Opinion ID: 2317903
Heading Depth: 1
Heading Rank: 11

Heading: Earth Embankment Claim.

Text: Included in the first count of the complaint was Terminal's claim for earth embankment work that is, a disputed portion thereof being an amount of additional fill used to complete embankment to the required level as a result of subsidence of the original surface of the ground upon which the embankments were constructed. The dispute, and the questions involved, gravitate to the construction of the pertinent contract terms. For instance, Mr. Ivan L. Bogert testified that there was no dispute as to whether there had been a sinking of the original ground, and that tests ordered by the engineer confirmed this, these tests being paid for by the authority. The engineer had denied that they (Terminal) were entitled to payment because of that (the subsidence of the original surface). The complaint, the pretrial order and the trial of the plaintiff's case proceeded on the theory that there was no ambiguity in the contract. The defense appears to have taken a like course. Terminal had called a witness who testified that the original surface was organic bog, that the whole embankment sank because the subsurface pushed out. Testimony of witnesses for the authority to the effect that the subsidence was due to Terminal's own conduct, raised a jury question as to the cause of sinking of the embankment. The contract specifically referred to settlement of embankments in the following terms in the Detailed Specifications: Sect. 3.5. Settlement. The Contractor shall provide additional material as required to compensate for settlement of embankments. Sec. 3.6. Measurement. The quantity to be measured for payment under Item 3 shall be the volume of compacted embankment between the original surface and the payment lines shown on the drawings ordered. No allowance will be made for materials in excess of the requirements, or for material which has settled. Surplus earth from excavations utilized to fill over pipe lines to an ordered elevation above the original ground surface, and around manholes and meter chambers on the sewer lines, and at other locations designated by the Engineer, where no compacting by trucks or rollers is required, will not be measured for payment under Item 3. (Emphasis supplied) It developed at the trial that the crucial issue on this claim was whether measurement for payment purposes ran from the pre-work level of the original surface, or from the level at which the original surface finally rested. Mr. Lincoln, as a witness for the defendant authority, testified (over Terminal's objection to the effect that the contract language was clear) that it was proper from an engineering standpoint to say that where the subsoil had settled there had been settlement of the embankment. In rebuttal Terminal called an expert witness who testified that settlement of an embankment that has been built, in engineering terminology, is consolidation due to compressive forces of working over the surface, the way the material itself, where the particles become more closely engrained in settlement, where compaction results, and that where the subsurface settles, carrying the embankment with it, such is not a settlement of the embankment. The authority objected to this line of questioning as improper rebuttal and on the ground that the construction of the contract terms was a matter for the court. The trial court overruled these objections, and we think, properly so. In this respect the authority on this appeal invokes the doctrine that the rebuttal opinion evidence was inadmissible because it constituted a reliance on custom and was not so pleaded. Johnson v. Hoffman, 7 N.J. 123, 133 (1951). In the Johnson case, supra, we held that the requirement for pleading custom is particularly true where the custom is relied on to aid in the interpretation of the contract or to explain the terms of the contract, where permitted under the parol evidence rule. Ibid. It is not necessary to decide whether the testimony as to engineering terms would ordinarily be excluded in the absence of pleading the included matter as a custom. The record here patently discloses that the testimony of Terminal's witness in this respect was rebuttal to direct testimony of a witness of the authority. In this light also, even if error existed, it may not be claimed as prejudicial by the authority, inasmuch as the authority itself created the trial course. On the merits of this item of claim, the matter of construction is a question ordinarily exclusively for the trial court. The following excerpt from Mr. Justice Heher's opinion in Atlantic Northern Airlines, Inc., v. Schwimmer, 12 N.J. 293, 301-302 (1953), is clearly pertinent herein: Evidence of the circumstances is always admissible in aid of the interpretation of an integrated agreement. This is so even when the contract on its face is free from ambiguity. The polestar of construction is the intention of the parties to the contract as revealed by the language used, taken as an entirety; and, in the quest for the intention, the situation of the parties, the attendant circumstances, and the objects they were thereby striving to attain are necessarily to be regarded. The admission of evidence of extrinsic facts is not for the purpose of changing the writing, but to secure light by which to measure its actual significance. Such evidence is adducible only for the purpose of interpreting the writing  not for the purpose of modifying or enlarging or curtailing its terms, but to aid in determining the meaning of what has been said. So far as the evidence tends to show, not the meaning of the writing, but an intention wholly unexpressed in the writing, it is irrelevant. The judicial interpretive function is to consider what was written in the context of the circumstances under which it was written, and accord to the language a rational meaning in keeping with the expressed general purpose. Casriel v. King, 2 N.J. 45 (1949). Application of the principles hereinabove quoted from the Atlantic Northern Airlines, Inc., case, supra, calls for a determination by the court that the subsidence of the original surface was contemplated by the contracting parties (due to the nature of the ground) and that the use of the word original established the liability of the authority to pay for fill required to compensate for such subsidence. Subsidence is a movement of the soil from its natural, i.e., original, position by shifting, falling, slipping, seeping or oozing. Levi v. Schwartz, 201 Md. 575, 95 A. 2 d 322, 326, 36 A.L.R. 2 d 1241 ( Ct. App. 1953). Cf. 4 Restatement, Torts, sec. 817. Such a condition was demonstrated without contradiction in the present case. The use of the word compacted in the contract clauses in question indicates the nature of settlement which the contractor was to rectify at his own expense. However, explanation of the contract and determination of amounts for which Terminal was to be paid thereunder, was delegated by the contract to the engineer. The action proceeded upon the constructive fraud theory as hereinbefore defined. The crux of this issue is, therefore, whether the engineer acted arbitrarily in this respect. Where such clauses exist in contracts, the contractor is bound by the engineer's decision unless it appears to have been arbitrary or made in bad faith. Benjamin Foster Co. v. Commonwealth, 318 Mass. 190, 61 N.E. 2 d 147, 151, 166 A.L.R. 925 ( Sup. Jud. Ct. 1945). The engineer as a matter of law  by virtue of construction of the contract  on this phase of the case occupied an independent status of an arbiter, to explain the contract. The trial court should have so instructed the jury, but no prejudice to the authority appears to exist from the submission of the issue to the jury. The principles of constructive fraud, for that is the category in which our courts of last resort have considered the effect of completion certificates which are forms of engineer control, apply to the engineer's conduct as an arbiter as hereinbefore discussed. There is evidence in the case from which it might be inferred that the engineer acted arbitrarily, independent of the testimony relative to engineering use of the term settlement. In this sense, evidence of constructive fraud and willful breach of contract was present in sufficient quantity and quality to support the submission of the embankment claim to the jury. We find no error prejudicial to the substantial rights of the authority therein. In summary, we find that the Superior Court, Appellate Division, erred in holding that the embankment claim was improperly submitted to the jury.