Page images
PDF
EPUB

method that is wasteful and extravagant be-, The evidence shows that some other royalty cause such method was customary.

Plaintiffs cited and relied upon Scott v. Steinberger, 113 Kan. 67, 213 Pac. 646. The question there was the price to be paid for gas, whether the lessor should be paid on the basis of the price of gas at the end of the pipe line through which it was marketed, or should he be paid upon the price of gas at the lease, and it was held:

"That the lessor was entitled to receive his

share as measured into a pipe line which connected with the wells at the price or value of gas at that place and not the price or value that was obtained for it at some distant place on the pipe line to which it was transported and sold." Syl.

There is nothing in this holding which conflicts with the conclusion here reached. The oil of plaintiffs is measured in the tanks on the leases, and samples are taken from which is determined the percentage of oil and water in the total quantity of fluid turned into the pipe line. So the oil is measured on the leases, and plaintiffs are paid in accordance with that measure.

Plaintiffs argue that the method used places them at the mercy of defendant; that defendant's agents and employees turn the oil from the tank, take the measurements, take the sample, and at defendant's laboratory, by a process with which plaintiffs are not familiar, they determine the amount of oil to be paid for. It is pertinent to ask who would do this if defendant did not? The lease is of no value to either party, unless it is operated. By the lease the defendant is required to operate it. The plaintiffs have no liability in that regard; plaintiffs are only indirectly concerned with method of operation; they are primarily concerned with the result obtained. So long as the method used by defendant is fair and efficient, and by its use the plaintiffs receive and are paid for one-eighth of all the oil produced and saved from the leased premises, they have nothing to complain about. Colgan v. Oil Co., 194 Pa. 234, 45 A. 119, 75 Am. St. Rep. 695; Locke v. Russell, 75 W. Va. 602, 84 S. E. 948; Grass v. Development Co., 75 W. Va. 719, 84 S. E. 750, L. R. A. 1915E, 1057.

owners do the same thing. By the method used by defendant the court finds that the taking of the samples and analyzing them to determine the amount of oil to be paid for must be done with care in order to be accurate, and obviously that is true, but the evidence is, and the court finds, that this work was being done with care by defendant. Now, if the plaintiffs desire to know with certainty the amount of oil they should be paid for, there is no reason why they could not have an employee take samples at the same time samples were taken by defendant and have them analyzed by some one employed by them, and they should be permitted to do that if they desire to do so. But there is no complaint along this line. Plaintiffs have never been denied the right to have their employee present at the time samples were taken and the oil turned into the tanks; in fact, the evidence shows that he was present at such times when plaintiffs desired him to be. And he should be permitted to take samples at the same time and under the same circumstances as those taken by defendant, or, if there is likely to be a difference between the two samples taken, to have a part of the sample taken by defendant and then to have that examined. But these rights have not been denied, and they are not complained of by plaintiffs. But there is nothing in the lease that would require defendant to pay plaintiffs' employee for doing such work. Defendant is required to treat the plaintiffs fairly and to pay them for their full one-eighth of the oil produced and saved from the leased premises, and when it has done that its obligation is fulfilled.

We have examined all of the authorities cited by counsel on both sides. There is nothing in any of them contrary to the conclusions here reached. It will not be necessary to make a more extended reference to them, for in its final analysis this case gets down to this proposition: When a plaintiff is defeated at the trial upon all the material allegations of his petition, and it is clear he has sustained no injury, the defendant should not be put to great expense because plaintiff entertains a fear that possibly he might be injured in the future. When he sustains such The evidence shows that even prior to the injury, if he does, the courts will give him use of this method by defendant that plain-relief. tiff's employed a man to watch and check the work of the gauger of the purchasing company and report to them, in order that they might have information of their own as to the amount of oil produced from the leases.

The judgment of the court below will be reversed, with directions to sustain defendant's motion for judgment in its favor upon the findings.

All the Justices concurring.

(230 P.)

ly justified in paying, court will enjoin city from WADE et al. v. CITY OF TACOMA et al. paying contractor the excess, leaving such ex

[blocks in formation]

1. Fraud 52-Widest latitude allowed to support allegations of fraud.

The widest latitude should be permitted in the introduction of evidence to support allegations of fraud.

2. Appeal and error 992-Supreme Court cannot interfere with trial court's judgment that proof offered to impeach public record is insufficient.

cess to be disposed of, as law may direct, after all legal demands are satisfied.

Holcomb, Fullerton, Parker, and Mitchell, JJ., dissenting.

En Banc.

Appeal from Superior Court, Pierce County; Clifford, Judge.

Suit by Cora E. Wade and others against City of Tacoma and another. From a judgment dismissing action, plaintiffs appeal. Reversed, with directions.

Burkey, O'Brien & Burkey, E. N. EisenWhere, in view of rule that every intend-hower, and B. W. Coiner, all of Tacoma, ment must be indulged to support public rec- for appellants. ord, there might reasonably be difference of opinion as to whether rejected proof offered by appellants would have been sufficient to impeach the record, Supreme Court could not interfere with trial court's judgment, if it had admitted the offered proof that it was insufficient to impeach the record.

3. Municipal corporations 370-When special assessment fails, city may not pay cost of work from general fund.

When special assessment has failed, city may not assume and pay cost of work from general fund.

4. Municipal corporations 360 (1)-Contract for paving held to obligate contractor to ascertain for himself cost of completing contract.

Contract for paving improvement by its terms held to obligate contractor to ascertain for himself the amount of labor and material required to complete contract.

5. Municipal corporations 360(1)-City held not empowered to pay contractor excess over estimated cost.

Where contractor was under his paving

contract bound to ascertain for himself the amount of labor and material required to complete contract, but failed to do so, city acting as agent of property owners could not at their expense relieve him by paying excess over estimated cost under guise of extras, when in fact whole work was fully covered by contract.

6. Municipal corporations 493 (6) - Court held powerless to set aside assessment roll confirmed pursuant to statute, and no appeal

taken.

In view of Laws 1911, p. 455, § 23, court could not set aside assessment roll, where statutory proceedings were followed in confirming it, and no appeal was taken therefrom.

7. Municipal corporations 995 (1)-City will be enjoined from paying contractor's expenses incurred in excess of his estimate, where city is not legally justified in paying such ex

cess.

Where court cannot by reason of Laws 1911, p. 455, § 23, set aside assessment roll which had been made large enough to pay expenditures incurred by a contractor, in excess of estimated cost, which excess city was not legal

E. K. Murray, Percy P. Brush, Lorenzo Dow, and William H. Pratt, all of Tacoma, for respondents.

TOLMAN, J. This appeal is by a number of interested property owners seeking reversal of a judgment dismissing their ac tion to enjoin the city of Tacoma from paying to the contractor a sum in excess of the contract price for the making of certain street improvements.

On September 13, 1922, the city council passed a resolution to widen the pavement then existing on St. Helens avenue in that city for a distance of three blocks, and to resurface the whole with asphaltic concrete to a depth of approximately two inches, for the construction of a concrete retaining wall along a designated portion of the lower side of the street, and the removal and replacing of ornamental lamps. Prior to the ordering of the improvement, after the initiatory resolution passed by the city council, a preliminary estimate of the cost was made, of which several property owners were notified. This estimated cost was $30,327.44, which included estimated engineering exPlans and specifications penses of $3,500. were prepared by the city engineer for the improvement, which were duly adopted, advertisements for proposals for bids were made, and, upon receipt of bids, a contract was let to the respondent Torkelson on a lump sum bid, with units separately priced

pursuant to the call for bids for the computation of all extras and deductions, to complete the entire improvement for the sum of $29,480. The contract called for the completion of the work according to the plans and specifications prepared by the city engineer, which work included the widening and resurfacing of the street, and "doing all other necessary work to bring the finished surface to a proper grade and crown"; construction of Portland cement concrete retaining wall and filling in back of the same, "the excavation for all walls to be carried down to a depth satisfactory to the commissioner of public works or his representative." The exact

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

location of the wall was designated. The contract also called for the removal of street lamps at the expense of the contractor.

order to make legal, if possible, the additional payment. Upon the trial the court below refused to permit a witness named Warter, who had contemplated bidding for the contract, to testify as to a difference in the specifications furnished to him by the engineering department upon which to bid from the specifications attached to the contract

The contractor completed the work, and at the conclusion thereof an assessment roll was prepared for a sum total of $39,459.70. This included the contract price of $29,480, to which had been added so-called extras ordered and allowed by the city engineer with Torkelson. The court also refused to and the commissioner of public works, amounting to $12,175.45, from the total of which was subtracted $737.75 as the value of work omitted, and an excess of $1,458.90 on the engineering estimate which was originally $3,500

A time was set for hearing on the confirmation of this assessment roll. Notice of the time and place of such hearing was duly published in the city official paper, which is a paper of general but not extensive circulation, but that notice the appellants claim never to have seen. Nothing was stated in the notice as to any increase in the roll over the original estimate or the contract price. None of the property owners had any actual notice of the hearing on the assessment roll or of the increase over the contract price or the original estimate.

permit the city comptroller to testify that no previous or subsequent contract had ever been entered into by the city containing the interlineations which appear in the specifications attached to the contract in question. The witness Warter was not permitted to testify that he called the attention of the engineering department of the city, prior to the opening of the bids, to the fact that the estimates were insufficient and the plans defective. Cross-examination of the city engineer was not permitted as to the reasons why the specifications in this particular instance contained interlineations not found in any other specifications. The rulings of the court above indicated, together with the refusal to enter judgment for the appellants as prayed for, constitute the errors claimed on this appeal.

At the time the roll was confirmed, none In summing up the case, the trial judge of the property owners filed any objections or stated that the evidence did not show any appeared, and none of the city commissioners, actual fraud, and that what would constiexcept the commissioner of public works un- tute constructive fraud under the circumder whose direction the roll had been pre- stances might be a matter of dispute which pared, had knowledge that the roll exceeded he would not go into; that what impressed the original estimate or the contract price. him was that under the proof the contracThe mayor and certain councilmen admitted tor would probably have been largely the losthat they would not have confirmed the roller had be been compelled to receive only the had the council known the facts, and the com- contract price, and, after some further obmissioner of public works admitted that he servations, the trial court concluded that had not sufficiently called the attention of the he could find no equity on the showing made mayor and the council to the fact that the by the appellants. assessment roll exceeded the original estimate or the contract price. The roll was, however, at all times on file in the office of the city clerk. It was before the city council at the time of its confirmation, and immediately after the confirmation the property owners were notified by postcard of the actual amount assessed against their properties. Thereupon various owners appeared before the council and asked relief. The council, for the first time being informed of the facts, referred the matter to the city attorney to ascertain if its action could be rescinded. The city attorney, fearing that such an attempt would involve the city in litigation with the contractor, advised against a rescission, and no further action was taken by the city council.

The records shows, and it is admitted, that the engineering department of the city made a gross mistake in the estimate. It is contended that this mistake was not discovered until the contract had been let, and the contractor had entered upon the premises and the work. It seems possible, therefore, that, in order to rectify this mistake and justify the additional payments necessary to make the contractor whole, the specifications were then altered by adding with pen and ink the four words "without extra compensation therefor," which will be hereinafter further referred to.

[1, 2] When fraud is alleged, the widest latitude should be permitted in the introduction of evidence, and we think the trial court should have received the offered testimony; This action was then commenced to en- but even so, since every intendment must join the payment to the contractor of any be indulged in support of a public record, sum in excess of that which he was entitled there might reasonably be differences of opinto receive under the terms of his contract, ion as to whether, if the appellants had been and to cancel the assessment roll. By trial permitted to prove all they offered to prove, amendment it was also alleged that, after that would have been sufficient to impeach bids were invited, the specifications were the record, and had the trial court admitted

(230 P.)

could not have interfered. We therefore pass | timates of the engineet as to leFor and mathis question without further comment.

[3-5] The main question is as to the power of the city in the premises. The contract provides:

"Bidders must examine and judge for themselves as to the location and character of the proposed improvement, nature of the material to be excavated," etc. The engineer's estimates are figured net; no allowances are made for waste and breakage of materials. The contractor assumes all risk for variance in any computation of amounts or quantities necessary to complete the work required by these specifications.

terial required, must not blind us to the law,
or lead to the adoption of a rule, which in
this particular case might relieve from an
honest mistake, but in the future might per-
mit dishonesty and fraud to wax fat at the
expense of innocent and helpless property
owners. When a special assessment has
failed, the city may not assume and pay
the cost of the work from the general fund
(Pratt v. Seattle, 111 Wash. 104, 189 P.
565); and on principle and in reason it
would seem that, even though the mistake
be its own, the city cannot, in such a case
as this, relieve the contractor at the expense
The reasoning in
of the property owners.
Paul v. Seattle, 40 Wash. 294, 82 P. 601;
Malette v. Spokane, 68 Wash. 578, 123 P.
1005, Ann. Cas. 1913E, 986; and McHugh
v. Tacoma, 76 Wash. 127, 135 P. 1011, lend
support to this position.

"All material and workmanship used in this improvement shall be in accordance with the following detailed specifications, and the accompanying diagram of the district and plans, which are hereby made a part of these specifications. The arrangement of walks, curbs, and minor details are subject to slight changes or alterations as the commissioner of public works may require, according to instructions furnished or delivered before the beginning of or during the progress of the work. No work or material not fully described on the said diagram or specifications shall be furnished without detailed plans or instructions from the commissioner of public works, provided, however, that no change in the work shall aggregate in extra cost, as estimated by the city engineer, throughout the entire district, an amount exceeding that bid by the contractor upon the work. The intent and purpose of this clause is to permit changes to be made in minor details to conform to the necessities that may arise or become evident as the work progresses, such as varying positions of walks, etc., but not to make any changes in the general design, nor to add to the estimated expense to the contractor in the aggregate, without extra compensation therefor." (The italicized words being those inter-ed by the contract. lined with a pen.)

When these provisions are read together, it seems to us their meaning is too plain to call for construction. The wording of the specifications and their manifest intent is that the bidder, who afterwards becomes the contractor, must examine and judge for himself as to the character and nature of the work and the labor and material required to complete the contract; that the engineer's estimates are no more than a mere guide, and the bidder must for himself determine as to their correctness, and, if he ac

cepts them unchecked and unverified, he does so at his peril. Moreover, paragraph 31 of the specifications, which contains the interlined words "without extra compensation therefor," provides for the increase of pay only for changes in plans and specifications in other than minor details, and here there were no changes in either plans or specifications, either minor or major, and the work, and all of the work was done strictly under the plans and specifications as first written and as embodied in the contract. Sympathy for the contractor, who in the face of these provisions relies upon the es

A contractor, under the terms of such a contract as this, is bound to ascertain for himself the amount of labor and material required to complete the contract (Hart, v. City of New York, 201 N. Y. 45, 94 N. E. 219; Dunn v. City of New York, 205 N. Y. 342, 98 N. E. 495; Winston v. City of Pittsfield, 221 Mass. 356, 108 N. E. 1038; Blackstaff Engineering Co. v. Commissioners of Sewerage, 147 Ky. 629, 145 S. W. 152; Stuart v. Cambridge, 125 Mass. 102; Molloy v. Village of Briarcliff Manor, 129 N. Y. S. 929), and, having failed to do so, the city acting as the agent of the property owners, has no power at their expense to relieve him by paying the excess over the estimated cost under the guise of extras, when in fact the whole work was fully embraced and cover

[6, 7] The statutory proceedings were followed in the matter of the confirmation of the assessment roll, and no appeal was taken therefrom. In mandatory terms, the statute provides that the failure to make objections in the manner prescribed and within the time fixed creates a conclusive presumption of the waiver of all objections, and by section 23 of chapter 98, Laws of 1911, it is provided:

"Whenever any assessment roll for local improvements shall have been confirmed by the council or other legislative body of such city validity and correctness of the proceedings reor town as herein provided, the regularity, lating to such improvement, and to the assessment therefor, including the action of the council, upon such assessment roll and the confirmation thereof, shall be conclusive in all things upon all parties, and cannot in any manner be contested or questioned in any proceeding whatsoever by any person not filing written objections to such roll in the manner and within from the action of the council in confirming the time provided in this act, and not appealing such assessment roll in the manner and within the time in this act provided. No proceeding of any kind shall be commenced or prosecuted for the purpose of defeating or contesting any

such assessment, or the sale of any property | vent the sale of any real estate, are (1) that to pay such assessment, or any certificate of the property about to be sold does not appear delinquency issued therefor, or the foreclosure upon the assessment roll, or (2) that the asof any lien issued therefor: Provided, that this sessment has been paid. section shall not be construed as prohibiting the bringing of injunction proceedings to prevent the sale of any real estate upon the grounds (1) that the property about to be sold does not appear upon the assessment roll, or (2) that said assessment has been paid."

Hence we cannot cancel or set aside the assessment, but nevertheless, since, as we have already seen, the city may not pay to the contractor any more than the sum legally due him, the trial court should have enjoined the city as to the payment of any excess, leaving such excess to be disposed of as the law may direct, after all legal demands are satisfied.

The judgment is reversed, with directions to enter a judgment in harmony with the views herein expressed.

MAIN, C. J., and BRIDGES, MACKINTOSH, and PEMBERTON, JJ., concur.

In North American Lumber Co. v. Blaine, 89 Wash. 366, 154 P. 446, we again dealt with this section; Judge Parker, speaking for the court, saying:

"This court has repeatedly held that such a determination by the city council, had upon due notice under previously existing statutes similar to this, became final as to all owners of property so assessed, unless the assessment was attempted to be levied under such circumstances that the city was exceeding its jurisdiction over the subject-matter. This question is reviewed at some length in Rucker Brothers v. Everett, 66 Wash. 366, 119 P. 807, 38 L. R. A. (N. S.) 582, where our former decisions The doctrine was adhered to in are noticed. Grandin v. Tacoma, 87 Wash. 98, 151 P 254, involving an assessment under this statute."

but in

In Giles v. Olympia, 115 Wash. 428, 197 P. 631, 16 A. L. R. 493, where the property owners had appeared before the city counHOLCOMB, J. (dissenting). Although cil upon due proceedings, made their objec the decision of the majority is but a Pyrrhictions, which were denied, and appealed to victory for appellants, it unfortunately in- the superior court from the action of the troduces marked discord in our decisions. city council, we sustained the objections and Under the statute quoted in the majority defenses of the property owners; opinion (section 23, c. 98, Laws of 1911) ap- Lee v. Olympia, 122 Wash. 616, 211 P. pellants are estopped to institute and main- 883, where the property owners in the same tain this action, and we have so held in a local improvement district as in the lastnumber of cases. In Goetter v. Colville, 82 cited case had not appeared before the city Wash. 305, 144 P. 30, Judge Main, speak-council and objected and set up their de ing for the court of the provisions of that section, said:

fenses, afterwards bringing an independent action like the one at bar, we denied their right to relief, all the present judges con"The language of the statute is clear and curring in that decision, except Judges explicit, and mandatory in its terms."

In Grandin v. Tacoma, 87 Wash. 98, 151 P. 254, a per curiam opinion in which the section quoted is dealt with, where no objections had been filed by the property owners to the assessment, and no appeal taken from the action of the city council, it was said:

*

[ocr errors]

"Appellants have filed no objections, as provided by this act, and are not attacking the assessment on either ground given by the law as cause for an injunction. Their right to enjoin the collection of the assessment results, if at all, from a total lack of authority in the council to assess their property for this improvement. By failing to file written objections before the confirmation of the assessment roll, showing that the improvement was of no benefit to their property, the appellants have brought themselves within the estoppel of section 23 of the act, and this action not being one of the exceptions provided for therein, the court was without jurisdiction of the subject-matter."

It will be recalled that the exceptions in the proviso of section 23, permitting the

MACKINTOSH and PEMBERTON.

There is no doubt in my mind that the

judgment in this case should be affirmed, and the litigation and expense to the city and property owners ended. I therefore dis

sent.

FULLERTON, PARKER, and MITCHELL, JJ., concur in what is said by HOLCOMB, J.

John P. DUKE et al., Respondents, v. NA-
TIONAL SURETY CO., Appellant.
(No. 18538.)

(Supreme Court of Washington. Nov. 14, 1924.)

En Banc.

Appeal from Superior Court, Pierce County; Chapman, Judge.

Hayden, Langhorne & Metzger, of Tacoma, for appellant.

F. D. Oakley, Guy E. Kelly, and Thomas

« PreviousContinue »