Geary v. Board of Com'rs of Port of New Orleans

• Decision Date: 05 June 1916
• Docket Number: 20931
• Citation: 72 So. 245,139 La. 781
• Parties: GEARY v. BOARD OF COM'RS OF PORT OF NEW ORLEANS
• Court: Louisiana Supreme Court

72 So. 245

139 La. 781

GEARY v. BOARD OF COM'RS OF PORT OF NEW ORLEANS

No. 20931

Supreme Court of Louisiana

June 5, 1916

James Wilkinson, of New Orleans, for appellant.

Cage Baldwin & Crabites and Edward P. Foley, all of New Orleans for appellee.

OPINION

PROVOSTY, J.

The defendant board has charge of the wharves of the port of New Orleans. After advertisement for bids, it let to the plaintiff, a general contractor, who was the lowest bidder, the contract for the construction of the Pauline street wharf. The work to be done was shown by plans and specifications accompanying the contract, and may be said to have consisted of an inner part, along the bank of the river where the water was shallower, and an outer part, further out in the stream. The board was to furnish the piles and lumber. Payment was to be made at 6 1/2 cents per lineal foot of piles driven, and $ 10.25 per 1,000 feet of lumber framed and placed. The cost of splicing and lagging the piles was to be reimbursed to plaintiff plus a profit of 15 cents on the cost. After about one-third of the inner part had been constructed, the defendant board, owing to disappointment in obtaining funds from the railroad for whose special use the wharf was being constructed, concluded not to construct the outer part, and so notified plaintiff. Plaintiff protested against this action, and gave notice that it would cause him a loss for which he would hold the board liable. He went on with that part of the work which he was allowed to do, and continued to receive payments, in accordance with the terms of the contract, as the work progressed, and when he had finished, and after vain efforts towards amicable adjustment, brought this suit.

The theory of the suit as propounded by his counsel is that the defendant board canceled the contract by an exercise of the right conferred upon proprietors by article 2765 of the Civil Code, and that he is therefore entitled to recover of the defendant board the sum of the expenses incurred by him plus the profit he would have made if he had been allowed to do all the work called for by the contract. The said article 2765 reads:

'The proprietor has a right to cancel at pleasure the bargain he has made, even in case the work has already been commenced, by paying the undertaker for the expense and labor already incurred, and such damages as the nature of the case may require.'

The defendant board claims that it had the right to curtail the work as it did under the following clauses of the contract:

'II. The work to be done under this contract shall be executed under the immediate direction and supervision of A. C. Bell, engineer of the purchaser, or his representative, and the said engineer shall be the sole judge of and shall decide all questions or disputes that may arise under this contract with regard to the interpretation of specifications, quality of material or workmanship or any other dispute or question arising hereunder, and his decision shall be binding upon the parties hereto.

'III. The engineer acting for the purchaser reserves the right to make such changes or modifications in the said plans or specifications, or both, as he may deem advisable, but the contractor shall not proceed with these changes without a written order from the engineer, approved by the purchaser; this order shall stipulate the work to be done under the changed modified or altered conditions, the difference in time allowance and the difference in the price, whether in favor of or against the contractor. The contractor shall under no circumstances have the right to increase, diminish or alter the work to be done under this contract; nor shall any claim for extra work be allowed or entertained, either in time allowance or in cost, unless the increase, decrease, or extra work shall have been ordered in the same manner as above required for changes, modifications, etc., to the plans and specifications.'

'XV. Neither the contractor nor his sureties shall be released from the whole or any part of the obligations hereby assumed by reason of any change in the amount, nature, scope, character or extent of the work, or in any plan or specification, or in the mode or time of payment, or by the consent of any subcontractor, or by any extension of time or indulgence granted to the contractor, even though any and all of said acts be without the knowledge and consent of the contractor or his sureties, unless such release be expressly made in writing by the purchaser.'

We do not so interpret these clauses. We think the changes which according to clause 15 were not to have the effect of releasing the contractor or his surety are those contemplated by clauses 2 and 3, namely, changes to be made by the engineer, not by the board; in other words, engineering modifications, such as ordinarily have to be made in the course of the execution of the plans of almost every work of any magnitude; and certainly not such as the one in question in this case, by which the contract might be converted into a plainly losing one for the contractor.

We do not agree with plaintiff that in canceling part of the work the defendant board was acting under said article 2765, and that the measure of its liability is that provided for in that article. The defendant board had no idea of acting under said article, but under the terms of the contract. The right which is conferred by this article is to cancel the contract, not to modify it. Neither in this state nor elsewhere has the proprietor the right to modify the contract at his will -- modify it either in the kind or amount of work to be done or the amount to be paid. This article 2765 confers upon him the right to cancel, or, in other words, put an end to, the contract in toto -- not to modify it. And neither the defendant board nor plaintiff understood that the contract was put an end to. Plaintiff continued in the execution of it, and continued to receive payments under it.

Plaintiff had the right to require the board to choose between either letting the contract go on as a whole, or else canceling it as a whole; he did not assert this right, but went on with the contract, reserving his right to indemnity. The latter right he has, but it is based on the breach of the contract by the defendant board, and not upon any supposed canceling of the contract as a whole; and the measure of the damages must be accordingly, and not as for a contract canceled under said article. That measure is the profits he would have made, and which he was deprived of the opportunity of making. In arriving at these profits the contract must, as a matter of course, be dealt with as a whole. That is to say, the profits must be found by deducting the total amount it would have cost plaintiff to complete the contract from the total amount he would have been entitled to receive under the contract had he completed it; and, inasmuch as the impossibility of knowing the exact figures has been brought about by the fault of the defendant board, the figures will have to be arrived at as best can be done from the available data; such as the plans and the estimates in the specifications.

The learned counsel of the defendant board contends that by going on with the contract, and receiving payments under same, or, in other words, receiving benefits under same, the plaintiff acquiesced in the change thus made, and waived any right he might originally have had to complain.

We do not think so. Plaintiff duly protested, and gave notice of his intention to hold the board liable. This intention was expressed in very polite and conciliatory terms, but was none the less positively and unmistakably communicated. And the going on with the work was the sensible and obvious thing to do in the interest of all parties concerned.

Perhaps, if the breach of the cotract had been simply passive, plaintiff would have been under the necessity of putting the board formally in default; but, under the circumstances, the board having announced its inability to go on for lack of funds and its intention not to do so, we think that a formal putting in default was unnecessary, putting in default not being necessary in the presence of an acknowledged inability to perform and an announced intention not to do so.

Another defense is that the defendant board is prohibited by Act 270, p. 468, of 1910, from incurring any obligation for meeting which the necessary funds are neither on hand nor in prospect. This defense would go to the contract having been null originally and in toto, for a contract cannot be valid in part and null in part; and no pretense is made that the contract was originally null. And, in the second place, said act, from its terms, has application only to the governing authorities of municipalities and parishes, not to a political board like defendant.

It is argued...