Action
by the Twohy Bros. Company against the Ochoco Irrigation
District, Crook County, and others. From a decree of
dismissal, plaintiff appeals. Affirmed.
The
plaintiff is a private corporation engaged in construction
work. The defendant Ochoco irrigation district is a municipal
corporation organized under the Oregon Irrigation District
Law. Plaintiff prays for an accounting, and "that it be
decreed that the reasonable value of the work done and
materials furnished by plaintiff in the performance of said
work is the full sum of $536,170.99, and that plaintiff be
given a judgment against said district for any balance
thereof that shall remain unpaid after said accounting,"
also for the cancellation of certain writings.
From
plaintiff's averment, it has been paid the total sum of
$302,469.33. The defendant alleges that it has paid to
plaintiff the full sum of $309.007.02, and that said sum of
money is equal to the value of all work done by plaintiff and
all materials furnished under the alleged contract referred
to in the amended complaint. A number of exhibits attached to
plaintiff's amended complaint and made a part thereof
too voluminous to be set forth in full herein, constitute a
contract for the construction of a canal 15 1/2 miles in
length and a dam for the purpose of impounding the waters of
a stream known as Ochoco river.
On May
19, 1917, the irrigation district executed a written
agreement with Clark-Kendall & Co. reading, in part, as
follows:
"Whereas
Ochoco irrigation district, for the purpose of procuring
necessary reclamation works and acquiring the necessary
property and rights therefor, and for otherwise carrying
out the provisions of the law relative to irrigation
districts, has heretofore duly authorized an issue of bonds
in an amount not to exceed $1,100,000; and
"Whereas
the board of directors of said district deem it for the
best interests of the district to use said bonds, or so
much thereof as may be necessary, at their par value, for
the purchase or acquisition of canals, reservoir sites
water rights, or other works, or for the construction, or
in payment for the construction of canals, reservoirs
pumping plants, or other works to be used for the
irrigation or drainage of land in the district, or any part
of said lands; and
"Whereas,
Clark-Kendall & Co., of Portland, Or., have had an engineer
make an examination of the district for the purpose of
making an estimate of the cost of the construction of
canals, reservoirs, pumping plants, or other works to be
used for the irrigation or drainage of the land in the
district; and
"Whereas,
the estimates made by said engineer on the cost of the main
dam for the reservoir and the first 15 1/2 miles of the
main canal aggregate approximately $409,500, as shown by
said estimate for said purposes hereto attached and marked
Exhibit A; and
"Whereas,
said last-mentioned estimates are in part based on definite
rates therein particularly set forth, which said
measurements and classifications of material as the work
progresses may change and increase or decrease the cost
thereof, but which at the present time are incapable of
being made more definite than as in said estimate
contained; and
"Whereas,
said estimates for the said main dam for the reservoir and
the first 15 1/2 miles of said main canal have been
examined and approved by the project engineer and by the
board of directors of said district; and
"Whereas,
the board of directors * * * have this day duly passed a
resolution authorizing the president and secretary for and
on behalf of said district to enter into a contract with
Clark-Kendall & Co. for the construction of said main dam
and the first 15 1/2 miles of said main ditch:
"Now,
therefore, for and in consideration of the premises and for
one ($1.00) dollar and other valuable consideration, it is
hereby agreed:
"(1)
Clark-Kendall & Co. shall employ a contractor for the
construction of the main dam and the first 15 1/2 miles of
main ditch at and for the price set forth in said
estimates, and in payment therefor shall accept said bonds,
or so much as may be necessary, at their par value,
provided, however, that said bonds to the extent of 80 per
cent. of the estimated amount of the construction shall be
delivered to said Clark-Kendall & Co. or their assigns, as
herein-after provided, upon their filing a surety bond
satisfactory to the district for the completion of the work
according to specifications. * * *
"(4)
The specifications for said construction may be modified,
changed or added to during the progress of the work. * *
*"
On
August 16, 1917, a supplemental agreement was entered into
between the Ochoco irrigation district and Clark-Kendall &
Co. for the construction of the proposed main dam for the
reservoir and the first 15 1/2 miles of the main ditch, which
provides, among other things, that:
"Whereas,
plans and specifications for said work had not been adopted
and approved on said date (May 19, 1917); and
"Whereas,
plans and specifications therefor have subsequently been
adopted and approved:
"Now,
therefore, it is hereby agreed:
"First.
Clark-Kendall & Co. shall employ a contractor for the
construction of said proposed main dam and the first 15 1/2
miles of main ditch, who shall construct same in accordance
with the plans and specifications therefor and shall be
paid in accordance with the estimates marked A and
incorporated in said contract of May 19, 1917. * * *
"It
is understood that the total amount to be paid said
Clark-Kendall & Co. under said contract of May 19, 1917,
the plans and specifications and this supplement thereto,
may exceed $400,000.00, and in that event it is hereby
agreed that such amount or amounts in excess of $400,000.00
shall be paid in cash from the proceeds of the sale of the
$500,000.00, par value, of the bonds of the district. * * *
"The
foregoing amounts are predicated upon estimates of the work
now contemplated by the plans and specifications."
An
acceptance of the specifications was made by Clark-Kendall
& Co., for themselves and their assigns, and the contract
was duly assigned to plaintiff, Twohy Bros. Company.
The
following is taken from the acceptance of the
specifications made a part of the complaint:
"(a)
We, or our assigns, are to perform all labor and services
and furnish all materials, plant, and equipment necessary
to complete the work contemplated under this contract and
as listed in Exhibit A. * * *
"(c)
All work to be done under this contract on the first 15 1/2
miles of the main canal must be completed * * * May 1,
1918. * * *
"(d)
* * * Ochoco dam and appurtenances must be completed * * *
on or before May 1, 1919. * * *
"(e)
Whenever in this contract the words 'pay,'
'payment,' 'money,' or words of equal
import are used, it is understood that for all amounts up
to $400,000.00 payment in bonds of the Ochoco irrigation
district, at their par value, is meant. For all amounts
over and above a total of $400,000.00, payment in cash is
meant. * * *
"(f)
The amount to be paid for work or services performed or
materials furnished under the terms of this contract shall
be a sum equal to the amount of the actual work done and
materials furnished as determined by the engineer under
each item in Exhibit A, multiplied by the unit prices
applicable to each such item. * * *"
Under
the heading "General Conditions," set forth in
Exhibit E, we have:
"The
word 'contract' shall mean collectively all of the
covenants, terms, and stipulations contained in the various
portions of this contract, to wit, agreement, bond,
specifications, acceptance of specifications, and contract
drawing. The word 'specifications' shall mean
collectively all of the terms and stipulations contained in
those portions of the contract known as the general
conditions, general specifications, and detailed
specifications. * * *
"The
words 'contract price' shall mean either the unit
price or prices, or flat price or prices. * * *
"The
cost and expense of said work and material shall be borne
by the contractor."
On
September 15, 1917, the plaintiff and defendant Ochoco
irrigation district entered into a written agreement relating
to the manner in which the money realized from sale of bonds
should be deposited and drawn upon. Twohy Bros. Company gave
the irrigation district a surety bond for $400,000, and
entered upon the performance of its contract by furnishing
material and labor in the matter of the construction of the
dam and main canal of the Ochoco irrigation district. After
doing a great deal of work, but before the completion
thereof, the plaintiff abandoned its contract. A suit was
instituted by this defendant in the circuit court of the
state of Oregon in and for Crook county, for the purpose of
restraining Twohy Bros. Company from removing its supplies,
equipment, and machinery from their "present location at
or upon or connected with the said dam, or from injuring or
destroying or interfering with the operation of the same, or
in any manner preventing plaintiff from using each and all of
said tools, equipment, or supplies."
The
defendant in the present proceeding filed an answer to
plaintiff's complaint. For a first, further, and separate
answer it averred:
"That
prior to the execution of the several instruments signed by
T. H. La Follett and R. L. Schee, at the time when the said
T. H. La Follett and R. L. Schee were respectively the
president and secretary of this defendant, the board of
directors of this defendant had given no notice, by
publication or otherwise, of their...
