Layne-Minnesota Co. v. City of Beresford

175 F.2d 161, 1949 U.S. App. LEXIS 2349
CourtCourt of Appeals for the Eighth Circuit
DecidedMay 26, 1949
DocketNo. 13803
StatusPublished
Cited by1 cases

This text of 175 F.2d 161 (Layne-Minnesota Co. v. City of Beresford) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Layne-Minnesota Co. v. City of Beresford, 175 F.2d 161, 1949 U.S. App. LEXIS 2349 (8th Cir. 1949).

Opinion

RIDDICK, Circuit Judge.

The Layne-Minnesota Company, herein- ' after referred to as the contractor, brought this action against the City of Beresford, South Dakota, for a judgment declaring the respective rights and obligations of the parties under a written contract for the construction of a well and its equipment with a pump of sufficient capacity and a motor of sufficient power to deliver the production of the well to the water treatment plant at an elevation 43 feet above the point of pump discharge at the well head. The complaint also charged the City with breach of the contract and asked for a money judgment.

In its answer the City denied the allegations of the complaint, charged that the contractor was guilty of a breach of the contract, and asked a judgment against the contractor for damages sustained by the City because of the contractor’s alleged refusal to perform the contract. The case was heard by the district judge without a jury and, without objection from either party, decided as an action for breach of contract.

.The questions' in dispute were the terms of the contract agreed upon by the parties, whether the City or the contractor was guilty of a breach of the contract, and the amount of the judgment to which the innocent party was entitled by reason of the wrongful act of the other.

The source of the controversy is to be found in the conflicting interpretations of the contract by the City and the contractor. The writings constituting the contract were the specifications for the work, the contractor’s qualification data accompanying its bid, and a writing entitled “Contract” signed by the parties, all prepared by the engineer employed by the City. By reference the specifications were made a part of the contract and the qualification data a part of the specifications.

The specifications for the well were based upon facts known to the engineer concerning the depth and capacity of the wells then being used by the City and upon the history of their operation. From these facts the engineer could not in the specifications state the exact depth or water production capacity of the new well, nor all the details concerning the equipment to be installed in it and necessary to deliver the well production when determined to the City water treatment plant. Bids were therefore asked for drilling wells of different types and production and of approximate depth, and for the equipment of the well drilled with a pump and motor of capacity estimated to be sufficient to deliver the maximum production of the well of the type and production actually drilled.

Although the specifications made it clear that the City preferred to let one contract for the well and for its equipment to one [163]*163contractor, provision was made for bids of water production contractors for drilling the well and for bids from equipment manufacturers for the delivery of the necessary well equipment f. o. b. Beresford. Requirements for the well construction and for pumps and other equipment for the well were set out in separate sections of the 'specifications.

The forms for bid proposals were prepared in accord with the above provisions of the specifications. Because of the necessity for the prompt performance of the work, the contractor bidding for the construction of a well was required, in addition to stating his bid price for a completed well of minimum or basic water production, to describe his machinery and other equipment available for the work and to estimate the time within which he could begin work after the acceptance of his bid, and the time within which the work could be completed after its beginning. A contractor bidding on well equipment was required to give the price of equipment delivered at Beresford, estimated to meet the requirements of the equipment specifications for a well of the type and minimum production drilled by the well contractor, and to estimate the time within which the required equipment could be shipped after receipt of an order for it.

The contractor in this case was engaged in well drilling and in the manufacture of well pumps. Its bids were accepted for the construction of a well of a minimum water production of 100 gallons a minute and for the installation in the well of equipment of the power and capacity required to deliver the well production when determined. The bid prices for the well, $15,800, and for the estimated equipment, $2,414, were stated separately, with provision for additional compensation for additional motor power and pump column if required. But, since it was impossible to know the details of the required well equipment until the well was completed, the depth of the well and its water production known, the specifications provided that the details of the bid concerning pump and motor equipment were to be considered by the parties as tentative estimates; and that the type and size of pump bowl, the depth of its setting in the well, the number and size of impellors with which the pump was to be equipped, and the power of the motor required to deliver the capacity of the well to the City water treatment plant would not be determined until the well was completed and the details of well equipment approved by the ■engineer.

The contractor in its qualification data agreed to begin work within 30 to 60 days from the date of the acceptance of its bid, to complete the well within 60 to 90 days from beginning work, to ship well equipment within 4 to 6 weeks from the date of the required authorized order for shipment, and to complete the installation of the equipment within 3 days of its arrival. The specifications provided a penalty of $10 for each day’s delay in shipment of authorized equipment in excess of 10 days beyond the time estimated as required for shipment.

Negotiations between the parties for the contract began in February 1945. At that time the City was obtaining its water from two wells, one of which was out of commission and the production of the other decreasing and insufficient to meet the City’s requirement for sanitation and fire protection. The City’s desperate need for an increased water supply was known to the contractor.

The writing entitled “Contract,” however, was not executed by the parties until March 29, 1945. Neither the “Contract” nor the specifications nor the bid proposal fixed a definite time for beginning or completing the work. The only reference in the specifications as to payment for the work is the provision that final settlement would be made upon final acceptance upon the basis of an actual test of the completed installation. The specifications did not otherwise fix the time for payment to the contractor. The “Contract” provided:

“The owner (the City) shall pay to the Contractor for the performance of this work in current funds as follows: 50% of the pump and motor price upon delivery of same at Beresford. Payment for the gravel wall well upon completion and acceptance of same, if partial payments have [164]*164not been recommended by the engineer and approved by the City Council prior thereto.”

The specifications required bids “upon the completed well and pumping equipment to the point of pump discharge." The cost of pipe and other equipment to connect the pump discharge to the City water treatment plant was to be paid by the City under a separate contract to which the contractor in this case was not a party. The section of the specifications entitled “General Specifications” for wells provided that:

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Cite This Page — Counsel Stack

Bluebook (online)
175 F.2d 161, 1949 U.S. App. LEXIS 2349, Counsel Stack Legal Research, https://law.counselstack.com/opinion/layne-minnesota-co-v-city-of-beresford-ca8-1949.