Ward v. City of Big Spring

• Decision Date: 06 March 1942
• Docket Number: No. 2246.,2246.
• Citation: 161 S.W.2d 821
• Parties: WARD v. CITY OF BIG SPRING.
• Court: Texas Court of Appeals

161 S.W.2d 821

WARD v. CITY OF BIG SPRING.

No. 2246.

Court of Civil Appeals of Texas. Eastland.

March 6, 1942.

Rehearing Denied April 17, 1942.

Appeal from District Court, Howard County; Cecil C. Collings, Judge.

Action for breach of contract by Joe E. Ward against the City of Big Spring. From a judgment for defendant, plaintiff appeals.

Reversed and remanded.

Leslie Humphrey, of Wichita Falls, for appellant.

Coffee & Coffee, of Big Spring, for appellee.

GRISSOM, Justice.

Joe E. Ward sued the City of Big Spring for damages alleged to have been suffered by reason of a breach of a contract to employ him to prepare the final plans and specifications and supervise the construction of a water works project for the City. The City's general demurrer to Ward's petition was sustained, he declined to amend and the case was dismissed. Plaintiff has appealed.

Plaintiff alleged that in June, 1935, he was employed by the City to make an investigation and report of a water supply and prepare engineering information necessary to apply to PWA for a loan and grant to construct the desired improvements and to assist the City in obtaining said loan and grant, for which services the City agreed to pay him $2,000. That the City also employed him conditionally to prepare final plans and specifications for the improvements and to supervise their construction for which the City agreed to pay plaintiff five per cent of the cost of construction. He alleged that the part of the contract for which he was to be paid $2,000 as aforesaid was performed, and said services paid for, but the City, although it built the improvements, breached the contract and refused to permit plaintiff to prepare the final plans and specifications for the improvements finally decided upon and supervise their construction. Plaintiff alleged, among other things:

"* * * That the real employment under said contract, conditioned that the City constructed said improvement, was the employment of said plaintiff as an engineer to prepare the plans and specifications and supervise the construction of the improvement, but first it was necessary to determine the nature of the improvement and in order to determine the same it was necessary to employ the services of a competent experienced engineer, and when such employment was made it was so provided in said contract that the engineer should recommend the nature of the improvement, the source of the supply of water, as well as the expense necessary to avail the City thereof. The preparation of the application under Section I of said contract merely involved the laying out of a plan for an additional water supply, and the estimated cost thereof and the assembling of such data necessary to apply to the Federal Emergency Administration of Public Works for a loan and grant to finance such construction, and while the city was not obligated under said contract to accept said plan or to make said improvement, nevertheless it was a conditional contract, which required the City, in the event it did accept the plan to secure the loan and grant and make the improvement, to employ the plaintiff and none other as an engineer to make the plans and specifications therefor and to supervise the construction, and required the City to pay the plaintiff the compensation therefor provided in the contract, to-wit, 5% of which was to be paid when the grant was obtained and the other 2½% to be paid as the work progressed; that therefore the whole contract was the true consideration which induced the plaintiff to lay out the program under Section I of said contract. The conditional consideration for the making of the plans and supervising the work in the event the program was accepted by the City and the work undertaken and performed was the inducement and consideration for the plaintiff, as well as the defendant, to undertake the performance of said contract as a whole."

Plaintiff alleged he performed the contract, insofar as it provided for laying out the plans for the improvements under Section I of the contract; that the city recognized his performance and paid him $2,000; that the contract provided, in addition to the services to be rendered under Section I, that plaintiff was to prepare the final plans and specifications and supervise the construction. Plaintiff alleged the City accepted his report and program; that the City made application to PWA for a loan and grant for the construction of the water works as a self-liquidating project; that the City's application to PWA provided that if the Government offered to assist in financing the construction "the City, if it accepted such offer, would sell its obligations in an amount, together with the grant, which would be sufficient to bear the cost of the construction." That in said written report signed by the City, which was alleged to be a part of the contract and an adoption by the City of the nature and extent of the improvements to be made, it was provided that plaintiff was to be the sole engineer employed. Plaintiff alleged the break-down of the plans as embodied in said report to PWA listed among other items the following: "Engineering, architectural and other fees for technical services, $22,650." That the project as embodied in said application was substantially the same project which the city thereafter constructed and substantially that which plaintiff recommended. Plaintiff further alleged:

"In this connection, plaintiff says that while said contract in itself did not create an unconditional debt on the part of the City to pay the plaintiff the sum of 5% for the preparation of the necessary plans and specifications and the supervision of the construction of the work, nevertheless it did provide a conditional obligation upon said city to do so in the event the funds for the construction of said improvement became available, and the work was undertaken and performed by the City; that the City, availing itself of the services of this plaintiff and based upon his surveys, engineering data, and plans, applied as aforesaid to the Federal Emergency Administration of Public Works for a grant of $225,000.00, agreeing that in the event the grant was obtained that it would issue its obligations in accordance with the constitution and laws of the State of Texas to further finance such grant to the extent of $500,000, including in said $500,000 the grant from the Federal Government, and thereupon an election was held and bonds of the City voted in accordance with the constitution and laws of the State of Texas, and regularly sold, sufficient together with the grant applied for to fully finance said project; that the plaintiff presented to the Federal Emergency Administration of Public Works the application executed on behalf of the City and the Federal Emergency Administration of Public Works made a grant of $225,000, which, together with the obligations of the City, as aforesaid, aggregated $500,000, the estimated cost of such improvement; that when such funds were obtained the contract made by the City with this plaintiff to employ him to prepare the plans and specifications and to supervise the construction became an unconditional obligation on the part of the City to pay to the plaintiff the compensation provided for in said contract of 5% of the cost of the construction; that when the debt became an unconditional debt it became a part of the cost of the project and provision was then made for its payment out of revenues in existence and coming into existence, and were to be paid as aforesaid with the moneys received from the Federal grant and from the sale of the obligations of said City made for the purpose of financing the water-improvement project; that the debt due this plaintiff then became an unconditional debt, a part of the cost aforesaid of the construction of such project, and at such time the City had then made provision to assess and collect annually a sufficient sum to pay the interest thereon, and create a sinking fund of at least 2% thereon in accordance with the constitution and laws of the State of Texas, and that while the contract made before the application to the Federal Emergency Administration of Public Works did provide that the amount and extent of the improvements was left within the discretion of the City, nevertheless when the City did outline a definite program in its application to the Federal Emergency Administration of Public Works and adopted the plan outlined by the plaintiff the contract became certain, and that the application of said city became a part of the contract and that the city was obligated in good faith and in good conscience to continue the employment of plaintiff under its written contract aforesaid for the preparation of the plans and specifications and for the supervision of the work aforesaid, and when it undertook the performance of said project it was its duty under the contract, to live up to it in respect to the employment and compensation of the plaintiff herein."

Plaintiff alleged that as a result of his work the City obtained a grant of $225,000; that while plaintiff was carrying out his part of the contract and after the plaintiff had performed substantially all the services necessary to perform in respect to the preparation of the plans and specifications for said plant, he was discharged by the City and other engineers were employed on July 18, 1938. Plaintiff alleged the City constructed the improvements substantially as originally planned and outlined by plaintiff, according to the general plans and specifications, survey and engineering data, except for minor details, as furnished by plaintiff. That the improvements were made at a total expenditure to the City of $497,537.64, for which the City was bound under its contract to pay plaintiff 5% thereof.

In the contract, which was attached to and made a part of the petition, the City was designated as party of the first part and Ward as party of the second...