Southern New England R. Corporation v. Marsch

• Decision Date: 02 January 1931
• Docket Number: No. 2487.,2487.
• Citation: 45 F.2d 766
• Parties: SOUTHERN NEW ENGLAND R. CORPORATION v. MARSCH.
• Court: U.S. Court of Appeals — First Circuit

45 F.2d 766 (1931)

SOUTHERN NEW ENGLAND R. CORPORATION v. MARSCH.

No. 2487.

Circuit Court of Appeals, First Circuit.

January 2, 1931.

Francis P. Garland, of Boston, Mass. (Joseph P. Sullivan and Hurlburt, Jones & Hall, all of Boston, Mass., on the brief), for appellant.

Ralph E. Tibbetts, of Boston, Mass., for appellee.

Before BINGHAM, ANDERSON, and WILSON, Circuit Judges.

WILSON, Circuit Judge.

This action is based on a contract entered into in 1912 for the construction of fifty-eight miles of railroad in Massachusetts between the town of Palmer and the town of Blackstone. The appellee is a resident of Illinois, and the appellant is a Massachusetts corporation. Work was begun by the appellee in the summer of 1912 and continued until November of that year, when the appellant ordered the work suspended. For this suspension the appellee claimed damages, and in August, 1913, an agreement was reached whereby the appellee was to be paid $375,000 as damages and the work was resumed under the original contract modified in certain particulars as set forth in correspondence between counsel for the respective parties.

The contract was not for a lump sum, but compensation was based on unit prices for doing the various classes of work.

The contract contained the provisions usually found in construction contracts, viz.: That monthly estimates of work completed, at the unit prices, should be made up by the engineer for the railroad, and the amount less a certain reserve should be paid monthly to the contractor; that an adjustment of all disputed claims should also be made by the engineer of the railroad acting as umpire or arbitrator, and who, upon the completion of the work, should also make a final estimate of the amount due and unpaid, which would be conclusive upon both parties.

The provisions of the contract relating to the appointment, duties, and authority of the chief engineer, and under which the issues in this case arise, are as follows:

"`Engineer' shall mean the Chief Engineer of the Southern New England Railroad Corporation, or such other person as the Corporation may from time to time appoint in his stead, to exercise the powers and perform the duties by this Contract conferred or imposed upon the Engineer."

"15. The Corporation shall have the right and be at liberty at any time before the commencement or during the construction of the work to have the Engineer make such changes in, additions to, or omissions or deviations from the plans, specifications or work as it may deem expedient, and the Contractor shall, in all cases, comply with such written orders in that behalf as may be given by the Engineer. Each such order shall specify the change, addition, omission or deviation, which has been made from the original plans and specifications, and only such written orders as are given by the Engineer will be recognized by the Corporation or shall be acted upon by the Contractor. If any such order directs a change in or addition to the work, resulting in the cost thereof being increased, the Contractor and Engineer shall, before the work called for by such order is commenced, ascertain and fix in writing signed by them respectively the precise changes as provided for above and the sum to be allowed therefor and to be added to the Contract price hereinafter mentioned; and the Contract price so increased as aforesaid shall be the full price to be paid by the Corporation for the completed work, provided, however, that as regards any such additional work the prices to be paid therefor shall as far as applicable be those mentioned in the tender attached hereto. The absence of any such agreement or writing shall be conclusive evidence that the Contract price hereinafter mentioned is to be the full amount to be paid for the work when completed, and that no extra charge or additional sum is to be claimed, allowed or paid because of any such change or addition. In no case and on no pretence shall any charge for extras or any additional sum be claimed by the Contractor or paid by the Corporation unless the requirements of this clause shall have been strictly complied with in all respects. * * *"

"19. If any dispute or misunderstanding shall arise between the parties hereto regarding any of the stipulations and provisions contained in this Contract, or the true intent and meaning thereof, or the manner of performance thereof, or of any part thereof by either of the said parties, each and all of such disputes and misunderstandings shall be referred to the Engineer, who shall be and is hereby made, constituted and appointed sole umpire to decide all such questions, matters and disputes, including any arising regarding the amount and quality, character and kind of work performed and material furnished by the Contractor and the decision of the Engineer thereon in writing under his hand shall be final, conclusive and binding on the parties hereto, and each of the parties hereto expressly covenants with the other to abide by, observe, fulfil and keep each and every such award or decision so made as aforesaid. * * *" (Italics supplied.)

"21. Approximate estimates of the work done, made up from returns of progress measurements and computed at the prices specified in the preceding paragraph are to be made by the Engineer at the end of each calendar month, and on or about the twentieth day of the next ensuing month payments equal to about eighty-five percent of the value of the work done as shown by such approximate monthly estimates computed as above provided, less any sums which under any of the provisions of this Contract the Corporation may be entitled to deduct therefrom, shall be made to the Contractor upon presentation of written certificate of the Engineer showing the value of such work computed as aforesaid and stating that the work for or on account of which such certificate is granted has been duly performed and executed to his satisfaction and in accordance with the plans and specifications. The presentation of such certificate shall be a condition precedent to the right of the Contractor to be paid the said eighty-five percent, or any part thereof. The remaining fifteen percent shall be retained by the Corporation until the final completion of the whole work as additional security for the performance of this Contract by the Contractor, and when, in the opinion of the Engineer, this Contract has been completely performed in accordance with the provisions thereof, and to his entire satisfaction, he shall certify the same in writing under his hand with a final estimate of the work done by the Contractor and a statement of the amount due and still unpaid, and within two months after the final completion and delivery of the whole work in place to the entire satisfaction and approval of the Engineer, the amount so certified by the Engineer as due and still unpaid, less any sums which the Corporation may be entitled to deduct therefrom, under any of the provisions of this Contract, shall be paid to the Contractor upon presentation of such final estimate and statement with the written certificate of the Engineer thereto, as by this Contract provided. * * *

"The presentation of such written certificates of the Engineer, and the production of the evidence called for by this clause, shall be a condition precedent to the right of the Contractor to receive or be paid the amount so certified as due and unpaid or any part thereof, and such certificate shall be conclusive as to the amount to be paid to the Contractor."

"23. * * * And no objection shall be raised to any decision of the engineer in the premises or to any certificate of the Engineer which is in this Contract provided for, on the ground that the Engineer is in the employ of either party hereto or is acting for or in the interests of either party or on the pretence that by reason of any order or statement which he may have made during the progress of the work he is disqualified to act as between the parties to this Contract as above provided on all matters which may arise as aforesaid, and actual fraud only shall disqualify him from acting as aforesaid, and the said parties hereto expressly covenant, promise and agree each with the other to accept each and all such decisions and abide by the same as final and conclusive."

There are other provisions of a similar nature in the contract or specifications defining the duties and powers of the chief engineer, but these sufficiently indicate the extent of his powers and the nature of his duties as bearing on the issues in this case.

During the first part of the work prior to the suspension, one H. R. Safford was chief engineer of the appellant and performed the duties required of him under the contract to the satisfaction of both parties up to the time of suspension; but although he continued to hold the office of chief engineer until March 1, 1914, by apparently a mutual understanding he performed none of the duties required of the chief engineer under the contract after the suspension of work in November, 1912.

Following Mr. Safford's resignation on March 1, 1914, as chief engineer, J. M. Morrison was appointed to that position and continued to serve until long after the contract was finished and this controversy arose, but he never performed any of the duties of chief engineer under the contract.

To perform the ordinary engineering services after the work was resumed in November, 1912, the corporation evidently relied upon one R. D. Garner, who was designated as engineer of construction, one Elmer A. Probst, and his successor, P. Daniel Fitzpatrick, designated as division engineer, and certain so-called resident engineers, who were subordinate to both the division and construction engineers.

From November, 1912, the engineer of construction was the head of the engineering service in connection with this job until January, 1915, when John B. Berry was employed by the appellant as consulting engineer....