Osceola v. Gjellefald Construction Co.

279 N.W. 590, 225 Iowa 215
CourtSupreme Court of Iowa
DecidedMay 10, 1938
DocketNo. 43888.
StatusPublished
Cited by9 cases

This text of 279 N.W. 590 (Osceola v. Gjellefald Construction Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Osceola v. Gjellefald Construction Co., 279 N.W. 590, 225 Iowa 215 (iowa 1938).

Opinion

Hamilton, J.

— The solution of the question involved in this ease calls for a construction of the “contractor’s bond”. By the terms of the bond, the specifications as well as the contract are by reference incorporated in the bond. In construing any instrument in writing the primary object is to arrive at what the parties to such instrument had in mind when it was prepared. 8 Amer. Jur., p. 722. In this case, the parties had- in mind the construction of a dam, made out of earth, across a creek bed between two hills for the purpose of creating a reservoir from which the city would obtain its water supply. If it was to be of any use at all, it was necessary that the dam be so constructed as to hold water. An engineer was employed by the city who prepared plans and specifications detailing the material to be used and the way and manner in which the dam was to be built which gave the engineer broad authority in the supervision of the work and the selection of the material; but, ,'as to the one absolutely essential feature, namely, water-tight construction, the responsibility was placed squarely upon the contractor by the specific provision found in the specifications, to wit: “The Dam shall be water-tight when finished, and the contractor shall assume entire responsibility for the obtaining of a water-tight structure. ’ ’

The specifications also provided:

“Before final acceptance of the work, the same will be inspected by the engineer, the City Council, or water committee, and the work as installed must be found in compliance with the requirements of the plans and specifications. * * * Any defects of workmanship or materials -revealed by such final inspection will be corrected and made good by the contractor before final acceptance of the work. A one year guarantee ion workmanship, materials, equipment, machinery and appliances will be required in the contract.”

These specifications were before the contractor when he made his bid. On October 9, 1933, the contract was entered into between the Gjellefald Construction Company and the City of *218 Osceola for the construction of this dam and in this contract the specifications are made a part of the contract and the contract contained the following provisions:

“First party also agrees to furnish within ten days after .signing this contract an acceptable legal bond for 100% of the contract price guaranteeing complete and proper fulfillment ¡of the Contract, and also providing a one year guarantee on the labor, materials of construction and mechanical equipment of said installations from date of acceptance by second party.”

Following the execfition of this contract, on the same date, a bond, designated “Contractor’s Bond”, with Gjellefald Construction Company as principal and Aetna Casualty & Surety Company as surety in the sum of $18,100 with the City* of Osceola named as obligee, was executed. The material provisions of which are as follows:

" The condition of this obligation is such that whereas the principal, on October 9, 1933, entered into a contract with the City to construct an earthen dam as included in Division C of the plans and specifications for the City of Osceola, Iowa, as prepared by Lafayette Higgens, Jr., of Des Moines, Iowa, copy of which contract, together with all of its terms, covenants, conditions, and stipulations is incorporated herein and made a part hereof as fully and completely as if said contract were recited at length herein and
“Whereas, the principal and surety hereby agree to pay -to all persons, firms, or corporations having contracts directly with the principal or with subcontractors, all just claims due them for labor performed or materials furnished, in the performance of the contract on account of which this bond is given, when the same are not satisfied out of the portion of the contract price which the public corporation is required to retain until completion of the public improvement, but the principal and sureties shall not be liable to said persons, firms or corporations unless the claims of said claimants against said portion of the contract price shall have been established as provided by law.
“Now, if the principal shall in all respects fulfill said contract according to the terms and tenor thereof, and shall satisfy all claims and demands incurred for the same, and shall fully indemnify and save harmless the Obligee from all costs and *219 damages which it may suffer by reason of failure to do so and shall fully reimburse and repay the Obligee all outlays and expenses which it may incur in making good any such default, then the obligation is to be void and of no effect; otherwise to remain in full force and effect.
‘ ‘ Every surety on this bond shall be deemed and held, any contract to the contrary notwithstanding, to consent' without notice:
“1. To any extension of time to the contractor in which to perform the contract.
“2. To any change in the plans, specifications or contract, when such change does not involve an increase of more than twenty per cent (20%) of the total contract price, and shall then be released only as to such excess increase.
“3. That no provision of this bond or of any other contract shall be valid which limits to less than one year from the time of the acceptance ¡of the work the right to sue on this bond for defects in workmanship or material not discovered or known to the Obligee at the 'time such work was accepted. ’ ’

Work was commenced the latter part of October 1933, and completed in December 1933. The work was inspected by the engineer and on February 22, 1934, the final estimates for said improvement were made and a resolution passed by the city council which provided: “ * * * That the improvement so constructed by the contractors above named be ¡accepted and approved by the Council.”

The dam, extending east and west between two hills ¡across a watercourse, was 510 feet long and was 20 to 25 'feet 'high with a spillway near the west end which was 5 feet lower than the top of the dam. On both sides of the spillway were built concrete walls which ran across through the dam. The water fall was toward the north, the reservoir situated south of the dam. The south slope of the dam was sheeted over with cement slabs 4 inches thick and 8 feet square, with expansion joints between them, and these slabs also extended over the spillway and down the north slope of the spillway portion of the dam. Because of the extreme drought Which existed in that part of the state in 1934, the major portion of this structure was exposed above the water level until late in the fall 'of 1934. On July 7, 1934, there were 4 or 5 feet of water behind the dam covering *220 a surface of 15 or 20 acres; the water was 33 inches lower than the overflow at the spillway. At this time the city started to pump but in about three weeks the water got too low. In October 1934, the water had risen to a height of 6 or 8 feet.

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Bluebook (online)
279 N.W. 590, 225 Iowa 215, Counsel Stack Legal Research, https://law.counselstack.com/opinion/osceola-v-gjellefald-construction-co-iowa-1938.