Opinion
02-07-1901
INHABITANTS OF CRANFORD TP. v. WATTERS.
Frank Bergen, for complainant. James Benny, for defendant.
Action by William H. Watters against the inhabitants of Cranford township on an improvement contract. The case was referred, and exceptions filed by both parties to the referee's report, whereupon, by injunction, defendant transferred the case to the chancery court. Report confirmed.
The object of the bill is to withdraw from the jurisdiction of the law court, and procure the final determination in this court, of a cause of action which the defendant, Watters, claims to have against the complainant, the township of Cranford, by reason of the performance by him for the complainant of divers works, being part and parcel of a sewer system installed by the complainant within its territorial limits. The work was mainly done under written contract which was entered into in the year 1894. There are also claims on the part of Watters (1) for extra work; (2) for the increased cost of work done under the contract, by reason of failure of the corporation to perform its part of the contract; and (3) for variations made in the specifications of the work to be done as provided in the contract. The defendant's claim is that work was done to the amount of about fifty thousand dollars, and that he had been paid twenty-three thousand and odd dollars, leaving a balance of about twenty-six thousand dollars due. To recover that balance he brought an action against the complainant in the year 1897 in the circuit court of the county of Union. The bill of particulars contained several hundred items. The complainant pleaded to the action, and the court referred it to a referee to hear the cause and state an account between the parties. Both parties dissented to the reference, thereby reserving to themselves the right, under the statute, to a trial by jury. The cause was tried before the referee, who by his report dealt with all the items in the bill of particulars, and by condensation reduced the number to 88, amounting, as claimed by the defendant herein, to $47,491.12, for which he allowed him a total of $34,159.77, disallowing some of the items altogether, and allowing only a portion of others. After crediting him with payments, he found a balance due of $11,435.54. After the bill was filed, the complainant, by leave of the court, paid $8,000 on account, which the defendant accepted. To this report each party filed divers exceptions. Watters' exceptions were 14 in number. The exceptions of the complainant (the defendant below) were much more numerous, but in the argilmentthey were all considered under 9 heads. Some of the exceptions of complainant referred to the same items excepted to by defendant, leaving about 20 disputed matters, disconnected with each other, and depending for their solution upon different evidence and variant considerations. After these exceptions were taken the complainant filed its bill herein, setting out the facts, and praying for an injunction. It was granted upon the strength of the case of Shove v. Lathrop Co., in which Chancellor Runyon granted an injunction under somewhat similar circumstances, but gave no reasons in writing. The defendant, Watters, answered, but in his answer set up the want of jurisdiction in this court, and claimed the right to a trial by jury. The cause was brought to hearing upon the evidence (which is voluminous) taken and exhibits made before the referee, and with one or two additional exhibits.
Frank Bergen, for complainant.
James Benny, for defendant.
PITNEY, V. C. (after stating the facts). The serious question in the cause is whether the court ought to take jurisdiction of it, it is urged—First, that it is not a cause in which the court ought to have assumed jurisdiction if that jurisdiction had been sought before any action at law had been commenced; and, second, granting that the court would ever have taken jurisdiction, it is contended that, having permitted the court of law to proceed and deal with the cause to the extent of a reference, it is now too late for the defendant at law to ask this court to withdraw the cause from the Jurisdiction of that court.
Dealing with the second ground first, I come to the conclusion that it is not well taken. Supposing it was a proper ease for the jurisdiction of this court under the old practice, and before the legislature had invested the court of law with power to refer causes of this kind to a referee to hear and determine the same, including the taking and stating of accounts, I think that the vesting of the courts of law with that jurisdiction ought to have the effect of making this court more cautious in assuming jurisdiction in such cases when sought before suit at law is commenced. The primary statement of the case, as presented in a bill in chancery, showing a large number of items and a prima facie case for the interference of the court, still leaves it practicable for justice to be done in a court of law under the modern practice of a reference. When the matter has been subjected to the examination of a referee, and he has made his report. it may and often does prove that the items actually in dispute are few and easily dealt with by a jury. And I am of the opinion that it is quite proper for this court, in a certain class of causes, to refuse to take Jurisdiction until at least an attempt has been made to obtain Justice by the machinery of a reference in a court of law, The various powers to compel the production of papers and the examination of the parties now possessed by a court of law gives that court facility for dealing with such cases almost if not quite equal to that of the court of chancery. And I think that, if the case as presented by the Watters bill of particulars of his demand against the township had been presented to a court of equity before the suit at law had been commenced, it might well have said—I do not mean to declare that it ought to have said —to the township: "Let Watters bring his suit. Non constat but that the result of a trial before a referee will be entirely satisfactory to all parties, or reduce the points in dispute to so few in number and such simple dimensions that a jury can deal with it." This view was taken by Vice Chancellor Reed in Bellingham v. Palmer, 54 N. J. Eq. 136, 33 Atl. 199. And, were it not for the provision in the practice act for the right of each party to dissent from the reference at law and to demand a trial by jury, I should think the remedy at law would be quite equal to that in this court. For if the referee mistook the law, or made a clear error in his deductions of fact, his findings would be open for examination and review by the court. And such I understand to be the English practice, and also that of the state of New York. But the defendant, Watters, still demands a trial by Jury; and when the parties appear before the jury the only advantage that either party will have from the report will be that it will be prima facie evidence of the truth of his findings, and all the items that are excepted to will still be open for examination before the jury. Hence the delay in coming to this court does not seem to me to be fatal to the complainant's right.
In the present case, Watters, the party who is objecting to the jurisdiction of this court, makes 14 distinct and separate exceptions to the findings of the referee, and is entitled to have those examined in detail by the jury. To these may be added several of the exceptions taken by the complainant (the defendant below), which are equally separate and distinct, making about 20 different items. And so it seems to me that we come at last to the question whether, with these different items to be examined and determined, the parties can obtain justice in a court of law, or are the items so numerous and difficult, and the evidence which must determine their solution so technical and complicated in its character, as that a jury cannot give it such attention and consideration, with the opportunity afforded them in the consideration of a case in the jury room, as to enable them to come, with any degree of certainty, to a just conclusion? Or, in other words, if the case is one which, if presented to the court uponthe exceptions taken by the several parties to the items, is such that it would have originally withdrawn it from the jurisdiction of the court of law, it seems to me that it ought to do it, even at this late stage of the controversy. In determining this question I have taken the pains to examine with some care the grounds on which courts of equity proceed in exercising what is called their concurrent jurisdiction with courts of law over matters of this kind. The usual ground stated is that of complicated accounts. But this classification is not confined to those cases of accounts where something more than an account between the Immediate parties must be taken, as in the settlement of partnership affairs, trustees' accounts, and the like; but it also includes a large class of cases where the matters of account are between the individual contestants,—the plaintiff and defendant A consideration of the cases has led me to the conclusion that the true ground of equity jurisdiction in such cases is that the issues necessary to be determined in order to arrive at a just conclusion are so numerous, and dependent upon such a variety of evidence, or of evidence of such technical character, as that it is substantially impossible for a jury, retiring in the ordinary way to a jury room, and obliged to carry all the oral evidence in their memories, to come, at one session, to anything like a just and proper conclusion. Such a state of affairs produces what is meant by the term "complicated" used in this connection.
The leading case on this subject is O'Connor v. Spaight, 1 Schoales & L. 305, decided by Lord Redesdale, in Ireland, in 1804. The case is thus stated by the reporter: "The defendant by indenture bearing date 31st March, 1780, demised certain premises to the plaintiff for three lives, at a rent of 20 shillings per acre for every acre the demised premises should or might contain, under which demise the plaintiff entered into possession. The number of acres was not ascertained, nor did plaintiff appear to have made any regular payments of rent eo nomine, nor had defendant given him any receipts in full or for precise gales; but from 1780 down to 1796 the plaintiff had been in the constant habit of accepting defendant's bills, of paying money to his order, of selling him goods on credit and supplying him and his family with money, the particulars of which several sums were set out in a schedule annexed to the bill, and for which the plaintiff insisted that, I? credit were given, a balance would appear due to him." At the end of 16 years the landlord claimed that a year's rent was due and unpaid, and brought his action of ejectment, based on such arrearage. The tenant filed his bill to enjoin the ejectment and for an accounting in the court of chancery. There was nothing in the nature of the accounts to make it difficult for a jury to determine each one of the items claimed, and for a great many of them there must have been vouchers. The number of acres for which rent was to be paid was easily ascertained by a survey. So that there was really nothing in the case which a Jury might not have dealt with, and the only ground for holding the jurisdiction was the great number of different items which were to be passed upon. Lord Redesdale, in delivering judgment, used the following language: "The ground on which I think that this is a proper case for equity is that the account has become so complicated that a court of law would be incompetent to examine it upon a trial at nisi prius with all necessary accuracy, and it could appear only from the result of the account that the rent was not due. This is a principle on which courts of equity constantly act, by taking cognizance of matters which, though cognizable at law. are yet so involved with a complex account that it cannot properly be taken at law, and until the result of the account the justice of the case cannot appear." It is manifest that the words "complex" and "complicated" are here used in the sense I have above stated. This meager statement of the rule has been cited with approval in a number of instances by English judges, both in the courts of first instance and in those of appeal. For an instructive explanation of O'Connor v. Spaight, see Railway Co. v. Brogden, 3 Macn. & G. 8, at page 24.
An instructive case, though briefly reported, is Cooke v. Betham, 4 Jur. 957, decided in 1840 by Lord Cottenham. It was a suit by a client to restrain an action at law brought against him by his solicitor to recover a bill of costs amounting to £18,000. Eight thousand pounds had been paid on account, but not as liquidated payments. Lord Cottenham agreed with the plaintiffs' counsel upon the impossibility of trying the case at law; and the question was whether, the account being all on one side, because it was long and complicated was a ground for bring ing it into equity. An injunction had been granted by the vice chancellor, and his decision was appealed from. The lord chancellor, at the argument, said: "The only difficulty arises from the plaintiffs not referring to a case establishing their equity on the ground of the long and complicated nature of the charge (being all on one side). The difficulty is the same, and the impossibility of obtaining justice at law, though the account is not mutual." Then, after consideration, he said: "I have no doubt that justice cannot be done in this case in a court of law. Directly it should be called on, it would be sent to a reference; and there can be no question that a reference to the master, with the power of appeal, is better than a nisi prius reference." There was there no dispute about the payments made on account. The whole dispute was the propriety of the solicitor's charges for services, consisting, of course, of a great numberof items, as all such charges do in England. The only difficulty was that the number of issues raised was so great that a jury could not carry them in their minds and deal with them in the jury room.
A case somewhat similar to O'Connor v. Spaight is Kennington v. Houghton, 2 Younge & C. Ch. 620. decided by Vice Chancellor Sir J. L. Knight Bruce in 1843.
Then we have the case of Railway Co. v. Nixon (1847) 1 H. L. Cas. 111. That was a bill filed by a contractor against a railway company to take an account of the work done by him for the company. The Jurisdiction of the court was seriously and ably disputed, and Lord Cottenham, speaking for the law lords, quoted O'Connor v. Spaight, and said (page 122): "That, my lords, is the rule applicable to questions of this sort, and it is quite obvious from the rule so laid down that each case must be decided according to the peculiar circumstances belonging to it. It is, therefore, nothing to the purpose to show that there are cases where the court will not entertain jurisdiction because it is a matter of law. Each case must be investigated, in order to see whether it comes within the rule laid down as that upon which a court of equity exercises its jurisdiction." And Lord Campbell and Lord Brougham made some remarks which are noticeable. Lord Campbell says (page 125): "I have great satisfaction in doing so, because, if there really had been any technical rule whereby a bill in equity could not have been filed in this case, it would have amounted to a very great defect. For, if an action at law were the only remedy in such a case, it really would amount, in my opinion, to a denial of justice. I do not proceed merely upon the ground which is stated in the case as having been taken by his honor the vice chancellor. I proceed upon this ground: that here is a complicated account that could not by possibility be taken by a jury. The facts of the case, as stated by my noble and learned friend on the woolsack, very clearly show that it would be a mere mockery to bring such an action before a jury. What would be done if such an action were brought at nisi prius? I know that within five minutes from the opening of the case by the leading counsel for the plaintiffs the judge would say, 'If we sit here for a fortnight we cannot try this sort of case, and therefore it is indispensably necessary, for the sake of Justice,—not to save us from the trouble of trying the case, which we are perfectly willing to take, but for the sake of justice,— that there should be a reference to an arbitrator, who will take accounts between the parties.'"
Then we have the ease of Railway Co. v. Brogden (1850) 3 Macn. & G. S. That case resembled the present, in that it was a suit by a railway company against the contractor to enjoin an action at law founded on work done under two several contracts. The contractor answered, denying the jurisdiction, and his answer set out a schedule of the items which he claimed in his suit at law. The description of the contents of those schedules shows some similarity to Watters' bill of particulars in this case, and the court held that the schedules to his answer, which were merely items for work and labor done, showed such a complicated state of accounts that a court of law could not deal with them; and the lord chancellor, in delivering judgment, relied on O'Connor v. Spaight, and held the jurisdiction of the court. He uses this language (page 23): "It appears that in certain cases, and where the account is of such a nature as that it is thought that justice cannot be done at nisi prius, this court will withdraw the matter from law, and will take the exclusive conduct and decision of the case, although it is a subject of legal Jurisdiction, and the demands on both sides are of a legal nature. In doing this the court will either itself decide the matter, or, if it be matter of law, and fit for the decision of a court of law, will put it into such a shape as to make the decision practicable, where it is thought not to be so in the general form in which the claim may have been advanced,"—and then proceeds to an elaborate statement and discussion of O'Connor v. Spaight
Another instructive case is Railway Co. v. Martin, decided by Lord Cottenham in 1848, reported in 2 Phil. Ch. 758. At page 762 Lord Cottenham says: "The Jurisdiction in matters of account is not exercised, as it is in many other cases, to prevent injustice which would arise from the exercise of a purely legal right or to enforce justice in cases in which courts of law cannot afford it; but the jurisdiction is concurrent with that of the courts of law, and is adopted because in certain cases it has better means of ascertaining the rights of parties. It is, therefore, impossible with precision to lay down rules or establish definitions as to the cases in which it may be proper for this court to exercise this jurisdiction. The infinitely varied transactions of mankind would be found continually to baffle such rules and to escape from such definitions. It is, therefore, necessary for this court to reserve to itself a large discretion, in the exercise of which due regard must be had not only to the nature of the case, but to the conduct of the parties."
Another case is Scott v. Corporation of Liverpool, 5 Jur. (N. S.) 105, 28 Law J. Ch. 230, dealt with by Lord Chelmsford. There a contractor who had failed to perform his contract and who had been discharged and his contract declared forfeited by the corporation, filed his bill to obtain payment for the work he had done, and based his right upon the authority of the other cases already cited. His lordship said: "I do not think, therefore, that the mere fact of the accounts being capable of settlement and adjustment in a courtof law would have prevented the plaintiff being entitled to an account, if there were no other objection in the way."
The next case is Croskey v. Shipping Co., reported in 6 Jur. (N. S.) 1190, decided by Vice Chancellor Wood, afterwards Lord Hatherley, in 1860, after the passage of the eommon-law procedure act of 1854, giving courts of law power to refer causes involving accounts to referees. It was there held, after argument by distinguished counsel, that the jurisdiction of the court was not affected by the power to refer causes given by the common-law procedure act. The action was for an account and to restrain an action at law, and the injunction was granted. It was admitted that, if the cause had proceeded to trial at law, it would have been a proper case for reference at nisi prius; and this seems to have been the ground for the injunction.
Another case is Kimberley v. Dick, 13 L. R. Eq. 1, decided by Lord Romilly In 1871, after elaborate argument. It was a suit in equity by a party who had contracted to build a house, and its object was to have an account taken of the value of the services — particularly for extra work done on the house. In that respect it is much like the present suit Lord Romilly seems to have considered his Judgment with care, and at page 21 he says: "Besides this, it appears to me that in various other matters the plaintiff is entitled to remuneration for which he has made claims which have not been allowed. It is too minute for me to go Into the details, nor is it desirable that I should do so; but I feel, after an attentive perusal of the evidence, and such examination as I am able to give to the plans, to the verbal promises made to the plaintiff, and to the expectations held out to him by Mr. White, that I should be inflicting undue injury upon the plaintiff if I were merely to dismiss his bill, and leave him to such remedy as he might have at law. At law, I am of opinion that the account would be too complicated to be taken in court,—that it would involve too many minute claims and counterclaims to be possible for it to be satisfactorily disposed of without a reference to arbitration. I am of opinion that the court has jurisdiction to deal with this case, and that it is bound to do so."
Then there is the case of Southampton Dock Co. v. Southampton Harbour & Pier Board, decided in 1870, reported in L. R. 11 Eq. Cas. p. 254. There Sir James Bacon, in referring to the case of Railway Co. v. Brogden, 3 Macn. & G. 8, above cited, says that these cases "have established as a very plain principle that it is not in every case of account that this court will interfere to withdraw from the jurisdiction of a court of common law the subject-matter of dispute between the parties. They all, I think, establish this proposition: that, where it is unquestionable that the court of law can do as full justice to the subject in dispute as can be done in this court, this court will not interfere. If there can be any doubt about that, the plaintiff has a right, as I conceive, to maintain his suit in this court." And, after going over the case, he enjoined the defendant from proceeding in the law court, and retained the jurisdiction of the court of chancery.
Two other cases worthy of notice are Harrington v. Churchward, 29 L. J. Ch. 521, and Edwards-Wood v. Baldwin, 9 Jur. (N. S.) 1280.
In this state the question has been considered on several occasions. In Seymour v. Dock Co., 20 N. J. Eq. 390, Justice Randolph, sitting as master, at page 407, says: "The equitable Jurisdiction of this court in matters of account is said to be concurrent with that of courts of law, and no precise rule can be laid down as to the cases in which it will be exercised. It is often adopted, because in many cases a court of equity has better means of ascertaining the rights of the parties. The court reserves to itself a large discretion upon the subject, and often assumes or rejects the cognizance of such cases, as the circumstances of the particular case may render expedient. The whole machinery of courts of equity is better adapted for the purposes of an account than that of the courts of common law; and in many cases, as has been said, when accounts are complicated, it would be impossible for courts of law to do entire justice between the parties. Courts of equity, in cases of complex accounts, take cognizance sometimes from the very necessity of the case, and from the incompetency of a court of law, at nisi prius, to examine it with the necessary accuracy." And then Mr. Justice Scudder, speaking for the court of errors and appeals in Crane v. Ely, 37 N. J. Eq. 564, makes substantially the same remarks; holding, however, that the case then before the court was not such as to warrant the court in interfering with an action at law. And then we have the opinion of Vice Chancellor Reed in Bellingham v. Palmer, before referred to. He there discusses the same questions, and refers to some cases which I have already cited at length, and to the case of Marvin v. Brooks, 94 N. Y. 71, and what was said by Judge Finch in that cause; and I will add that a later New York case is Uhlman v. Insurance Co., 109 N. Y. 421, 17 N. E. 363. In Marvin v. Brooks, Justice Finch says "that the necessity for a resort to equity is now very slight, if it can be said to exist at all, since a court of law can send to a referee a long account, too complicated for the handling of a jury, and furnishes, by the examination of the adverse witnesses before trial, and the production and deposit of books and papers, almost as complete a means of discovery as can be furnished by a court of equity." That remark applies with great force to those jurisdictions where, when acause is once sent by a common-law court to a referee, it is finally taken from the cognizance of a jury. Such is the case in New York, and it may be in other states. It is not applicable in its full force to this state, or to the present situation, where the machinery of a reference has been resorted to and has expended its force, and, after all, has left the cause in such a situation that it must still be sent to a jury by the common-law court. As before remarked, I think that if it were not for the fact that the parties may, under our practice, after the cause has run the gauntlet of the referee, demand a trial by jury, then there would be little or no occasion for the Intervention of a court of equity upon the single ground of complexity of accounts. And so it seems to me that the case comes back to where it would have stood if there had been no practice of the common-law court of ordering a reference, and such a reference had not been had. And the question now is whether it is such a one as this court would, in that state of the law, withdraw from the jurisdiction of a court of law; and on that question I think the authorities establish the conclusion above stated, namely, the test is, are the issues so numerous and so distinct, and the evidence to sustain them so variant, technical, and voluminous, that a jury is incompetent to intelligently deal with them and come to a just conclusion? An examination of the several exceptions and the evidence bearing upon them leads me to the conclusion that it is the duty of the court to assume jurisdiction.
We come now to the merits. The work for which compensation is sought was done under a contract, chiefly printed, with a part in manuscript, entered into between the parties on December 20, 1804. The character of the work is described with great minuteness in print, and also the obligations of the parties; and then is added the price, per piece and by measurement, of all the work to be done. So that the ascertainment of the amount was dependent upon measurements, and they were to be made by the chief engineer of the town, in charge of the work,—Mr. Carroll P. Bassett. This contract was accompanied with maps and profiles, the one showing the line of the sewer, and the other showing the depth to which it was to be placed; and bids were made on laying the pipe by the running foot including all excavations.
The defendant's first four exceptions relate to certain items of Iron bends, iron pipe, the pipe, and a lot of old barrels used in the work, which were in the nature of extra work. With regard to the pipe and bends covered by the first three exceptions, I perceive that the referee found the same number of each as were allowed by the engineer, and that their findings are sustained by the evidence. The real difference between the parties is as to the character and price of these articles. The defendant charged for iron bends and Iron pipe where tile was furnished. Tile is much cheaper than iron, and the prices fixed by the referee were those for the. The prices allowed by the engineer and by the referee are proper, and the first three exceptions are overruled. The fourth of these exceptions refers to a lot of old barrels which were used in the work. For these the defendant charges 50 cents each. The proof on the part of the complainant is that they were empty cement barrels, brought on the ground by defendant filled with cement, and when empty of no value except as kindling wood. The defendant's evidence is that he brought no cement on the ground in barrels, and that he was obliged to go around the country and pick up these barrels, and that they were worth 50 cents apiece. The referee believed the complainant's witnesses, and so do I, and adopt his finding.
The fifth exception is that the referee refused to allow the defendant for the excavation of 2,163 cubic yards of earth at $2 per cubic yard, for which he claims on the ground that the profiles upon which he made his bid showed a less amount of excavation than he was compelled to make; and in support of and against this claim much evidence, including several maps and profiles, was produced. The defendant relied on the evidence of an engineer, Mr. Vreeland, whom he employed some time after the job was finished to go over the line of the sewer and take the levels with an instrument and determine the depth to which the trench had been dug, and to compare that with the depth shown on the profiles annexed to the contract, and upon which his bid was made. By comparing the profiles as prepared by him with those annexed to the contract he says that the depth actually dug under the instructions of the engineer are greater than those shown on the profiles upon which he made his bid, and he makes the difference in the amount of excavation 2,163 cubic yards; and he swears that this was worth $2 a cubic yard. This difference is accounted for by the contractor in two ways: First the original profiles were incorrect and did not show the real depth to which it was intended to excavate; and, second, that by a supplemental contract the line was changed in some places, with the like result. This excavation is called "excavation above grade," but why so called I do not understand. First, with regard to the price: There is a clause in the contract which provides that wherever any excavation shall be made in the bottom of the trench below the grade called for by the profiles, the contractor shall be allowed for that 20 cents per cubic yard. That clause is in this language: "For all such excavations below grade the sum of twenty cents per cubic yard will be paid the contractor." That clause refers to specific excavationsbelow grade, rendered necessary to get a firm and solid foundation; and it is argued that the price for that work could not apply to a general depression of the bed of the trench below the grade given by the contractual profiles. There is much force in that argument, and yet it indicates to some degree what the cost of such excavation would be. No evidence was given directly by the complainant as to the value of such excavation; but in another connection evidence was given by complainant that $1 a cubic yard would be a full price for the total excavation of a trench from the top, where it was 25 feet deep,—a depth two or three times as great as the average depth of the whole trench. Naturally the cost per cubic yard of excavating a deep trench is much greater than that of a shallow one, and for other excavation of a similar character 30 cents per cubic yard was allowed by the engineer and the referee. I think that price ample. The direct answer of the complainant to the case so made by the defendant is: First, that, although there was a change in the line of the sewer in several places, yet that change did not increase the depth of the excavation on the average, since a careful comparison made by the chief engineer of the original profiles and those of the substituted lines furnished to the contractor with the profiles of the contractor's engineer, who made the subsequent measurement, shows no substantial difference in the amount of excavation. If there be any, it is in favor of the contractor. And, second, that if it did it was provided for by the supplemental contract entered into between the parties relating to such change in the line. In answer to the first point the defendant replies that the profiles which were used by the complainant's engineer in making this comparison are not the profiles upon which he made his bid, but were a new set of profiles furnished two or three months later. The complainant, in reply, proves that the new profiles were copies of the originals, so far as the old lines were followed. Now, in considering these different contentions, I am unable to adopt the view of the complainant,—that the supplemental contract compelled the defendant to do the work on the substituted line for the same price per running yard as that provided for in the original contract. So that if, in point of fact, it did appear either that the new line involved, on the average, a deeper excavation than the old line, or that the original profiles upon which he made his bid were deceiving, and did not show the actual depth to which he was finally required to excavate the trench in places where the old line was followed, he would be, in the absence of any prohibitory clause in the contract, entitled to extra compensation. The original profiles were produced, and I have, so far as I could, compared Mr. Vreeland's profiles with them, and find some quite marked differences. But they consist, in part, at least, of an elevation on Mr. Vreeland's map at places where a sudden and serious depression is found on the originals. Mr. Vreeland's observations were made in the summer of 1896, nearly a year after the work was done. It is quite impossible to believe that the original profiles were false in these instances, and it is easy to suppose that after the work was done, and before Mr. Vreeland's observations, these depressions had been filled up, either by the landowner or the public authorities, according to the ownership of the soil. But I have gone further, and compared the original profiles produced by Mr. Vreeland, and which it is alleged were those upon which the contractor bid, with the profiles produced by Mr. Bassett, upon which he made his estimate, and I find them precisely the same. Those that Mr. Bassett used are tracings from the original blueprint profiles produced by the contractor and used by Mr. Vreeland. I have also compared Mr. Vreeland's profiles with both sets of profiles. Further, Mr. Bassett showed, by red lines drawn on the profiles which he produced, which are copies of the originals, the actual amount of excavation as compared with what it would have been if the original profiles had corresponded exactly with the surface of the earth as it was found by Mr. Vreeland, and the result is to support Mr. Bassett's sworn estimate that the amount of excavation was actually a trifle less than the original profiles called for. For this reason I overrule that exception.
Exceptions 6 and 7 refer to allowance to the contractor for extra concrete work and special concrete work. The evidence supports the measurements which were allowed by the engineer, and the only dispute is as to the price. The contract provides that all extra concrete wrork shall be done at $1 a cubic yard, and the referee has allowed that much. The price thus allowed is much less than the cost of the work that was actually done, and there is an apparent hardship in enforcing it against the contractor; yet 1 know of no principle upon which the provision of the contract can be evaded. Besides, in one marked instance, at least, the contractor was relieved by the engineer of the serious expense of tunneling under the Central Railroad tracks, and permitted to avoid it by going under one of the arches of the bridge over the Rahway river, and thereby he saved a considerable amount; and a part of that concrete work charged for was rendered necessary by that diversion from the original line.
The eighth exception is aimed at the refusal of the referee to allow the contractor for the expense of uncovering, raising, and relaying a short piece of the sewer pipe on the property of one Crane, between High street and the Rahway river. To understand this exception, it is necessary to observethat. In order to keep the tile to the grade called for in the profile, the levels are run, and the grades fixed and marked at intervals of, I believe, about 50 feet over the line of the sewer. These grades are marked on boards set up edgewise, and attached to stakes driven in the ground, one on each side of the line of the ditch; and, of course, these supporting stakes must be so far apart that in working in the ditch they will maintain the level at which they stood at the time the grade was marked upon them. The contract provides: "The contractor shall provide suitable stakes, forms, and render such assistance to the engineer at his own expense as may be necessary to establish lines and grades for the guidance of his work, and shall carefully preserve said points at all times." This preparatory work was done over the stretch of the line here involved, and the grades all correctly marked upon the boards. While the work was being done one of the grade boards settled and got out of horizontal line with the others, owing to the stakes being placed too near together, so that the earth settled and caused a sag. The inspector, on behalf of the township, in charge of this work, observed it before the sewer pipe was put in its place, and called the attention of the contractor's foreman to the condition, and told him that he should stop work until the matter was righted. He declined to do that, and went on. Shortly after, another inspector came along, who was not aware of the warning of the previous inspector; and he was asked whether the grade was all right, and, casting his eye in the usual way over those before and behind the one which had sagged, and which in the meantime had, as I infer, disappeared, said it was all right, and the work went on, and the pipe was covered. The result was a sag at that place, which was discovered by Mr. Bassett, and the contractor was obliged to re-excavate the ditch and elevate the sewer pipe to its proper grade; and for that work he asks compensation of $216.25. It is plain, upon this statement of the case, that the township is not liable. In the first place, the fault was in the grade board and stakes furnished by the contractor; and, in the second place, he was plainly warned by one of the inspectors, and cannot fall back upon the fact that a subsequent inspector, unaware of the fault, approved the work. It looks as if that inquiry of the second inspector was a trick on the part of the foreman of the contractor to throw the fault on the township, instead of where it really belonged. In the third place, there is a clause in the contract to this effect: 'When any work or material is found to be imperfect, whether passed upon or not by the inspector, the said work shall, at the request of the township committee or the engineer, be taken up and replaced by new work at any time prior to final acceptance." For each and all of these reasons this exception fails.
The ninth exception is for the refusal of the engineer and referee to allow the contractor the sum of upward of $2,000 for lowering the grade of a part of a tunnel which he constructed through a part of the line where the average depth was about 25 feet. The chief engineer refused to allow anything for it, and the referee allowed $420. A large amount of testimony was taken on this charge, and the items going to make it up run into the hundreds. The point in question was near the lower end of that portion —section A—of the sewer which was covered by the defendant's contract, and the length of the proposed tunnel was several hundred feet The grades were all given by one of the assistant engineers, called in the evidence "inspectors." The tunnel was commenced by sinking a shaft near the end of the section, and less than 100 feet away from similar work going on upon the adjoining section by a different contractor, and where other grade boards were set. For the purpose of sinking the shaft a board was set up, and a grade marked upon it by one of the assistant engineers. In setting that grade he made a mistake of 2 feet, making it so much too high. The contractor sunk his shaft, and tunneled each way from it,—altogether about 120 or 125 feet. The error was then discovered, and the charge of $2,037.86 is the aggregate of days' work, material, and the use of implements, due, as alleged by the contractor, to the necessity of lowering the bed of the tunnel 2 feet for the distance mentioned. The work, according to the contractor, cost about $19 a running foot The extravagance of the claim is manifest at once. In the first place, there was no provision in the contract for tunneling; and, in the second place, the estimate of the engineers is that the cost of digging an open trench for that distance would not be over $2 or $3 a running foot The chief engineer refused to allow anything, for reasons which he gave at length; but the referee allowed $420, being at the rate of between $3 and $4 a running foot One argument against the whole claim made by the complainant is that, granting an error was made in the stake driven, the contractor was, at last, not obliged to sink the ditch any deeper than he would have been compelled to if the stake had been set rightly in the first instance. The answer on the part of the contractor to this argument is that he made his bid on the basis of saving money by tunneling, as he had a right to do, and that the cost of driving and timbering the tunnel originally was but a trifle, comparatively speaking, but that the great increase of cost was due to his being obliged to sink the timbers, side posts, and roofing which he had already placed in the tunnel in the due course of his work, and that this was dangerous and expensive, because the workmen encountered quicksands. But I think the answer to that, again, is that when he discovered the mistake he should. insteadof spending such an enormous amount of money in settling the timbers of the tunnel, have commenced at the top and excavated, which could have been done at one-third the cost actually, as claimed by him, incurred. The course he adopted in order to save the small amount of work done before the mistake so occurred resulted in an expenditure, according to his testimony, many times greater than all he could have saved by tunneling instead of excavating from the surface; or, to put it in another way, the premiums he paid for Insurance amounted to much more than the value of the thing insured. Another answer by the complainant to this claim is that the mistake of 2 feet was palpable and visible to the eye when that grade as marked was compared with one on the adjoining section in plain view, and which was actually seen by the contractor, and his attention called to it by one of the inspectors of the township. The contract required that the contractor should at all times have an intelligent foreman on the ground, who could properly interpret the directions and marks of the assistant engineers and inspectors; and the argument from that is that he should be such a man as would detect so palpable a mistake, and have sense enough not to persist in working under it There is much force in this argument. But the contractor's reply is that the grade stake was an order to him, and he was bound by the contract to proceed according to the orders of the inspectors, even though be had reason to believe that they were erroneous. Another answer of the township is that the chief engineer's attention was called to this error as soon as, or very shortly after, it was discovered; that he went on the ground, examined the situation, and gave the contractor specific directions how to proceed to remedy the mistake at a trifling cost; and that the contractor did not follow his directions with any sort of intelligent system. The contractor tries to show, in answer to this, that ho did follow the chief engineer's instructions. But I am satisfied that he did not, and, if the matter had been presented to me de novo, I am not at all sure I should have allowed the contractor anything for this item. But the referee had the advantage of hearing the witnesses and getting a closer and finer view of the situation than I can get, and I am not disposed to vary his finding. I think, however, that he has been sufficiently liberal, and that the township is sustained by the evidence in its contention that the long list of items of charges, amounting, as above mentioned, to $2,037, is an aggravated inflation. For these reasons I overrule that exception.
The tenth exception is to the refusal of the referee to allow the contractor $137.25 for extra work done on High street and Centennial avenue, required by reason of the failure of the engineers to furnish the contractor with proper grade. The facts with regard to that are these: The contractor, in excavating a section of the trench to the proper depth to lay the sewer pipe, encountered a very strong spring of water, and did not have at hand the appliances to deal with it and temporarily abandoned that short section, and proceeded to work on the other side of it and lay the sewer pipe. In the meantime all the grade stakes in the immediate neighborhood were obliterated and gone. When the contractor got ready to proceed with that section, he asked the assistant engineer in charge to give him anew the grade for it, and the engineer required the contractor to dig down to the ends of the pipe already laid on each side of the section, so that he could verify the grade from those pipes, and it was for this work, and the delay incident to it that the charge is made, as I understand it. The question is whether the requisition of the assistant engineer was a reasonable one. The chief engineer thought it was, and refused to allow for the work. The referee agreed with him, and I think both were right. All the grades for that section and those immediately adjoining had once been given in due course of business. It was no fault of the township that they had been obliterated. How much labor it would have been to have started from some bench mark to re-establish the grades does not appear; but such work was liable to error, and it was highly proper for the engineer to verify whatever work he did by comparison with the ends of the pipe already laid, and thereby insure against the least jog in the connections. That exception is overruled.
The eleventh exception is aimed at the refusal of the referee to allow $55.50 for extra labor at a manhole at Springfield avenue. The complainant's assistant engineer swears that the contractor was allowed for this item, in the last and corrected estimate, at $34, and it so appears upon that estimate. He further swears that he called on the contractor for the items of the job, and was unable to get them, and so made them up from other sources as best he could. I shall not allow this exception.
The twelfth exception relates to the refusal of the referee to allow Watters $144.50 for extra work required because of an error in the grade given by the assistant engineer at a point between the Rahway river and Forest avenue. This item was not included in the original bill of particulars, but is added in the supplemental bill. It seemed to be an afterthought. The fact is that Mr. Cressy, one of the assistant engineers, gave the grade at that particular point, and gave it just 1 foot too high; and about 84 feet of the sewer pipe had been laid before it was discovered, and the contractor was obliged to take up that 84 feet and replace it How the work could have proceeded so far without a discovery of the mistake, I am unable to understand. The matter was called to the attention of the chief engineer, and he promptly decided that Mr. Cressy mustpay the expense of the change out of his own pocket The latter called upon the contractor, stated the liability he was under, and asked what the extra cost was; and the contractor refused to give it to him, and stated he need not trouble himself, for the reason that he (the contractor) would make no charge. This is denied by the contractor, but the fact that he did not put it in his original bill of particulars indicates pretty strongly that there must have been some reason for it, and I am inclined to think that Mr. Cressy's reason is the true one. In other words, the contractor made no charge for it at the time because he knew it would come out of Mr. Cressy personally. The referee believed Mr. Cressy, and so do I.
The thirteenth and fourteenth exceptions are aimed at the failure of the referee to allow for commissions on the extra work and labor and extra material. The extra work is put in at $5,364.11, and the extra material at $1,430.08. Most of that extra work has not been allowed. The total amount allowed by the engineer is less than $300, including material. The additional allowances made by the referee amount in all to about $2,000. The presumption is that any possible claim for commissions is included in the amount of his allowance. He has, in a few instances besides those I have mentioned, allowed more than the engineer allowed. The total amount allowed by the engineer was $32,168.42. The total amount allowed by the referee was $34,159,—an increase of .$1,990.58. I think the referee was sufficiently liberal with the contractor, and I decline to allow him anything for commissions. In fact, I am not satisfied he could be entitled to commissions under any circumstances.
I come now to the exceptions of the township. They are, as I said, more numerous than those of the contractor, but at the argument they were reduced to nine.
The first point or exception taken by the counsel for the township was that all the extras allowed by the engineer, and again by the referee, should be stricken out because they were not done under written order, and the contract so provides. And in favor of that legal position he refers to the case of O'Brien v. City of New York (in the court of appeals of New York) 35 N. E. 323. I am not disposed to adopt that view in this case. The township has had the benefit of the work, and should pay for it.
The second exception is this: The original profiles and map showed that the sewer must run under the wide embankment of the Central Railroad near its bridge over the Rahway river. This was undoubtedly a serious undertaking, and would have been attended with considerable expense to the contractor. When he was about ready to commence, and had made some excavation into the slope on one side, it was suggested—the engineer says by the contractor, but the latter denies it—that a diversion should be made by which the sewer should be carried under the first arch of the bridge, and the excavation through the embankment saved. This course was adopted, and a considerable sum of money was undoubtedly thereby saved to the contractor, as I have already mentioned. The engineer in his estimate allowed no credit to the township on account of that saving of expense, and I am unable to see how the township can receive any credit for that unless it was stipulated for at the time. I must therefore overrule the exception.
The third exception has in it more substance. In measuring up the length of sewer pipe laid, all the manholes were included. In point of fact, no tile was laid at the bottom of the manholes, and the latter were all bid upon and paid for as distinct parts of the work. The distance across the manholes amounted in the aggregate to 300 feet and the average price of the tile used was $1.67 a foot making the overpayment, as claimed by the township, to be $501. It does not appear that there was any settled custom to warrant that liberality in measurement yet Mr. Bassett swears that he adopted it from a desire to act liberally towards the contractor. If the matter was res nova, I am not entirely sure that the township ought not to be allowed that item. But bearing in mind—First, that the chief engineer who made the allowance was really the agent of the township; and, second, that the referee has adopted the engineer's views,—I will not allow the exception.
The fourth exception is for the refusal of the engineer to estimate accurately and make an allowance for what he swears to be a slight difference in favor of the contractor in the total amount of trenching. This, it is to be remembered, is the item concerning which the contractor's engineer swears that a subsequent measurement shows that he did more trenching than the contract called for, while Mr. Bassett comes to a different conclusion, and that he did a trifle less, without stating how much less. I see no occasion for interfering with the result arrived at by the referee.
The fifth exception has in it more of substance. The evidence shows that two more manholes were Inserted in the work than the plans called for, and that they were rendered necessary to overcome the effect of an error made by the contractor in tunneling. The contractor's agents and foreman made a mistake in two Instances in tunneling from opposite directions, so that the lines did not meet and a reverse curve ensued; and in order to deal with that situation the manholes had to be inserted. The theory of the township is that the error in alignment was entirely the fault of the contractor, and that the manholes were of no value to the town. There is some evidence attempted to be given by the contractor that in one instance therewas a slight lack of accuracy in the marks given him by the engineer. From the examination I have given to that part of the case, I am inclined to think that the contractor would fail if the result depended upon that question of fact But I am not disposed to find that the manholes are of no use to the town. Independent of the reverse bend in the line, I do not think the position of lack of value is entirely warranted by the evidence. Be that as it may, the same remark applies here as applied to the former instance: The engineer saw fit to allow the cost of those manholes, and the referee has seen fit to allow for them, and while, if the matter had not been so dealt with by those officials, I should feel strong doubt in my mind about it still I shall not disturb the report of the referee.
The seventh exception is to an approval by the engineer of a change in the mode of building 63 silt basins in such a manner as to save $1 or more on each in their construction. This was done by the consent of the engineer, and I think the exception should not be allowed.
The eighth exception is as to allowing $89.35 for more weight of castings than the contract permitted. It appears that when the castings were sent from the foundry they weighed more than the order called for. The chief engineer has allowed for the full weight, and so has the referee. For the same reasons given in the previous exceptions, I do not feel disposed to make any change.
The ninth exception is to the allowance by the referee of $420 for the cost of the change in the bottom of the tunnel, due to a mistake in the grade. I have already dealt with that item, and expressed my views upon it.
Taking the case all together, I am unwilling to disturb the findings of the referee, and will add two remarks: First The character of the job was such that it was and is quite difficult, if not impossible, in many instances, to arrive at a conclusion with entire accuracy. In making up his final estimate, the chief engineer seems to have been sufficiently liberal to the contractor, and the referee still more so. Second. The time spent and attention given by me to the great mass of evidence, much of it of a technical character, with the numerous maps and profiles accompanying it has satisfied me that a jury would have been quite powerless to deal with it with any kind of probability of arriving at a just conclusion. I will advise a decree in accordance with these views.