Board of Regents of Oklahoma Colleges v. Walter Nashert & Sons, Inc.

• Decision Date: 01 July 1969
• Docket Number: No. 42194,42194
• Citation: 456 P.2d 524
• Parties: The BOARD OF REGENTS OF OKLAHOMA COLLEGES et al., Plaintiffs in Error, v. WALTER NASHERT AND SONS, INC., an Oklahoma Corporation, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 524

456 P.2d 524

The BOARD OF REGENTS OF OKLAHOMA COLLEGES et al., Plaintiffs in Error, v. WALTER NASHERT AND SONS, INC., an Oklahoma Corporation Defendant in Error.

No. 42194.

Supreme Court of Oklahoma.

July 1, 1969.

Syllabus by the Court

In construing a written contract, the whole of the instrument is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the others.

Appeal from the District Court of Oklahoma County; Boston W. Smith, Judge.

Action by plaintiff, Walter Nashert and Sons, Inc., for a writ of mandamus against the defendants, the Board of Regents of Oklahoma Colleges, et al., commanding them to make certain payments allegedly due under the terms of a contract. From judgment for plaintiff, defendants appeal. Reversed.

G. T. Blankenship, Atty. Gen., W. J. Monroe, First Asst. Atty. Gen., Harry Johnson, Oklahoma City, for plaintiffs in error.

Halley, Halley & Spradling, John T. Spradling, Oklahoma City, for defendant in error.

JACKSON, Justice.

Plaintiff in the trial court, Walter Nashert and Sons, Inc., a building contractor, was the successful bidder on a contract for the construction of a dormitory on the campus of southwestern State College at Weatherford, Oklahoma. In the course of preparing its bid as the general contractor, plaintiff called for bids on various items from sub-contractors. It accepted a bid of $4800 from Mr. H for certain excavation work called for in the contract, but did not require him to post a performance bond. Soon after the excavation work actually started, Mr. H encountered material his equipment could not move and he abandoned the job. Plaintiff thereafter completed it but had to use blasting techniques at considerable extra expense in order to do so. It then filed an action in the District Court for the purpose of collecting extra pay, over and above the amount of its lump sum bid. From the judgment for plaintiff, defendants, the Board of Regents of Oklahoma Colleges, et al., appeal.

Plaintiff's relief would normally have been found in an ordinary action on contract, based on a paragraph to which we shall refer hereinafter as the 'Extra Pay Provision'. However, for reasons which are immaterial here, it chose to file an action which in form was one of equitable cognizance--an application for a writ of mandamus ordering the defendants to make the extra payment or issue to plaintiff self-liquidating bonds in the proper amount. The action was based on allegations of fraud (1) in the drafting of the contract, and (2) in withholding certain material information as to sub-surface conditions at the building site.

As to (1) above, the allegations were to the effect that the contract was drawn in such a way as to mislead prospective bidders and persuade them to believe that extra pay would be made for excavation of material too hard to be removed by ordinary mechanical means. There was no allegation or evidence that any provision of the contract was actually concealed, or overlooked, and no allegation or evidence of fraudulent representations in the inducement of the contract aside from the language actually appearing on the face thereof. This phase of the controversy therefore presents only the restricted question of how the language of the contract should be interpreted. Under plaintiff's interpretation (which was adopted by the trial court) plaintiff was justified in believing that in the excavation it would encounter 'reddish brown sandstone, soft', which would be removable by ordinary mechanical means. Under defendants' construction, the contract plainly put plaintiff on notice of the fact that it would encounter not only 'reddish brown sandstone, soft', but also 'reddish brown sandstone', a harder substance.

Regardless of the form in which it was brought, the action was basically an action for money due by the terms of the contract. The contract provision upon which plaintiff relies, the Extra Pay Provision, was as follows:

'Should the Contractor encounter subsurface and/or latent conditions at the site materially differing from those shown on the Plans or indicated in the Specifications, he shall immediately give notice to the Architect/Engineer of such conditions before they are disturbed. The Architect/Engineer will thereupon promptly investigate the conditions, and if he finds that they materially differ from those shown on the Plans or indicated in the Specifications, he will at once make such changes in the Plans and/or Specifications as he may find necessary, any increase or decrease of cost resulting from such changes to be adjusted in the manner provided in Paragraph 17 of the General Conditions:'

After a careful examination of the entire record before us we find no evidence that plaintiff encountered conditions 'materially differing from those shown on the Plans or indicated in the Specifications'. As a matter of fact, plaintiff's own witnesses identified the material actually encountered as 'Reddish Brown Sandstone', the existence of which at the building site was plainly indicated on Sheet No. 1 of the Specifications, which was called the Plot Plan.

Plaintiff tacitly concedes that the Plot Plan did show the existence of 'reddish brown sandstone' at the building site. It argues, in effect, that it was entitled figuratively to 'close its eyes' to the information on the Plot Plan and to other unambiguous provisions of the contract making the determination of sub-surface conditions at the building site 'at locations other than those shown' the responsibility of the contractor, and providing that excavation would be 'unclassified', meaning (according to plaintiff's own witnesses) that the contractor would be expected to excavate whatever material was encountered, regardless of its nature, without extra pay.

Plaintiff concedes that as a general rule, a contract is to be construed as a whole. This rule is stated as follows in Freeling v. Wood, Okl., 361 P.2d 1061:

'In construing a written contract, the whole of the instrument is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.'

Reduced to its essentials, plaintiff's claim is that it was entitled to rely almost exclusively upon the third sentence Only in the following paragraph of the contract:

'CLASSIFICATION OF EXCAVATION: Excavation will be unclassified. No additional payment will be made for excavation regardless of the material encountered. Test borings made for buildings near the site of both additions indicate sandy loam and reddish brown sandstone, soft. See Soil Test Data on Plot Plan.'

The Plot Plan, referred to in the last sentence above, was Sheet No. 1 of 53 sheets of drawings and specifications detailing the work to be done under the contract. It plainly showed, in graphic form, all of the factual information as to subsurface conditions at the building site obtained from six test holes bored by Standard Testing and Engineering Company for the architects. Among other things, it showed substantial layers of 'reddish brown sandstone'.

In order to avoid the effect of the...