Arc & Gas Welder Assoc., Inc. v. Green Fuel Economizer Co.

• Decision Date: 30 December 1960
• Docket Number: No. 8186.,8186.
• Citation: 285 F.2d 863
• Court: U.S. Court of Appeals — Fourth Circuit
• Parties: ARC & GAS WELDER ASSOCIATES, INC., A Maryland Corporation, Appellee, v. GREEN FUEL ECONOMIZER CO., Inc., a New York Corporation, and National Surety Corporation, a New York Corporation, Appellants.

285 F.2d 863 (1960)

ARC & GAS WELDER ASSOCIATES, INC., A Maryland Corporation, Appellee, v. GREEN FUEL ECONOMIZER CO., Inc., a New York Corporation, and National Surety Corporation, a New York Corporation, Appellants.

No. 8186.

United States Court of Appeals Fourth Circuit.

Argued November 8, 1960.

Decided December 30, 1960.

Byron N. Scott, Washington, D. C. (Hilary W. Gans, Baltimore, Md., and Robert Day Scott, Washington, D. C., on brief), for appellant The Green Fuel Economizer Co., Inc.

John Henry Lewin, Baltimore, Md. (David C. Green, Baltimore, Md., and Venable, Baetjer & Howard, Baltimore, Md., on brief), for appellee.

William L. Marbury and Mathias J. DeVito, Baltimore, Md., on brief amici curiae.

Before SOPER and BOREMAN, Circuit Judges, and BRYAN, District Judge.

SOPER, Circuit Judge.

This case concerns a dispute between a subcontractor and a sub-subcontractor as to which one of them was obliged to do certain work in the performance of a government contract. Blount Bros. Construction Company, a co-partnership of the State of Alabama, the prime contractor, entered into a general contract with the United States, acting through the Department of the Army, on June 30, 1955, to construct two stainless steel cloud chambers in a biological laboratory at Camp Detrick, Frederick, Maryland. On July 28, 1955, Blount entered into a subcontract with the Green Fuel Economizer Company, Inc., a New York corporation, to construct and deliver the cloud chambers in accordance with the plans and specifications of the general contract. On August 24, 1956, Green entered into a sub-subcontract with Arc and Gas Welder Associates, Inc., a Maryland corporation, to do part of the work which Green had contracted to perform. This contract was later superseded by a contract of November 1, 1956, between the same parties which changed to some extent the work to be performed by Arc. The instant suit was brought by Arc against Green, claiming that it had performed the work specified by the contract between them and also certain extra work ordered by Green, but had not been paid for its services. The case was heard before the District Judge sitting without a jury and resulted in a judgment for Arc in the sum of $80,778.20, from which Green has appealed. The exhaustive opinion of the District Judge is found in 182 F.Supp. 648, 651.

Cloud chambers are airtight rooms of stainless steel polished to a finish so smooth that there are no pits, cracks or crevices left in the walls in which germs may lurk after the chambers have been cleaned. Under the general contract the outer walls of the chambers were to be constructed of stainless steel plates 3/16ths of an inch in thickness, welded together and supported by carbon steel structural beams tack-welded to the outside of the plates. Each chamber contained a vertical baffle to be constructed of welded stainless steel sheets and a horizontal baffle of welded stainless steel plates.

The principal questions arising under the contract between Green and Arc relate to the kind of polishing required to be done by the general contract and which one of the subcontractors, Arc or Green, was obligated to do it under the contract between them. The following provisions of the specifications annexed to the general contract pertain to the character of the finish to be given to the surfaces of the chambers and are particularly pertinent, since they throw light upon the meaning of the terms used in both contracts:

"8-06 f. (1) All welds in the Cloud Chambers, Dissemination Room, Dressing Room E, and Air Lock No. 4 shall be ground smooth, and where No. 4 finish is hereinafter specified, shall be ground substantially flush with parent metal surfaces.

"8-06 f. (3) Inside Cloud Chambers `A\' and `B\', all stainless steel surfaces, including weld metal surfaces, shall be polished to a No. 4 finish without pits, cracks, or crevices. No. 4 finish shall include both faces and all exposed edges of baffle sheets and all exposed surfaces of baffle-supporting or reinforcing members.

"8-06 j. Final Polishing: Immediately prior to completion of the contract work, stainless steel surfaces with No. 4 finish shall be given a final recheck for pits, cracks, and crevices, and a final polishing."

As stated in the opinion of the District Judge, 182 F.Supp. 654, the August contract between Green and Arc called for the following work to be done by Arc:

"Complete erection, Fabrication and Testing of two (2) Stainless Steel Cloud Chambers in accordance with drawings (as per rider attached)."

The rider listed the drawings and, under the heading "Work," contained three paragraphs, two of which were identical with those quoted below from the rider to the November contract. The third paragraph read as follows:

"Polishing of the welds is not a part of this subcontract."

The August contract in fact did not require Arc to do any polishing and the stated consideration of $33,000 did not include any amount for polishing.

This contract was superseded by a contract between the same parties on November 1, 1956, which contained the following provisions describing the work to be done by Arc:

"Article I — Sub-contractor (Arc) shall furnish all labor and materials and perform all work necessary to complete the following part or parts of the work of the General Contract in all respects as is therein required of the Contractor, and all work incidental thereto, namely:

Complete erection, fabrication, testing, and polishing of two (2) Stainless Steel Cloud Chambers in accordance with drawings (as per rider attached)."

* * * * * *

"Article IV — Sub-contractor shall make all alterations, furnish the material for and perform all extra work or omit any work owner or contractor may require without nullifying this agreement as a reasonable addition to or deduction from the sub-contract price hereinafter named and pro rata to the same. No changes are to be made, however, except upon written order from the Contractor and the Contractor shall not be held liable to Sub-contractor for any extra labor, materials, or equipment furnished without such written order."

* * * * *

"Article XV — The provisions of the attached rider complement and are a part of the printed contract."

The rider provided as follows:

"Work

"1. All rigging work, erection, and welding necessary. Testing work necessary to make a complete and satisfactory job in accordance with the aforementioned drawings, plans, and specifications.

"2. It is understood and a part of this subcontract that the structural steel backing for the stainless steel plates will be delivered prefabricated and polished in accordance with the aforementioned drawings.

"3. Polishing of the welds is a part of this contract. All surfaces welded to be polished to a No. 4 finish with a maximum roughness finish tolerance allowable of 42 micro-inches."

The controverted questions relating to the respective duties of Arc and Green to polish the surfaces of the cloud chambers were not decided by the District Judge solely upon the terms of the written contracts. A great mass of testimony was taken in which the meaning of the terms was explained and additional oral agreements between Arc and Green were proved. When the contract of August 24, 1956, between Arc and Green was first offered in evidence, Green objected on the ground that the contract in suit was the later contract of November 1, 1956, but the court received the earlier contract in evidence and also additional evidence extrinsic to the contracts for the stated reason that the contracts were unclear in certain respects and hence additional evidence would be received with the right of the parties to move to strike the evidence before the court announced its final findings of fact. The ambiguities or uncertainties to which the judge referred related in part to the term "No. 4 finish" used in the documents and in part to what share of the work was to be done by Green and what share by Arc. On this appeal it is argued that the evidence should not have been received because the Arc-Green contract incorporated by reference the provisions of the Blount-Green contract with its riders, drawings, and specifications so that the two contracts constituted an integrated whole from which the respective obligations of Green and Arc should be ascertained in accordance with the rules laid down in the Restatement of Contracts §§ 226, 227 and 230, and 3 Williston on Contracts §§ 538 and 539, and in Insley v. Myers, 192 Md. 292, 64 A.2d 126.

It is, however, quite obvious that extrinsic testimony was required in this case. It is conceded by the appellant that the descriptive term No. 4 finish has no dictionary definition, and a large part of the testimony was therefore taken to ascertain the meaning given to the term in the industry in connection with the polishing of steel plates. The phrase relates to the surface smoothness to be given to the material which may be measured in micro-inches as, for example, a smoothness which does not exceed 42 micro-inches, which reveals no visible pits, cracks or crevices upon the surface. Green contends that (as used in the trade) a No. 4 finish does not possess such a high degree of smoothness as this and that its obligation under the contract with Arc was limited to the delivery of steel plates having...