Case Name: COUNTY OF BLUE EARTH AND ANOTHER v. NATIONAL SURETY COMPANY
Court: Minnesota Supreme Court
Jurisdiction: Minnesota
Decision Date: 1925-10-09
Citations: 164 Minn. 390
Docket Number: No. 24,614
Parties: COUNTY OF BLUE EARTH AND ANOTHER v. NATIONAL SURETY COMPANY.
Judges: 
Reporter: Minnesota Reports
Volume: 164
Pages: 390–401

Head Matter:
COUNTY OF BLUE EARTH AND ANOTHER v. NATIONAL SURETY COMPANY.
October 9, 1925.
No. 24,614.
Horace W. Roberts, for appellant.
G. E. Phillips, E. G. Farmer, J. L. Lohben and Franlc E. Morse, for respondents.
Reported in 205 N. W. 277.

Opinion:
Lees, C.
Judicial Ditch No. 7 in Watonwan and Blue Earth counties was established by the order of the district court in April, 1913. The two counties entered into a construction contract, under which work commenced in May, 1914, and continued intermittently until the contractors ceased work in 1909. Thereupon appellant, as surety on their bond, was called on to complete the work, employed one of the contractors for that purpose, and drew upon the retained percentage of the contract price to pay him.
The drainage was unsatisfactory and, in July, 1922, appellant was notified that the work had not been done properly and that bids would be received for the completion thereof. The lowest bid exceeded the amount of the benefits as determined by the viewers, and all bids wre rejected. In March, 1923, this action was brought on the bond to recover damages for breach of contract. Bespond-ents recovered a verdict of $21,531.83, and this appeal is from an order denying a motion for a new trial.
1. Many assignments of error are based on rulings excluding evidence wMcb appellant attempted to introduce in tbe examination of L. E. Lambert, tbe civil engineer in charge of construction from May, 1914, to October, 1918.
Tbe original survey was tbe work of W. F. Brooks, an engineer appointed by tbe court wben tbe drainage proceeding was commenced. His plans and specifications were made part of tbe contract and tbe contractors agreed to do tbe work in accordance therewith.
Respondents' principal witness was an engineer named Meyer, who was appointed by tbe court, after tbe work ceased, to inspect tbe work and report bis findings. He made a comprehensive report of tbe defects be discovered and testified at great length concerning tbe particulars in which tbe work failed to conform1 to tbe plans and specifications. Lambert was called to rebut tbe conclusions which would necessarily be drawn from Meyer's testimony. While tbe work was in progress, Lambert bad Brooks' field notes, plans, specifications and profiles, and they were before him wben be testified. It appeared that he. had laid out tbe work on tbe ground by taking levels and setting grade stakes; that much of tbe construction work was done under bis direct supervision and tbe remainder under tbe supervision of inspectors be employed; that, as tbe work progressed, be inspected the tile as it was laid and, from time to time, issued certificates to tbe contractors or their subcontractors; that be bad kept a record of bis survey and bad deposited tbe book in tbe office of tbe clerk of court, but at the time of tbe trial tbe book could not be found.
Lambert was repeatedly asked whether tbe tile was laid at tbe elevation shown by Brooks' profiles, whether tbe elevations shown by tbe grade stakes be (Lambert) set were tbe same as those shown by the profiles, and whether tbe pipe was laid at the depth marked on tbe grade stakes and prescribed by tbe original plans and profiles. To all such questions objection was interposed on tbe ground that they called for opinions of tbe witness, and that, until bis note book was produced, there was no foundation for a conclusion that the tile had or had not been laid at the depth or grade Brooks had specified. We cannot agree that these questions called for the conclusion of the witness. He had personal knowledge of the manner in which the tile was laid. The absence of the note book might affect the weight of the testimony, but not its admissibility. Kies v. Warrick, 149 Minn. 177, 182 N. W. 998. To deprive appellant of the benefit of Lambert's testimony on a vital issue in the case was prejudicial error.
Lambert knew whether the contractors had done their work in accordance with Brooks' plans and specifications. The work was done under his supervision. It was his duty to see that it was done in the manner prescribed by the contract, and the questions called for statements of fact. The modern tendency is all in the direction of liberality in the admission of evidence. Dun. Dig. § 3312. As an illustration, see Phillips v. Menomonie H.-P. B. Co. 109 Minn. 55, 122 N. W. 874, a case where the performance of a contract was in issue and it was held that the trial court, in its discretion, might allow a party to testify that he had performed the contract, if the answer amounted to no more than a mere shorthand rendering of the facts.
Certain question's of law, fully argued in the briefs, will come up again when the case is retried. ' It seems desirable that we should state our views as to some of these questions.
2. Appellant attempted to prove that the contractors dug the ditch to a depth and laid the tile at the level indicated by the grade stakes set by Lambert. The court ruled that such evidence was inadmissible, unless it was shown that the grade shown by Lambert's stakes was the same as the grade shown by Brooks' profiles and required by the contract. The ruling was correct. The provisions of the contract relative to directions given by the engineer did not relieve the contractors from their obligation to do the work in accordance with the plans and specifications.
Brooks was the engineer appointed by the court to make the survey and prepare the plans and specifications. These were the plans to which the court gave its approval. They were the bases for the assessment of benefits. The contractors' bid was based upon them. The contract obligated the contractors to dig the ditch and lay the tile in' accordance with their requirements. The engineer had no authority to modify them during the progress of the work without the consent of the court. G. S. 1913, § 5526, 5555.
Defendant takes the position that, if it could show that the tile was laid at the depth indicated by Lambert's grade stakes, it need not go-further and «how that this was the depth required by Brooks' specifications and profiles. The court is of a contrary opinion. Neither Brooks nor Lambert had any authority except such as was conferred on them by the statute. Lambert had certain duties to perform while supervising the work of the contractors. His duties were defined by the statute. In discharging them he represented the two counties. Seastrand v. D. A. Foley & Co. 135 Minn. 5, 159 N. W. 1072. His authority was derived from the law. He had no authority to direct the contractors to do the work in any other manner than thej law required. By statute, as well as by the express terms of the contract, the contractors were bound to do the work in the manner specified in Brooks' survey and report. When they notified the engineer that they had completed the job, it became his duty to inspect the work and, if he found that they had completed it according to the contract, plans and specifications, it was his duty to report that fact to the court and give the contractors a certificate to that effect. G. S. 1923, § 6694.
The limited authority of the engineer is shown by the last proviso of the section, which declares that none of the certificates issued by the engineer under the drainage law shall constitute prima facie or other evidence of the truth of the contents thereof, or of the ful-filment of the contract. In referring to this provision, it was said in State v. Clarke, 112 Minn. 516, 128 N. W. 1008, that Hie engineer is not clothed with authority to relieve the contractor from a substantial performance of the contract, and Gilbertson v. County of Blue Earth, 145 Minn. 236, 176 N. W. 762, is to the same effect.
We hold that defendant could not escape liability by a mere showing that the ditch was dug and the tile laid at the depth and or the grade indicated by tbe stakes set by Lambert and that, to defend successfully on the ground that tbe contractors bad fulfilled tbeir obligation, it was necessary to show that tbe work bad been done as provided by tbe contract and by Brooks' plans and specifications.
Tbe answer to tbe suggestion that such a ruling will place contractors at tbe mercy of incompetent or dishonest supervising engineers is that they may sue on tbe engineer's bond to recover tbeir damages, and that tbe engineer is not tbe representative of tbe property owners who must pay for the work and who have a right to insist that it shall be done in substantial compliance with tbe original survey and report upon which tbeir assessment was based.
We are not concerned with tbe rules applicable to building contracts in general. A drainage contractor is bound by tbe provisions of tbe drainage law. Drainage proceedings are special proceedings and we must look to tbe pertinent provisions of tbe statute and not to tbe common law to ascertain tbe rights and duties, of contractors.
3. The contractors sublet a portion of tbe work. Tbe engineer issued bis certificate to tbe subcontractor pursuant to G. S. 1923, § 6694. In reliance thereon, tbe contractors paid tbe subcontractor. For the reasons already stated, we do not sustain tbe contention that these facts estop respondents from recovering tbe cost of remedying defects in the subcontractor's work.
4. An open ditch through Law Lake was changed to a tile drain. This was done pursuant to an order of tbe district court based on tbe written application of tbe engineer and with tbe consent of the contractors, but without notice to appellant. Tbe change added 10 per cent to tbe cost of the work. It was authorized by virtue of that portion of G. S. 1923, § 6678, which provides for tbe modification of tbe plans and specifications during the progress of tbe work. Tbe substance of the provision is found in tbe contract, but 2 instead of 10 per cent was written. At one time tbe statute limited the increase in cost to 2 per cent of the contract price, but, prior to tbe initiation of this proceeding, tbe statute bad been amended and the limit fixed at 10 per cent.
In view of the rule that a contract made in the course of a proceeding under a statute is presumed to have been made with reference to the provisions of the statute and that such provisions .are to be read , into the contract, Bohn v. McCarthy, 29 Minn. 23, 11 N. W. 127, and in view of grave doubt as to the power of the parties to the contract to deprive the engineer and the court of the right to exercise the authority expressly conferred by section 6678 for the evident purpose of securing an efficient system of drainage, the contract should be read in conjunction with the statute and is controlled thereby. This was conceded in the course of the argument, and the case should be tried as though the contract read 10 per cent instead of 2 per cent.
5. There are several reasons why appellant cannot escape liability on account of this change in the plan of construction. In the first place, the answer does not set up as a defense a release of liability by reason thereof. In the second place, the contract expressly provides that changes may be made. And in the third place, after notice of the contractors' default, appellant took charge of the work with knowledge of the change, undertook to complete it, and obtained respondents' consent to the release of the retained percentage of the contract price. This clearly amounted to a waiver of notice of the proposed change. MacLeod v. Nat. Surety Co. 133 Minn. 351, 158 N. W. 619.
The other questions discussed in the briefs require but one comment: The circumstances under which the culvert beneath the public highway was constructed, and its effect as an obstruction to the flow of water in the open ditch, should be brought out at the trial in order to give the court all the facts relative to the issue under the pleadings in respect to the culvert and the legal consequences of its construction and maintenance.
For the reasons stated above, the order appealed from is reversed and a new trial granted.