Merritt v. Peninsular Construction Co. , 91 Md. 453 ( 1900 )

This suit was instituted by the appellant to recover from the appellee the value of work, materials and labor, under a written contract for the construction of the Queen Anne's Railroad, and also for extra work and materials. The narr. contains only the common counts in assumpsit, and no bill of particulars was filed. The defenses set up by the pleas, are non assumpsit, and that the plaintiff entered into a written contract with the defendant for the building of the railroad and the plaintiff did not complete the work within the time specified in the contract, etc., whereby the defendant suffered great loss, over and above all claims of the plaintiff, for which the defendant claimed judgment.

Five exceptions to the admissibility of evidence were taken by the plaintiff, and all the evidence, not stricken out at the time it was tendered, was admitted subject to objection. At the end of the examination of the witnesses, the defendant offered eight motions to exclude different portions of the evidence, three of which, together with an instruction taking the case from the jury, were granted by the Court.

Instead of considering separately, the several motions of the defendant and the action of the Court thereon, we will take up the whole case as it is presented in the record, and determine in that manner the legal principles applicable to the points involved.

In the summer of 1895, the appellant, in an interview with the general manager of the appellee, was shown "the plans and profiles but not the estimates of quantities of work" of the proposed railroad. Subsequently the appellant, having gone over the route, made two proposals for the building of the road; one "submitting prices per cubic yard per foot, board measure, and so much for track laying;" the other "for building the road at so much per mile." The appellee accepted the latter, and on the 11th day of September 1895, entered into the written contract, which appears without abbreviation in the record. It seems to be a carefully constructed instrument, in which the respective rights and obligations of the parties are minutely prescribed. It is too voluminous to be inserted in full in this place, but we will cite such portions of it, as may be required for the purpose we have now in view. By its first item, the appellant, agrees "to construct, build, complete and equip, ready for operation, the first section of the line of railway, known as the Queen Anne's Railroad, from the sea end of the pier or wharf at Queenstown, to the west side of the Choptank river at or near Denton * * estimated at about twenty miles, including the wharf at Queenstown, and including in such construction all the grading and masonry, track-laying and other work, and the furnishing of the rails, ties and all other material required for a single-track railroad, ready for operation on said section, as laid off, surveyed and designated by the chief engineer, etc., including more particularly all work required to be done by the company on said section in strict accordance with the annexed specifications, which are signed by the parties hereto, and are made a part of this agreement, and are hereby declared and accepted as an essential part of the same, etc., all of said work was to be done under the direction and inspection of the engineers of the Queen Anne's Railway Company appointed to superintend the same," and to the "full satisfaction and acceptance" of its chief engineer in "strict conformity with such lines, levels, stakes, profiles, plans, maps, drawings, specifications and instructions as shall from time to time be given by the chief engineer as herein provided for the direction and guidance of the contractor." If replacement or repairs became necessary before the final acceptance of the whole work, by reason of defective material or workmanship, it was to be done at the expense of the contractor. The entire work was to be commenced within six days after the 11th of September, 1895, and completed within six months, unless it was delayed by unavoidable strikes or legal proceedings; and this time was to be considered as of the essence of the agreement. The "whole and full consideration," "for the final, total and satisfactory construction," was $6,750.00 per mile. The wharf at Queenstown, to be charged for, "as forming so much linear part or portion" of the work, was to be finished first, and ninety per cent of its cost, or if it cost to exceed $10,000, then not more than $9,000 was to be paid on its completion, as part of the whole consideration to become due under the contract. The balance of the consideration was then to be divided equally per mile, and when each five-mile section was completed, ninety per cent of the money due for that section was to be paid, it being intended that the ten per cent thus retained should stand as security for loss,c, and not be paid over until the completion and acceptance of the whole work. The specifications annexed, specifically made a part of the agreement, contain directions for the details of the work, yet, from the nature of the case, there were many things that could not be minutely specified, but yet were contemplated should be done by the contractor, to complete the work according to the true spirit and intent of the general plans, and in such cases the specifications provide the work shall be done as the engineer may direct. To protect the company from charges on account of extra work, it was provided, that "no claim for extra work shall be allowed, unless this work shall have been done in pursuance of a written order from the engineer, and unless the claim be presented at the first settlement after the work was executed." One of the chief contentions of the appellant grows out of the proper construction of the clause just cited. There is no evidence that the work for which he claims an extra allowance was done in pursuance of a written order from the engineer, but he insists that he has a legal right to recover for it in this suit because of an alleged oral agreement between himself and the company, made before the signing of the contract and immediately thereafter by the president, to the effect "that if any change was made in the plans of the work, which entailed work in excess of the work called for by the contract," such excess should be paid for by the company. Upon the plaintiff's offer to prove such an oral contract, the Court ruled that to do so would be to alter the written contract and the evidence was therefore inadmissible. The offer was in effect to prove that contemporaneously with the making of the written contract, (that is, "before and immediately after,") there was in respect to the extra work a verbal contract, other than that contained in the written paper. Whether that was competent for him to do must depend upon the proper answer to be made to the question, was the verbal contract an independent agreement about which the written contract is silent ? That question in this case is purely one of law, for the reason that its determination depends entirely upon the proper construction of the written agreement. Did the parties, according to a fair and proper construction of what they reduced to writing, intend that all extra work of every kind should not become the subject of additional charge, unless the same was ordered in writing by the engineer, and the claim therefor presented at the first settlement thereafter? If the Court should so hold, then, the oral agreement is not collateral, but is a modification of the written contract, and cannot be proved without violating the well-established rule of evidence. The question in Bonaparte's case, 73 Md. 199, was whether, when the contract between the parties was partly in writing and partly by parol, the jury were at liberty, from all the evidence in the case, written as well as oral, to find what the contract actually was; here the question is, do the provisions of the written contract include the subject-matter of the oral agreement? for if they do, the written paper is conclusive, and parol evidence inconsistent therewith cannot be offered. Fusting v.Sullivan, 41 Md. 169.

What then is the proper construction of this clause? The case of Abbott v. Gatch, 13 Md. 329, is conclusive on this point. There was in that case a similar provision in a contract to put up a mill. The Court said, "the object of such a provision in building contracts is certainty as to the terms on which the work is to be done." The extra work for which compensation was claimed was in making certain alterations and putting in portions of the mill, not embraced by the terms of the contract. One of the questions involved was the right of the plaintiff to claim therefor additional compensation. It was held that the contractor "was under no obligation to receive suggestions from Abbott; on the contrary, if he deemed them unsuitable or impracticable, or likely to cause increased expense, he should have resorted to the contract, as containing all that he was required to perform, and insisted on having the additional work brought within its terms as well for his own protection, as to prevent misapprehension on the other side. * * We take the true construction to be, that there was to be no charge for extra work, that is, for any work beyond that stated in the contract, no matter what it might be, whether alterations in the plan or mode of doing the work or additions or improvements in and about the completion of the mill, unless reduced to writing and attached." The same doctrine was affirmed in the later case of O'Brien v. Fowler,67 Md. 565, where the claim was for "work and materials not embraced in said written contract," which contained a similar provision with reference to extra work. The Court said "without the written order and approval, as provided by the contract, any extra work that may have been done was not embraced by such contract, * * and to entitle the plaintiff to claim under the contract, he must claim in conformity to the terms and not otherwise. The very object of the stipulation in the contract was to exclude such claim for extra work, except upon the condition prescribed." That was an action of covenant, and the Court proceeded to say, that if the extra work and materials were furnished by "the order and direction of the defendants, and they expressly promised to pay for the same," and "that the written orders were not received for such work and materials by reason of inadvertence and neglect, and that the defendants waived such written orders and approval thereof," then the plaintiff would have had a right of recovery in an action ofassumpsit. If the plaintiff in this case had shown that the defendant expressly promised to pay for the extra work, or had waived the written orders, a different case from that now before us would have been presented. Stuart v. Cambridge,125 Mass. 108; Balto. Cemetery Co. v. Coburn, 7 Md. 208; Wortman v.Kleinschmidt, 30 Pac. R. 283; 12 Mont. 316; Russell v. DaBandeira, 13 C.B. (N.S.) 149.

We do not think this Court questioned the doctrine laid down inAbbott v. Gatch, supra, by anything said in the case of A. B.S.L.R.R. Co. v. Ross, 68 Md. 319. In that case a different question was involved. The right of the railroad company to make alterations was unquestioned, but it was limited by a provision that such alterations should not subject the contractor to "an expense in construction beyond the proportion of the balance of the work." It was held that the construction of the contract was for the Court, but "whether the work as finally done was within its scope" was a question for the jury; that is whether the work as done, increased the expense beyond the proportion of the balance of the work. In Bartlett v. Stanchfield,148 Mass. 395, there was evidence of an express promise to pay for the extra work and also of a waiver of the written contract. InDuBois v. The Del. Hudson Canal Co., 12 Wend. 334, the extra work referred to was such as was caused by an alteration of the line of the canal, by the very terms of the contract, and it was held that the enumeration of this one species of extra work was an exclusion of all others. In Wood v. Fort Wayne,119 U.S. 312, in addition to the clause like the one under consideration, there was another to the effect that the trustees could make any alterations in the plan of the work, and it was held that by a proper construction of the two taken together, the extra work referred to in the first clause did not include that referred to in the second. We do not regard this case as in conflict withAbbott v. Gatch, supra, in any respect.

Upon the whole we are of the opinion that the provision relating to extra work includes all kinds of work, and if this be correct, it follows that the Court was not in error in excluding the evidence of the oral agreement.

The wharf at Queenstown was completed in March, 1896; the first section of four miles about the first of May; and the second and third sections in September following, at least as far as to entitle the appellant to the ninety per cent payments. By the first of October about four miles of track remained to be done on the fourth section. Sometime in June, 1896, the appellant had an interview with Mr. Bosley, in which that gentleman agreed that if the appellant would subscribe $10,800 to the loan then being raised to complete the road to Rehoboth, the company would furnish him with the material (about $17,700 worth) to complete the fourth section, and it was upon that promise, the appellant states, that he made the subscription for that amount. He further testified that in October following he had an interview with the president and other officers of the company, at which they told him they would get the committee together the next day, and "see whether they would advance the material;" that after waiting a month the committee met on the 25th of October; that "the matter was submitted to them whether they would furnish this material and they refused to furnish it, and the appellant then said that was end of it, he could do nothing unless they furnished the money to get material." Hubbell, who was Merritt's financial backer, also testified in substantially the same manner.

It is contended this is a valid agreement, binding upon the company, and that the consideration the appellant was to receive was that "his difficulties about obtaining materials was removed, and in order to bring about this result he was willing to subscribe to the proposed loan and thus risk on the success of the enterprise $10,800 in addition to the $10,000 stock he had already subscribed for." The importance to the appellant of establishing this contract as a binding obligation on the appellee is obvious. The work was to be completed within six months from the eleventh of September, 1895. In October, 1896, the appellant abandoned the work, the fourth section being then uncompleted. He had received all sums then due him under the contract. If the company in June promised to furnish the money for materials and failed to do so, whereby he was unable to complete the work, his failure having been brought about by the act of the company, he could recover in this action for whatever he has actually done. Gill v. Vogler, 52 Md. 663; Bull v.Schuberth, 2 Md. 57.

Would the agreement, if fully proven, be valid and binding on the appellee? To so hold, it must be made to appear that Bosley had power and authority to bind the company in such agreement, or that the company subsequently ratified and adopted it. There is no evidence that the corporation had ever conferred upon him the authority to make agreements at variance with contracts made by the corporation under its corporate seal. At a meeting of the stockholders at which the appellant was present on the 31st of July, 1895, the directors were authorized to appoint committees to transact all business entrusted to them; and on the same day the board appointed a committee on contracts and entrusted to them the duty of supervising and authorizing all contracts, and upon such authorization the "proper officers" were to sign and carry them out. Bosley was never a member of this committee. There can be no presumptions as to Bosley's power to make this contract for the company in this case, from the fact that there is no evidence that he ever at any time attempted to exercise such a power, and even if there was, the appellant was not at liberty to so presume. He knew what the usual course of the business was with respect to the making of contracts. He was present at the meeting of the contract committee on the 11th September, 1895, and knew every step that was taken with reference to the contract of that date. And again, when it was proposed to change the location of part of the line, he made his proposal in writing for the work to the contract committee, which thereupon authorized the change and accepted his bid. It is clear, therefore, from the evidence before us, that Bosley in point of fact never had the power expressly conferred upon him, and had not performed acts from which the appellant could justly presume an acquiescence by the directors. Western R.R. Co. v.Bayne, 11 Hun. 171; Boynton v. Lynn Gas Light Co.,124 Mass. 197.

But it is also contended that Bosley's authority must be implied from the adoption and recognition of the agreement by the company, from the time at which it is alleged it was made, until the 24th of October, when the advance of money for materials to finish the fourth section was refused and the appellant abandoned the work. Eckenrode v. Chemical Co. of Canton, 55 Md. 65.

Is there any evidence, however, of such "adoption and recognition?" If there is, it would tend to show that the company ratified the contract, whether Bosley had authority or not to make it, provided it was also shown that the company committed such acts of recognition with full knowledge of all the material facts and circumstances. Adams Ex. Co. v. Trego, 35 Md. 69.

Now, the chief ground upon which the appellant contends, there has been such "adoption and recognition," is, that "Bosley continued during a period of four months to order payment to be made to Merritt for materials, and the executive committee of the company continued during the period to approve the vouchers for the payments so ordered." The contract sought to be established, and of which it is said this course of dealing on the part of the company amounted to a recognition of its binding effect, may be restated as being that the appellant signed the subscription-loan in consideration of the promise of the company to furnish him materials, or advance him money to pay for materials. The evidence, however, does not show or tend to show that the company advanced him "money for materials" or furnished him material. As far back as March, 1896, the company made him payments, partly in cash and partly on orders, on account of the work. When orders on the company were given and paid, it was particularly stated therein that payment was to be made "out of the first monies that become due," "under the contract between your company and myself, dated September 11th, 1895." There is here certainly no recognition or adoption of the oral agreement of June, 1896. And there is nothing to show that anything further was intended than is apparent upon the face of the orders. No changes were made in the method of dealing between the parties after June, '96, and no testimony whatever was offered tending to show that the company at any time paid or advanced any money, except in fulfillment of their obligations under the contract of September the eleventh. In fact the only evidence we have been able to find, that tends to show the attitude of the corporation towards this alleged contract, is that which pertains to the meeting of the contract committee in October, when the appellant was told that the committee refused to furnish any material, or make any advances for material, to enable him to complete the work. We will not prolong this opinion with a farther discussion of this phase of the case, except to say that after a full examination of the evidence, we find none proving or tending to prove any ratification or adoption of this alleged agreement.

We do not perceive the relevancy of the evidence relating to the construction of the wharf by Sandford Brooks. The appellant testified that he had gone to Mr. Brooks himself and told him that his company could have the job of building the wharf "if he wanted it;" and that that company was paid by the construction company upon orders given by the appellant. If he did not make the contract as he contends with Sanford Brooks, he had at least assented to its being made, and if he was in fact delayed by them in beginning the construction of the road, no blame attaches therefor to the construction company.

We find nothing in the proof contained in the record that presents a legally sufficient reason for the abandonment of the work by the appellant, and that being so, in view of what we have already said upon the other points in the case, the instruction granted by the Court was proper.

Judgment affirmed.

(Decided June 15th, 1900.)