State, By and Through State Highway Commission v. State Const. Co.
| Decision Date | 23 February 1955 |
| Citation | 52 A.L.R.2d 779,203 Or. 414,280 P.2d 370 |
| Parties | , 52 A.L.R.2d 779 STATE of Oregon, by and through its STATE HIGHWAY COMMISSION, composed of Ben R. Chandler, Charles H. Reynolds, and M. K. Melver, Appellant, v. STATE CONSTRUCTION COMPANY, a corporation, and Continental Casualty Comapny, a corporation Respondents. |
| Court | Oregon Supreme Court |
Charles C. M. Peterson, Salem, for appellant. With him on the brief were Robert Y. Thornton, Atty. Gen., C. W. Enfield, Asst. Atty. Gen. and Chief Counsel for Oregon State Highway Commission, and Leonard I. Lindas, Salem.
L. A. Recken, Portland, for respondents. On the brief were Recken & Recken, Portland, and Henry Elliott, Seattle, Wash.
Before WARNER, C. J., and TOOZE, LUSK and BRAND, JJ.
This suit was originally commenced as an action at law to recover the sum of $8,634.95 and was brought by the State of Oregon, by and through its State Highway Commission, as plaintiff, against State Construction Company, a corporation, and Continental Casualty Company, a corporation, as defendants. Defendants answered plaintiff's complaint and affirmatively pleaded matters arising out of the facts requiring the interposition of a court of equity, and material to their defense in the law action, and prayed for affirmative relief. Pursuant to the provisions of ORS 16.460, the action at law as stayed and the case thereafter proceeded as a suit in equity. A decree was entered in favor of defendants. Plaintiff appeals.
This litigation involves the liability of a bidder and its surety upon a bid for the construction of five piers for a bridge spanning the Willamette river, a navigable stream, in Marion and Polk counties, Oregon. The Salem-Dallas highway is an established state highway running in a general easterly and westerly direction between the city of Dallas, in Polk county, and the city of Salem, in Polk and Marion counties. As permanently located by the State Highway Commission, the route of said highway crosses the Willamette river within the corporate limits of the city of Salem, the easterly end or approach of which river crossing is in Marion county and on Marion street; the westerly end or approach connects with the Salem-Dallas highway in Polk county.
Having found it to be in the public interests to construct such bridge, to be known as the Marion Street Bridge, and having secured the necessary approval of the War Department, the Highway Commission caused plans, specifications and other engineering data to be prepared for use and employment in connection with a call for competitive bids for the construction of piers numbered one to five as a part of said proposed bridge structure. Pier No. 1 was to be constructed on the high bank on the easterly side of the river, Piers Nos. 2, 3, 4 and 5 in the river itself, No. 5 below low water mark on the west side of the river.
The proposed construction was a Federal Aid Project, the United States, through its Bureau of Public Roads, to pay approximately 50 per cent of the cost. As a condition of Federal aid, the approval of the Bureau of Public Roads of the plans and specifications for the structure was required. At the time bids were called for in connection with the construction and installation of the piers, the Bureau of Public Roads had not given its formal approval to the plans and specifications.
However, the Highway Commission issued and published a call for competitive bids for the construction and installation of said piers, bids to be submitted to and filed with the commission for consideration at a meeting to be held April 24, 1950, in Portland, Oregon, at 9:00 a. m. The Commission reserved the right to reject any or all bids, or to accept the proposal deemed best for the state of Oregon.
In the bid proposal form prepared by the Commission for use of prospective bidders, the bid was subdivided into seven separate items, the bidder being required to subdivide his bid accordingly.
State Construction Company is a Washington corporation, with its principal offices located in Seattle, and is authorized to transact business within the state of Oregon. It was duly qualified as a bidder under the provisions of §§ 98-102 to 98-106. O.C.L.A., ORS 279.010 to 279.028. Alfred H. Cohn is the president and general manager of said corporation. He is a registered engineer in the state of Washington. Edgar C. Hart is general superintendent on heavy construction for and a stockholder of the corporation.
The printed form for bid proposal for the construction of the piers for the Marion Street Bridge, together with the plans and specifications therefor, were furnished the defendant Construction Company by the Highway Commission.
Cohn and Hart made a trip to Salem, where they interviewed members of the engineering department of the Highway Commission, and also looked over and investigated the site for the construction of the piers. They interviewed materialmen, investigated labor conditions, river conditions, and secured other available data necessary to prepare a bid. At the same time they were investigating the proposed construction of an overhead pass on State Highway No. 99 at Eugene, with a view to bidding thereon; bids were to be opened on Tuesday, April 25, 1950.
Upon their return to Seattle, Cohn and Hart commenced work on the preparation of bids of the Construction Company. They had but a few days within which to prepare the same. Hart did most of the figuring, Cohn securing the prices of the needed materials. The first item on the form of proposal for the bridge piers was for 'shoring, cribbing, etc.' This item included construction of the necessary cofferdams. Included in the first item were necessary dredge work, lumber, labor and approximately 400,000 pounds of steel sheet piling. The cost of the necessary steel sheet piling delivered to the job site approximated $35,000. It was the inadvertent omission of the cost of this steel piling from the completed bid of the defendant Construction Company that led to the instant litigation.
In the preparation of their proposal, Cohn and Hart were compelled to work rapidly in order to complete the bid and get it into the mail by Friday evening, April 21. It was to be and was mailed on Friday to the defendant Continental Casualty Company in Portland, which corporation was to furnish the bidder's bond and file the bid and bond with the Commission before 9:00 a. m. on Monday, April 24.
At the time Hart finished his work sheet summary of the items and their cost, going to make up the bid respecting shoring and cribbing, he had not been furnished the cost of the steel sheet piling and on his tabulation left that cost open. On Friday, the cost thereof was furnished him by Cohn, that, is the cost per pound. Cohn had secured this information from the Bethlehem Steel Corporation in Seattle. The cost was seven cents per pound f. o. b. Salem, Oregon. An additional cost for transportation from railroad to the work site was also involved. Although Hart was given this cost by Cohn on Friday, in his haste to get the final figures to Cohn, who made up the formal bid, he inadvertently omitted to extend that cost on his work sheet summary.
Hart's summary as to item No. 1 (shoring, cribbing, etc.) on his work sheets, prepared before information had been received as to the cost of the steel sheet piling, is as follows:
'Piling 152-50' 144-25'
Lumber 35M at 300.00 10500.00
Dredge 2 1/2 Mo. 5000.00
Labor 2500.00
---------
18000.00
Sup 1000.00
---------
19000.00
Miss 5000.00
---------
24000.00
Drive & Pul. 7400.00
---------
31400.00
3100.00
---------
34500.00'
The figures 152-50' and 144-25' referred to the number and length of steel piling required, that is, 152 piling 50 feet in length, and 144 piling 25 feet in length. The amount of $3,100 represented the estimated profit. As before observed, Hart failed to extend the cost of the steel sheet piling in the above summary.
After completing all his estimates upon the seven items included in the bid, Hart transferred the totals from his work sheets to a final estimate sheet, which he turned over to Cohn, and from which Cohn prepared the bid proposal. This final estimate sheet delivered to Cohn carried the figures $34,000 for item 1, and Cohn placed those figures in the bid as submitted to the Highway Commission. The cost of steel sheet piling was entirely omitted from the bid. The bid, prepared upon the form furnished by the Highway Commission, was as follows:
'Marion Street Bridge Piers Bid
Sheet
-------------------------------------------------------------------------------
Item Item and Quantity Unit Price Amount
No
-------------------------------------------------------------------------------
1. Shoring, Cribbing, etc. All
required
For Thirty-four thousand dollars Lump sum $34,000- $34,000.00
.00
-------------------------------------------------------------------------------
2. Structural Excavation 2,200 Cu
Yds
For Six dollars & fifty cents Per Cu. Yd. $6.50 $14,300.00
-------------------------------------------------------------------------------
3. Structural Excavation
Below Elevations Shown 40 Cu. Yds.
For Ten dollars Per Cu. Yd.
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