Georgia Pacific Ry. Co. v. Brooks

• Decision Date: 03 June 1889
• Parties: GEORGIA PACIFIC RY. CO. v. R. M. & J. M. BROOKS ET AL
• Court: Mississippi Supreme Court

6 So. 467

66 Miss. 583

GEORGIA PACIFIC RY. CO. v. R. M. & J. M. BROOKS ET AL

Supreme Court of Mississippi

June 3, 1889

FROM the chancery court of Oktibbeha county, HON. T. B. GRAHAM Chancellor.

The appellees, R. M. & J. M. Brooks, citizens of the state of Georgia, contracted on June 9, 1888, with the appellant company to build and construct for it eleven miles of railroad in this state. The contract, which is mainly set out in a printed form, contained an extended and minute specification of the terms upon which the work was to be performed, and the conditions upon which the price was to be paid.

Before executing the contract, the said appellees signed and delivered to the appellant a written proposal or offer to do the work upon the conditions and according to the specifications of the above mentioned contract and at certain stated prices.

In this proposal the said appellees, among other things, certified that they had personally and carefully examined that portion of the line or division of the projected railroad on which the said work was to be let, and having made such examination they proposed to perform the work on the terms and conditions and according to the specifications set out in the contract and at prices therein stated.

On the same day the contract was signed on the part of the company and the said appellees. The provisions of the contract which are material to be referred to here are as follows:

1. The said contractors were to begin work within fifteen days from the date of the contract, June 9, 1888, and to complete the entire eleven miles by November 15, following. No charge should be made by the contractor for any hindrance or delay from any cause in the progress of the work or any portion of it, but it might entitle them to an extension of the time fixed for the completion of the work sufficient in the judgment of the engineer to compensate for the detention. It was further agreed that no claim for damages, arising from delay that might occur in obtaining title to right of way should be made by the contractors; but if title was not obtained in three months from the date of the contract, then the contractors might abandon the work upon the portion the title to which could not be acquired.

2. The company reserved the right to make changes in the grades curves, embankments, etc., as the engineer should deem necessary and proper, subject to an allowance or deduction from the price as the work was increased or diminished thereby.

3. The contractors were prohibited from letting or transferring their contracts or any part of it (except for delivery of work or material), or withdrawing their constant personal attention from the work, without the written consent of the chief engineer indorsed on the contract.

4. No claim should be made for extra work unless the same should have been done in pursuance of a written order from the engineer in charge, and the claim be made at the time of the first monthly payment after the work was executed, unless the engineer at his discretion should direct the claim to be allowed.

5. The contractors should remove and rebuild without charge any work which the engineer might consider defectively executed.

6. The measurement of quantities should be made in excavation before their removal, except that borrowed material, at the discretion of the engineer, might be measured in the bank. The excavation was divided into three kinds, viz.: earth rotten limestone and solid rock, and the prices per cubic yard graded accordingly.

7. The company should reserve ten per cent. of the amount due upon each estimate, and in the event the work was not finished in accordance with the specifications, and agreeably to the directions of the engineer under the contract, on or before November 15, 1888, the said reserved percentage should be forever forfeited by the contractors. The company also reserved the right to employ a sufficient force and complete the work, if it became apparent that the work would not be completed by the time agreed upon, the expenses thus incurred to be charged to the contractors.

8. Upon the completion of the work a final estimate by the engineer should be made of the quality, character, and value of the work under the contract, and at every stage of the work it should be subject to the direction, inspection and acceptance of the engineer, who should determine, without appeal, what in any case a fair construction of the contract required to be done by either party; and his measurements, classification and estimates, monthly or final, should be absolutely conclusive upon both parties.

The bill in this cause was exhibited against the appellant by the said contractors, R. M. & J. M. Brooks, certain of their creditors as hereinafter set out, and others who were sub-contractors under them in the building of the said sections of railroad. After setting out the terms of the aforesaid written contract, the bill alleges that the contract as originally drawn in duplicate provided for the building of only ten miles of said road, but the company added another mile to the work to be done, and inserted it in the contract against the protest of said R. M. & J. M Brooks, who, as they allege, had never examined the work along said mile, and knew nothing of its character; that they were induced to permit the insertion of that mile into the contract on the false and fraudulent representation that the work upon it was easy, and of the same kind as that upon the other ten miles, and that the company would endeavor to find another contractor to take the one mile and release them, and, failing in this, the company would pay for the work thereon such a fair compensation as it could afford to pay under all the circumstances; that the said contractors had nothing to guide them in reference to the character of the work on said mile, except the profiles shown to them by the company at the time, and its statements in reference thereto, all indicating that the work was very desirable; that upon these assurances the contract was signed by them; that it was understood that the contract was not to be effectual until it was also signed by said company, but the company has never signed the contract at all.

The bill further alleges that, contrary to the said profiles and representations, the one mile was in a dense, heavily timbered swamp, through which the road could only be built at an enormous cost. Complainants also allege a similar misrepresentation and fraud on the part of the company in reference to another mile of the work, which they claim they were induced to contract for by the false representations of the company's engineers, and which, because of the wet character of the soil, was very difficult and expensive to construct; that the extra cost and outlay incurred by them in endeavoring to do the work on said two miles was very great, and they are justly entitled to additional compensation therefor.

Several sub-contractors under R. M. & J. M. Brooks have joined in the bill as complainants. The bill sets out the several contracts made with them, the sections of the work undertaken by each, and the work done by them. It is alleged that the sub-contractors agreed to fulfill the requirement of the contract as made by the company with R. M. & J. M. Brooks, and the latter agreed to pay each sub-contractor the money collected on Ms work from the company under the estimates of the engineers, and that each sub-contractor thereby became the equitable assignee of the claim for his own work against the company to the amount agreed to be paid him; that these sub-contractors have no claims against, the contractors, except so far as their claims can be enforced against the company through the contractors, and to do this is the primary object of this suit.

It is also alleged that after said contractors went on the work and had sublet the contract as to some of the sections, the railroad company made alterations in the grade of the road in certain places, which caused additional expense and loss to the sub-contractors as well as the contractors; that the company also failed to procure right of way to a certain part of the line, and this necessitated a suspension of work, and removal by one of the sub-contractors at a great loss and expense to another place.

The amounts claimed by the several sub-contractors are set out in the bill, and a lien upon the debt due by the defendant to R. M. & J. M. Brooks is sought to be established.

The bill further alleges that before entering into the said contract the said R. M. & J. M. Brooks were required by the company to make a deposit of two thousand dollars as a guaranty that they would fulfill the contract on their part; that this deposit was not required by the written contract, and besides this the company reserved ten per cent. of the amount due upon each estimate, which by the terms of the contract was not to be paid until a final settlement, and was to be an indemnity to the company for any loss which might be sustained by the refusal or failure of the contractors to finish the work.

It is alleged that the work was delayed because of the wrongful acts and negligence of the engineer of the company in preparing the section for the contractors and staking it off that various monthly settlements were made, based on the estimates of the said engineers, but that the engineers were acting solely in the interest of the company, and made false and fraudulent estimates, intending to cheat and defraud the contractors and sub-contractors, and thus forced them to settle upon false under-estimates; that because of the losses and reverses due to the willful wrongs and frauds of the company's engineers, the said contractors were forced to abandon the work...