708 LEWIS et al·. fl.
CHICAGO, S. F. & C. Ry. Co·.
(O(rcuit Oowrt, .1:. D. Mvsouri, N. D. Decetnber 7, 189L) L OoNBT1\tlOTION OJ' CONTBAOT-PICRIIORMANOB.
The provision in a oontraotfor railroad grBdlng that the measurements and calcula,tlons by tl/.e railrqad company's chief engineer of tl/.e quantity and amount of the several kinds of work, and his classification of the materials contained in excavations, shall be final and oonolnslve, Is a valid provision, and Is binding upon the parties to the and there oan, be no recovery in excess of hi8 final esti· mate, in the absence of fraud, gross error, or mistake.
.. BA¥B-RELIBII A.GAINST HXST.A.XB.'
The court will relieve mistakes In measurements and calculations appuupon the face of the.llstlmllotes, or clearly proven, thongh not so apparent, or frqm oversight to measure or estimate any partioular part of the work, or from ns: eonstru.etlons putupon the prQvl.sionS of the oontraot by tbe engineer; but .. will not relieve alleged mistakealn determining the kind of materials found In the several outs, the parties being bound by the judgment of the engineer selected by them for speoial skill and attention as the umpire on such questions; nor will It ,relieve against slight dlscrepanoies In meaSurements. WrG. ' ..
..
. 'Under the provisions of· a oontraot for railroad grading, exoavatlons were to be me-.sured and paid for either as eal'th, lOOile rock, or solid rock; loo.se rock to oomrise "shale or soapstone l,Ing In its origlnal or stratill.ed positlonl C10arse boulders n' gravel, cemented gravel, hardpan, or any other material requmng the use of pick and bar,orwhioh oannotbe plowed with a strong, ten.inchgrading plow, well handled, behind a good six mule or horse team." Held, that the materials mentioned were to be olassifled as loose rook, Irrespective of the plowing test, Which was only applioable to the material," not speciftcallynamed.
GRADING.
r.
"
SAME..
It appeared that the materlalin all cuts, except rock cuts, varied much In consistency anddhardness, and .lay in irregular strata, and that the largest part of it was broken bv the plo"". that the practice of the engineer in estimating loose rook by percentagllll was jilstlflable in the oircumstancea. .
..'
.' .
In Equity.
.STATEMENT BY THAYER,
For prior report, see 39 Fed. Rep. 52. , '"
JUDGE.
This was a suit to recover a balance claimed to be 'due for grading a in the state of Missouri. The plaintiffs portion of were subcontra'ctors under McArthur Bros. The contract under which the work was done contained the f0110winJt clau!:le: "The work 'lrhall be executed under the direction and' supervision of the 'cbief engineer Of said railwaycompany'and bis a8sista:nts, by whose measurementsand calculations..the quantities and amounts of tbeseveral kinds of work performed under this contractsbaU be determineci, .and whose determln.atlon shall be .conclusive upon ,the parties bereto; ....... ... and said chief engineer sball decide ev.ery question Which can or may arise between the parties in the execution of this contract, and bis decisioD.sball be binding and final upon botbparties. And whereas, the classification of excavation provided for in the annexed specifications is of a character that makes it necesaalV that specialattenUon should be called to it, it is expressly agreed by the parties to tbis con,tract that the classifications, measurements, and calculations of tbel$a1d engineer ot the respective quantities 6t sucb excavation shall be final and conclusive." . The defendant pleaded this proVision of the contract, and further alleged that the chief engineer of the railway company had made a final estimate of the quantity of work done, and that the railway company J . ' : , " ' . .': ' , .-';
LEWIS V. CHICAGO, S. F. & C. RY. CO.
709
had paid the amount of such estimate, and were not further liable. The plaintiffs contended that the provision of the contract was not binding upon them;, anu, furthermore, that the estimate of the chief engineer ought to be disregarded for fraud and mistake on the part of the neer.Plaintiffs also claimed that they had done certain extra work, not embraced by the provisions of the contract. The specifications attached to the contract under which the work was done contained the following clause: .. Excavation in Loose Rock. * * * Loose rock shall comprise: First. Shale or soapstone lying in its original or stratified position, coarse boulders or any other material requirinj:t the use in gravel, cemented gravel, of pick and bar, or whicbcannot be plowed with a I!ltrong, ten-inch grading plow. well handled, behind a good six mule or horse team. Second. Detached rock or boulders in masses exceeding Ii cubic and less than one yard." By the terms of the contract, all of the material found in the excava;tions was to be measured either as earth, loose rock, or solid rock. The grubbing specification referred to in the opinion was as follows: .. Measurements for grubbing will include all area under embankments and within six feet of slope stakes; also ,all area within slope stakes of elFCaVl\tions, and within area of all necessary borrQ.w pits where grubbing is satily done." . , It appeared in the evidence that the engineers of the railway company, in classifying the material found in the .various cuts along the line of plaintiffs' work, had measured the total quantity of material found in the cuts, and allowed a certain percentage thereof as loose rock, based upon their observation o( the number of animals that were used in plowing it. As the engineers construed the specifications, shale, cemented gravel, hardpan, etc., wer,e not classified as loose rock, unless more than six horses or mules were required to plow such substances. Craig, McOrary Oraig, for plaintiffs. Gardiner .Lathrop, Ben Eli Gmhrie,and T. L. Montgomery, for defendant. THAYER, District Judge, (after stating the jacf$ as above.) For the information of counsel the court states the conclusions it has reached concerning the various qrtestions of law and fact that have arisen in this case as follows: Fir8t. The second clause in the contraot, declaring that the engineer's measurements and calculations of the quantity and amount of the se\Teral kinds of work, and also that his classification of the material' contained in excavations, shall be "final and conclusive," is a valid provision, and is binding upon the parties to the agreement. Therefore there can be no recovery in' excess of the engineer's final estimate, unless such estimate is successfully assailed for fraud, gross errors, or mistake. Railroad 00. v. Ma,rch, 114 U. S. 549, 5 Sup. Ct. Rep. 1035; Wood v. Railroad 00., 39 Fed. Rep. 52, and citations; Sweet v.MorriBon, 116 N. Y. 19,22 N. E. Rep. 276; BruBh v. Fisher, 70 Mich. 469, 38 N. W. Rep; 446.
110
FEDERAL REPORTER,
vol. 4
Second. The· estimate may be .impeached for fraud; that . is to s1l1, it may be shown that the engineers in oharge intentionally underestimated 'or'overestimated the work. It may also beimpeached by. proof of grosS errors inthemeasuremen'ts and If .theev.idenoe shows I:Iuch errors, it either. creates thepresum ption of fraud, or warrants the conclusion that the engineers did not exercise that degree of care. skill, and good faith in the discharge of their duty which the law exacts; and in either event th,e court will disregard the estimate so far as is necessarytoElo substantil!.ljustice. The meaning of the word "mistake," as above employed, must be carefully defined. (a) The court will relieve against mistakes in measurements and cal· culations that are apparent on the face of the estimate, or that are clearly proven, not so. apparent. (b) If it is satisfactorily shoWn that the engineers failed, through oversight. to measure or estimate any particular part of the work, the court w.ill grant relief as to suchmistakes. (c) If it appears thattbe engineer in charge put a wrong construction on any proVision of tnecontract; ;the court will correct any substantial errors resulting from such mistake, for the reason that the parties did notmake the decision of tbe eugineeras to the proper interpretation of the oontra:ctflnal and ooflclusive. . It is the province of the court to construe the agreement. Bridge Co. v. Oity of St. Louia, 43 Fed. Rep. 768. (d) But in determining the kind of material found in the several cuts, the engineers w-ere caned upon to exercise their judgment. That was a matter, as the contract in Iluhstance recites, which involved the exercise of special skill and attention as tbe work progressed, and for that reason the parties selected an umpire, by whose judgment they agreed to be bound. Rotnger v. Rauway Co., 1 Eng. Ry. Cas. 1; 13 Sim. 368. The court will not undertake to revise the decision of the engineer on questions of tbatcharacter if it appears that he acted in good faith. The utmost it can doie to correct Elrr.)rs of classification that may have resulted from an erroneous interpretation of the contract. (e) Slight discrepancies in measurements made by the respective parties must also be disregarded; and even when tbere are discrepancies of some magnitude tbe court must accept made by the engineers of the railway company, unless the proof clearly shows that they are erroneous. The presumption is that all measurements made by such are correct, and the burden is on the 'plaintiffs to overcome that presumption. Torrance v. Amsden. 3 MeLean, 509; Bumpa88 v. Webb, 4 Port.CAla.) 65; Pleaaanf.8 v. R088, 1 Wash. (Va.) 156. Third. After an attentive consideration of the question, the court concludes that the engineers put a wrong construction on the second clause of the specifications, in so far as they construed the" plowing test" to be applicable to shale, soapstone, cemented gravel, and hardpan, as well as to other hard, earthy substances. The right interpretation of the clause is as follows:· Shale, soapstone,cemented gravel, and hardpan were known substances, and were known to be hard to handle. Therefore it was declared that they should be classified as loose rock. And, inas-
711: much as It wasthought or possible that other hard earths mlght be encountered in theprop;ressof the work; it was agreed that any other material requinngthefnse of pick'and bar, or that could not be plowed dWith teri"incb grading plow, "'. ** behind a,good six horse or team," should likewise be classified as loose rock. This is.· the correct and truly expresses the thought in the mind of the draughtsman. . But the. court is of the opinion that the practice pursued by the engineers of estimating loose rock by percentages was justifiable and proper. Under all the circumstances of the case, that seems to have been the only fair and practicable method of classifying mMh of the material when the plowing test was applied. The evidence satisfies me that the material handled varied much inconsistency lind hardness, and lay.in By far the largest portion Of all the material found in the various cuts, except the rock cuts, was broken up, I think, by the use of a team of not more than six hOrses. Probably was the most practicable and economical method of working the cute, as an eighthorse team is usually cumbersome. Nevertheless, if the engineers had classified every cubic yard of earth that was so broken up with six horses "as earth excavation," it would not have accorded with the spirit of the contract. The applicatiollof that rule to the work of those 'contractors who had much hard material to handle, and very little easy plowing, would have been manifestly unjust. On the other hand, it would have been contrary to the spirit of the,agreement, and equally unfair to the railway company, to have classified all of such ruaterialas loose rock. In short, the contract must be interpreted in a reasonable manner, with a due regard for the rights, of both parties, and with a proper appreciation of the nature l!'nd magnitude of the undertaking, and the difficulties encountered in applying the plowing test to the subject-matter. In the light of such considerations as these, the specifications will not admit of the construction that it was the duty of the engineerS todrl1w a rigid line, under all circumstances, between earth and loose rock, and to classify a given material as all loose rock, unless a sixhorse teafuwas able to plow therein continuously, from day to day, and to tum a full ten-inch furrow.' As the contract did 'not define what shOUld be esteemed plowing, or describe to what extent it should be impossible to plow with six horses, to entitle the contractor to loose rock classification,' there was a grave difficulty in applyinp; the force ,test to much Of the material, and upon the whole I am satisfied that the engineers properly solved that difficulty in accordance with the spirit of the agreement by allowing a given percentage of loose rock, basing the percentage upon their observation of how the material was handled, and the difficulties actually encountered in moving it. This conclusion is fortified by the fact that these plaintiffs did not object to the method of classification by percentages while the work was in progress. Stich objections asthey made were to the amount of the allowance, rather than to the method by which it was ascertained. Finally, while expressing ,. . _" "-'l-. _ .- .. " -: ' ...... c· _ ·
mule
712
J'BI)EBAL
vol 49.
my:viewB on questions of interpretation, I will add that the grub1?ing speclfiqation was properly construed by the engineers. The fair reading of that specification is that "measurements for grubbing will include all areas· under embankments, and within slope stakes of excavations, and the areas of all borrow pits, where grubbing is necessarily done." Any other view. would be taking advantage of a mere error of punctuation in framing the grubbing clause. Fourth. Having announced some general propositions in accordance with which.the court has considered the evidence, I may as well say at the outset that there is very litile testimony in the case tending to show underestithat any of the engineers in charge of the work mated it. I am well satisfied, and accordingly find, that the chief engineer and his assistants intended. to deal fairly with the contractors, and classifications for and that in making the final estimate theY aimed to allow them aU that was due under the 'termsQf the contract as· they it. . Fifth· ..The evidence in the case .fails to satisfy me that. there are any substantial erro}.'!! in. the measurements or calculations as made by the engineers. By this I mean to say that the gross contents of the excavations and embankments, the totaJ...haul and overhaul, and the total amount of clearing, grubbing, and close chopping, seem to have been ascertained with substantial accuracy. At all events, the testimony is insufficient, at this late day, to warrant a contrary conclusion. Nor has it been shown to the satisfaction of the court that the engineers failed, through oversight or otherwise, t9 measure or estimate any work that was actually done by the plaintiffs. . Sixth. In view of the unsatisfactory character of the testimony, I have not felt at liberty to allow any of the claims for extra work. I can only take time to mention a few of the inore important items orthis kind. (a) The ;rock ditch on section 192was a part ofthe contract work, and was properly;estimated and paid for, at contract rates. It was a hard job; and thecontracto.l'll undoubteq.ly lost money on the work; but the claim. court cannot, for that reason, allow: :. (b) I have found it from the testimony before me how much material was handled in the spring of the year 1888 in filling up and fi,nishing the house. track at Revere station. It is most probable, I think, that the final estimate was based on measurements that included that .work; and that. it was work Jlecessary to be done to complete the contract. (c) With reference to the claim for carrying and piling up rock ballast on seotion 193, it will suffice to say that the railway company paid rock pl'!ices for the excavation and haul, and the evidence leaves it uncertain whether any piling was in fact done, or whether it was merely dumped from cars. . (d) The company seemS to have made the contractor an allowance for the broken rock placed in cut No.2 to bring it up to grade, and I am unable to· say that the allowance for that work was inadequate.
LEWIS V. CHICAGO, S. F. ,& C. BY. CO.
713
Seventh. It must have become apparent to all persons who have been concerned in the trial of this suit, and others of a similar character, that the litigation owes its origin to differences of opinion on questions of classification. If conflicting views on that point had been reconciled, no controversy would probllbly ha\7e arisen as to other matters. It is also probably true that the railway company and the contractors underof the estimated the cost of grading and excavation on some road, for the reason that much of the material encountered proved to be more difficult to handle than either party had anticipated. After carefully re-reading all of the testimony, I have reached the conClusion that the engineers did not classify some of the excavations made by the plaintiffs '(particularly on sections lS8to 191) as highly as they should have dohe; or as highly, perhaps, as they would have done, had they erly con$trued the second' clause ()f the specifications. I am far from entertaining the view that all the material found in the cuts, lying un. derneath the subsoil, or even below the gumbo, was hardpan, within the meaning of that term as employed in the specifications. In my judgment the word "hardpan," as ordinarily understood among railroad contractors, means something more than clay or very hard clay. It is no doubt difficult to give an exact definition of the word, because the substance varies somewhat in'composition in ditferent localities. Nevertheless I feel satisfied that there was some material found in the cuts on the Lewis, Wood & Penny work which the engineers might fnirly have classified as "loose rock," without' regard to the plowing test; becatise it was hard-pan, or cemented gravel; arid my best judgment is that the classification of some cuts was too low, and that the plaintiffs sustairled injury, because the plowing or "force test" was applied indiscriminately to all the material, on the erroneous assumption that it was the only test applicable to the case. In' a letter written by McArthur Bros. to Mr. Robinson, the chief engineer, under date Qf March 21, 1888, .after the final estimate was received, I find thefollowingstatementl'l, "The classificatioDs which you give for cuts ODsee. 187 to 191 are, we think, uniformly too low; much lower than classifications elsewhere on the work. To these we wish to call your particular attention." . Then, after suggesting a considerable increase in the classification of certain cuts, (which was not allowed,) they say of the proposed increase I this "is as low as we think any competent and fair man who saw the work done would put them. * * * This part of the work was dis. tant from Mr. Lamborn's office, and not often seen by him in its ress." McArthur Bros. appear to have been fair-minded men, aOd)o have acted very impartially in the cOllrse of all the disputes that al'ose concerning questions of classification. They had also had large experi. ence in railroad construction, and were thoroughly conversant with the subject to which they alluded. I am s.atisfied that they expressed' their ho.oest convictions in the paragraphs of the letter above quoted,and their views under the circumstances are en,titled to great weigM. . result has been that the court has determined to raise the classification
f14 .. "
I'EDERAL REPORTEB,
vol. 49. ',. to 191 to
oncuts Nps. P, 9, 10, 11, 13,14, 15,and 16 in sections tllefonowing, extent: On c'ut
'5 to 60 percent. ottbe total contents ot the cut. fe'"'' 9 """40'"' '" .. fe,,'. 10' '.40'"" ,"U ". ,;' , 11 · 50' " . . 14;,"" .. "fe" 4; ; IS .. 40" ",," I I ' " .. "" " .. & 15 ", 50 " '" " ".. " """ ... 16'.. 60" · .. .. '.. " N ".. ' ..
,: "
;,
II.. " ". .'.? ," " .· '.,"
The other ,outs were estimated with substantial accuracy and {aimess. The oourtrhss, taken Mr. Brooker's of the total contents of these cuts, and has ascertained the amount alre41dy paid according to the old clsssificatiQn,'.and has also computed the amount due according to the Dew classification. The sum due is found to be 631 578.19, for which amount and" interest from the time this suit was brought a lien it allowed.
SUlIKEB8
e. CHIOAGO, S. F.& C.
RY.
Co.
(OfnmU ' Ooon. 1/J; D.MC,.OUri, No D. December '1, 189L) ','
In EqUltly. Suit by James W. Snmmersagalnstthe Chicago. Santa Fe & OalttOJ.'Dla RaUwayCQmpany to recover for grading road. 8.T., NUl/Au and C" B. MatZock, for plaintiff. , 6ardtmr LathroP. BBA HZt 6uthrlB, and T. L. Montl/om61'11o for defendant. ' ' THAnm,Distrlct JUdge. What has been said in deciding theLetDiB Case, 49 Fed. Rep. 708,lllappUcalJle in a measure to this case. The contracts involved in the two 'cases are practically the same. but the work done by Summers was done 65 miles,w8IltoftheLewis, Wood & Penny work, and, as a whole, appears to bav., beep. ,of a less difficult and .expensive The total amount .ofmatt)rlal taklllll from all the cuts on the of the road constructed by Summers was only about 22 per cent. of the gross amount taken from. the cuts on tbe five sections constructed by Lewis, Wood & Penny in Missourl;A, very considerable portion of Summers' work was in the valley of theCharltoQ river, and the court is satisfied that the bulk of the material handledwa8 much easier to move than on the Lewis, Wood & Penny sections·. QP\lrt had the advantage of hearing all of th,e oral testimony in .thiscaee. and. it ",iUaumee to say that it created a very strong impression that Mr. \vas liberallyestlmated under any construction of the cotlttadt;That has been confirmed by a careful perusal of the testimonY' sinee the case argued. It is true that the dlvl!lion engineer in charge of:.this'portfon of the work construed the "plowing test" as applicable to hardpan" cemented gravel. etc. ; but that is not an adequate reason for disthe tlnal.8stimate, unless the plaintiff sustained some injury. If the test actualIy all the loos.e-rock cla.ssification that he was fairly eIj.titled to, the estimate shtiuld not be disturbed. At the conclusion of the work,alId' eVidently with a 'full knOWledge of all tbe facts, Mr. Summers : t ,