Court Opinion

ID: 3888153
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:17:26.112368+00
Date Added: 2024-06-11T07:42:06.788461
License: Public Domain

This is an original action in this court instituted under the provisions of sections 2109-2112, Rev. Code 1919, against the state to recover $9,296.82, which the plaintiffs allege is the remainder due them and unpaid *Page 137 
for the grading of three and seven-tenths miles of highway and the construction of drainage structures thereon.
The material facts as disclosed in the complaint are that a contract was made and entered into between the plaintiffs and the state highway commission; that the contract executed by the parties recites that notice to contractors, proposal, and the plans and specifications were made a part of the contract; that in the notice inviting proposals, an item, and the one in question of "110,067 cubic yards excavation (unclassified)," is specified; that the blueprints of the project indicate the approximate amounts of common and loose rock or gravel, but no solid rock excavation; that prior to this letting the state highway commission had been letting contracts on a unit-price basis under the classification of common, loose rock, and solid rock excavations with exception of certain projects in the Black Hills; that a standard form of specifications was adopted and used under the contract without any provision of change for unclassified excavations; that the plaintiffs relying upon the blueprints, plans, and specifications, which purport to specify the nature of the materials to be excavated, submitted their proposal for the unclassified excavation computed upon the general average of the cost of common and loose rock excavations; that the plaintiffs to complete the contract were required to remove 22,487 cubic yards of loose rock and 2,390 cubic yards of solid rock; that the highway resident engineer in charge of the project was notified that the plans and specifications did not show the true nature of the materials to be excavated; that the resident engineer and the state highway engineer arbitrarily refused to make any adjustment, revision of the contract, or any provision for extra work or different classification; that the plaintiffs and the state highway commission believed and assumed at the time the contract was entered into that there would be no solid rock encountered; and that without an actual fraudulent intent on the part of the highway commission the plaintiffs were misled to their prejudice, which in justice and equity require that a recovery be had upon a quantum meruit for the reasonable value of the services rendered.
The plaintiffs describe themselves as engaged in a general contracting and highway building business and allege that they had entered into numerous contracts with the state highway commission, but had had no experience in the construction of highways in the *Page 138 
locality of the project here involved and had made no previous investigation, boring, or testing in the locality of this project; that it had never been the custom or practice among contractors to determine the nature of materials to be excavated; that the state highway commission had adjusted the compensation according to the nature of the work after its completion. It was in the light of these experiences that the plaintiffs submitted their proposal which states that they personally inspected the actual location of the work and understood the conditions under which the work was to be performed and that they waived all right to plead any misunderstanding regarding the location of the work or the conditions peculiar to the same. A provision of the specifications made a part of the contract and included in the allegations of the complaint provides that the estimate of excavation to be done under the contract as shown on the plans accompanying the proposal is "approximate and is given only as the basis of calculation for comparing bids, and awarding the contract. The State does not assume any responsibility that the quantities given shall obtain in the construction, and reserves the right to increase or diminish the quantities shown or to omit any of them as it deems necessary." A demurrer was interposed by the defendant, and the question for decision is whether the complaint states a cause of action.
Whether the highway commission owes a duty to prospective bidders with approximate accuracy to state the amount of different classes of material, if it attempt to state at all of what the strata to be excavated consist, and whether a bidder might rely thereon to the exclusion of other considerations, we need not consider.
The contract contains this provision: "The contractor shall perform extra work, for which there is no quantity and price included in the contract, whenever, to complete fully the work as contemplated, it is deemed necessary or desirable, and such extra work shall be done in accordance with the specifications therefor, or in the best workmanlike manner as directed. This extra work will be paid for at a unit price or lump sum to be agreed upon previously in writing by the contractor and the commission, or where such a price or sum cannot be agreed upon by both parties, or where this method of payment is impracticable, the commission may order the contractor to do such work on a `force account' basis." *Page 139 
If the plaintiffs were entitled to a separate classification of solid rock, no such unit was provided in the contract and no price was fixed; but there was no agreement entered into in writing as required by the contract and it does not appear from the pleadings that the highway commission ordered the excavation of solid rock upon a force account by reason of the failure of the parties to agree upon an amount to be paid for extra work.
The good faith of the members of the highway commission in furnishing the estimate is not questioned, and the alleged mistake, the plaintiffs concede, was unintentional and that the parties to the contract were ignorant of the existence of the solid rock; but plaintiffs contend, and the action is founded upon the theory, that they, with knowledge that under the law the contract could not be rescinded and damages recovered from the state, had no remedy other than to complete the project and bring an action for cancellation or rescission of the contract and to recover upon a quantum meruit.
The statute under which the contract was authorized (section 57, chap. 333, Laws of 1919), in part, reads as follows: "When it shall have been determined that the necessary funds have been made available for any highway improvement on the Trunk Highway System, and when the plans and specifications have been finally prepared by the Highway Commission, the work contemplated shall be advertised for bids in a manner determined by the Highway Commission and shall be let to the lowest competent and responsible bidder unless such bid shall be deemed to be unreasonable. Contracts for all road and bridge construction performed on the Trunk Highway System shall be between the state and the contractor and shall be approved by the Highway Commission, and payments from all funds made available therefor shall be made from time to time by the State Treasurer upon estimates approved by the Highway Engineer."
The plaintiffs are chargeable with knowledge of the provisions of this statute and are bound by its terms. A contract was entered into as the statute contemplates, and it is not contended that the mistake arises from the failure of the contract to express the actual agreement of the parties thereto. The pleadings would not justify a recovery on such basis. It is not sufficient to entitle plaintiffs to *Page 140 
recover by reason of such mistake and upon contract merely to show that a mutual mistake was made and that the plaintiffs relied upon it to their injury. It would be essential to establish in addition to the mutuality of mistake that the minds of the contracting parties met, that they agreed upon a certain thing which was to have been embodied in their contract, and that by mistake it was either fraudulently or inadvertently omitted or inadequately expressed. Ariss-Knapp Co. v. Sonoma County, 73 Cal. App. 262,238 P. 752. But assuming that the plaintiffs have a right in a case in equity to apply for a rescission of the contract and for relief from performing its terms and that there may be a recovery on an implied contract against the state, I am of the opinion that the allegations are insufficient to warrant recovery. The alleged mistake as to the existence of solid rock and the difference in the requirements of the contract as understood by the plaintiffs and the interpretation of its provisions by the state became known to the plaintiffs during the progress of the work. They may then have been entitled to repudiate the contract. If effect is not given to what may be the intent and purpose of the contract to make provision for determining compensation for extra work by reason of all unforeseen difficulties, it does not follow that the plaintiffs could proceed with the excavation with full knowledge of the facts and recover upon quantum meruiut. This case is distinguishable from Long et al v. Inhabitants of Athol,196 Mass. 497, 82 N.E. 665, 17 L.R.A. (N.S.) 96, which is relied upon by the plaintiffs. It there appears that contractors were induced to enter into a contract for public work by mutual mistake as to the amount to be done and that plaintiffs upon ascertaining the real facts refused to proceed further with their contract and instituted an action for the cancellation of the contract for mutual mistake and for recovery upon a quantum meruit for the work that had been performed. The plaintiffs did not proceed to a completion of the work, and the court held that in the absence of laches on their part they were entitled to recover.
If a party desires to rescind on the ground of mistake, he must, upon the discovery of the facts, promptly announce his purpose and adhere thereto. Section 906, Rev. Code 1919. Though a contractor may be entitled to a rescission of a contract on the ground of a mistake, by completing the contract with full *Page 141 
knowledge of the facts, he will be presumed to have waived the infirmity and elected to proceed under the contract. Nounnan v. Sutter Land Co., 81 Cal. 1, 22 P. 515, 6 L.R.A. 219; Glasgow and S.W.R. Co. v. Boyd (1915) A.C. (Eng.) 526; City of Boston v. McGovern (C.C.A. 1st) 292 F. 705; Winston v. City of Pittsfield,221 Mass. 356, 108 N.E. 1038.
RUDOLPH, P.J., concurs in this opinion.