Passaic Valley S. Com'rs v. Holbrook, Cabot & Rollins Corp.

• Decision Date: 24 July 1925
• Docket Number: No. 3284.,3284.
• Citation: 6 F.2d 721
• Parties: PASSAIC VALLEY SEWERAGE COM'RS v. HOLBROOK, CABOT & ROLLINS CORPORATION.
• Court: U.S. Court of Appeals — Third Circuit

6 F.2d 721 (1925)

PASSAIC VALLEY SEWERAGE COM'RS v. HOLBROOK, CABOT & ROLLINS CORPORATION.

No. 3284.

Circuit Court of Appeals, Third Circuit.

July 24, 1925.

Riker & Riker, of Newark N. J. (Alfred F. Skinner, Adrian Riker, and Irving Riker, all of Newark, N. J., of counsel), for plaintiffs in error.

John W. Griggs, of New York City (Thomas F. Conway, of New York City, John W. Harding, of Paterson, N. J., and Joseph A. Kellogg and Thomas E. O'Brien, both of New York City, of counsel), for defendant in error.

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

WOOLLEY, Circuit Judge.

The sanitary drainage of the Passaic Valley and the municipalities there located was conceived in 1902. The execution of the project was, by various acts of the Legislature of the State of New Jersey, entrusted to a commission created for that purpose with powers of a corporation and known by the name of Passaic Valley Sewerage Commissioners. It was a large undertaking, contemplating the removal of sewage from a wide, thickly populated area and carrying it out to sea through a subterranean and submarine tunnel. It involved the solution of wholly new and highly perplexing engineering problems and the expenditure of large sums of money.

Before entering upon the work, the Commissioners laid out a line of the proposed tunnel, beginning inland and extending down to and through the earth under the waters of New York Bay. According to the general plan it was intended that the sewage should be collected in the valley, then conducted under pressure through a circular concrete tunnel twelve feet in diameter to a terminal chamber situate well out in the bay and thence discharged into the tidal waters. The construction was divided into two parts. Section 1 had to do with long distributing pipes or fingers radiating from the terminal chamber, a phase of the work before this court in Passaic Valley Sewerage Commissioners v. Tierney, 1 F.(2d) 304. Section 2, which is the part here involved, included the construction of the terminal chamber and a sewage tunnel extending from the chamber inland 15,000 feet, of which 9,400 feet were under the water of the bay and 5,600 feet under the adjacent upland.

After locating the line the Commissioners conducted a carefully planned system of borings, both in the upland and in the earth beneath the bay, in order to determine before letting contracts the character of the materials through which the tunnel would be driven. These borings — wet and dry — were made on both sides of the line of the tunnel and at points varying from 25 to 100 feet distant therefrom and at intervals of 500 feet. Pursuant to good engineering practice, they were not made in the line of the tunnel, for that would create just so many artificial air vents — a thing manifestly undesirable in driving a tunnel under air pressure. They were made off-side the line yet close enough to the line, and to one another, to disclose approximately and fairly the character of the earth material between. After the borings had been completed and the field notes tabulated, the Commissioners caused drawings to be made, purporting to show, elaborately and particularly, the character of the materials found and, therefore, the character of the materials which contractors would expect to encounter when doing the work. These drawings indicated that at every boring, save one, a "cemented Triassic formation" was found; that is, a formation or earth substance of the named geological period, which, being practically impervious, would prevent the water of the bay seeping into the tunnel workings and prevent the air conducted to the operation under pressure escaping to the water and thence to the surface. Based on the borings, these drawings showed generally that under the water of the bay, for a distance of 9,400 feet, the material consisted first of a layer of mud, beneath that sand and some boulders, and below that (in and overlying the path of the tunnel) a cemented Triassic formation of a thickness of about 30 feet throughout — practically sealed working conditions.

On this data the Commissioners entered into a contract with the O'Rourke Engineering Construction Company for the construction of the part of the work embraced within section 2. After driving the tunnel 4,489 feet — a relatively small part being under the bay where cementedTriassic formation was indicated — that concern, it is said, failed to find formation of that kind and abandoned the work. The Commissioners then entered into a contract with C. A. Haskins to continue the work left unfinished by O'Rourke. The Haskins contract drawings showed the same blanket of cemented Triassic formation in and overlying the line of the tunnel in the part under the bay. Haskins, it is said, finding no formation of that character, also stopped. (We wish it to be understood that nothing in this opinion is intended to have any bearing on the litigation which followed these stoppages of work and which, we are informed, is still pending.)

When Haskins quit he had reached a point which left 3,000 feet of so-called "rock" tunnel and 3,000 feet of so-called "soft ground" tunnel to be constructed, a part of which was under the fast land and a part under the bottom of the bay. The terminal chamber was yet to be constructed and the concrete lining in certain portions of the excavations to be put in place.

To finish the work thus left uncompleted the Commissioners asked for bids on drawings given the earth formations we have described. But in showing the borings and making representations as to sub-surface conditions the Commissioners appended to the blue prints (afterward constituting contract drawings) a note reading as follows:

"Note. — The borings, soundings, contour lines, profile, and indications of rock outcroppings, sub-surface materials, pipes and other underground structures are supposed to be approximately correct, but should they be found to be otherwise the contractor shall have no claim on that account, it being expressly understood that the Commissioners do not warrant the plot to be approximately correct."

Holbrook, Cabot & Rollins Corporation was one of the bidders. That concern did not make its own investigation of earth conditions nor did it resort to the field notes or with much care to the boring samples of the Commissioners, which, had it desired them, were available, but relying (as it claimed) upon the Commissioners' representations as to earth formation it made a bid and was awarded the contract.

In due course the Holbrook, Cabot & Rollins Corporation embarked upon the work, but after advancing the tunnel a short distance it encountered gravel, quick sand, bull liver, boulders and other pervious materials instead of a blanket of cemented Triassic formation. Within a reasonable time it disclosed these conditions to the Commissioners. After going still farther in the work to ascertain with certainty the exact earth materials, it found nowhere the cemented Triassic formation which the contract drawings indicated would be found everywhere. This corporation then rescinded the contract on the grounds of breach of warranty, misrepresentation, mistake and fraud, and brought this suit on quantum meruit to recover the actual cost of the labor performed, services rendered and materials furnished in the work. The Commissioners traversed all the plaintiff's allegations of fact and, as a special defense, interposed a claimed lack of liability under the quoted note on the contract drawings. They asserted, in addition, that, in any event, the plaintiff was not required to rely, and that in fact it did not rely, upon their representations of sub-surface conditions, and that it knew, or was charged with the knowledge, that the formation was glacial drift, of which previous gravel and boulders are a characteristic. The plaintiff had a verdict for $765,422.82 and interest and to the judgment entered the defendant sued out this writ of error.

During the trial...