Drainage Dist. No. 1 v. Rude

• Decision Date: 13 August 1927
• Docket Number: No. 7732.,7732.
• Parties: DRAINAGE DIST. NO. 1 OF LINCOLN COUNTY, NEB., et al. v. RUDE et al.
• Court: U.S. Court of Appeals — Eighth Circuit

21 F.2d 257 (1927)

DRAINAGE DIST. NO. 1 OF LINCOLN COUNTY, NEB., et al. v. RUDE et al.

No. 7732.

Circuit Court of Appeals, Eighth Circuit.

August 13, 1927.

C. L. Baskins and J. G. Beeler, both of North Platte, Neb. (M. E. Crosby, of North Platte, Neb., on the brief), for plaintiffs in error.

Clarence M. Hanson, of Ft. Dodge, Iowa (Dwight G. Rider, of Ft. Dodge, Iowa, and Matthew A. Hall, Raymond G. Young, and Harvey M. Johnsen, all of Omaha, Neb., on the brief), for defendants in error.

Before KENYON, Circuit Judge, and MOLYNEAUX and JOHN B. SANBORN, District Judges.

JOHN B. SANBORN, District Judge.

In this opinion, the defendants in error will be called plaintiffs, and the plaintiffs in error defendants, as in the court below. The facts out of which this controversy arose are these: The defendant drainage district, which comprises some 9,500 acres, desired to construct a system of drains to reduce the ground water level and thus prevent the accumulation of alkali near the surface of the lands. It employed an engineer, Mr. Kelly, to make the necessary surveys, prepare plans and specifications, forms for bids, instructions to bidders, and contracts. He was the "drain commissioner." The system proposed by him consisted of two main ditches, designated No. 1 and No. 2, averaging 10 feet deep, with certain branches or laterals leading into them of lesser depth. Part of the drains were open, and part were covered or tile drains. Mr. Kelly made his report to the district board in August, 1921, which contains this statement:

"It is recommended that contracts be let at this time only for drains Nos. 1 and 2, both the open and closed portions. No contract should be let for the lateral drains until after the completion of drains Nos. 1 and 2, as then definite data will be available showing whether it is desirable to change the location or capacity of the lateral drains.

"It should be clearly pointed out to the contractor that the bids on covered drains are simply for the purpose of having unit prices on which payment for covered drains will be made, as it is very probable the sizes of tiles will be changed before construction begins on the covered drains.

"Careful measurements of water developed in the open ditches should be made as construction proceeds, as this information will indicate the capacity which should be provided in the covered drains."

Notice to bidders was published September 19, 1922. Bids were invited for constructing approximately 22.8 miles of open drains and 6 miles of tile drains, in accordance with four schedules. Schedule No. 4, with which we are concerned, related to "hauling tile, excavating, laying, and backfilling complete in place 31,900 feet of tile drain varying in size from 8 inch to 24 inch, average depth from 7 to 8 feet." The notice stated that instructions for bidders, proposal blanks, plans, and specifications, form of contract, and other instructions could be obtained from the drain commissioner, and that sealed bids would be received up to 1 o'clock in the afternoon of October 23, 1922. The instructions to bidders required that they satisfy themselves, by personal inspection, of the nature of the work; that they make bids upon one or more schedules; that every item in each schedule upon which a bid was made should be bid upon; and stated that bids would be considered upon the approximate quantities shown by the plans and specifications on file; that consideration would be given to the basis of aggregate cost as well as to separate schedules; that character and ability would be considered; that all proposals would be received with the express understanding that the bidder accepted the conditions contained in the instructions, specifications, contract, and bond referred to therein; that, "if any difference of opinion shall arise as to the true intent and meaning of the specifications or plans, after proposals have been delivered to the drain commissioner, the decision of the district engineer shall be final"; that "work on schedule No. 4 cannot be started until sufficient work has been done on schedules 1 and 2 to provide outlets for the tile drains." Prior to the receipt of bids, schedule No. 4 was changed, increasing the length of the tile drains to be laid and providing for 9 lines of tile drains, totaling 86,518 feet. The change was made on October 21st, and Mr. Kelly sent out a supplemental statement to bidders showing it. He claims that he orally stated to prospective bidders that, while bids were to be received upon the changed schedule, it was with the understanding that it was proposed to construct only the tile lines on drains No. 1 and No. 2, 2F and 2F1 — about 37,900 feet — and that the construction of the other laterals would depend upon the necessity for them. The plaintiffs deny that any such statement was made to them. Their bid on schedule No. 4, as shown by the contract, was:

"Furnishing all labor and materials excepting drain tile and sewer pipe for covered drains complete in place:

                     Size                    Unit Price
                    Drain                    Per Foot
                     8" ....................... $0.61
                    10" ....................... $0.62
                    12" ....................... $0.63
                    15" ....................... $0.66-5
                    18" ....................... $0.70
                    20" ....................... $0.72
                    22" ....................... $0.75
                    24" ....................... $0.78
                

"42 manholes of concrete @ $70.00 each.

"5 outlet structures of concrete @ $75.00 each.

"Furnishing gravel in place around tile, if required, $3.00 per cubic yard.

"Furnishing cradles or supporting timbers in place under tile, if required, @ $200.00 per M., F. B. M."

— which totaled, according to the plans and specifications, $63,037.23. The bid was accepted. The contract was made January 12, 1923. It provides for the plaintiffs' doing the work within 360 days from the time they commence, and for a penalty of $50 a day for every day thereafter their work remains unfinished; that the sum mutually agreed to be paid for the work is $63,037.23 in cash "provided the amount of work done and material furnished is the same set out in the proposal"; that payments shall be made in monthly installments, the district to retain 15 per cent., and that final payment shall be made within 30 days after the completion of the contract; that the district employs the contractor to do the work "according to the terms and conditions herein contained and referred to, for the price aforesaid, and hereby contracts to pay the same at the time, in the manner, and upon the conditions set forth." The plans and specifications are, by reference, made a part of the contract, but not the notice to bidders. The specifications contain these provisions:

"11. The contract to cover the work to be done will be based upon the proposal, these specifications, and the plans to which they refer, which will be attached hereto and form a part hereof. Should any discrepancy exist between the plans and specifications or any part of either, or should the language of any part of the same be ambiguous or doubtful, the engineer shall decide as to the true intent and meaning of the same."

"13. The engineer or his authorized representative shall at all times have full control and direction of all work under the contract, and all questions, dispute or differences as to any part or detail thereof shall be decided by such representative."

"24. The drain commissioner of the district, acting for the district, reserves the right to make any desired changes in the alignment or location of the drains, to exclude any item, to increase or diminish the quantities to any extent, and to increase or decrease the cut over that shown on the profile; the extra yardage or extra work to be done to be paid for or deducted at the unit price bid. Such alterations or reductions shall not vitiate or annul the contract or agreement hereby entered into."

"25. The quantities given are only approximate and the actual quantities may vary widely from those given, these being the purpose of obtaining a unit price on which to work."

"75. In case it becomes necessary during the construction of the drainage system to construct extra lengths of drain lines, accessories, or structures, additional over and above the amounts advertised, the contractor shall construct the same upon the written order of the engineer, and shall be paid for such work at the same rate as bid for similar items or at the rate of actual cost, plus 10 per cent., if on some item upon which no unit price has been stated. The right is reserved by the drain commissioner of said drainage district No. 1 of Lincoln county, Neb., to reduce the quantities, to exclude any items, or to make any changes in the dimensions or locations of the drain or drainage structures, providing written notice is given to the contractor before he has delivered the necessary materials for the construction upon the ground, and to make deductions from payments under the contract at the rate of unit price agreed upon for such work."

On November 18, 1924, Mr. Elliott, who had replaced Mr. Kelly as drain commissioner and was the engineer in charge of the work, wrote the plaintiffs that open drains Nos. 1 and 2 would be completed in December, and that they would be expected to start the tile work as early in the spring as possible; that "there will be about 7½ miles of tile work to be installed under your contract, and we hope that you will be able to get started not later than the 1st of April, 1925." On December 2, 1924, the plaintiffs wrote Mr. Elliott, stating that they would begin work as early in the spring as conditions would permit, and also stating:

"We note you speak of 7½ miles of tile drain, and in this we believe you are in error. As we recall it, there is approximately 16 miles of work for us to do."

On December 8th, Mr. Elliott replied as follows:

"Your letter of the 2d at hand and glad to note your readiness to...