Sioux City v. W. Asphalt Paving Corp., 43180.

Citation271 N.W. 624,223 Iowa 279
Decision Date16 February 1937
Docket NumberNo. 43180.,43180.
PartiesSIOUX CITY v. WESTERN ASPHALT PAVING CORPORATION et al.
CourtUnited States State Supreme Court of Iowa

223 Iowa 279
271 N.W. 624

SIOUX CITY
v.
WESTERN ASPHALT PAVING CORPORATION et al.

No. 43180.

Supreme Court of Iowa.

Feb. 16, 1937.


Appeal from District Court, Woodbury County; F. R. Rice, Judge.

Action by city on contractor's bond for construction of paving against contractor and bond company. Trial to jury; verdict and judgment for plaintiff; defendants appeal.

Reversed.

Superseding opinion in 268 N.W. 595.

[271 N.W. 627]

Helsell, Burnquist, Bradshaw & Dolliver, of Fort Dodge, for appellants.

Fred H. Free and Robert P. Munger, both of Sioux City, for appellee.


HAMILTON, Justice.

This case was argued and submitted at the Janaury, 1936, term of this court, and the opinion by Justice Parsons is reported in 268 N.W. 595, 598. Appellants petitioned for rehearing, alleging that the opinion failed to determine or pass upon essential matters properly presented by the brief and argument, the determination of which, the appellants contend, will dispose of the case. A rehearing was granted and the matter was reargued and again submitted to the court. Accordingly, the former opinion is withdrawn and this opinion substituted therefor.

The record is quite voluminous; the pleadings alone comprise more than 150 pages of the printed abstract, including

[271 N.W. 628]

petition and amendments thereto, to which are attached the contract and specifications. This was attacked by motions and demurrer, followed by an additional amendment to the petition to comply with the court's ruling to make the petition more specific. Following this are separate answers by the defendants, followed by a reply, amended and substituted reply, and motion for change of venue, with a long list of exhibits and affidavits in support of the said motion and resistance thereto. There seems to have been considerable confusion in the court below and among the parties, as to just what the suit was about. As we view the record, the suit is one for damages based upon breach of contract in the failure of the contractor to substantially comply with the contract and specifications, the failure in compliance consisting in the pavement when constructed being of an average thickness of between 4 and 5 inches, instead of 6 inches, as provided by the contract. The plaintiff itself defines its cause of action when it states in an amendment to its petition “that this action is brought for damages resulting from the breach of the written contracts and the various bonds given with respect thereto, * * * by the city of Sioux City in its corporate capacity as one of the parties to the contract upon the breach of which this action is brought.” And in another paragraph it states: “As a further requirement of the ruling of the court herein the plaintiff respectfully states that this is an action brought for the breach of a written contract, and on the bond given for the faithful performance thereof,” and in the prayer of the petition as finally amended plaintiff “asks that it may have judgment upon this its first count in the sum of $1,776 as damages for breach of contract, $95.54 for costs of coring, or a total judgment of $1,871.54, with interest, costs and attorney fees from the date set forth in Count 1 of plaintiff's petition.” This same form of expression is contained in the prayer of all five counts of plaintiff's petition.

It might as well be stated at this point that the measure of damages by which the plaintiff arrives at the amount prayed for is based upon the following provision of the specifications: “Before the pavement is accepted the thickness may be tested by removing as many cores as the city engineer and the commissioner of streets and public improvements may determine. If the average thickness is more than one-quarter inch and less than one inch below that specified, the price will be reduced by an amount double the actual deficiency. If the average thickness is one inch or more below that specified, the pavement will be rejected. The reduction will be as thickness is to price per square yard.”

The basis for recovery of the costs of the coring is the following provision of the specifications with reference to defective work: “When the superintendent or engineer has any reason to believe that any portion of the work has not been properly done, and in accordance with the specifications, he may cut into or tear down such portion of the work and the contractor shall pay all costs of removing and restoring the same if it be found improperly done, but if such work has been done according to contract, then the city shall pay all such costs.” The petition alleged “that the city engineer of the plaintiff herein did, during the year 1932, receive information giving him reason to believe that the work, described in the contract and specifications herein referred to, had not been properly done and thereupon he was instructed by the plaintiff herein to purchase or procure a machine for the purpose of cutting into and coring the pavement herein described, and thereupon the plaintiff did purchase said machine and did employ men skilled in the operation thereof and have cut into and cored the pavement described herein, and have found the same to be ‘improperly done’ as by said contract provided, and that the reasonable cost and expense incurred by the plaintiff in such work, is $95.54, which is due and owing from the defendants herein, and no part whereof has ever been paid.” The petition contained five counts and the amount of the damages prayed for, and the amount of the costs of the coring are set forth in each count separately, the figures given above being those contained in count 1.

The contract was entered into on or about the 24th day of May, 1929, between the city and the defendant Western Asphalt Paving Corporation, the Maryland Casualty Company executing the surety bond known as the “construction bond.” The contract was assigned to Harrington & Jorgensen of Sioux City, who did the

[271 N.W. 629]

actual work of constructing the pavement. The effect of this assignment upon the liability of the bond company is one of the questions involved, and we will have more to say concerning this later.

There is no question under the record that the pavement was all constructed under the supervision of the city engineer, L. N. Hintgen, and one or two city inspectors who were present at all times when the work was being done. As each separate contract was completed, the engineer made a formal report to the city council, stating, in substance, that the work had been completed and was ready for acceptance. These reports bore the approval of the commissioner of streets and public improvements. Acting on these various reports, the city council by resolution accepted the work and authorized payment therefor, and the special assessment certificates were delivered in due time to the proper parties. The work was settled for on the basis of pavement 6 inches thick, as called for by the specifications. There is no question raised with reference to any of the prior proceedings. All statutory provisions apparently were complied with, which would include notice to property owners fixing the time for hearing and for making objections to the assessment upon their property for the cost of the pavement, and there appears to have been no objection filed by any one, and so the matter stood until a new dynasty “who knew not Joseph” arose and took charge of the city affairs, and we gather from the exhibits attached to a motion for change of venue, which are all set out in the abstract, that a new city engineer was employed and an investigation started. Experts from the office of the state highway commission at Ames, Iowa, were employed, and a systematic testing of the thickness of all the pavements constructed during the past several years prior thereto was undertaken, and this investigation extended over a period of some two years. The investigation disclosed the astounding fact that with the exception of a small per cent. of the contracts, there had been an apparent consistent failure of the contractors to substantially comply with the specifications with regard to the thickness thereof, all of which, if subtantiated by competent proof, would show that the city and abutting property owners had been defrauded to the extent of several hundred thousand dollars. It appears that numerous suits to recover back from the various contractors the amounts so paid were instituted, one of which is the case now before us. The suit is brought in the name of “City of Sioux City, Iowa, a municipal corporation.”

I. The right of the city to maintain this suit is challenged by the defendants. Section 17 of the contract provides:

“The contractor shall simultaneously with the execution and delivery of this contract also execute and deliver to said city in duplicate originals, a bond on the form attached to the specifications for said improvement, which bond shall be in the amount provided by said specifications and which bond shall be for the benefit of said city, and all persons injured by the breach of any of the terms and provisions hereof. Said bond shall be filed with the city clerk of said city and approved by the city council of said city, and shall be a part of this contract.”

The construction bond referred to in the contract recites that the principal and surety named therein “are held and firmly bound unto the city of Sioux City, Iowa, for its use and benefit and for the use and benefit of all persons, firms and corporations who shall perform any labor or furnish any material, including fuel, in the carrying out of the public contract hereinafter described in the penal sum of $ ------, * * * for the payment of which sum well and truly to be made at the office of the city treasurer of said city we do hereby jointly and severally bind ourselves,” etc. The bond then states what the principal had undertaken to do under the provisions of the contract, and then recites:

“Now, therefore, the condition of this obligation is...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT