Delzer Const. Co. v. New Marian Homes Corp.

Decision Date05 November 1962
Docket NumberNo. 7999,7999
Citation117 N.W.2d 851
PartiesDELZER CONSTRUCTION COMPANY, a Corporation, Plaintiff and Appellant, v. NEW MARIAN HOMES CORPORATION, Defendant and Respondent.
CourtNorth Dakota Supreme Court

Syllabus by the Court

1. The object of construction of a contract is to ascertain and give effect to the intention of the parties. To accomplish that purpose the contract should be construed as a whole, all of its parts considered together and every clause, sentence or provision should be given effect consistent with the main purpose of the contract.

2. The intention of the parties to a written contract must, if possible, be ascertained from the contract alone.

3. A contract may be explained by reference to the circumstances under which it was made and the matter to which it relates. Section 9-07-12, N.D.C.C.

4. Where a developer petitions City for the installation of water and sewer facilities in its Addition and City accepts petition, sets up special improvement districts, plans the work, calls for bids and accepts bids on a unit price basis but, before contract is made with successful bidder to perform the work, procedure is changed by agreement and developer, as a party to the contract, joins with City in a contract with the successful bidder, in which developer agrees to pay for that portion of the work required to serve its Addition and the City agrees to pay for the oversize of the systems necessary to serve other areas, and dispute arises between developer and contractor as to contract sum, for reasons stated in the opinion the contract is construed to be a unit price contract and not a fixed sum contract as contended by developer.

5. Where a construction contract provides for computable liquidated damages for delay and no evidence is received in support thereof, cause is dismissed.

Jansonius, Fleck, Smith, Mather & Strutz, Bismarck, for plaintiff and appellant.

Rausch & Chapman, Bismarck, for defendant and respondent.

TEIGEN, Judge.

This is an appeal by the plaintiff, Delzer Construction Company, from a judgment dismissing plaintiff's complaint and the defendant's counterclaim. The case was tried to the court without a jury and a trial de novo is demanded. The appeal is from the whole judgment and the entire judgment is open for review.

The plaintiff, a contractor, brought this action against the defendant, a subdivision developer, for money damages alleged to have arisen out of contract. The defendant admits contract, pleads payment in full, and counterclaims for damages for delay.

The district court dismissed plaintiff's complaint and defendant's counterclaim and judgment was entered accordingly. This dispute arises over the interpretation of the contract.

There were two contracts entered into, one for the construction and installation of water mains and the other for the construction and installation of a sanitary sewer within the defendant's subdivision known as Marian Park Second Addition to the City of Bismarck, North Dakota. This was a new development for residential housing. The defendant had secured 53 purchase orders for homes and had entered into building agreements relative thereto. It petitioned the City of Bismarck to extend its water and sanitary sewer mains into the addition. The plaintiff was the successful bidder and it entered into contracts with the defendant and the City for the work. The contracts provide for a division of the costs between the City and the defendant, the defendant assuming and agreeing to pay the costs for the water main and the sanitary sewer necessary to serve its addition and the City assuming the cost for the oversize of the systems needed for trunk line purposes. The preface of the contracts describes this. It states:

'WHEREAS, NEW MARIAN HOMES CORPORATION, a corporation, has petitioned and requested the City to extend its water and sanitary sewer mains to Marian Park Second Addition, which is now undeveloped, but which petitioner intends to develop, and

'WHEREAS, petitioner has agreed to pay for said extensions as necessary for its particular area, and the City will pay for such extra size of said main extensions as are needed for trunk line purposes, and

'WHEREAS, a bid for such extension of the sanitary sewer and water mains in Marian Park Second Addition has been made by the Contractor, which is acceptable to the City and the Owner, and they desire to provide for such work and the payment of their shares therefor, along with other work of the City alone contained in said bid.'

The defendant and the City, in one instrument, each contracted separately with the plaintiff for its proportion of the work and the consideration to be paid. The entire work was constructed as one unit. There were two contracts similar in format, one for the construction of the water main and the other for the construction of the sanitary sewer.

The plaintiff construes the contracts to be on a unit price basis and claims the contract sum can be determined only after the work is completed. The defendant construes the contracts as fixed sum contracts. The issue turns upon the construction of the contracts in question.

Article Three of the contracts provides for the contract sum. The first section of Article Three provides for work in which the defendant corporation has no interest and is to be paid for in full by the City. The second section in each of the contracts provides for the work, the cost of which is to be divided between the City and the defendant. Because each contract is identical as to form, we copy only from the water contract. It states, in part, as follows 'The Owner, New Marian Homes Corporation shall pay the Contractor according to the following schedule of approximate quantities for the performance of the following work in its addition:

                Unit No. 1
                Item No.                 Item Quant.  Unit  Unit Bid       Total
                ----------------------------------------------------------------
                1. 6"' C.I. Watermain           3782  L.F.     $3.25  $12,291.50
                2. 6"' Gate Valve & Box           16  Ea.      90.00    1,440.00
                3. 6"' Hydrant                     5  Ea.     225.00    1,125.00
                4.  C.I. Fittings                1160  Lb.        .  30      348.00
                5.  Pitrun Gravel                 415  C.Y.      3.00    1,245.00
                6.  Rock Excavation                 6  C.Y.     40.00      240.00
                 TOTAL--Unit 1                                        $16,689.50
                Less amount to be assumed by the City of Bismarck
                Item No.                                Item Quant.  Unit  Unit Bid       Total
                -------------------------------------------------------------------------------
                1. 6"' C.I. Watermain                           580  L.F.     $3.25   $1,885.00
                2. 6"' Gate Valve & Box                           2  Ea.      90.00      180.00
                3. 6"' Hydrant                                 None
                4.  C.I. Fittings                            112 1/2  Lb.        .  30       33.75
                5.  Pitrun Gravel                                 41  C.Y.      3.00      123.00
                6.  Rock Excavation                             None                   $2,221.75
                New Marian Homes Corporation shall pay                               $14,467.75
                

The City will assume and pay to the Contractor the following part of the contract work to be done in Marian Park Second Addition, being the part attributable to trunk line service in said Addition:

                Item No.                 Item Quant.  Unit  Unit Bid       Total
                ----------------------------------------------------------------
                1. 6"' C.I. Watermain           3782  L.F.     $3.25  $12,291.50
                2. 6"' Gate Valve & Box           16  Ea.      90.00    1,440.00
                3. 6"' Hydrant                     5  Ea.     225.00    1,125.00
                4.  C.I. Fittings                1160  Lb.        .  30      348.00
                5.  Pitrun Gravel                 415  C.Y.      3.00    1,245.00
                6.  Rock Excavation                 6  C.Y.     40.00      240.00
                                                                      $16,689.50
                Less Amount New Marian Homes Corporation shall pay
                Item No.                               Item. Quant.  Unit  Unit Bid       Total
                -------------------------------------------------------------------------------
                1. 6"' C.I. Watermain                          3202  L.F.     $3.25  $10,406.50
                2. 6"' Gate Valve & Box                          14  Ea.      90.00    1,260.00
                3. 6"' Hydrant                                    5  Ea.     225.00    1,125.00
                4.  C.I. Fittings                           1047 1/2  Lb.        .  30      314.25
                5.  Pitrun Gravel                                374  C.Y.      3.00    1,122.00
                6.  Rock Excavation                                6  C.Y.     40.00      240.00
                                                                                     $14,467.75
                City of Bismarck shall assume and pay                                $2,221.75'
                

The specifications were drawn by the City and are made a part of the contract by reference. Section 27 of the specifications provides for the item 'Rock Excavation.' It states that all rocks in volume smaller than two cubic feet, or rock that in the opinion of the engineer can be economically removed by a trenching machine or by workmen with picks, spade or shovel, shall not be classified as solid rock, but shall be termed excavation and the cost of removal thereof included in the price bid for the item for which the excavation is made. Detailed explanation is made for the excavation of rock and provision is made for the method of measurement of the rock in place by the engineer.

Section 5 of the specifications provides the engineer shall be the City Engineer or his authorized representative. It states that the decisions of the engineer shall be binding on the parties upon all questions concerning the execution of the work and interpretation of the specifications or the plans.

Section 15...

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