North Carolina Highway Commission v. Rand

• Decision Date: 23 June 1928
• Docket Number: 603.
• Citation: 143 S.E. 851,195 N.C. 799
• Parties: NORTH CAROLINA HIGHWAY COMMISSION v. RAND et al.
• Court: North Carolina Supreme Court

143 S.E. 851

195 N.C. 799

NORTH CAROLINA HIGHWAY COMMISSION v. RAND et al.

No. 603.

Supreme Court of North Carolina

June 23, 1928

Appeal from Superior Court, Haywood County; Harding, Judge.

Action by the North Carolina Highway Commission against R. G. Rand and another. Judgment for plaintiff, and defendants appeal. New trial.

Failure of state highway engineer to give written notice as required by contract, and entering on construction of road without contractor's consent, held breach of contract.

This was a civil action brought by the plaintiff, the state highway commission, against R. G. Rand and Fidelity & Deposit Company of Maryland, for the recovery of the sum of $63,510.50 for alleged breach of the contract sued on.

On the 27th day of July, 1923, the plaintiff and the defendant R. G Rand, entered into a contract for the construction of a certain road leading from Waynesville, N. C., to Pigeon River, in Haywood county, known as state highway project No 940, "being approximately 7.13 miles long and approximately estimated to cost $80,380." Prior to this time the plaintiff had contracted the construction of this same road to Alexander & Patton, and the contract between the plaintiff and the defendant Rand referred to the Alexander & Patton contract and made certain of its provisions parts of the contract sued on. Following the execution of the contract sued on, to wit, on the 28th day of July, 1923, the defendant Rand entered into an indemnity or guaranty bond in the sum of $40,000 with the defendant Fidelity & Deposit Company of Maryland as its surety, with the usual conditions, and the surety company was made a party defendant for the purpose of making it liable for the alleged breach of the contract with Rand. The defendants denied any breach of the contract on the part of Rand, alleging that the plaintiff breached the contract by placing, without defendants' consent, and without giving the notices required by the contract, men and equipment in charge of one end of the road, thereby rendering it impossible for the defendant Rand to perform and complete the contract on his part. For this alleged breach of the contract on the part of the plaintiff, the defendant Rand pleaded a counterclaim and sought recovery of the plaintiff for $20,722 damages.

The issues submitted to the jury, and their answers thereto, were as follows:

"(1) Did the defendant R. G. Rand commit a breach of his contract with the plaintiff, executed July 27, 1923, as alleged in the complaint? Answer: Yes.

(2) Did the defendant Fidelity & Deposit Company of Maryland commit a breach of its indemnity bond, executed for its codefendant R. G. Rand, on the 27th day of July, 1923, as alleged in the complaint? Answer: Yes.

(3) What damages, if any, is the plaintiff entitled to recover of the defendants, by reason of such breach? Answer: $24,222 with interest from July 12, 1924.

(4) Did the plaintiff commit a breach of its contract with the defendant R. G. Rand, executed July 27, 1923, as alleged in the answer? Answer: No.

(5) Did the plaintiff commit a breach of its contract with the defendant Fidelity & Deposit Company of Maryland, as alleged in the answer? Answer: No.

(6) What damages, if any, is the defendant R. G. Rand entitled to recover of the plaintiff, by reason of his counterclaim? Answer: Nothing."

Definition of Terms.

Engineer. The state highway engineer of the state of North Carolina, duly authorized by the state highway commission, acting either directly or through authorized assistants, by whom all explanations and directions necessary for the satisfactory prosecution and completion of the work will be given.

Quantities are Approximate Only.-The foregoing quantities are approximate only, being given as a factor for the computation of the total amount of bids, upon which basis such bids are to be computed. The state highway commission does not expressly or by implication agree that the actual amount of work and materials will correspond therewith, and reserves the right to increase or decrease the amount of any class or portion of the work and materials as may be deemed necessary or expedient by the engineer.

Examination of Plans, Site, etc.-Before submitting a proposal, each bidder should make a careful examination of the attached conditions, specifications, and contract, and fully inform himself as to the quality of materials and character of work required, and should further make a careful examination of the source of supply for materials, and, should his proposal be accepted, he will be responsible for each and every error in his proposal resulting from his failure or neglect to observe or comply with these instructions.

Additional Work.-The contractor shall perform such work, in additional quantities other than those designated in the approximate estimate, as may be deemed necessary to complete fully the roadway as planned and contemplated, and shall receive for such additional work payment in full at the prices shown on the contract and in the same manner as if such work had been included in the original estimate of quantities.

Progress of Work.-The contractor shall within ten (10) days after the award of contract begin and promptly and efficiently prosecute the work with a force adequate to complete the project for which he has contracted within the time fixed therein for completion. Failure to comply with this requirement may result in the annulment of the contract as hereinafter provided.

Character of Workmen and Equipment.-The contractor shall at all times employ sufficient labor and equipment for prosecuting the several classes of work to full completion in the manner and time specified. Any person employed by the contractor whom the engineer may deem incompetent or unfit to perform the work shall be at once discharged; such persons shall not be employed again on any work which is under the jurisdiction of the state highway commission. Failure by the contractor to provide adequate equipment may result in the annulment of the contract as hereinafter provided.

Engineer's Decision Final.-It is mutually agreed between the parties to the contract that, to prevent all disputes and misunderstandings between them in relation to any of the provisions contained in these specifications, or their performance by either of said parties, the engineer shall be a referee to decide all matters arising or growing out of said contract between them, and his decisions shall be final and binding upon both parties.

Time of Completion.-In computing the time allowance for completing the work, the engineer will allow an additional number of working days over and above the time allowance mentioned in the proposal equal to the number of working days lost by the contractor after starting the work, because of conditions which the engineer considers such as to prevent the work, and during which days work was actually suspended or materially impeded. The basis for computing any extra time allowance will be the weather record kept by the engineer or his assistants. If the satisfactory execution and completion of the contract shall require work or material in greater amounts or quantities than those set forth in the contract, the contract time shall be increased in the same proportion as the additional work bears to the original work contracted for. No allowance shall be made for delay or suspension of the prosecution of the work due to fault of the contractor.

Failure to Complete Work on Time.-Should the contractor fail to complete the work within the time allowance mentioned in the proposal subject to the above modifications, the engineer will thereafter deduct from any moneys due or becoming due to the contractor an amount equal to the cost of maintaining the necessary force of engineers and inspectors during the additional time, together with an additional sum of 10 per cent. per annum of the cost of the construction, incomplete at the expiration of the time limit given in the contract, for the additional time required, and this amount shall be considered as reasonable liquidated damages due the state highway commission by the contractor for his failure to have finished the work within the specified time limits.

(68) Annulment of Contract.-The contract, of which these specifications form a part, may be annulled by the state highway engineer for the following reasons: (1) Substantial evidence that the progress being made by the contractor is insufficient to complete the work within the specified time. (2) Failure on the part of the contractor to observe the requirements of these specifications. (3) Failure on the part of the contractor to properly make good any defects in materials or workmanship that may be pointed out to him by the engineer.

Before the contract is annulled the contractor and his surety will first be notified in writing by the state highway engineer of the conditions which make annulment of the contract imminent. Fifteen days after this notice is given, if no effective effort has been made by the contractor or his surety to correct the condition complained of, the state highway engineer may declare the contract annulled, and notify the contractor accordingly.

Upon receipt of a notice from the state highway engineer that the contract has been annulled, the contractor shall immediately discontinue all operations. The state highway engineer may then proceed with the work in any lawful manner that he may elect, until it is finally completed. When the work is thus finally completed, the total cost of the same will be computed. If this total cost is less than the contract price, the difference will be paid to the contractor. If the total is greater than the contract price, the difference shall be made up either by...