which delayed plaintiff in fabrication of steel required for the structure and prevented plaintiff from continuously carrying on the work of reconstruction.
Plaintiff‘s contract was executed February 29, 1936. It provided that plaintiff was to commence work within 15 days after notice to proceed. Notice which was given in the latter part of March (after he already had commenсed work) required him to begin work on or before April 5. The contract provided for reconstruction of the Inter-City viaduct, between Kansas City, Missouri, and Kansas City, Kansas, which was the route of U. S. Highway No. 40. (The Missouri part was 4286 feet, and plaintiff also had another contract for the part in Kansas, made with the Kansas Highway Commission.) The old concrete roadway was to be demolished. Some of the old steel framework was to be removed and replaced with new steel and a new concrete pavement laid. The contract set August 15, 1936, as the date for sufficient completion for opening to traffic and rеquired final completion by October 1, 1936. It provided for liquidated damages at the rate of $500 per day for failure to open for traffic within the time specified. The viaduct was open for traffic on November 4, 1936, and the entire contract fulfilled on January 25, 1937. It is conceded that the contract was fully performed; that there was no disagreement as to the amount due plaintiff for the work done; and that the only dispute was the right of defendant to withhold, from the amount due plaintiff under the contract, the amounts claimed for liquidated damages.
Although the contract was let by the State Highway Commission, the money was all furnished by the United States government and the plans were prepared by the firm of consulting engineers employed by the City of Kansas City, which had built the original viaduct.
It was necessary to have the elevations in order to make the drawings for shims (metal plates of different sizes used to bring the steel work to the proper elevation) which were the first materials it was necessary to [REDACTED] have on the ground to begin the reconstruction of the steel work оf the viaduct. Shop drawings had to be prepared for these shims and for all other steel work to be fabricated. Plaintiff sublet a contract to the Builders Steel Company for preparing all shop drawings. The first sheets of these drawings were submitted to the Highway Department which did not pass on them but forwarded them to the consulting engineers employed by Kansas City. There was evidence that there was a misunderstanding between defendant and the consulting engineers about this matter; that defendant understood it was to pass on the drawings but the consulting engineers insisted on passing on them; and that “there was quite a little delay at the start bеfore a system was worked out;” so that it took “at least three weeks to get the first shop drawings approved, when normally four or five days ought to have been enough.” Plaintiff‘s evidence also tended to show considerable delay in passing upon these shop drawings throughout the whole period and some of the first ones were held up until the elevations of the new grade could be furnished to the consulting engineers. This delayed the fabrication of the steel work which was being done by Ryerson & Sons of Chicago.
There was evidence to show further delay after some of the beams on the east end of the old structure, encased in concrete, were uncovered and found to have deteriorated. These beams were finally condemned and plaintiff was required to reрlace them. Plaintiff‘s evidence showed that there was a delay of from eight to ten days after these beams were uncovered before defendant determined what to do about them. There was also a change in the plans, for an approach at the Helmers Manufacturing Company near the east end of the viaduct. Plaintiff showed that he did not get final approval of the shop drawings for this change until July 22nd. Other drawings were approved as late as July 13th to 18th. Plaintiff‘s evidence further showed that there was some discussion about changing the design of this approach as early as March; that a new dеsign was not due to anything discovered in the field; and that it could have been made at that time. After submitting shop drawings on the basis of the original plan, plaintiff was notified on May 25th to stop work there and was not furnished the new design until June 18th. Because of this delay in making the change, plaintiff‘s evidence showed that he could not get the fabricated steel for this part of the viaduct on the ground in time to construct that part of it when the steel erection crew was
Defendant‘s instructions criticised by plaintiff were as follows:
“I. The court instructs the jury that if you find and believe from the evidence that the failure of plaintiff to complete the work, contemplated in the contract within the time fixed by the contract, was occasioned solely by plaintiff‘s failure, if any, to secure qualified workmen to carry on said work, then your verdict must be for the defendant on Counts I and II.”
“K: The Court instructs the jury that the written contract between this plaintiff and the defendant provided that the contractor shall be responsible for the accuracy of all dimensions and elevations and he shall bеar the cost of all extra work in construction caused by errors in measurements or in detailing the shop drawings or in fabrication.
“In that connection you are further instructed that there was no obligation under the contract upon the defendant State Highway Commission of Missouri, its agents or employees, to furnish the plaintiff, his subcontractors or agents, with such dimensions and elevations; and you are further instructed that your verdict cannot be for the plaintiff upon Counts I and II, or either of them, for any or all of the days which you may find from the evidence the plaintiff was delayed in the prosecution of his work by reason of his failure to secure such dimensions and elevations.
“L. You are instructed that the law required a written contract for the construction of the viaduct in question be awarded to the lowest responsible bidder and only after all bidders had been granted an opportunity to bid for doing the work under plans, contract and specifications which would be the same for all bidders.
“You are further instructed that the written contract introduced in evidence and the other documents executed in pursuance thereof, authorized therein and introduced in evidence in this case, constitute the sole and only agreement between the parties. Therefore, if you find and believe from the evidence that the defendant Highway Commission carried out its obligations under said agreement and paid all money provided in said contract according to the tenor thereof, then your verdict must be for the defendant upon Counts I and II.”
Plaintiff says that Instruction K erroneously authorized the apportionment of liquidated damages. We think the concluding clause of this instruction is susceptible of this construction. The general rule is that, except under unusual сircumstances or definite contractual provisions, there can be no apportionment of liquidated damages (or recovery of any part thereof by a party [REDACTED] at fault for substantial delay) even when the parties are mutually responsible for delays preventing completion on time. [9 Am. Jur. 37, sec. 50; 15 Am. Jur. 696, sec. 262; Annotation 17 Ann. Cas. 646; 25 C. J. S. 696, sec. 115; Beattie Mfg. Co. v. Heinz, 120 Mo. App. 465, 97 S. W. 188; Sneed & Co. Iron Works v. Merchants’ L. & T. Co. (Ill.), 80 N. E. 237, 9 L. R. A. (N. S.) 1007; Wallis v. Wenham (Mass.), 90 N. E. 396, 17 Ann. Cas. 644; Board of Education v. Chaussee (Mich.), 177 N. W. 975; Mosler Safe Co. v. Maiden Lane Safe Dep. Co. (N. Y.), 93 N. E. 81, 37 L. R. A. (N. S.) 363; Smith v. City of Tahlequah (Okla.), 245 Pac. 994; Bauman v. Peters (Minn.), 231 N. W. 613; United States v. United Engineering & Constracting Co., 234 U. S. 236,
As to Instruction L, it is obvious that, as plaintiff claims, the last sentence submits to the jury a pure question of law, namely: The entire matter of the construction of the contract and its application to the evidence. It not only erroneously submits a legal question but does so in the broadest abstract way so as to give the jury a roving commission to find a verdict without being limited to any issues of fact or law developed in the case. [See City Trust Co. v. Crockett, 309 Mo. 683, 274 S. W. 802, l. c. 811; City of Weston ex rel. Maley & Kelly Contracting Co. v. Chastain (Mo. App.), 234 S. W. 350; Phelps Stone & Supply Co. v. Norton, 227 Mo. App. 268, 52 S. W. (2d) 413; Thompson v. St. Joseph Ry., L., H. & P. Co., 345 Mo. 31, 131 S. W. (2d) 574.] We recently stated the following reasons why instructions, authorizing verdicts upon abstract legal propositions, are
The matters complained of in admission of evidence are not likely to occur again on retrial. Nevertheless, we deem it advisable to point out that both parties improperly offered and were permitted to put in evidence statements of [REDACTED] State and Federal engineers (which were their own opinions or conclusions) as to what the United States government would or would not do at some future time concerning the controversy under certain contingencies. It was likewise improper for defendant to inject matters connected with other contracts between it and plaintiff, and for defendant‘s inspector to relate statements made by the steel manufacturers’ agents who were not employees or agents of plaintiff. (Admissible perhaps for impeachment after proper foundation.) Whether or not such matters should have been held prejudicial if there had been a proper submission, we do not now rule. However, we do not think plaintiff has shown any reasonable grounds to question the admissibility of defendant‘s Exhibit 5, a chart made from the records of the consulting engineers, showing when shop drawings were received and when they were approved. Plaintiff introduced similar charts as to what its records showed as to these and other matters in controversy.
The judgment is reversed and the cause remanded as to Count I, and affirmed as to dismissal of Counts II and III.
Bradley and Dalton, CC., concur.
PER CURIAM:—The foregoing opinion by HYDE, C., is adopted as the opinion of the court. All concur.
NATIONAL SURETY COMPANY, in liquidation, by LOUIS H. PINK, Superintendent of Insurance of the State of New York, and Statutory Liquidator, Appellant, v. COLUMBIA NATIONAL BANK OF KANSAS CITY, a Corporation.—153 S. W. (2d) 364.
Division One, July 21, 1941.
