Mullins & Kyte v. Road Improvement District No. 5

• Decision Date: 04 February 1924
• Docket Number: 143
• Parties: MULLINS & KYTE v. ROAD IMPROVEMENT DISTRICT No. 5
• Court: Arkansas Supreme Court

258 S.W. 639

162 Ark. 427

MULLINS & KYTE v. ROAD IMPROVEMENT DISTRICT No. 5

No. 143

Supreme Court of Arkansas

February 4, 1924

Appeal from St. Francis Chancery Court; A. L. Hutchins, Chancellor affirmed.

Decree affirmed.

Coleman & Gantt, for appellant.

The record shows that the contract was breached by the district. Such being the case, appellants are entitled to recover the amount due them for the work they had done up to the time of the breach, and also the amount they would have earned on the remaining work, had the district carried out its contract. 158 Ark. 91; 80 Ark. 228; 9 C. J. 822. Even if appellants had been responsible for the delay, the district had waived the right to declare a forfeiture on that account. 158 Ark. 91. If the language of the contract is doubtful, that construction should be adopted which will impose the least hardship upon the parties. 78 Ark. 202. And all doubts should be resolved against the party who prepared the contract--in this instance, the district. 112 Ark. 1; 115 Ark. 166. See also 88 Ark. 363; 95 Ark. 449. If the engineer thought the work was being done improperly, it was his duty to reject it at once. 200 Mich. 453; 166 N.W. 904; 90 N.W. 700. Failure to reject an obvious defect is equivalent to approval. 35 Cyc 229; 152 N.W. 1071. It was an abuse of discretion to tax the entire costs against the appellants. 148 Ark. 181; 125 Ark 332; 132 Ark. 606; 158 Ark. 91. Plaintiffs were entitled to an equitable garnishment. 143 Ark. 446; 146 Ark. 494; 148 Ark. 181; 152 Ark. 422. There was at least a substantial performance of the contract which entitled appellants to recover. 64 Ark. 34; 67 Ark. 219; 97 Ark. 278; 105 Ark. 353; 147 Ark. 203; 148 Ark. 181. Taking charge of the road and attempting to remedy the alleged defects constituted an acceptance of the work. 97 Ark. 278.

A B. Shafer and Mann & Mann, for appellees.

The engineer was made the referee in this case, and, if he acted in good faith, his findings will not be disturbed. 175 U.S. 590; 44 Law. ed. 284; 137 F. 369; 114 S.W. 242. The evidence does not disclose that the engineer, at any time, so acted or ruled that his conduct amounted to fraud or bad faith.

OPINION

SMITH, J.

Road Improvement District No. 5 was organized under the Alexander road law, for the purpose of improving several short lines of road in St. Francis County, near Hughes. In May, 1920, it entered into a contract with appellants, Mullins & Kyte, for a part of the construction work which was planned. This contract embraced the building of the bridges and the culverts on the three lines of road designated as "A," "B," and "F," and the construction of the earth embankment on line "F," which begins about two miles north of Hughes and extends to the Crittenden County line near Chatfield, a distance of a little over three and one-half miles. The road for its entire length was along the right-of-way of the Missouri Pacific Railroad Company.

At the time the contract was entered into it was planned that the road should begin on the west side of the railroad, near Hughes, and should continue on that side for 1;622 feet, and then cross over to the east side, along which it ran for 7,512 feet, and then crossed back to the west side, where it continued to the Crittenden County line. After the contractors entered upon the job, it was decided by the commissioners of the district to change the location of the roads at two points, and the contractors were so notified on the 26th day of June.

The first change was in the property of J. M. Bush between stations of the road numbered 16 and 41, where the road crosses a small slough, and it is insisted that this change put the road on lower land, which was wetter and required a higher fill of earth. It is alleged that the center line of the second .change was not located until August 18, and that no profile for the new location was ever furnished to the contractors by the engineers for the district. These changes in the route of the road constitute the chief excuses for the admitted delay in the completion of the improvement. Another excuse is that the unfavorable weather delayed the work. At any rate, only 26.22 per cent. of the work had been completed on December 1, 1920, when, according to the contract, the work should have been entirely completed. Thereafter but little work was done until June 21, 1921, when the contractors were directed to discontinue the work. The contractors immediately brought suit to enjoin the commissioners from canceling the contract, and they prayed that the funds of the district be impounded and held subject to the order of the court, and that a master be appointed to determine the amount of work done and to be done, and to state an account between the parties, if they were not allowed to complete the work.

The commissioners filed an answer, in which they denied the allegations of the complaint, and alleged breaches of the contract by the contractors in many respects; and a cross-complaint was filed in which judgment was asked for liquidated damages for failure to complete the road in the time limited, for alleged overpayments, and for improper excavations of borrow-pits, and certain other items of damage, amounting, in the aggregate, to $ 27,700. There was a reply to the cross-complaint, denying the damages claimed.

The cause was heard on the 14th of April, 1922, and the court made the following findings:

That the contractors were not in default in failing to complete the contract by December 1, 1920, as the changes in the location of the road produced a material change in the contract, which entitled the contractors to an extension of time.

That the district is not therefore entitled to recover liquidated damages for delay.

That the delay of the contractors thereafter in completing the road, and their failure to place adequate equipment on the work, warranted the district in taking over the work in June, 1921, and proceeding to finish it under the terms of the contract.

The contention of the district in regard to the measurement of the earth work was sustained.

A finding was made in favor of the contractors covering the issue in regard to clearing and grubbing the right-of-way.

A finding was made in favor of the contractors in regard to the retained percentage of the contract price held by the district.

That the contractors should recover $ 462.61 erroneously charged to them in estimate No. 17, made by the engineer of the district.

That the contractors should recover the difference between the contract price for doing the unfinished portion of the work and the reasonable cost to the district of completing the work.

That the reasonable cost to the district of the earth work remaining to be done with drag-line machines is 35 cents per cubic yard, and the reasonable cost of finishing work in the Bush fill is $ 1 a cubic yard, which amounts to a total for said finishing work of $ 1,778.70.

The court, not being sufficiently advised as to the quantities of the work remaining to be done, or as to the cost of the items thereof other than earth work as above set forth, ordered that a special master be appointed to state an account of the difference between the contract price for doing said work and the reasonable cost to the district of completing it and of the amount due them for work already done, based on the findings herein set forth.

Upon these findings the court ordered that F. H. Ford be appointed as a special master to determine the reasonable cost to the district of completing the work, and to state an account of the difference between such reasonable cost and the contract price for doing said work, and to make a finding as to the balance due the contractors.

The eighth finding of the court was based upon the 61st paragraph of the contract, which authorized the district, upon the failure of the contractors to prosecute the work with such materials and equipment as, in the opinion of the engineer, is necessary to complete the work within the time specified, to secure such additional labor, equipment and materials as may be necessary to properly proceed with the work. This section of the contract authorizes the commissioners to charge the expense thus incurred to the contractors, but further provides that, in case the expense so incurred shall be less than the sum which would have been payable under the contract, if it had been complied with by the contractors, the contractors shall be entitled to the difference; and, if more, the contractors and their sureties shall pay the excess.

On May 13, 1922, the master made a report, which was based upon testimony taken before the original submission and testimony taken by the master himself. According to the master's report, the net amount payable to the contractors was found to be $ 14,265.50. These figures were based upon a consideration and finding upon numerous controverted items.

The district filed fourteen exceptions to this report, which were heard and sustained by the court on the ............ day of June, 1922. The report was disapproved, and leave was given to both the contractors and the district to take further evidence, and this was done.

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