Northern Pac. Ry. Co. v. Twohy Bros. Co.

95 F.2d 220, 1938 U.S. App. LEXIS 4097
CourtCourt of Appeals for the Ninth Circuit
DecidedMarch 1, 1938
Docket8594
StatusPublished
Cited by12 cases

This text of 95 F.2d 220 (Northern Pac. Ry. Co. v. Twohy Bros. Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northern Pac. Ry. Co. v. Twohy Bros. Co., 95 F.2d 220, 1938 U.S. App. LEXIS 4097 (9th Cir. 1938).

Opinion

DENMAN, Circuit Judge.

Appellant railway company appeals from a judgment in favor of appellee, railway building contractor, awarding damages for two breaches by the railway of a contract under which the contractor was to do the work of construction and during construction the commercial haulage upon a branch line railway. The branch, some forty-one miles long, extended from Orofino, Idaho, to a destination called Headquarters in a pine-forested area, which the road was to penetrate, and whose logs were to be its principal freight.

Appellee contractor brings a cross-appeal, later considered.

A. One of the items of damage awarded the contractor was based upon a claimed right of the contractor to haul in its .work trains, during the period of the construction of the branch line, commercial freight, i. e., logs and other goods not used in construction.

The railway contended that under a stopping work clause of the contract the *222 work of commercial haulage could be, and was, stopped without liability other than for the work of haulage already done. It gave such notice on July 8, 1927, when twenty-nine miles of the road were graded, railed, and sufficiently ballasted for the hauling of logs, and thereafter hauled the commercial freight in its railway log trains.

The railway further contended that, even if the contractor had been improperly deprived of the haulage, the court’s award was based on a wrong theory of fixing the damage.

The contract gave to the contractor the right to, and required him to, perform two,classes of work: (1) To construct the entire branch line; and (2) do nonconstruction work, such as hauling the commercial freight for third parties in its work trains. There is no merit to the railway’s contention that both were construction. The contract terms “construction” of the railway and the operation of “commercial haulage” themselves seem mutually exclusive in function. The contract so treats them. In its paragraph entitled “Work” it describes the contractor’s agreement to “construct” with the various incident of construction such as “clearing, grubbing culverts, bridging tunnels, track laying, ballasting” and then provides for "other work for which prices are hereafter named.” Later, in the body of the contract, the “prices” for “other work” referred to in the “Work” clause and descriptions of the haulage operations appear under the title “Prices for Work,” as follows :

“(72) Handling, prior to date line is turned over to Operating Department of the Company, all commercial business, material and empty oars of the Company used in commercial service and in the service of other contractors, to include all necessary switching and spotting and apply to empty car movement from point of origin of the empty car to the loading site and loaded car return to the operated lines of the Company, per mile...........$1.00”

(Italics supplied.)

The commercial business is something for the “Operating Department” after construction. It is none the less operating as distinguished fr'om construction if done during construction.

All this work of both classes was agreed to be completed by September 1, 1927. The contractor was to do all of both classes of work, unless, so far as concerns this item of the appeal, the carrier could at any time stop work on a-ny portion of the line’s construction or the work of commercial haulage and continue it with carrier’s employees to the exclusion of the contractor and without responsibility to it under the following clause:

“Stopping work.

“The Company at any time before completion may stop the work or any part thereof, or may reduce- the force employed or retard the work or any pa-rt thereof. On receiving such direction the Contractor shall stop work or diminish the force as directed, and shall have no claim whatsoever for damages by reason thereof, but shall receive payment for the work done in full discharge and satisfaction of all demands against the Company. Any notice given by the Company under this paragraph shall be in writing signed by the Chief Engineer, and shall be delivered to the Contractor or some person on the work representing him at least five (5) days prior to the required stoppage or reduction.” (Transcript, 68.)

The question on the legal construction of the contract is whether the “work” which the railway could stop under this “Stopping work” paragraph was the contractor’s work, which it was engaged to perform, or the work itself of building the railway and carrying the commercial freight, by whomsoever performed. Was it still “work” within the meaning of that term in the contract, though performed by the railway after the contractor had been stopped? If the latter, the work itself could not be continued and performed by some one else without a breach of the agreement that the contractor was to perform it.

The clue to the construction of the term “work” is contained in the succeeding paragraph dealing with the construction of the railway if the contractor was not progressing with the "work as fast as necessary or with sufficient force” and permitting a termination of the contract by the railway. The clause treats the word “work” as something continuing after the railway declared the contract to be terminated. It is as follows:

“Accelerating work.

“If at any time the Contractor shall not be in the opinion of the Chief Engineer *223 progressing with the work as fast as necessary, or with sufficient force to insure its completion within the contract time, the Chief Engineer may direct the Contractor to put on such additional force and means as in his judgment are necessary, and on the failure of the Contractor to comply with such directions, the Chief Engineer may declare this contract terminated; and in such case the amount of moneys then remaining unpaid including the percentage retained on all monthly estimates, shall be kept by the Company until the Work is completed, and the Company may employ such force and means as in its judgment shall be necessary to complete the work and the cost thereof shall be paid by the Contractor.” (Italics supplied.) (Transcript, 68.)

We do not find any ambiguity here warranting evidence to explain the term “work.” The company had the right to stop the building of the road or commercial hauling by any one, but, in the absence of some failure on the part of the contractor, it could not continue such building or hauling by itself or a different contractor without violating its agreement that the contractor should do all the work of building and hauling.

However, were the term “work” still ambiguous as to its interpretation, we are required to interpret it against the railway, since it prepared the contract headed “Form 109-A General Contract” which the contractor signed. Sartoris v. Utah Construction Co., 9 Cir., 21 F.2d 1, 2.

The railway argues in support of the contrary construction that it created no hardship to the contractor to require it to stop work, since the work, including haulage, was to be paid for at unit prices and not by a lump sum for the line and haulage as a whole.

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Bluebook (online)
95 F.2d 220, 1938 U.S. App. LEXIS 4097, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northern-pac-ry-co-v-twohy-bros-co-ca9-1938.