City of Houston v. Howe & Wise, 14188

• Decision Date: 05 December 1963
• Docket Number: No. 14188,14188
• Citation: 373 S.W.2d 781
• Parties: The CITY OF HOUSTON, Appellant, v. HOWE & WISE, Appellee.
• Court: Texas Court of Appeals

Page 781

373 S.W.2d 781

The CITY OF HOUSTON, Appellant, v. HOWE & WISE, Appellee.

No. 14188.

Court of Civil Appeals of Texas, Houston.

Dec. 5, 1963.

Rehearing Denied Jan. 9, 1964.

R. H. Burks, City Atty., Homer T. Bouldin, Edgar Pfeil, Senior Asst. City Attys., Houston, for appellant.

Fred Parks and Donn C. Fullenweider, Houston, for appellee.

COLEMAN, Justice.

This is the second appeal of a suit on a contract to recover fees alleged to be due for supervisory engineering services. On this trial the issues were confined to the liability of the City for fees alleged to be due in connection with the removal and relocation of certain railroad property. The opinion of this Court on the previous appeal is reported under the style of City of Houston v. Howe & Wise, 323 S.W.2d 134.

The controversy grows out of a letter by the terms of which appellees waived their right to fees, to which they might become entitled under their contract, for services to be performed in connection with the removal and relocation of such railroad property as would be made necessary by the construction of Lake Houston, conditioned on their not being required to perform such services. A railroad bridge was subsequently relocated and appellees performed no services referable to this work.

Appellees alleged in effect that they were induced to eliminate this railroad work from their contract by fraudulent misrepresentations. In answer to special issues the jury found that F. N. Baldwin, Director of Utilities for the City of Houston, told W. F. Smith, a partner in the firm of Howe & Wise, that the City would not pay more than $50,000.00 to the Beaumont, Sourlake & Western Railway Company in connection with their railway bridge; that this representation was false; that F. N. Baldwin knew that this representation was false; that W. F. Smith would not have executed the waiver letter had such representation not been made; that in making the representation it was the intention of F. N. Baldwin to induce W. F. Smith to sign a letter purporting to waive his fee for the removal and relocation of the railroad bridge; and that W. F. Smith signed the waiver letter relying on such representation.

By written contract the City of Houston employed Howe & Wise to perform the engineering services, incident to the clearing of the Lake Houston reservoir area and 'the removal, rearrangement and/or relocation or a railroad and certain pipelines which cross the reservoir area, including the area on which the dam itself will actually rest.' The contract provided:

'While for convenience the engineer's services in connection with the clearing and in connection with the removal of such existing facilities or their rearrangement, etc., will be separately described, this is a single entire employment for the entire engineering services involved in all the work herein referred to.'

Other portions of the contract pertinent to the questions involved herein follow:

'B.

'Supervising the Rearrangement, Removal or Relocation of the

Railroad and Pipelines.

'Under this part of the Engineer's employment, he will, working in close co-operation with the City's Director of Utilities and/or the City's Legal Department, perform in general the following services, to-wit,----

'As stated above, there is a railroad and a large number of pipelines which cross the reservoir area. Agreements have not yet been reached between the City and the owners of these facilities as to the extent to which they may severally remain in their present location with or without nay rearrangement or any additional construction. Similarly, no decision or agreement has yet been reached, and many months may be required before agreements are reached, as to the extent, if any, to which the cost of any removal, relocation or rearrangement of such facilities will be borne by the City. It is possible that some of the facilities, particularly the railroad will simply be abandoned and nothing done except to tear up the tracks so far as involves the reservoir area. Similarly, some of the pipelines may be simply abandoned and by-passed. In connection with others, they may be placed in trestles and carried across the reservoir in that manner while as to others, they may be lift in the ground but first strengthened by additional construction, weighting, or other construction work.

'It is the Engineer's responsibility when a decision is reached that a certain existing facility will remain where it is but that certain construction work or relocation or strengthening will be done, to supervise generally the work which is done and see to it that it is done in such manner as to involve the minimum of danger to the City's reservoir. On the other hand, where an existing facility is simply to be removed, the Engineer will have no responsibility except to see to it that the removal is in such manner as does not endanger the City's reservoir or leave the ground in such condition as to constitute a future hazard or danger. The same shall apply to the simple abandonment of the railroad with the removal, however, if the railroad company sees fit, of its tracks and/or its present railway bridge across the San Jacinto River.

'The City and the Engineer both realize that the foregoing description of the Engineer's services and duties under this part of his employment is extremely general. It shall, however, be fairly construed to require the Engineer in connection with the work actually done in the matter with the present facilities within the reservoir area to perform those engineering services which the City in ordinary prudence would find it necessary to perform for itself if this agreement had not been entered into.

'* * *

'III.

'Co-operation with the City.

'In the performance of his duties and particularly in the matter of the preparation of the clearing specifications and the approval of work proposed to be done or done in connection with the present utilities within the reservoir area, the Engineer will hold periodic conferences with the Mayor or with the City's Director of Utilities to the end that the project as perfected will have full benefit of the City's accumulated experience and knowledge of existing needs and facilities and be consistent with current municipal policy. To implement this co-ordination, the City will make available to the Engineer all of its existing plans, maps, field notes, statistics, computations and other data relative to the entire project.

'TV.

'Time for Performance of Services.

'The City presently hopes to be able to award a contract for the actual construction of its dam about or shortly after the middle of the year 1951. * * *

'* * *

'The Engineer's services in connection with the rearrangement, removal or relocation or abandonment of the existing utilities within the reservoir area will, of course, be performed as the necessity therefor arises, depending upon the agreements which from time to time are reached between the City and the owners of such facilities as to what is going to be done about them.

'V.

'FEES: For and in consideration of the services to be rendered by the Engineer, the Engineer shall receive a fee which shall be five per cent (5%) of the actual cost to the City of the work of clearing of the reservoir site and of the rearrangement, removal or replacement of the railroad and/or the pipelines within the reservoir area.

'* * *

'As for the rearrangement, relocation or replacement of the railroad and other utility facilities within the reservoir area, the cost for the purpose of determining the final amount of the Engineer's fee will be the actual cost to the City, i. e., the amount paid by it incident to such rearrangement, removal of or replacement of any such facility or facilities. To clarify this point, the following examples are stated:

'(a) If for example it is determined that a certain facility will remain in the reservoir area but that its owner will do certain construction or strengthening work of a cost of $50,000.00 of which the City agrees to pay $10,000.00, then $10,000.00 will be considered as the cost of this part of the work for the purpose of computing the Engineer's five per cent fee.

'(b) If an existing facility is to be removed and replaced by another facility crossing the reservoir area of a cost, within the reservoir area itself, of $200,000.00 of which the City agrees to pay $20,000.00 then $20,000.00 would be taken as the cost of this item for determining the amount of the Engineer's percentage fee.

'(c) If an existing facility is to be abandoned so far as it is within the reservoir area, then the Engineer will be entitled to no percentage at all upon any amount which the City may see fit to pay the owner of such facility as a part of its cost or damage on account of such abandonment, unless by replacement of the facility within the reservoir area itself the situation is brought within that described in (b) above.

'(d) Similarly, if an existing facility so far as it is within the reservoir area is to be abandoned by the owner of its salvages and removes part of all of the materials constituting the same (i. e., pipe, rails, bridge, etc.), then the Engineer shall be entitled to no percentage fee on account of this particular facility even though the City sees fit to agree to pay the owner thereof some sum of money in satisfaction of all or a part of its damages or less on account of such abandonment or salvage.

'(e) In the improbable event of the City itself undertaking within the reservoir area construction by way of replacing of or substitution for any of these existing facilities, then the Engineer's percentage fee shall be computed upon the entire cost of such work even though the City may be reimbursed for a part of such cost by the owners of some or all of the facilities so replaced.

'Although it is impossible at the moment to do much more than hazard a guess as to the cost to the City as hereinabove defined of the work to...