HW Nelson Co. v. Grand Trunk Western R. Co.

• Decision Date: 09 December 1935
• Docket Number: No. 6730.,6730.
• Citation: 80 F.2d 986
• Parties: H. W. NELSON CO., Inc., v. GRAND TRUNK WESTERN R. CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

80 F.2d 986 (1935)

H. W. NELSON CO., Inc., v. GRAND TRUNK WESTERN R. CO. et al.^*

No. 6730.

Circuit Court of Appeals, Sixth Circuit.

October 8, 1935.

Rehearing Denied December 9, 1935.

J. H. Clark, of Detroit, Mich., and Newton D. Baker, of Cleveland, Ohio (Clark, Klein, Ferris & Cook, of Detroit, Mich., on the brief), for appellant.

John J. Gafill and H. V. Spike, both of Detroit, Mich., for appellee.

Before HICKS and ALLEN, Circuit Judges, and NEVIN, District Judge.

HICKS, Circuit Judge.

Appeal from an order dismissing the action.

Appellant, a general contractor, brought suit against appellee, successor to Detroit, Grand Haven & Milwaukee Railway Company, for damages resulting from inability to proceed with the construction of a railroad grade it had contracted to build, due to appellee's delay in acquiring full title to the right of way, and to its misrepresentations to appellant as to the state of its title. The construction was incidental to the widening of Woodward avenue, a state highway leading north from Detroit. The widened highway covered portions of appellee's old right of way and the construction, involved, was of the relocated railroad grade.

The declaration was framed in three counts. The first set forth that appellant made a bid which was accepted for the grading of the relocated line extending from a point in Royal Oak, Mich., northwardly about nine miles to a point beyond Birmingham, Mich. The contract was prepared between May 29 and June 21, 1928, was executed about June 22, 1928, and was filed as Exhibit A to the declaration.

It was averred that by the terms of the contract appellee was to provide the right of way free from any liens, claims or interests of any person or persons other than appellee so that appellant might proceed expeditiously; that about June 1 appellee notified appellant that it had secured substantially all the right of way and ordered appellant to commence work at Maple avenue, Birmingham; that having already moved its equipment to the right of way appellant assembled it together with a working force at Maple avenue ready for actual excavation on June 12, when appellee "notified plaintiff to remove all equipment and track material, including track already laid south of Maple Avenue, advising the plaintiff's representative * * * that injunctions were pending or threatened which prevented the doing of the work to be performed at this point * * *," and ordered the equipment moved to Charing Cross road, two and a half miles south, which change resulted in large expense to appellant; that after having finished the grade separation work there, it was ordered about July 3 to a cut south of Trowbridge farm, when an injunction was served on both appellee and appellant by those claiming easements in the right of way; that thereupon appellee informed appellant that the injunctions would shortly be dissolved and ordered it to keep its equipment and organization ready to proceed under the contract; that appellee advised appellant that it would be paid for any loss on account of the delay; that appellant did keep its equipment and men on the job ready to resume work when the injunctions should be dissolved, which was about July 28, 1928, and work was then resumed but was shortly thereafter again suspended by reason of other injunctions; that appellant kept its organization together, though reduced in force, and its equipment upon the job, appellee continuing to advise appellant that the later injunctions would shortly be dissolved and the work could be resumed and that appellant would be paid for all loss resulting from delay.

Appellant averred that about the time all the injunctions were finally dissolved in July, 1929, it contracted with appellee for extra work near the Yellow Cab plant and agreed to make no claim for delays thereafter occurring on the Woodward avenue project; that appellee then altered its plans to provide a four track railway instead of the double track one, necessitating much additional work; that appellant then reassembled its force and reconditioned its tracks, trestles, etc., at great loss and expense and resumed performance of the contract upon the assurance that it would be without prejudice to its right to collect for losses due to delay, except as modified by the Yellow Cab contract.

It was averred that all work was completed by August, 1931, and that appellee acknowledged complete performance and paid appellant on the express agreement that all losses suffered by it on account of the delays and injunctions were excepted from the settlement. It is unnecessary to particularize the many elements incorporated in appellant's alleged measure of damages.

The second count repeats certain averments of the first but is distinguished therefrom by the averments that after the injunctions of July 3, 1928, were served, causing a suspension of the work south of Trowbridge farm, appellant through its representative "discussed with the defendant the possibility of proceeding with the work under the contract and the defendant advised the Plaintiff that said injunctions would be dissolved within a very short time and ordered this plaintiff to keep its equipment, men," etc., ready for operation and "then and there agreed with the plaintiff that it would pay any loss that the plaintiff might suffer on account of such delay and on account of the retention on the job of its equipment," etc. (italics ours), and in reliance thereon appellant did keep its equipment and men on the job and moved them to another point, commencing preliminary work in preparation for construction, when it was again served with an injunction on August 3, 1928, and was again compelled to suspend operations; that during all this time appellee from day to day and week to week continued to advise appellant that the injunction would shortly be dissolved and to order it to keep its men and equipment ready to resume performance; and to advise appellant that losses resulting from the delay would be paid to appellant by appellee. This averment of an oral agreement is substantially repeated in paragraph 14 of the second count.

The third count reiterates certain averments of the first but sets out in distinction that on or about June 1, 1928, appellee notified appellant that it had secured substantially all the right of way, knowing full well that it had not, even though it was physically in possession thereof, and that it did not have the right to construct its railway thereon for the reason that the right of way was burdened with certain reciprocal negative easements or restrictions preventing its use for railway purposes; that appellee withheld from the appellant the information that injunctions were pending, and willfully and wrongfully represented to appellant that it had the right of way, knowing that appellant would be enjoined from carrying on its work to appellant's great damage; that appellant having no information as to the claims asserted by the owners and fully believing the statements and representations of appellee that it did have the right of way and that appellant could proceed expeditiously with performance prepared its equipment and brought it to the right of way at a cost of $25,000; that relying on the representations, appellant started to work at Maple avenue, bringing in and setting up its machinery and employing a large force of men and laying its plans for an expeditious performance of the contract in accordance with its terms and within its time limitations.

It was further averred that by reason of appellee's false and wrongful representations before the commencement of performance that it had substantially secured all the right of way upon which the work was to be done, appellant entered upon performance and when restrained by delays...