E. & F. Const. Co. v. Town of Stamford

• Decision Date: 09 February 1932
• Parties: E. & F. CONST. CO. v. TOWN OF STAMFORD.
• Court: Connecticut Supreme Court

158 A. 551

114 Conn. 250

E. & F. CONST. CO. v. TOWN OF STAMFORD.

Supreme Court of Errors of Connecticut.

February 9, 1932

Appeal from Superior Court, Fairfield County; Edwin C. Dickenson Judge.

Action by the E. & F. Construction Company against the Town of Stamford to recover damages resulting from alleged misrepresentations by the defendant relied on by plaintiff in connection with the execution of a contract for the construction of a high school. A committee's report on the facts was accepted by the court, but committee's conclusions were rejected, and judgment was rendered in defendant's favor, and plaintiff appeals.

Error and cause remanded.

William H. Comley and Theodore Steiber, both of Bridgeport for appellant.

Thomas J. Ryle, of Stamford, and Jackson Palmer, of Greenwich, for appellee.

BANKS J.

The committee found the following facts: In the fall of 1926 the defendant, acting through its High School Building Committee, invited contractors to bid upon the construction of a new high school. The plaintiff procured from the architects a set of plans, specifications, and instructions to bidders, the specifications containing a provision that the contractor should remove all rock encountered, except boulders, at an additional price per cubic yard provided for in the bid form. The plaintiff submitted its offer to build the school for $838,998 plus a unit price of $4.50 per cubic yard for rock encountered in the excavation of the site, which however was not the lowest bid submitted. Thereafter negotiations were commenced between the plaintiff on the one hand, and the architects and certain members of the building committee on the other hand, for a revision of the plaintiff's bid, and it was proposed that the plaintiff, as a concession for the award of the contract to it, include the cost of rock excavation in its lump-sum bid. The plaintiff thereupon notified the building committee that if it was awarded the general contract it would (1) agree to have the building ready for occupancy on or before August 15, 1928, (2) accept a clause in the contract providing for the payment of damages to the town for each day of delay after September 1, 1928, and (3) make all necessary rock excavation without additional cost. The building committee awarded the contract to the plaintiff, and a contract was executed in which the plaintiff agreed to erect the building as called for by the plans and specifications for the lump sum of $838,998, which sum should include all necessary rock excavation incident to the full performance of the contract. Among the completed drawings of plans submitted the bidders was one known as sheet No. 6, which showed the outline of the building and the location of 38 borings, together with contour lines and elevations; the borings being distributed over the entire area of the site. This sheet contained the following notation: " Within the area shown by dotted line there is rock at 93 and 94. Over the entire plot where the building is located there is loam and gravel, sand and gravel and boulders" ; and beneath this a heading, " Soil and soundings at points shown," following which was a record of the subsurface conditions reported at depths ranging from 1 foot 6 inches to 14 feet, which record disclosed a subsurface structure of loam, sand, clay, gravel, and boulders, but showed no rock except in the area within the dotted lines. This area contained approximately 150 cubic yards of rock to be excavated. The plaintiff began excavation and encountered a solid ledge of rock not shown on the plans which in some places came up within a few inches of the surface. It complained of the rock conditions, but, the architect agreeing to present its claim for extra compensation to the defendant at the proper time, it proceeded with the work and completed its contract within the time limit. In order to make the required excavation, the plaintiff was obliged to excavate 6,198 cubic yards of rock over and above the amount shown in the rock area within the dotted lines on sheet No. 6, at a reasonable cost of removal of $4.50 per cubic yard. The committee found that the boring data contained on sheet No. 6 were prepared and submitted to the plaintiff and other bidders for the purpose of informing them as to subsurface conditions, that it was a proper and reasonable inference to be drawn by the plaintiff that no rock would be encountered in the excavation outside the area of the dotted line circle and to the depth of the borings, and that it was justified in assuming that the total amount to be encountered to the bottom of the borings would be about 150 yards. The committee further found that in making its contract the plaintiff relied upon the information as to subsurface conditions given on sheet No. 6, and that this information was false and misleading, in that it disclosed no rock except within the small area of the dotted line circle. In some portions of the building the borings did not go fully to the depth of the required foundations, and the amount of rock excavated by the plaintiff below those levels at those points was 535 cubic yards, which was included in the 6,198 cubic yards excavated. The committee found that the plaintiff by waiving the unit price for rock excavation assumed the risk of finding rock between the depth of the borings and the depth of the foundation, but that it was entitled to recover the expense of excavating 5,663 cubic yards of rock, at $4.50 per cubic yard, with interest from the date of the complaint, and recommended that judgment be entered for such amount. The court accepted the report of the committee on the facts but not its legal conclusions or recommendations, and entered judgment for the defendant.

The sole question upon this appeal is that of the correctness of the trial court's conclusion that, upon the facts found by the committee, the plaintiff is not entitled to recover. The committee found that the plaintiff, in entering into the contract by the terms of which it agreed to make all necessary rock excavation, relied on information as to subsurface conditions specifically set forth upon the plot plan sheet No. 6, that the plaintiff was justified in assuming that this information was true, and that in fact it was false and misleading. The trial court reached the conclusion that the plaintiff's offer to make all the rock excavation without extra cost if it were awarded the general contract constituted, when accepted by the defendant, a separate agreement-a " contract to obtain the building contract" -that this contract was not affected by any representations of the defendant as to the character of the subsurface of the building site, and that the plaintiff, having agreed to make all necessary rock excavation in consideration of the award to it of the general contract, had no right to rely upon the assumption that no rock would be encountered other than as indicated upon the sheet No. 6. The plaintiff contends that the facts stated in the committee's report do not support these conclusions of the court.

The original specifications upon which the plaintiff and other contractors were asked to submit bids called for a unit price on rock excavation. No contract was awarded upon that basis and the plaintiff submitted a modified offer in which it agreed to include the cost of rock excavation in its lump-sum bid which offer was accepted by the defendant, and a contract executed incorporating such agreement. The plaintiff's original bid and its modified offer were negotiations leading up to the execution of the building contract and were merged in that contract. That contract by its terms obligated the plaintiff to excavate all the rock encountered without extra charge, and it was excavated in fulfillment of the terms of the contract, and not under those of the preliminary agreement to make such a contract. If it be true that, as the trial court said in its memorandum of decision, the plaintiff, to obtain the contract, was required to agree to make all necessary rock excavations, the same would have been true if the original specifications had called for bids upon the basis of including in the total amount of the bid the cost of all such excavation. ...