Case Name: The John H. McGowan Co. v. The City of Portsmouth
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1922-12-30
Citations: 106 Ohio St. 629
Docket Number: No. 17334
Parties: The John H. McGowan Co. v. The City of Portsmouth.
Judges: Marshall, C. J., Hough, Bobinson, Jones and Clark, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 106
Pages: 629–637

Head Matter:
The John H. McGowan Co. v. The City of Portsmouth.
Municipal corporations — Contract for erecting waterworks — Partial use before entire improvement accepted — Implied contract for extra compensation — Additional labor, repairs and engineering supervision.
The provisions of a contract, duly executed hy a city, for the erection of a waterworks plant, contained a provision permitting the city to enter upon and use the whole or any portion of the work in condition to use previous to its final acceptance, of which provision the city availed itself.
Held: That from such express provision there does not arise an implied contract binding upon the city under which the contractor may recover for engineering supervision, additional skilled labor and repairs furnished prior to the acceptance of the plant by the city, upon the claim that such supervi sion, labor and repairs were required to safely operate said plant or to maintain the same in the condition as installed until its final acceptance by the city.
(No. 17334
Decided December 30, 1922.)
Error to the Court of Appeals of Scioto county.
This action was instituted in the court of common pleas of Scioto county hy The John H. McGowan Company, which will hereafter he referred to as the company, against the city of Portsmouth, hereafter referred to as the city. The claim of the company was set forth in twelve causes of action, all of which grew out of a contract for the construction of the fifth division of a waterworks plant.
The contract in question was entered into August 8,1912, by The New York Continental Jewell Piltra tion Company and.the city, which, contract comprehended divisions two and five of the proposed waterworks improvement, for an aggregate consideration of $150,150, and a certificate that such amount was in the treasury not appropriated to any other purpose had theretofore been filed. Prior thereto bonds of the city in the sum of $300,000 had been issued and sold, subsequent thereto bonds of the city in the aggregate amount of $295,000 were issued and sold, all for the purpose of constructing the waterworks plant, and it was provided by ordinance, authorizing the issuance thereof, that such funds should be disbursed for no other purpose. With the' consent and approval of the city that portion of the contract covering division number five was assigned to The John H. McGowan Company. No question is made relative to that transaction.
Said contract contained the f ollowing clause: ‘ ‘ The city reserves the right to increase or decrease the quantity of the work, or any part thereof, to the amount found necessary. No allowance will he made in case of increase for any sum above the rate of price bid, nor in case of decrease for any real or supposed damage or loss of profit occasioned by such diminution. The time fixed for the completion of the work will be proportionately increased or diminished. The city also reserves the right to change or modify the plans or specifications for any portion of the work, or change the location of reservoir, pumping station, filtration plant, etc., by notifying the contractor of its intention, and the contractor shall in such case follow the instructions of the engineer, and the contractor shall make no claim for damages or loss of profit, nor shall he claim for feiture of contract by reason of such changes. If the changes increase the amount of work or material, the contractor will be paid in proportion to the increase. If such changes decrease the quantity of work or material, a proportionate reduction shall be made from the contract price for the work.”
It was the claim of the company that in order to make operative the extension of the waterworks system certain changes were required, as ascertained during the progress of the work, involving the installation of various items of equipment in addition to those specified in the contract, and that they were installed by the company upon the written direction of the city’s engineer named in the contract, and in accordance with the instruction of said engineer as therein provided. The company’s claim for compensation therefor is detailed in causes of action Nos. 2, 3, 4, 5, 6 and 8. The primary issue presented to this court however grows out of the claim of the company set forth in causes of action Nos. 9,10 and 11. In accordance with the terms of the contract the city entered upon and used and operated the waterworks plant after the installation of the machinery and pumping equipment by the company, but prior to the acceptance thereof by the city, and the claim is made by the company, in its ninth cause of action, that in order to ascertain the modification of the high-service pumps necessary to meet certain changed operating conditions, as well as to ascertain the nature of the modification required in the low-service pumps and other machinery, it became necessary for the company to have engineering in vestigation, advice and instruction, and that because of the failure and neglect of the city to have such engineers on the work or otherwise accessible to the company to inspect and direct by instruction and orders the work being installed, and to give written authority for necessary deviations and changes, it became necessary for the company to employ and place on the job a consulting engineer. The company sought to recover the amount it claimed it had paid for such services. Such possession and operation of the plant by the city was pursuant to the following provisions of the contract: “The contractor will be held responsible for the entire work until completed and accepted by the engineer, and until he is formally released from his obligations by the city. He is required not to assign or sublet his contract without permission from the engineer, but must keep it in his name and control until completed and accepted, and, in case of his absence from the work, must have a duly qualified person to take care of it. This section is not to be construed to prevent the board from entering upon and using the whole or any portion of the work which may be in condition to use at any time previous to its final acceptance, and such privilege is hereby given. Such use is not to be taken as an acceptance by the board of the whole or any part of the materials furnished, or work performed under this contract.”
The 10th and 11th causes of action are based upon the claim that when the city entered upon and operated the plant under the privilege granted in the contract, it thereby agreed that it would protect, supervise, care for, repair and maintain the machin ery and pumping equipment and operate the same with adequate and sufficiently skilled labor for its safety, but that the city in operating the plant, in breach >of its agreement, and without fault on the part of the company, failed and neglected to protect, supervise, care for and maintain such machinery and pumping equipment, and failed to employ adequate and sufficiently-skilled labor to safely operate the same, and that because thereof, and in order to maintain the same in the condition in which it wTas installed so that it would be accepted by the engineer, the company was required to and did provide skilled labor to adequately supplement that furnished by the city for the safe operation of the machinery and pumping equipment, which from the time the city entered upon the operation of the plant until the acceptance thereof by the engineer was at an actual cost to the company of the sum of $11,883.17, $939.78 for repairs and $10,943.39 for labor, and from the last-named date, that is since the acceptance of the work by the engineer, and pending the final acceptance by the city and the discharge of the company, at an actual cost in the sum of $1,999.55, $341.07 being for repairs and $1,658.39 for labor.
IJpon the trial in the common pleas court special verdicts were returned by the jury, finding for the company on each of the causes of action in an amount therein stated, and judgment was entered upon such special verdicts. This judgment, upon proceeding in error to the court of appeals, was by that court affirmed as to all causes of action except Nos. 9, 10 and 11, as to which that court held the judgment was contrary to law except as to repair's furnished, and rendered judgment for plaintiff in the sum of $19,844.34. The ease was, upon motion, ordered certified to this court for review.
Messrs. Iiosea, Knight & Phares and Messrs. Miller & Searl, for plaintiff in error.
Mr. Sherrard M. Johnson, city solicitor; Mr. S. A. Shelton; Mr. William J. Meyer and Mr. E. G. Millar, for defendant in error.

Opinion:
Matthias, J.
The question now presented arose only out of causes of action nine, ten and eleven, in which the company seeks to recover damages from the city for its alleged failure to perform its implied contract with reference to the supervision and care of the waterworks plant, after the city, under the express provisions of its contract set out in the foregoing statement, had assumed operation of the plant or a portion thereof, and pending the acceptance of the same by the city. The company seeks to recover the amount it claims to have necessarily expended during such period for the service of an engineer to supervise changes, made necessary to secure proper operating conditions, and for labor and repairs furnished because of the failure of the city to have its engineer on the work giving orders, advice and instructions, and because it failed to supervise, care for and maintain said machinery and pumping equipment, and to employ adequate and sufficiently skilled labor to safely operate same. The company's claim is based upon its contention that the expenditures which it seeks to recover were made by reason of the city's failure in the respects stated, and in order that the plant be maintained in the condition as installed until accepted by the city.
It is quite clear that the employment of an engineer and of labor because of failure of the city to furnish proper engineering supervision and "adequate and sufficiently skilled labor" was not pursuant to or by reason of any express provision in the original contract. There is no reason for the contention that the city made any valid contract, or any contract, for such engineering supervision or additional labor. That is not claimed, and the company relies entirely upon the so-called implied contract of the city, arising from its action in operating while the plant was undergoing trial and test and before acceptance in accordance with the express terms of the contract. Yet considerable evidence, including correspondence between the parties, tending to indicate an agreement upon the part of some city officials to pay for certain of the items in controversy, was permitted to be introduced, which would have warranted a reversal of the judgment by the court of appeals on at least one of the causes of action. That court, however, found as a matter of law that the judgment on causes of action nine, ten and eleven, except to the extent above stated, "is contrary to law, solely because municipal liability cannot be founded upon implied terms of an expressed contract and the expressed terms of the contract in question do not give rise to the implications contended for by defendant in error." We are in harmony with the conclusion of the court of appeals in this respect.
Having reference to the ninth cause of action, that asserting a claim for compensation of an engineer whom the record discloses was employed by the company to ascertain the cause of and suggest a remedy for the failure of pumps installed by the company to perform their proper function, which fault was ascertained and corrected, the record amply supports the city's contention that this was done to meet the company's obligation under its contract; but if it be assumed that a service was thereby rendered to the city, which was not within the requirement of the company's contract, the suit to recover such compensation is not based upon the contract, but merely upon quantum meruit, and cannot be recovered. City of Wellston v. Morgan, 65 Ohio St., 219, and Mehurin & Son v. Stone, 37 Ohio St., 49, 55.
Having reference further to the tenth and eleventh causes of action, there is no express provision in the contract relative to the expense of operation of any portion of the plant which the city was, under its terms, permitted to use, pending acceptance. Presumably it would be at the city's expense, but there was no warrant for the company to volunteer to provide labor or materials for the benefit of the city, and it could not, for the reasons above stated, volunteer such service and maintain an action as upon quantum meruit.
The contract requires the contractor to care for the plant pending acceptance, "and, in case of his absence from the work, must have a duly qualified person to take care of it." We are unable to see how from the express provisions of the contract there arises any right or authority upon the part of the company to employ ' ' additional labor, ' ' claimed now to have been necessary to supplement the labor furnished by the city, or to procure supplies, etc., nec essary for the safe operation of the machinery and pumping equipment, and recover the cost thereof with an arbitrarily added ten per cent. No damage accrued to the plant, but the company anticipated that if the additional supervision, skilled labor and supplies were not provided, injury to the plant would result, and it continued to do so voluntarily and without any legal contract therefor.
For the reasons stated, we are of opinion that there was no right of recovery either as to the ninth, tenth or eleventh cause of action. The judgment of the court of appeals will therefore be affirmed.
Judgment affirmed.
Marshall, C. J., Hough, Bobinson, Jones and Clark, JJ., concur.
YCanamaker, J., took no part in the consideration or decision of the case.