White Construction Co. v. Arkansas-Louisiana Highway Improvement District

• Decision Date: 22 October 1923
• Docket Number: 186
• Citation: 254 S.W. 820,160 Ark. 452
• Parties: WHITE CONSTRUCTION COMPANY v. ARKANSAS-LOUISIANA HIGHWAY IMPROVEMENT DISTRICT
• Court: Arkansas Supreme Court

254 S.W. 820

160 Ark. 452

WHITE CONSTRUCTION COMPANY v. ARKANSAS-LOUISIANA HIGHWAY IMPROVEMENT DISTRICT

No. 186

Supreme Court of Arkansas

October 22, 1923

Appeal from Chicot Chancery Court; E. G. Hammock, Chancellor affirmed.

Decree affirmed.

Winston Strawn & Shaw, and Coleman, Robinson & House, for appellants.

To determine the meaning of the bond in this case, reference must be made to the contract. 116 Ark. 212. The bond does not guarantee the road, but only all work performed by the contract, that is, materials and workmanship. The plans and specifications were not guaranteed. Unless specifically guaranteed, an interpretation of a contract to so hold would be harsh, unnatural and unfair. For cases so holding see 113 N.E. 703; 54 N.E. 661; 73 Wis. 650. Of course a contractor may guarantee the plans themselves as in the case of 116 Ark 212, but the court will not find such an absolute guaranty unless plain and explicit language in the contract requires it. The following cases are directly in point: 196 P. 1091; 136 Minn. 288, 161 N.W. 593; 97 S.W. 1; 107 S.W. 244, 14 L R. A. (N. S.) 1216; 41 N.W. 338.

J. R. Parker and Rose, Hemingway, Cantrell & Loughborough, for appellee.

In the last analysis the situation of the parties, what they did and the plain terms of the maintenance bonds, show the intent that the contractors should keep all of the work in repair and maintain it for a period of five years. If the bonds do not mean this, they mean nothing. Cases arising under similar bonds, where they have been construed to mean an absolute undertaking to keep in repair, are found as follows: 89 Ark. 95; 224 F. 842; 171 F. 29; 134 Ill. 203; 35 S.W. 1125; 38 S.W. 458; 101 N. E. (N. Y.) 162; 60 N.J.L. 394; 46 N.Y. 444; 29 App. D. C. 506. The case so strongly relied upon by appellant at 135 N.E. 702 did not contain a guarantee clause similar to the case at bar. There was no provision that, at the end of the five-year period, the work should be in as good condition as when completed--a feature on which the court commented in distinguishing the cases. The other cases cited by appellant are either not in point or are easily distinguished from the case at bar.

OPINION

WOOD, J.

The Arkansas-Louisiana Highway Improvement District (hereafter called appellee) instituted three separate suits, two against the White Construction Company and its surety, the United States Fidelity & Guaranty Company, and one against the Bryant Paving Company and its surety, the National Surety Company. The construction companies will hereafter be referred to as the appellants and the surety companies as the guaranty companies. As the suits are identical in purport, they were consolidated for hearing. The suits are on maintenance bonds executed by the appellants, pursuant to their respective contracts to construct certain portions of the road. The complaints alleged, in substance, that defects in the road work had appeared in sections covered by the bonds, which the respective contractors and their sureties had failed to repair as required by the respective maintenance bonds; that demand had been made for such repairs, and that the appellants had failed and refused to make them. The amounts necessary to make the repairs in the respective sections and the amounts of the maintenance bonds covering such sections are set forth in the complaints.

The appellants, in their answer, admitted the defects complained of, and admitted that there had been a demand to repair, and that they had refused to do so because, as they alleged, none of the defects complained of were due to inefficient workmanship, or material supplied by them, but to unskillful and insufficient plans and specifications prepared by the engineer of the appellee. They further alleged that all the work was done by them in accordance with the plans and specifications, under the direction of the engineer of the appellee in charge of the work, and according to the method of construction called for by the contracts and directed by the engineer; that the contractors knew all the time that the plans were defective and that their deficiencies would eventually produce the very conditions which have developed, and that the contractors so advised the engineer of the appellee before and during the progress of the work. But the appellee did not change its plans, and the contractors were required by the engineer, as well as by the contracts, to carry them out to the letter.

The testimony in the record is quite voluminous, and was evidently taken with a view of placing the trial court as near as possible in the situation of the parties to the contracts and the maintenance bonds, in order that the court might construe them with reference to the precise situation and circumstances of the parties at the time the contracts were entered into in order to effectuate their intention in making them. Such of the testimony as we deem necessary will be set forth as we proceed.

The commissioners of the appellee were ten landowners in the district. They employed an engineer to make plans and specifications for the work. They issued a circular letter containing general information to bidders for the work to be done under the plans and specifications, which included approximately one hundred and fifty-five miles of roadway in the district, divided into five sections, corresponding to the work in the counties embraced in the district. Among other things this circular contained the following recitals:

"All things herein contained, the proposal, plans, and general information for bidders, are hereby made a part of these specifications and contracts, and are to be considered one instrument. The intent is to make them explanatory one of the other. Should any conflicting statements be found, the bidder, or contractor, shall accept the interpretation of the engineer, whose decision shall be final and conclusive."

"No contract will be awarded except to responsible bidders capable of performing the class of work called for by these specifications. Bidders must examine carefully the plans, specifications and contract and proposal forms before submitting proposals."

"Bidders who have submitted proposals will be considered as having examined the location of the proposed work and as being familiar with the conditions to be encountered and with the requirements of these specifications."

This circular specified the kind of work that the plans and specifications contemplated in the respective counties. The foundation and wearing surfaces of certain types were specified for certain counties. For instance, for Chicot, Desha and Drew counties a mixed method asphalt wearing surface, of types designated "A," "B" and "C," was to be placed on either a cement concrete base, a roll-stone base, a bituminous roll-stone base, or upon a rock mac base. And it further recited: "A five-year maintenance guaranty will be required, including the foundations, as specified on types of wearing surfaces 'A,' 'B' and 'C,' and in case bidders do not desire to give such a guaranty on any of the foundations specified, they will leave such base items blank as they do not care to guarantee with the surface laid thereon."

The bids by the contractors were on printed forms of proposals, in which the contractors state that they have carefully examined the plans and specifications and form of contract to be entered into, and by personal examination and investigation had satisfied themselves of the nature of their obligations. These proposals showed bids on concrete headers and on four-inch concrete base and on five-inch concrete base and on the asphalt top. The proposals showed no bids on either the four- or five-inch "roc mac" base, on the five-inch "roll-stone" base, or either the four- or five-inch "bituminous" base. Nor did either proposal show a bid on type "B" or "C" wearing surface. There was a note in the proposals which stated that on the work in Desha, Chicot and Drew counties a five-year maintenance guarantee will be required on items 28, 29 and 30, types "A," "B" and "C," as also will be required on items 21 to 27 inclusive. It was further stated in the proposal: "Price bid for items 28, 29 and 30 contemplates the use of Trinidad Lake asphalt, and includes maintenance guaranty for five years." The proposal for work in Lincoln County was for water-bound trap rock macadam, and in Ashley County for gravel macadam, and covering the work in these counties a bond containing a maintenance guaranty of one year was required. Work done in Lincoln and Ashley counties was not involved in this controversy, but the difference in the character of the work in those counties and the maintenance bonds required for that work is mentioned, because it throws some light on the correct interpretation of the contracts and bonds here under review. With the information contained in the above circular and proposal form, the appellee and the appellants entered into contracts for the construction of the work, and the appellants executed the bonds upon which these actions are based. We will not set forth all of the contracts and bonds in detail, but will give in substance such of their provisions as we deem pertinent.

The contractors were required to furnish the material, equipment and labor, and to construct certain roads (describing them) according to plans and specifications prepared by the appellee, for the price named in the proposal for contracts. The work was to be completed in approximately five-mile sections, as designated by the engineer of the appellee. The retained percentages were to be paid to the contractors on their completing such sections of the work, and on their furnishing a maintenance bond, on the terms provided in the specifications for such...