Court Opinion

ID: 8758558
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:57:09.231564+00
Date Added: 2024-06-11T17:01:25.010261
License: Public Domain

SANBORN, Circuit Judge
(dissenting). The conclusions of the majority that the master erroneously disregarded the provision of the contract that “no classification whatever will be allowed in borrow pits, unless such borrow pits are selected and approved by the chief engineer,” and that he classified a large amount of material as “hard pan” and loose rock which the chief engineer had the right in his discretion to designate loose earth, seem to me to be correct; but I am unable to assent to the other views expressed in the opinion or to the general result of the decision of the court.
*252The rule is that the award of an umpire is sustained by the presumption of his honesty and good faith, and that this presumption must prevail unless it is overcome by clear and convincing evidence of his fraudulent acts or intent in making his award, or of mistakes so gross that they imply bad faith. But in this case this presumption is met and overcome in this court by the equally persuasive presumption that the finding of the master and of the trial court that the estimates of the chief engineer were made in bad faith, with intent to defraud the contractors, was correct. Stearns-Roger Mfg. Co. v. Brown, 52 C. C. A. 559, 563, 114 Fed. 939, 943; Mann v. Bank, 86 Fed. 51, 53, 29 C. C. A. 547, 549; Trust Co. v. McClure, 78 Fed. 209, 210, 24 C. C. A. 64, 65. The evidence in this record has forced 'my mind to the conclusion, as it did the minds of the master and of the trial court,, that the chief engineer intentionally estimated the amounts due the contractors much less than he knew they were entitled to receive, and that they ought to recover in this suit the amounts found by the master and the court below, less the increase which they allowed on account of the borrow pits. The case is, however, decided by the conclusions which the majority of the court have reached, and no digest or review of the evidence would be useful at this time. Suffice it to say that these facts, which are established by the record, persuade me that the chief engineer did not act in good faith:
It is conceded by the witnesses for all the parties that 90 to 95 per cent, of the slide material was originally solid rock in place, and the concession is also made that the material in the measured prism within the stakes was properly measured in excavation and allowed as solid rock, although a large portion of it was thrown over the precipice when blasts were fired and required no farther handling. The contract provided that:
“In rock excavations all projections toward the center line of track beyond the plane of the measured prism and all material on slopes loose or liable to fall shall be removed.”
If the rock which slid from above the prism had remained overhanging and liable to fall, the contractors would have been required by this provision of the contract to blast it out and to remove it; and if they had done so they would have earned payment for rock measured in excavation. The natural interpretation of the provision appears to me to be that they were entitled to the same payment, although the rock slid from its place upon the removal of the prism. For a long time after large quantities of this rock had descended upon and beyond the prism the chief engineer refused to allow any estimates whatever on account of it, and for a still longer time he classified it as loose earth, and in his final estimate changed his classification to loose rock, but never allowed any substantial part of it as solid rock. Complaint was made t.o him as early as April that this slide material was not carried into pay quantities in the approximate estimates. He absolutely refused in that month to carry any part of it into these estimates, except a small portion in certain borrow pits which he designated. In other words, he refused to give to the contractors approximate estimates to *253which they were clearly entitled on any basis of classification. _ In May, by his direction, his special deputy, Hogue, carefully examined this material, and reported that there were about 67,000 yards of it already down, and that there would be 13,000 yards more in a few days, while the resident engineers’ estimate, which conditioned the amount to be received by the contractors, disclosed only about 20,000 yards. Nevertheless, the chief engineer, in the face of repeated complaints and of Hogue’s report, made no correction of this estimate, but permitted it to stand unchanged through May, June, and July, so that this large quantity of material did hot appear in the approximate estimates until August. In the month of May he directed his resident engineers to classify all slide material as loose earth, although he must have known that the percentage of loose earth in it was very small, and that it was nearly all either solid rock or loose rock. Indeed, according to his own final estimate, he held back from these contractors about $93,-•000 which they were entitled to receive on approximate estimates until his final estimate was completed. When he made his final estimate, lie changed the classification of the slide material from loose earth, for which the contractors were entitled to receive 13 cents a cubic yard, to loose rock, for which they were entitled to receive 33 cents per •cubic yard, but still refused to classify it as solid rock, for which they were entitled to receive 60 cents per cubic yard. The evidence is ■conclusive that the chief engineer knew that this slide material was not loose earth in April, May, and June. His instructions to his engineers, in the face of this knowledge, to carry this material as loose earth at 13 cents a yard, when he knew that it was either loose rock, worth 33 cents a yard, or solid rock, worth 60 cents a yard, was necessarily a great detriment to the contractorsand it is very persuasive evidence •of the bad faith of the engineer.
There are many other facts which this record discloses that appear to me to point in the same direction. When all the facts which the evidence establishes are considered together, they seem to me inconsistent with the exercise of good faith by the engineer, and ample to sustain the finding of the master and of the court below that he intentionally reported the amounts due the contractors in both his approximate and final estimates much less than he knew they were •entitled to receive; and this conclusion leads directly to the result that the findings of the master and of the court below should be sustained in all things, except in the allowance of the increase on account of the •material taken from the borrow pits, which they gave under a mistaken view of the terms and effect of the contract in this regard.