Sager v. State Highway Com'n

• Decision Date: 16 April 1942
• Docket Number: 37644
• Parties: K. L. Sager, K. J. Sager, H. H. Lewis, Comprising all of the last Board of Directors of the Inland Construction Company, a Defunct Missouri Corporation, v. State Highway Commission of Missouri, Appellant
• Court: Missouri Supreme Court

160 S.W.2d 757

349 Mo. 341

K. L. Sager, K. J. Sager, H. H. Lewis, Comprising all of the last Board of Directors of the Inland Construction Company, a Defunct Missouri Corporation, v. State Highway Commission of Missouri, Appellant

No. 37644

Supreme Court of Missouri

April 16, 1942

Appeal from Cole Circuit Court; Hon. Sam C. Blair, Judge.

Reversed.

Louis V. Stigall and Wilkie Cunnyngham for appellant.

(1) The trial court erred (A) In not sustaining demurrers to the evidence on each count. (B) In giving plaintiffs' requested Instructions P. II to P. IX, purporting to cover the whole case on the respective counts and directing verdicts for the plaintiffs, but which did not include an element necessary to plaintiffs' recovery, to-wit, that before proceeding with the alleged extra work, changes in the work, or departures from the plans, the contractor (plaintiffs) had received a copy of "Order Record (Form 259)" signed by the Engineer, or a "Change Order (Form C-238)" signed by all of the parties whose signatures are provided for thereon except that of the Federal Engineer. Usona Mfg. Co. v. Shubert-Christy Corp., 132 S.W.2d 1101; Jones v. St. Louis-S. F. Ry Co., 226 Mo.App. 1152, 50 S.W.2d 217; Contract Paragraphs E-7, E-5, p. 17; D-4(c), D-4(d), p. 13. (C) In refusing defendant's requested Instruction D-35. (D) In admitting testimony (over defendant's objection) of alleged extra work, changes in work, or departures from the plans, which were claimed to involve payments, when transactions between the contractor (plaintiffs) and the representatives of the chief engineer concerning the same were not in writing, and where there was no "Order Record" signed by the engineer and no "Change Order" signed by the parties in advance. (1) If there were any alterations or extra work it is conceded that payment has been made in such case or cases where there was a written order given in advance of doing the work. (2) If there were any alterations or extra work where there was no written order, given in advance of doing the work, it would be illegal to pay for such extra work so performed outside of the plans and specifications as submitted to competitive bidding. (a) The contract, as submitted to competitive bidding, provided (1) that all changes in the work or departures from the plans provided for in the contract would be considered unauthorized and done at the expense of the contractor, unless, before proceeding with the work, the contractor had received a copy of an "Order Record (Form 259)" signed by the engineer, or a "Change Order (Form C-238)" signed by all parties whose signatures are provided for thereon, except that of the Federal engineer, (2) that all transactions between the contractor and the representatives of the chief engineer, which might involve payments, should be made in writing, (3) that all objections must be made in writing at the time of the transaction and delivered to the other party; and (4) that the representatives of the chief engineer were not authorized to revoke, alter, enlarge, relax or release any requirements of the special provisions, specifications, or contract. (b) The rule and requirement for written orders to precede all alterations or extra work was a part of said contract because of the statutory authority and duty conferred upon the State Highway Commission to make all rules and regulations it may deem necessary for the proper management and conduct of the work of constructing state highways and for prescribing the contracts under which state highways must be constructed. R. S. 1939, secs. 8763, 8767. (c) The contract for construction of the state highway, after having once been entered into as the result of competitive bidding, could not be changed or altered without receiving new bids, even by or with the consent of the State Highway Commission. (i) The only contract for construction of the state highway which is authorized by law to be entered into would be a contract prescribed by the State Highway Commission, and entered into with the lowest responsible bidder only after publication of notice and receipt of sealed competitive bids for said contract. R. S. 1939, secs. 8764, 8767. (ii) The State Highway Commission of Missouri is "a subordinate branch of the Executive Department of the State of Missouri," or the State's alter ego in the performance of governmental (not proprietary) functions of the State. State ex rel. McKinley Pub. Co. v. Hackman, 314 Mo. 33, 282 S.W. 1007; Constitution of Missouri, Art. IV, Sec. 43; Bush v. State Highway Comm., 329 Mo. 843, 46 S.W.2d 854; Campbell Bldg. Co. v. State Road Comm., 95 Utah 242, 70 P.2d 857; Curtis & H. Gravel Co. v. State Highway Comm., 91 N.J.Eq. 421, 111 A. 16; Burrow v. St. Louis Serv. Co., 100 S.W.2d 269; R. S. 1939, secs. 8759, 8764, 8767, 8768. (iii) It would be illegal, and a violation of Art. IV, Sec. 48, of the Missouri Constitution, to expend any "state revenue" or state highway funds in payment for extra work, or work done under alterations or changes of the plans and specifications, not made under, and in full compliance with, the requirements of the contract, as submitted to competitive bidding. Kansas City Bridge Co. v. State, 61 S.D. 580, 250 N.W. 343; Ambaum v. State, 80 Wash. 122, 141 P. 314; Contra Costa Const. Co. v. Daly City, 48 Cal.App. 622, 192 P. 178; United Construction Co. v. St. Louis, 334 Mo. 1006, 69 S.W.2d 639; Wade v. Tacoma, 131 Wash. 245, 230 P. 99; Sandy Hites Co. v. State Highway Comm., 149 S.W.2d 828; State ex rel. McKinley Pub. Co. v. Hackman, 314 Mo. 33, 282 S.W. 1007; Campbell Bldg. Co. v. State Road Comm., 95 Utah. 242, 70 P.2d 857; Gillioz v. State Highway Comm., 153 S.W.2d 18; Estoppel, 21 C. J. 1119, sec. 122; Art. IV, Sec. 48, Mo. Constitution; Hillside Securities Co. v. Minter, 300 Mo. 380; State ex rel. Abeille Fire Ins. Co. v. Sevier, 335 Mo. 269, 73 S.W.2d 361; Layne-Western Co. v. Buchanan County, 85 F.2d 343; Carpenter v. State, 39 Wis. 271. (2) The trial court erred in (a) Instructing the jury that they (rather than the engineer, as provided for in the contract) should decide whether the work had been done and completed by the contractor (plaintiffs) in accordance with the plans and specifications before alleged orders of the engineer were given to further "dress up," "touch up," finish, complete or work on the same; and to decide whether alleged work was done in carrying out the requirements of the original plans and specifications, or whether it was work done on altered and changed plans and specifications. (b) In refusing to give defendant's requested Instruction D-36. Cervien v. Erickson Const. Co., 94 Wash. 500, 162 P. 267; United Construction Co. v. St. Louis, 334 Mo. 1006. (3) The trial court erred in giving instructions requested by the plaintiffs assuming as true or proven matters which were in dispute. Morris v. Morris, 28 Mo. 114; Barr v. Nafziger Baking Co., 328 Mo. 423, 41 S.W.2d 559.

E. McD. Stevens, James T. Blair and Bradshaw & Fields for respondents.

(1) The doctrine of equitable estoppel may be invoked against appellant. Rhodus v. Geatley, 147 S.W.2d 631; Johnson v. Ferguson, 44 S.W.2d 650; Peterson v. Kansas City, 23 S.W.2d 1045; State ex inf. Shartel, Atty. Gen., ex rel. City of Sikeston, v. Missouri Utilities Co., 53 S.W.2d 394; United States v. Denver R. G. W. R. Co., 16 F.2d 374; City of Mountain View v. Farmers' Tel. Exchange Co., 224 S.W. 155; State ex rel. City of California v. Mo. Utilities Co., 96 S.W.2d 607; 21 C. J., Estoppel, 1195; State ex rel. Abeille Fire Ins. Co. v. Nike G. Sevier, 335 Mo. 269, 73 S.W.2d 361; Layne-Western Co. v. Buchanan County, 85 F.2d 343; Edwards v. Kirkwood, 127 S.W. 378, 147 Mo.App. 599; Hillside Securities Co. v. Minter, 300 Mo. 380, 254 S.W. 188; Bryson v. Johnson County, 100 Mo. 76, 13 S.W. 239; Secs, 8763, 8764, R. S. 1939; Contra Costa Const. Co. v. Daly City, 192 P. 178; Kansas City Bridge Co. v. State, 250 N.W. 243; Ambaum v. State, 141 P. 314; Ritter v. United States, 19 F.2d 251; Mullins v. Kansas City, 268 Mo. 444, 188 S.W. 193; Sandy Hites Co. v. State Highway Comm., 149 S.W.2d 828; United Const. Co. v. St. Louis, 344 Mo. 1006, 69 S.W.2d 639. This is a proper case in which estoppel should operate. Briscoe v. Merchants & Miners Bank, 102 S.W.2d 751; Bradley-Metcalf Co. v. Tootle-Campbell Dry Goods Co., 180 S.W. 389; Beattie Mfg. Co. v. Heinz, 120 Mo.App. 465; Sandy Hites Co. v. State Highway Comm., 149 S.W.2d 828; Wheeler v. Cantwell, 140 S.W.2d 744; 21 C. J., Estoppel, 1119.

Hyde, C. Bradley and Dalton, CC., concur.

OPINION

HYDE

This is an action (by the last Board of Directors of the Inland Construction Company, a defunct Missouri corporation, hereinafter called plaintiff) for additional compensation claimed for extra work, due to change of plans made and additional difficulties encountered, during the construction of a state highway between Morehouse and Lilbourn in New Madrid County. The suit was in 14 counts and the jury found for plaintiff in some amount (on several for less than claimed) on each count, except the sixth. Judgment thereon for the total amount of $ 4481.94 was entered, and defendant has appealed.

Defendant raised questions (in its answer) involving the construction of Section 48, Art. IV of the Constitution. [See Spitcaufsky v. State Highway Commission, No. 36838, 349 Mo. 117, 159 S.W.2d 647, recently decided in Division 2.] This highway was built in 1934 and 1935. It covered about seven miles, let in two projects. The 13 counts upon which plaintiff had a verdict (there was no appeal as to the sixth) involved several types of claims which may be classified, as follows:

Counts 1-4-5. That land furnished for borrow pits or for obtaining material for building the highway was not suitable because full...