Court Opinion

ID: 3304631
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:20:01.804696+00
Date Added: 2024-06-11T12:28:01.281541
License: Public Domain

I dissent. It is not possible under the evidence to escape the conclusion that the plaintiff did not substantially perform the terms of its contract. The evidence shows an almost uniform and utter disregard by plaintiff's employees of one or the other of two plain and unambiguous provisions of the contract, absolutely *Page 433 
essential to protection against excessive leakage of sewer pipe laid below the water-level, and inserted for the purpose of such protection, the result being that the work, as turned over to defendant, could not have served the purpose for which it was intended.
So far as the claim that the certificates of the engineer constituted an estoppel is concerned, the question presented is a simple one. It may be assumed, as was held by the trial court and the district court of appeal, that the engineer was by the terms of the contract made the arbiter whose decision upon the question of performance should bind the respective parties. But it is recognized by all the authorities, and is admitted by learned counsel for plaintiff, that such a decision is conclusive only in the absence of a showing of fraud, collusion, or mistake of fact. Where it is shown that the decision was obtained through fraud, collusion, or such mistake of fact as is ground for relief in equity, the effect of the approval is overcome. (3 Page on Contracts, sec. 1469.) The trial court was amply warranted in concluding that Mr. Manson had given these certificates in absolute ignorance of the manner in which the work certified had been done, a matter as to which plaintiff must be held to have had full knowledge, and upon the assumption, warranted under the circumstances, that plaintiff had in doing it complied with these all-important provisions in the specifications.
As to the claim that the city is estopped from denying that the work was performed in accordance with the contract by reason of the fact that it was done under the supervision of a superintendent, an assistant engineer to give the lines and grades, and inspectors, all appointed by it for the purpose, who failed to make objection thereto, and allowed plaintiff by their silence to believe that it was satisfactory until it was too late to remedy it except at great expense: There is a line of authorities holding that where it is the evident intention of the contract that the work shall be inspected as it progresses, and unsatisfactory material or labor rejected at once, and the owner has a representative on the ground to oversee the work as it is done and to guard against defective material or labor, defects which were observed by the owner's representative, or which would have been discovered by him by reasonable inspection, are waived by the owner, in the absence of fraud on *Page 434 
the part of the contractor. (See Schliess v. Grand Rapids,131 Mich. 52, [90 N.W. 700]; Wildey v. Fractional School District,25 Mich. 419; Laycock v. Moon, 97 Wis. 59, [72 N.W. 372]; Ashlandetc. Co. v. Shores, 105 Wis. 122, [81 N.W. 136]. It has been said that it is a reasonable and just doctrine that in such cases the loss should fall on the owner, and not be shifted to the builder who may have been lured into the belief that his work and material were satisfactory until too late to remedy defects therein without serious loss, and that any considerable delay in manifesting disapproval will operate, by equitable considerations, as an acceptance, except as to defects not discoverable by reasonable attention to the duties of inspection.(Ashland etc. Co. v. Shores, 105 Wis. 122, [81 N.W. 136].) The rule is, of course, based entirely on equitable considerations, and we have not found any case where it has been applied to such a substantial departure by the contractor from plain and unambiguous terms of his contract, as is found to exist here, a departure which must be held to have been knowingly made, and which, as the contractor must have known, would necessarily have the effect of materially impairing the efficacy of the new sewer system of which its work was an essential and important part. In the case at bar, it was, of course, the duty of the superintendent and inspectors employed by the city, to notice such failure to comply with the specifications on the part of the contractor as were obvious, or could be ascertained by the exercise of reasonable care on their part, and to require such compliance, or at least to bring the matter to the attention of the engineer, Mr. Manson. But if through ignorance or carelessness they failed to perform their duty in this regard, plaintiff would not be warranted in assuming from their silence that the city was willing to waive a plain requirement so important to the success of the work. It knew that the inspectors were there simply for the purpose of requiring conformity on its part to the terms of the contract, and were without authority to waive any material provisions thereof; it knew that it was essential to the protection of the pipe against excessive leakage that the cement mortar put on the joints should be protected against water until it had time to set, and it knew that for this purpose the contract imposed upon it the obligation of keeping the trenches entirely clear of water until the mortar on the pipes therein had set. *Page 435 
Unless we are to hold that the knowledge of its representatives in charge of the work as to the manner in which the work was being done, was not the knowledge of plaintiff itself, which, of course, cannot be held, the evidence was sufficient to support the conclusion that plaintiff knew that this substantial provision as to water in the trenches was being almost constantly disregarded by its agents, and that the work being done could not be satisfactory to the engineer in charge when ultimately put to a proper test, and the failure to comply actually discovered by him. As to such a failure under such circumstances, no equitable consideration exists in favor of the contractor which will serve as the basis for an application of the doctrine as to waiver and estoppel. (See, generally, Wait on Engineering and Architectural Jurisprudence, secs. 388, 446, 467, 468.)
It should be stated in this connection that there was sufficient support in the evidence for the conclusion that the inspectors and superintendent for the city, actually supervising the doing of the work, could not, by the exercise of all reasonable care, have known of the extent to which the provision of the specifications as to keeping the trenches clear of water was violated, inasmuch as the evidence tended to show that the failure to operate the pump and the consequent flooding of the trenches, generally occurred during the night hours, when they were off duty, the result being that new work on which the mortar had not set, and which had in some cases been already partially covered with earth, was washed to such an extent as to remove the cement therefrom.