Robson v. United Pac. Ins. Co., 50837

• Decision Date: 14 June 1965
• Docket Number: No. 2,No. 50837,50837,2
• Citation: 391 S.W.2d 855
• Parties: Vern ROBSON, an Individual, doing business as Sac City Construction Company, and Sac City State Bank, Assignee, Respondents, v. UNITED PACIFIC INSURANCE COMPANY, an Insurance Corporation, Appellant
• Court: Missouri Supreme Court

Page 855

391 S.W.2d 855

Vern ROBSON, an Individual, doing business as Sac City Construction Company, and Sac City State Bank Assignee, Respondents, v. UNITED PACIFIC INSURANCE COMPANY, an Insurance Corporation, Appellant.

No. 50837.

Supreme Court of Missouri, Division No. 2.

June 14, 1965.

Motion for Rehearing or for Transfer to Court En Banc Denied

July 12, 1965.

Wm. F. Milligan, Glenn E. McCann, Kansas City, Thomas L. McCullough, Sac City, for respondents.

Lucian Lane, Tucker, Murphy, Wilson, Lane & Kelly, Kansas City, for appellant.

EAGER, Presiding Judge.

This is a suit by a subcontractor and his assignee upon a performance and payment bond furnished to cover labor and materials on a government project. The defense is that the subcontractor did not properly perform his contract and is not entitled to the balance allegedly due. Plaintiff-assignee recovered judgment, in a trial without a jury, for $15,754.23 and, after the overruling of several after-trial motions, this appeal followed.

The United States Army awarded a general contract to J. W. Bateson Company of Dallas, Texas, for the construction of 1,329 housing units for military personnel at Ft. Leonard Wood, Missouri. Bateson let a subcontract to Tetyak Construction Company, a Missouri corporation, for the construction of approximately 21 miles of streets, drives and carports. That contract, dated September 22, 1958, required Tetyak to furnish all material and perform all work described in accordance with the conditions, plans and specifications prepared by the Corps of Engineers. The work included the laying of a 'base course aggregate' of crushed rock according to the specifications to which we shall refer later. It also required the laying of the actual asphalt, but our controversy does not reach that stage. Tetyak acquired, by purchase or lease, land on the Roubidoux River (apparently dry) some 7-8 miles from the job as a source of river gravel. The evidence shows, without contradiction, that his superintendent Richard E. Peterson and probably Tetyak himself, were warned in advance by local people that this type of rock when crushed might not 'key in' or settle down to a tight mixture as required for the base of the streets, without the use of some 'additive'; in other words, it might not be compact enough. Peterson then investigated the possibility of obtaining dolomite rock dust as such an additive. Tetyak also purchased or leased a 'mixer' at substantial cost, which he located near the construction site, several miles from the river. All this occurred before Robson, the plaintiff, entered the picture.

Tetyak had no rock crushing equipment and plaintiff Robson was recommended to him; Robson's headquarters were in Iowa. Robson, Tetyak and Peterson met several times on the site to discuss the situation. On or about February 24, 1959, plaintiff Robson and Tetyak Construction Company, Inc., executed the contract now in issue. It recited that Tetyak had rock for crushing but did not have crushing facilities to meet that standards required by the specifications, and that plaintiff had agreed to crush the rock delivered to him at his plaint to be established; it was further provided therein that: 'The contractor agrees to crush all rock supplied to him at his plant site at Fort Leonard Wood, Missouri, by the owner, in such quantities and sizes as is necessary to meet the specifications for base material and asphalt aggregate material hereunto attached. The contractor shall reject any rock supplied to it by the owner which cannot be processed by the contractor to satisfactorily meet the specification requirements. Crushed rock base material and asphalt aggregate material shall be delivered by the contractor at his plant site. Owner agrees to take material from plant.' The price agreed upon for crushing the base material was 41 cents per ton; there were certain more or less formal provisions regarding progress payments, final payment, insurance, bonds and time of performance. The contract concluded with the following provision: 'The Owner may order changes in the work, the Contract sum being adjusted accordingly. All such orders and adjustments shall be in writing. Claims by the Contractor for extra cost must be made in writing before executing the work involved. The Owner shall furnish the name or names of his agents or representatives authorized to order, direct, approve and sign for changes or extra work to be performed by the Contractor.' It was shown that Peterson, Tetyak's superintendent, prepared this contract, apparently by using portions of other contracts and by improvising the parts specifically applicable here. It is not contended that Robson had any part in its actual preparation. The contract recited that the specifications were attached, but in fact they were not; Robson testified that he had gone over them with Tetyak and Peterson. He further testified that Tetyak and Peterson had then stated that they knew that the material to be used would not 'match' the specifications exactly, and that he, Robson, knew from what they told him that something would have to be added to the rock which he crushed. We will ordinarily refer to Robson as the plaintiff, for convenience.

In late February or March, 1959, plaintiff moved in his crusher and set it up at the river bank. Peterson was in full charge of the operations of Tetyak except for those occasions, perhaps once in two weeks, when Tetyak was present himself. Peterson stated that he was in charge probably 80% of the time. The Tetyak employees scooped the gravel out of the riverbed and delivered it to the intake of the crusher; they also took it in the crushed form in trucks immediately from the crusher belt and hauled it to such locations as they chose. At the trial there were strenuous objections to evidence of the various conversations and dealings between Peterson and plaintiff and to the directions given by Peterson; this, upon the theory that plaintiff had pleaded only the written contract, was bound by it, and that he was thus seeking to vary it by parol, and to recover upon a different and partly oral agreement. The trial court heard the testimony and, in the view we take, it is necessary to recite its substance. From the beginning of the crushing in March, 1959, the laboratory of the Corps of Engineers made 'sieve tests' and other tests of the crushed rock to see if it met the gradation and plasticity requirements of the specifications. It will be unnecessary to describe these tests in detail. The principal requirement of the specifications, so far as we are concerned, was that the crushed rock going into the streets should consist of a mixture of specified percentages of varying sizes, with some leeway allowed in each grade; the permissible sizes (actually in six gradations) were from slightly over one inch to a very finely crushed material, perhaps dust-like. Some of the samples were taken from the crusher, some from a stockpile which Tetyak established about a mile from the project, some from piles where the crushed rock had been dumped, and some from the base actually laid for streets; some of these test samples were taken by Peterson, some by the engineers. Twenty-five of thirty-two samples were reported as deficient in gradation (or otherwise), most frequently because too much of the material was passing through the one-half inch screen although, as Peterson testified, the rock too often ran in 'the middle area' with not enough fine and not enough coarse. Peterson discussed the situation with the engineers almost daily and with Robson or his son almost continuously; he directed Robson as to the settings of his crusher and from time to time had him crush specific sizes which were taken away to mix in with rock already crushed. No complaint was made at any time to plaintiff by Tetyak or Peterson about the manner of his crushing operation or its results. During all this time it is indicated that Tetyak was operating his mixer at the job site attempting thereby to obtain the specified gradations. At one time Peterson had plaintiff dig up, screen, and furnish some fine loam soil to be used at the mixer as an additive, in an attempt to get the mixture to compact or 'key in'; Peterson testified that Tetyak would not or could not (financially) bring in the dolomite rock dust which was the additive element really needed; also, that they were handicapped by the very wet spring and, to some extent, by deficiencies in the original sub-base laid by someone else. Peterson made the significant statements that: 'Well, we told them what sizes to crush--we crushed the rock as close to the specifications * * * as was possible with the type of rock.' Peterson and Tetyak had thus assumed a mixing operation of the crusher run, coarse rock and loam soil, in which they eventually failed. Peterson described plaintiff's crusher as a normal one, the type commonly used; he testified on cross-examination: that 'we' were looking for someone who knew how to crush rock so that it would meet the specifications (by an affirmative answer to a leading question), but added that they wanted someone who would 'crush the rock so we could complete the Bateson job'; that the approval of the riverbed gravel by the engineers merely meant that they would accept it as rock, i. e., that it was hard enough, if it could be processed to specifications, but that this rock would not initially crush into the required gradations with Robson's crusher or any crusher; that 'we' did not think in advance that the rock would come off the crusher to meet the specifications, and that he felt that the crushing was properly done. Plaintiff testified: that from what Tetyak and Peterson told him in the first place he doubted that the rock could be crushed to specifications without mixing in an additive; that he had examined the specifications before signing the contract but that he had no copy, and that he crushed the rock just...