Gjellefald v. Drainage Dist. No. 42

• Decision Date: 15 March 1927
• Docket Number: 37486
• Citation: 212 N.W. 691,203 Iowa 1144
• Parties: O. N. GJELLEFALD, Appellee, v. DRAINAGE DISTRICT NO. 42 et al., Appellants
• Court: Iowa Supreme Court

212 N.W. 691

203 Iowa 1144

O. N. GJELLEFALD, Appellee, v. DRAINAGE DISTRICT NO. 42 et al., Appellants

No. 37486

Supreme Court of Iowa, Des Moines

March 15, 1927

REHEARING DENIED JULY 1, 1927.

Appeal from Osceola District Court.--C. C. BRADLEY, Judge.

An action in equity to reform a contract and to recover thereunder, after its reformation, certain items which it is claimed were unpaid by the drainage district. A decree of reformation was entered, and allowance was made by the district court for items claimed. The drainage district appeals.--Modified and affirmed.

Modified and affirmed.

W. C Garberson and E. E. Wagner, for appellants.

Senneff Bliss, Witwer & Senneff, Thompson, Loth & Lowe, and Morling & Morling, for appellee.

ALBERT, J. EVANS, C. J., and STEVENS and DE GRAFF, JJ., concur. MORLING, J., not participating.

OPINION

ALBERT, J.

The Graettinger Tile Works is an intervener in this action on certain claims held by it against appellee, O. N. Gjellefald, but, as these matters were all determined in another case, and its only interest in this case is the application of the funds obtained by Gjellefald in this case against the drainage district, we will give this matter of the petition of intervention no further consideration.

In September, 1919, the board of supervisors of Osceola County, Iowa, duly established its codefendant herein, the Drainage District No. 42, under the drainage laws of the state of Iowa. It advertised for bids for labor and material to construct the improvement in said drainage district. In pursuance thereof, on the 8th day of September, 1919, the appellee, Gjellefald, filed his written bid for labor and material to construct said improvement. His general bid was for the sum of $ 143,010. It also contained the following provisions:

"Intake material $ 1 per inch in size of tile. * * * Overdepth 50% above attached schedule. Underdepth in proportion to bid."

To this bid was attached a schedule, covering all tile from 5 inches to 48 inches in diameter, together with the charge for laying said tile at different depths. The bid thus made by Gjellefald was accepted by the board. Later, the county auditor purported to draw a contract for labor and material, which was made in two contracts, one to cover labor and the other to cover the material. These were forwarded by mail to Gjellefald, who signed same and returned them to the county auditor. It appears that, in preparing these written contracts, the county auditor did not, in terms, follow the accepted bid. With reference to the inlets, the contract read as follows:

"It is further bargained and agreed that the inlet material for all direct inlets additional to those specified in Notice to Contractors, etc., will be furnished by second party [Gjellefald] upon the basis of one dollar per inch of diameter of inlet."

At this point, it is argued that this paragraph of the contract should be reformed by striking out the words "additional to those specified in the Notice to Contractors." As to this matter, the contract written varied from the accepted bid in this: that in the bid it read, "Overdepth 50% above attached schedule." In the contract, as written, it reads:

"It is hereby stipulated and agreed that 50% of the prices specified in Exhibit A [the schedule attached to the bid] hereto attached shall be the schedule for additional services, if any, performed by the second party in excavating for and installing tile at depths additional to those specified in the existing plans."

It is argued that the contract should be reformed to correspond to the bid: in other words, that for overdepth work the pay should be 50 per cent above the schedule prices, instead of 50 per cent of the schedule price.

At the time in controversy herein, there was no provision whatever in the drainage laws of Iowa specifying or providing for or authorizing the making of such contracts as were made in this case. It is a well settled principle of law that, in these public improvements, where there is no provision for the making of contracts, that the bid made, with its acceptance by the proper municipal body, constitutes the contract. City of Ft. Madison v. Moore, 109 Iowa 476, 80 N.W. 527; Hedge v. City of Des Moines, 141 Iowa 4, 119 N.W. 276; Capital City B. & P. Co. v. City of Des Moines, 152 Iowa 354, 132 N.W. 188; 13 Corpus Juris 289.

Under these rules, the real contract between these parties, therefore, was the bid made, and the acceptance by the board. It is also apparent from the record that, when the written contracts were attempted to be made, in the respects above pointed out they varied from the contract as actually made by the bid and acceptance. The testimony in the case overwhelmingly shows that, when these written contracts were made, it was the intention of all parties that they should correspond in all respects with the bid.

In Day v. Dyer, 171 Iowa 437, at 450, 152 N.W. 53, this court said:

"We find this doctrine laid down in the books: that, whenever it clearly appears that the written instrument, drawn professedly to carry out the agreement of the parties previously entered into, is executed under the misapprehension that it really embodies the agreement, whereas, by a mistake of the draughtsman, either as to fact or law, it fails to fulfill that purpose, equity will correct the mistake by reforming the instrument in accordance with the previous agreement."

In Merriam v. Leeper, 192 Iowa 587, 185 N.W. 134, the court said:

"It is a general rule in equity that a party to a written contract may not escape the obligations thereof by merely showing that he failed to read the same, and therefore failed to discover some of its provisions. * * * Such is not the case before us. The minds of these parties had previously met, and their contract had been reduced to writing. Their mutual rights and liabilities were therefore defined by such written contract. There is no claim of any mistake in such contract. There were no later negotiations looking to a new contract. * * * True, it was competent for the parties to the antecedent contract to modify the same by subsequent negotiations, and such modification could properly have been included in the notes and mortgages. But there were no negotiations between the parties looking to...