City of Cleveland v. Walsh Const. Co.

• Decision Date: 07 February 1922
• Docket Number: 3571.
• Citation: 279 F. 57
• Parties: CITY OF CLEVELAND v. WALSH CONSTRUCTION CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

279 F. 57

CITY OF CLEVELAND v. WALSH CONSTRUCTION CO. et al.

No. 3571.

United States Court of Appeals, Sixth Circuit.

February 7, 1922

[Copyrighted Material Omitted]

Wm. B Woods, Director of Law, and Alfred Clum, Asst. Director of Law, both of Cleveland, Ohio, for plaintiff in error.

Geo. B Harris and Thos. S. Dunlap, both of Cleveland, Ohio (Klein & Harris, of Cleveland, Ohio, on the brief), for defendants in error.

Before KNAPPEN, DENISON, and DONAHUE, Circuit Judges.

DENISON Circuit Judge.

The city of Cleveland asks the reversal of a judgment rendered against it in the court below for about $22,000, as the net balance of the counterclaims of the parties.

At the outset, we must observe the subject of our power to review. The Walsh Company (which we shall call plaintiff) sued to recover from the city what was said to be the unpaid balance owing under a contract for the construction of part of a water filtration plant; the city, by counterclaim, asked damages against the Walsh Company and its surety for nonperformance of the contract; the parties stipulated in writing that a jury be waived and that the issues be referred to a commissioner. The commissioner made a report, containing elaborate findings of fact and of law. Exceptions were taken by each party to the findings of law, as if to a master's report in equity, and the trial court disposed of these exceptions and entered judgment according to the practice pursued in such cases in equity, and, we assume, in accordance with the state practice.

Under the practice as it existed before 1865, when there was a trial before the court without a jury, the judge was practically an arbitrator, and ordinarily there could be no effective review; but an agreed statement of facts, signed by counsel and filed in the case, early came to be thought a part of the technical or primary record, equivalent to the special verdict of a jury; and the question whether the judgment lawfully followed on such agreed facts could be raised on error. If the judge made special findings of fact, they were extrajudicial, and not recognized by the appellate court. ^[1] Section 4 of the Act of March 3, 1865, was intended to provide a fuller review, and the application of that section in its later form (sections 649 and 700, R.S.; sections 1587 and 1668, U.S. Comp. St. 1916) has caused much difficulty. This court has undertaken to apply it in many cases, of which Shipman v. Ohio Coal Exchange, 70 F. 652, 17 C.C.A. 313, is an early example, and Philadelphia v. Fechheimer, 220 F. 401, 136 C.C.A. 25, Ann. Cas. 1917D, 64, Edwards v. La Dow, 230 F. 378, 144 C.C.A. and Lillie v. Dennert, 232 F. 104, 146 C.C.A. 296, are later ones. Analogous questions constantly arise, as in this case and in other cases pending decision at this time. The subject involves, not only some confusion and uncertainty among both trial and appellate courts, but much and frequent misapprehension by counsel. It ought to be clarified. After as careful a review as we can give to the very numerous decisions and to the principles upon which they must rest, it seems advisable to state our complete conclusions, which may be taken as a formulation of what we consider the appropriate and settled practice in this circuit

A waiver of jury trial may be by express stipulation in writing. meeting the letter of section 649, or it may be oral, either express or to be implied from acquiescence in nonjury proceedings. We have therefore the two classes of nonjury trials: those by written waiver, and those by oral waiver. They also may be subdivided into those where the proceedings are wholly before the district judge and those which are disposed of in part before a referee--by whatever name called. As affecting the action of the trial court only, it is immaterial whether the waiver be written or oral, and whether it be express or implied; ^[2] but only when it affirmatively appears by the record that the waiver was written can there be the full review which is contemplated by section 700, and which is analogous to that following upon a jury trial. ^[3]

Taking up first the cases where the trial is entirely before the judge: If there was a written waiver a review may be had not only of all questions inherent in the primary record, but also of all the rulings on the trial which were imported into that record by the bill of exceptions, and which were properly challenged; but if the waiver is not written the review brings up only the primary record. ^[4] In the latter class, as in the former, special findings of fact by the judge became a part of that record; and whether the findings support the judgment will be considered by the reviewing court, even without exception taken. ^[5] Whether there was error as to admitting evidence, or as to the burden, or whether there was no evidence to support a particular finding, or was no justification for refusing it, or any evidence to support the judgment-- all should be deemed rulings on the trial, and if properly challenged can be reviewed, but only if section 700 has become applicable by a written stipulation. ^[6]

Coming to the other class of cases, where there has been a reference, and the trial proceeds before the referee as preliminary to its conclusion before the judge: The reference may be under the common-law practice, or the trial judge may adopt and follow the state practice, indicating such adoption either by express order or by tacitly following such practice after the referee's report, or the parties may, with the judge's approval, stipulate to extend or narrow the referee's functions. ^[7] A written stipulation for, or recognizing, the reference, meets the requirements of section 649, and is a waiver in writing and permits review under section 700. ^[8] In such case review thereunder will not directly reach the rulings or legal conclusions of the referee; but if the trial judge thereafter proceeds under the applicable state or a stipulated practice, his rulings reviewing those of the referee will thus become subject to review under section 700. Of course, there must be exceptions to the judge's rulings; exceptions to those of the referee will not suffice. ^[9]

Still with reference to cases of written stipulation: If the reference is at common law, and the findings of the referee are therefore final, or if, under other practice, after review they stand as his findings, intact or modified, or if the judge by adoption or otherwise makes his own findings, in either case the fact findings must be deemed a part of the primary record, opening for review the question whether they support the judgment. Cases of reference, where the jury waiver is not in writing, cannot be reviewed under section 700, and bills of exceptions and recitals of evidence are ineffective; nevertheless, the findings in any of the forms just recited have the same character and effect as in the case of written waiver. ^[10]

In the present case the written stipulation of the parties lends itself to the construction that it provides for a complete arbitration before the referee; but it is not clear to this effect, and both parties and the court below have interpreted it otherwise. Under the circumstances of this case, some of which have not been stated, the referee's findings of fact might be thought to amount to an agreed statement of facts; but whether they be so considered or merely as referee's findings which have been confirmed by the court, we have jurisdiction to inquire whether they support the judgment; and that is sufficient to reach all the important questions presented.

The waterworks system in Cleveland, of which this new structure was to be a part, was maintained by fees charged to the users, and the funds to pay for this improvement were to be obtained from bonds sold or to be sold, and to the payment of which the revenues of the water department were to be devoted. The sections of the city charter claimed to be controlling are quoted in the margin. ^[11] Assuming, for the present, the applicability of these sections, we find that the contract called for a structure of concrete fully described in terms of its ultimate form and size, but provided for payment on the 'unit plan,' whereby the price was so much per cubic yard of excavation, so much per cubic yard of concrete laid, etc. The contract was pursuant to an acceptance of plaintiff's bid, and plaintiff's bid or proposition had been pursuant to specifications advertised by the city as a basis for competitive bidding. Accompanying these specifications was an estimate prepared by the city and given out as the basis that it would use in comparing bids, since the bids themselves were necessarily to be of prices per unit and not of an entire price. The prices which the plaintiff bid and which were decided to entitle it to the position of the lowest bidder, when computed according to the estimate of the units to be done, made a total of about $272,000. When the work was finished according to specifications, it developed that the true computation was about $300,000, in addition to about $9,000 for extras which had been furnished by the contractor in full compliance with the conditions of the contract upon that subject. At the time of making the contract, the Director of Finance certified that there was the sum of $272,000 in the city treasury to the credit of the fund and not appropriated for any other purpose and from which payment to the contractor was to be made. The amount so certified has been nearly all paid to the plaintiff, and the claim in suit is substantially for the excess.

The court below assumed that if the proceedings had been under the general municipal code of Ohio instead of under the Cleveland charter, and in a case where the certificate was...