Bank of Spring City v. Rhea County

• Decision Date: 08 September 1900
• Citation: 59 S.W. 442
• Parties: BANK OF SPRING CITY v. RHEA COUNTY et al.
• Court: Tennessee Supreme Court

59 S.W. 442

BANK OF SPRING CITY v. RHEA COUNTY et al.

Court of Chancery Appeals of Tennessee.

September 8, 1900.

Appeal from chancery court, Rhea county; T. M. McConnell, Chancellor.

Suit by the Bank of Spring City against Rhea county and others on a county order. From the decree both parties appeal. Modified and affirmed.

John C. Lock, for complainant. J. O. Benson and A. P. Haggard, for defendant Rhea county. Burkett, Miller & Mansfield, for defendant bridge company.

NEIL, J.

The bill in this case was brought against Rhea county on an order for $300, payable in county warrants. The suit against the county is in two aspects: First, as an acceptor of the order; and, secondly, on the theory that the order operated as an assignment of that much of a specific fund set apart by the county for the purpose of building a bridge over Piney river, in Rhea county. The Massillon Bridge Company, a corporation of the state of Ohio, is also made a defendant. The particulars of the complaint against this defendant are set forth in the bill, which will be stated hereafter.

The matters involved arose out of the following state of facts: During the year 1898, Rhea county, being desirous of building a bridge over the river just referred to, appointed a committee at the July term of the county court in that year by the following order: "It is ordered by the court, a majority of the justices being present and voting therefor, that J. M. Benson, H. A. Crawford, L. E. Smith, J. M. Broyles, and J. L. McPherson be appointed to contract for and build an iron and steel bridge across Piney river, near the old Lowe ford, where the bridge now stands, and report their action to the next term of this court; and that a sum of not exceeding $6,000 be appropriated to pay for said bridge and masonry when completed and accepted by said committee; and said committee is especially directed to have said bridge built on deferred payments, if practicable, without interest, and the chairman of this court is hereby directed on the order of said committee, to draw his warrant for the payment thereof. Said committee is also authorized to make such sale or dispose of the old bridge as they think best for the county." Certain members of the committee resigned, and others were put in their place, but, as finally constituted, it was composed of L. Q. Barton, L. E. Smith, A. M. Broyles, J. A. Torbett, and J. L. McPherson. The committee organized by electing Mr. Barton as chairman and Mr. McPherson as secretary. Pursuant to the authority conferred upon them by the above order, the committee advertised for bids for the work as a whole, and also separately for the substructure and for the superstructure. Numerous bids were offered, — some for the entire work and some for the different parts of it just referred to. At the first meeting of the committee after the bids were in, and when they were opened, some controversy arose as to whether the persons bidding would expect to be paid on a cash basis, or whether they would give time, and how much, to the county for payment, and on what terms as to interest. After further consideration of this matter, and to allow time to bidders to give their views, the committee adjourned until another time. At the adjourned meeting J. R. Thompson was found to be the lowest bidder for the substructure and the Brackett Bridge Company was found to be the lowest bidder for the superstructure. The latter company declined to enter into a contract, and the result was that Mr. Thompson's combination bid of $5,300 for the entire work was accepted by the committee. Before this latter contract, however, was accepted, the following events occurred, which the committee were not a party to, and of which they had no knowledge, viz.: Before Mr. Thompson put in his combination bid, he had a conference with the Massillon Bridge Company, and asked them to give him the lowest figures at which they would furnish him the superstructure in case he put in a combination bid. This figure was fixed with him at $2,000, the same figure at which the bridge company themselves put in a bid for the superstructure before the committee. While it was yet undetermined whether the committee would accept what is called in the record Mr. Thompson's combination bid (that is, his bid for $5,300 for the whole work), at the suggestion of Mr. R. C. Cunningham, a lawyer of Rhea county, he got into a correspondence with the Massillon Bridge Company, as follows: On August 17, 1898, Mr. Thompson wrote to the bridge company: "It is barely possible that our combination bid can be successfully pressed. Can you stand $300 in order to get it? I think it would take that to make a go of the whole thing; otherwise, I am in great fear. Answer me by wire." On the 20th the bridge company answered: "Can stand the amount named. Hope this will take the work." On the 30th of August, Mr. Thompson wired the bridge company: "Bridge been awarded me. Are you ready to enter into contract per your telegram 20th? Answer." The bridge company replied in the affirmative on the same day, and asked that plans be sent. On the 1st of September, Mr. Thompson wrote a letter forwarding plans. This letter closes as follows: "I will arrange with Mr. Cunningham, my attorney, at a very early date, to draw a contract, and will forward to you, that you may sign the same. I will also instruct him so that your pay will come direct from the county, and in this way make your pay absolutely secure." This was replied to by the bridge company in a letter on the 3d of September, in which the following occurs: "We note that you will arrange to have contract drawn up, and have it forwarded to us for signature." On the 13th of September, Mr. Thompson wrote the following letter to the bridge company: "Inclosed I hand you contract for the superstructure of the Piney river bridge, signed by me in triplicate. Also order on Rhea county, payable to R. C. Cunningham, for $300. You will examine the copies of the contract and the order signed, and return them to me without delay. The bridge was awarded on my combination bid, the combination being with you to build a superstructure at $2,000. Just before the bridge was awarded, I wired Mr. Swigart to know if he would stand $300 reduction on his $2,000 bid for the superstructure. He answered on the 20th ult.: `Can stand amount named. Hope this will take the work.' As soon as the bridge was awarded me, I wired Mr. Swigart: `Bridge been awarded me. Are you ready to enter into contract per your telegram? Answer,' — and received answer same day, `Yes, send copy of plans to me.' I sent copies of plans as requested, and stated in the letter that Mr. Cunningham would prepare contract, which he has done, and I inclose you contract in this letter in triplicate. Notwithstanding the contract price of $2,000 for building the superstructure is expressed in the face of the contract, I have provided for the $300 reduction in the order to R. C. Cunningham for fees, and you will get only $1,700 for building superstructure. I have prepared the contract showing the full amount of your bid, so that the commissioners need not know the amount the bridge can be built for. You will note also that I have provided for the county warrants to be issued direct to you, and for the purpose of notifying the commissioners that you are to be paid direct by the county have provided for them to have a copy of the contract except that $300 covered by the inclosed letter to Mr. Cunningham, which you will sign, and return also with the contract." On September 15th, the bridge company returned the papers executed. The contract for $2,000 between the bridge company and Mr. Thompson, referred to in the above letters, is as follows: "Whereas, J. R. Thompson, party of the first part, on the 3d day of September, 1898, entered into a contract with Rhea county, Tennessee, to construct a highway steel bridge over Piney river, in said Rhea county, Tennessee, under plans and specifications which are attached to his written contract, and which are on file in the office of J. L. McPherson, secretary of the commissioners representing Rhea county in said contract: Therefore, the said J. R. Thompson, party of the first part, has this day subcontracted the construction of the superstructure of said bridge to the Massillon Bridge Company of Toledo, Ohio, party of the second part, as follows: The party of the second part covenants and agrees to furnish all material, and contract and build the superstructure of said bridge according to plans and specifications thereof as agreed upon [by] the party of the first part, and which plans and specifications appear attached and made a part of the contract of the party of the first part and the county of Rhea, and they are here referred to and made a part of this contract. The party of the first part to be governed by Cooper's Rules, as revised in the printed edition of 1896, in the construction of said superstructure. The said superstructure to be finished and completed by the 1st day of January, 1899. And the said party of the second part is to be paid the sum of $2,000 therefor, the payment to be made in Rhea county warrants in one, two, three, and four years; said warrants to bear interest from the date of the completion of said bridge ready for travel. It is expressly agreed that said warrants will be issued directly to the party of the second part, and the commissioners representing Rhea county in the construction of said bridge are notified of the contract (a copy of same being signed and delivered to them), and are directed to draw their orders on the chairman of the county court of Rhea county for the issuance of warrants payable to the party of the second part, as hereinbefore provided, and will credit the amount contracted by the party of the first part for the construction of said bridge with said $2,000." The accompanying order for $300, which is the subject of the present suit,...