Case Name: ENGLAND, et al, Plaintiff, v. STATE, Defendant
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1933-02-06
Citations: 61 S.D. 132
Docket Number: File No. 7230
Parties: ENGLAND, et al, Plaintiff, v. STATE, Defendant.
Judges: POLLEY, J., concurs.
Reporter: South Dakota Reports
Volume: 61
Pages: 132–141

Head Matter:
ENGLAND, et al, Plaintiff, v. STATE, Defendant.
(246 N. W. 628.)
(File No. 7230.
Opinion filed February 6, 1933.)
Martens & Goldsmith, of Pierre, and M. L,. Parish, of Murdo, for Plaintiffs.
M. Q. Sharpe, Attorney General, and Benj. D. Mintener, Assistant Attorney General, for the State.

Opinion:
WARREN, J.
The plaintiffs are contractors, and some time prior to May, 1929, examined certain plats, specifications, and' plans relating to certain highway work specified in a notice to contractors to 'be performed on State Trunk Highway No. 63 near the Cheyenne River bridge. The notice to contractors provides, among other things, for certain excavations, to wit: "110,067 C. Y. as Unclassified, 127,169 C. Y. Stas. Overhauling of Excavation, and, 144 C. Y. Structure Excavation." Thereafter the plaintiffs became the successful 'bidders and entered into a contract with the defendant state the latter' part of May of said year, in which it was agreed that they were to receive a certain stipulated price per cubic yard for common excavation and a certain price per cubic yard for shale or loose rock excavation, but the contract is silent as to'the price for solid rock formation excavation. The plaintiffs state that the cross-section of the blueprints show an area by lines and figures to consist of 96,303 cubic yards of common excavation and 10,387 cubic yards of shale or loose rock excavation. The complaint and the various exhibits are before us for the purpose of deciding whether or not the complaint states facts sufficient to constitute a cause of action, it having been demurred to upon that specific ground.
The complaint is quite specific in its charges and alleges in a chronological way the various steps by both parties before entering into the contract and the things that took place after the contract had been executed and' while proceeding with their work. They allege that while performing the excavation large bodies of solid rock were encountered and that the plats, plans, specifications, and contract did not contemplate the encountering of such a substance; that on encountering solid rock, the engineers in charge for the state were notified of this fact and that an additional expense would be incurred in removing this class of excavation. The state engineers countered by contending that the plaintiffs must proceed with their work, that they were bound by the contract, and1 that they would -be compelled to proceed without any additional compensation, and called the plaintiffs' attention to the fact that there were certain binding specifications for road and bridge work embodied in the contract which would make it imperative that they proceed with the work. The South Dakota Standard Specifications for Road and Bridge Work on State Trunk Highways urged by the defendant as controlling are section 15, par. 16; section 40; and section 42.
The controversy between the plaintiffs and defendant, the state, from the allegation as disclosed by the complaint, is in respect to the necessary excavations which had to be made to complete the contract. The plaintiffs seek to recover the reasonable value for this excavation of 87,560 cubic yards of common excavating at 18 cents per cubic yard, and 70 cents per cubic yard for 22,487 cubic yards of loose rock excavation, and also $2 per cubic yard for 2,390 cubic yards of solid rock excavation, increasing the amount of recovery to $36,281.70 instead of $26,984.08 as allowed and paid for by the defendant.
From the allegations in the complaint it is apparent that the plaintiffs obligated themselves to complete the project for 24 cents per cubic yard, regardless of the kind, character, or classification of such excavation, and that they have never appealed to, com plained ¿f, or objected to proceeding- with their contract at any time during its existence, to the state highway commission.
There are allegations to the effect that complaint was made to the district engineer and the state highway engineer, but it will be readily seen from an inspection of the complaint that the parties to the contract were not notified and that the engineers had no authority to modify the existing contract.
Section 40 of South Dakota Standard Specifications and a part of the contract provides as follows: " Should any such corrections or modifications of the plans or specifications require a different quality or class of work than that upon which the unit prices in the proposal are based, or if the modifications or corrections are required in parts of the work partially completed and such modifications result in an increased cost to the contractor, a 'fair and equitable amount in settlement shall be agreed upon before the work is performed, in writing, between the contractor and the commission.' "
It will thus -be .seen from the wording of the foregoing section that it is expressly provided that in the event of an)' correction or change where the work had been partially completed and where it would be necessary to modify and make changes which would be of any increased cost to the contractor that a "fair and equitable amount in settlement shall be agreed upon before the work is performed, in writing, between the contractor and the commission."
This provision is mandatory and was one of the elements in the contract between the parties, and had the plaintiffs so desired they could have availed themselves of the opportunity and obtained the benefits of that provision of the contract by submitting to the commission that a modification of the contract was necessary on account of the extra cost in completing the excavation which had been encountered after partially completing the contract.
The plaintiffs did not rescind promptly upon discovering the facts, and are therefore not now entitled to rescind, having failed to -comply with the rules governing rescission contained in section 906 of the 1919 S. D. Revised Code.
In considering plaintiffs' right to recovery for additional or extra work, we are met with the provisions of the contract and section 42 of the specifications, which provides that the contractor shall perform extra work for which there is no quantity and price included in the contract, and that when such extra work is deemed necessary and desirable, the extra work will be paid for at a unit price or lump sum to be agreed upon previously in writing between the contractor and commission, and in case the price or sum cannot be agreed upon by both parties, or if the method of payment is impracticable, the commission may order the contractor to do such work on a force account basis. In this case the complaint fails to show any agreement in writing which was contemplated by the parties to the contract. The plaintiffs are clearly foreclosed from asserting any right to extra work under the express provision of the specifications. The authority to perform such work must be given in the manner and in accordance with the terms of the contract, for it is expressly provided that the extra work to be done and the price for said work must be expressed and given in writing in order to bind the parties to the contract. See McQuillan on Municipal Corporations, § 1946, p. 4183; see, also, Wilson v. Salt Lake City, 52 Utah, 506, 174 P. 847.
The plaintiffs contend that they were misled by certain drawing's and plans prepared by the engineer for the state highway department and which, according to the expressed stipulations, were not prepared as a guide to prospective bidders, but were mere esimates for the use of the state highway commission in comparing bids. Whatever the facts may be, the plaintiffs must have known what they were, being experienced contractors and having perforated highway contracts under similar specifications. But regardless of this condition they could not have been misled and must have known that it was incumbent upon them to notify the highway commission, who was a party to the contract, before any change could be made and that it would be necessary that a contract be entered into in writing with said commission as contracting party in order that the additional compensation might be fixed.
The requirements to be observed by the parties are plain and unambiguous, specifically pointing out what must be done and that there must be an agreement in writing before the work is performed, this being the requirement, and 'by their failure to bring themselves within those expressed provisions they are now precluded from recovering for any additional work and in any other manner or form than is provided for by their contract.
Plaintiffs contend that it was not incumbent upon them to notify the state highway commission to bring about a modification of the contract; that they did all that was necessary when they notified the district engineer and the state engineer and that section 69 of the specifications relieved them of any other or further duty. They contend that section 69 of the specifications provides, in substance, that the engineer shall decide any and all questions which may arise as to the interpretation of the plans relating to the work, and the specifications and such decisions shall be final and conclusive, and that any doubt as to the meaning or any obscurity as to the work of the specifications will be explained by the engineer so as to give due effect to the contract. They further contend that this is a provision and an express delegation of authority given by the state highway commission to the engineer and binds the state highway commission. We are unable to share the views expressed by the plaintiffs and are unable to reconcile the plaintiffs' contention with what we have said relating to notice and entering into a contract in writing directly between the contractor and the commission.
It is plain to us that the specification and the terms of the contract are not susceptible to such a construction as advanced by the plaintiffs. To so hold would do violence to the terms contained in specification No. 40, which in part provides, " shall be agreed upon before the work is performed, in writing, between the contractor and the commission. "
The only authority for a change rested in the commission, and under the facts as stated in the complaint we must assume that the plaintiffs had knowledge of the provisions of the contract which the}' entered into and ratified by commencing the work, completing all of it and even accepting the amount tendered by the state in payment thereof.
The demurrer is sustained.
POLLEY, J., concurs.
CAMPBELL, P. J., concurs in result.