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BURKE v. BOARD OF IMPROVEMENT PAVING DIST. NO. 5
contractor, that the engineer should have the for paving roadways of all the streets of right to make alterations in the line, grade, said city and the work was carried on by plan, , and quantity of the work, and that if such alterations diminished the quantity of them during a period of 5 or 6 years, after work, this should not constitute a claim for they had erected a brick manufacturing damages on anticipated profits. A proposal for plant, at an expense of near $150,000, in the bids, which stated the approximate quantities city of Ft. Smith, to comply with the terms upon which bids would be received, was not included nor referred to in the contract. Held, of the contract in furnishing brick manufacthat the contract being unambiguous and such tured in Ft. Smith for the work. A great proposal not having become a part thereof, the mass of testimony was introduced, and the district was not bound to give the contractors the quantity of work specified in the proposal, record is voluminous. A master was appointbut was bound to permit them to do all of the ed by the chancellor, and reported his findwork required to be done so long as the contract ings on the different claims made, and upon continued in force, and the district could not exceptions to the master's report the chanunder the guise of making alterations in the contract, take from the contractors certain des- cellor found in favor of appellants on their ignated streets and do the work itself or through claim for retained percentage $38,297.86, of other contractors.
the amount due for paving, and for pine [Ed. Note. For other cases, see Municipal headers $197.88, and for iron gutter plates, Corporations, Cent. Dig. $ 883; Dec. Dig. Cum $377, and rendered a decree for the whole 352.] 2. MUNICIPAL CORPORATIONS 366–PAVING sum, $42,260.88, found to be due, from which STREETS-CONTRACTS-COMPLETION OF WORK Burke Bros. appealed, contending that the BY CITY.
chancellor erred in finding against them on Where the district paved certain of the their other claims and in reducing their streets after giving the contractors notice that this would be done in the exercise of the option claims on the items for pine headers and reserved to employ additional forces of men iron gutters. The court held against appeland purchase materials in the open market, it lees on all claims made by way of counterdid not attempt to deprive the contractors of the work, but only to pave such streets at the ex- claim and set-off, and they also appealed. pense of the contractors, and the contractors In the notice and proposal for bids sent were entitled to the difference between the cost out by the district it was stated: to the district of doing the work and the agreed
"The approximate quantities upon which bids price.
will be received and compared are as follows: [Ed. Note. For other cases, see Municipal
"Square yards of completed brick pavement Corporations, Cent. Dig. 899; Dec. Dig. Om laid on said foundation, 20,000 sq. yd. 366.]
“Square yards of completed brick pavement 3. MUNICIPAL CORPORATIONS C362–PAVING laid on concrete foundation, 20,000 sq. yd. STREETS–CONTRACTS—DAMAGES FOR DELAY.
"Cubic yards of concrete in place for gutterWhere a paving district and parties con- ways 4,000 cu. yd. tracting to pave the streets of the district rec
"Pounds of cast iron cover plates for gutterognized that the paving could not possibly be ways, 300,000 pounds." completed within the time provided in the con
The bidders were also advisedstruction by the contractors of a plant for the “to make such examinations as may be necesmanufacture of bricks and the time lost on ac- sary to inform themselves in respect to present count of the failure of abutting property owners conditions of the streets and local surroundings to construct the curb. and guttering against before submitting proposals.” which the pavement must rest, for which fail- Appellants' bid of 8134 cents per square ure neither the paving district nor the contrac- yard for the pavement on sand foundation, tors were to blame, a finding that the district was not entitled to any damages for the failure $1.46 per square yard for pavement on conto complete the work within the specified time crete foundation, $12 for each yard of conwas warranted.
crete in place for guttering, and 3 cents per [Ed. Note.-For other cases, see Municipal pound for iron covers for gutterways, all Corporations, Cent. Dig. $S 894, 895; Dec. Dig. materials to be furnished and work done by 362.]
the bidders, was the lowest bid and accepted Appeal from Sebastian Chancery Court; by the board and a contract made with them. Jas. D. Shaver, Special Chancellor.
The contract as entered into for the construcAction by M. C. Burke and J. A. Burke, tion of the paving contains no provision relacopartners as Burke Bros. against the Board tive to the particular kind and amount of of Improvement Paving District No. 5 and paving to be done, and makes no reference others. From a judgment for plaintiffs for to the proposals for bids, nor bids received, an insufficient amount, they appeal, and de- except it recites that Burke Bros., party of fendants also appeal. Modified and affirmed the first part
Pryor & Miles, John H. Vaughan, and J. V. "in competition submitted the lowest and best Bourland, all of Ft. Smith, for appellants. tender for constructing the paying improvement Kimpel & Daily, of Ft. Smith, for appellees. in paving district No. 5, of the city of Ft. Smith,
Arkansas, said improvement being as follows,
viz.: Thé construction and completion of the KIRBY, J. This suit was brought by paving of the roadways of the streets and aveBurke Bros. for an accounting and to re- nues in șaid paving district No. 5, as indicated
by said board of improvement, and furnishing cover the balance claimed to be due under the necessary labor, materials, tools and plant a contract with improvement district No. 5 therefor." of the city of Ft. Smith, for paving the The other provisions necessary to be set streets of said city. The contract provided out are sections 9, 14, and 15 of the contract
and the specifications relating to concrete, dinance passed after a grant of power by and gutterways as follows:
the Legislature succeeded in having it done. "9. If, in the judgment of the engineer, the There was much friction between the board work is not being pushed with the degree of ac- and the contractors, each insisting that the tivity necessary to its completion within the other was at fault in the performance of the specified time, then it shall be at his option upon written notice and approval of the board,
to contract; the contractors insisting that they employ such additional force of men as may be were being arbitrarily required to move to required, and to purchase material in open mar- different and distant places at great expense ket and deduct the cost thereof from money and loss of time; that they were harassed due the contractor."
"14. The engineer, in concurrence with the by numerous inspections and rejection of board, shall have the right to make alterations brick captiously made, and the board claimin the line, grade, plan, form and quantity of ing that the brick used and attempted to be the work herein contemplated, either before or after the commencement of the work.
put down in paving was not of the kind and "If such alterations diminish the quantity of quality contracted to be used, and did not the work to be done, they shall not constitute meet the test prescribed ; also that the cona claim for damages on anticipated profits on tractors were furnishing brick from their the work dispensed with; if they increase the amount of work, such increase shall be paid for plant to be used and using them on other according to the quantity actually done, and contracts and improvements at different the price or prices stipulated for such work in places, outside of Ft. Smith. Certain paving this contract."
15. In consideration of the completion by the on sand foundation was done in some of the said first party of all work embraced in this gutters, which should have been done by the contract in conformity with the specification property owners, and likewise in the alleys, and stipulations herein contained, the board of improvement of paving district 'No. 5 of the but which was done by the contractors at the city of Ft. Smith, Arkansas, party of the sec- regular price to the district, and for which ond part hereby agrees to pay said first party the property owners paid the commissioners the following prices: For each square yard of $1 per yard. Payments for the work were completed brick pavement laid on sand foundation the sum of eighty-one and three quarter made in accordance with the schedule of cents (81-34 cents) dollars; for each square of prices fixed in section 15 of the contract upcompleted brick pavement laid on concrete foun-on monthly estimates of the engineer, less dation the sum of one and forty-six one hun. dredths ($1.46) dollars; for each cubic yard of 10 per cent. of the amount of the estimates concrete in gutterways, the sum of twelve retained by the board, in accordance with ($12.00) dollars; for each pound of cast-iron the contract, until the completion and accover for gutterways, the sum of three (3) cents.'
"Concrete. If upon any street to be paved the ceptance of the work. board of improvement should decide to use as Certain designated streets and portions of concrete base due to the presence of street or streets were paved by the district with consteam railway tracks, or for any other cause, crete after the board of improvement and the engineer may order that the surface of the subgrade be brought eleven (11) inches below engineer notified the contractors that it and parallel with the finished cross-section of would be done in exercise of the option, rethe street, and that upon this subgrade, when served in section 9 of the contract, to emproperly prepared, there shall be laid a layer of Portland cement concrete, not less than five (5) ploy additional forces of men and purchase inches in thickness when tamped.
materials in the open market for the con“Gutterways. At such street and alley inter- struction of the work; such notices assumed sections as may be designated by the engineer for the purpose of it only, that the contract there shall be constructed by the contractor, as a part of the street pavement, covered gutters was still existing, and expressed that the or waterways, the same to conform to the de- engineer, with the concurrence of the board, tails therefor on file. * * * "
had the power (which was denied by the Appellees, after constructing a plant for the contractors), under section 15, providing for manufacture of paving brick out of shale, the alterations, to diminish the quantity of at Ft. Smith, which required almost two work contemplated under the contract, by years, proceeded with the work of paving the eliminating therefrom the streets designated streets as they were designated for that for concrete pavement by the board. purpose by the engineer of the district. They As already said, the volume of testimony were delayed greatly in the prosecution of is great and in many instances it is in dithe work of paving by the failure of the rect conflict. Especially is this true relative property owners to construct the sidewalks to the conduct of the engineers and the imand curbs on the abutting property, and provement district in the designation and were compelled often to move their working failure to designate streets to be paved and companies and appliances to different streets, in the inspection and rejection of the brick or to different sections of the same street, to be used and in the action of the district in order to continue the work without too and failure to have the curb and guttering great break or delay. Neither the paving completed that the paving could be continudistrict nor the contractors were at fault ed, as well as in the kind and quality of for the failure of the property owners to brick furnished and used in the paving, none sooner construct their sidewalks and curbs. of which it was claimed came up to the The city attempted to compel the construc-test required by the specifications. No usetion by an ordinance which was declared ful purpose can be served by setting out the
BURKE v. BOARD OF IMPROVEMENT PAVING DIST. NO. 5
say that it supports the findings of the chan-, creasing the number of units in another. cellor upon all claims, upon which judgment The court is of opinion, however, that the was rendered in appellants' favor, and that district did not attempt to deprive the conhis findings upon any and all other matters, tractors of the work, but only to pave said except as indicated herein, are not clearly designated streets at the expense of the conagainst the weight or the preponderance of tractors under the provisions of said secthe testimony.
tion 9 of the contract, because the work was  The proposals for bids sent out by the not being dispatched by the contractors as board of improvement, with instructions to rapidly as the board thought it should be bidders stating the approximate amount and done, in order to the completion of the pavkinds of paving to be done, did not become a ing within the time given therefor. Appelpart of the contract, not being included nor lants were therefore entitled to recover for referred to therein and the contract having said paving the difference between the cost afterwards been prepared and executed with thereof per yard to the district and the out any agreement for or designation of a price agreed to be paid them for pavement, certain amount and kind of paying to be on a concrete foundation, which was 10 cents done, the price alone for the certain kinds per square yard on 105,000 square yards of or units of a class being stipulated in said pavement, amounting to $10,500, as found by section 15 thereof. The contract provides the master. for
The parties appear to have disregarded “the construction and completion of the paving and waived the provisions of the contract of the roadways and streets and avenues in in many particulars, the district appearing said paving district No. 5, as indicated by said to have endeavored to get all the pavement board of improvement and furnishing the necessary labor, materials, tools and plant there- laid on a sand foundation, out of the best for," "and to complete the work in strict con- brick that could be manufactured by the formity with the details and plans for said work contractors at their plant from the material on file in the office of the said board of improve available, while the contractors appeared ment, and according to the specifications hereinafter contained and made part of this con- desirous of making the best paving brick that tract, and in compliance with the directions could be manufactured under the existing of the said board of improvement, or their duly conditions and using them in the laying of authorized agents, and to the satisfaction and the pavement on the streets designated, with acceptance of said board."
The contract being unambiguous, the no- proper expedition and dispatch. Both partice and proposal for bids, containing the ap
ties appear finally to have waived and disreproximate amounts of the different kinds of garded all the provisions of the contract, expaving, cannot be construed to be a part of cept only those relating to the price and payit, having been omitted therefrom, and must ment for the pavement laid of the best brick be considered only as belonging to the pre- that the commissioners could get the conliminary and antecedent negotiations. Sou- tractors to make and use therein, and the dan Planting Co. v. Stevenson, 83 Ark. 163, rattler test was never insisted upon, the par102 S. W. 1114; Tedford Auto Co. v. Thomas, ties appearing to have recognized that the 108 Ark. 503, 158 S. W. 500.
brick that could be manufactured at the conThe district was not bound to give the tractors' plant would not stand this test, and contractors the number of square yards of to have accepted instead the best brick that completed brick pavement on concrete foun- could be manufactured from the materials dation and the number of cubic yards of available to the plant and that were of a concrete in place for gutterways mentioned standard of quality equal to those that had in the proposal for bids, the contract not theretofore been used in the paving of Garproviding therefor, but it was bound to per
rison avenue. mit them to put down in concrete all the
 The parties appear also to have recgutterways that were designated by the en- ognized that the paving could not possibly be gineer and all the kinds of pavement that completed within the time provided in the were required to be made in paving the contract, because of the time required for streets, so long as the contract continued in the construction of the plant for the manuforce. In other words the district could not, facture of the bricks and of the time necesunder the guise of making alterations under sarily lost from the work of paving on acthe provisions of section 14 of the contract, count of the failure of the abutting property take from the contractors certain designated owners to construct the curb and guttering streets, a substantial portion of the work against which the pavement must rest, and contracted to be done, and deprive them of the chancellor's finding that the district was the benefit thereof by giving it to the other not entitled to any damages for failure to contractors, or having the work done itself. complete the work within the specified time, Kieburtz v. Seattle (Wash.) 146 Pac. 400 is also in accordance with the testimony. (March 15, 1915).
The decree upon the items found in favor  Such would not be the case of a loss of appellants is correct, and appellants are suffered because of the performance of the further entitled to recover the difference bework required by the contract on account tween the cost of the paving laid in concrete of a change in the plans, increasing the num- done by the board of improvement at the exber of units of work in the one class and de- pense of the contractors and the price to be paid them therefor-$10,500, as found by the phis, for carrying freight and passengers for master-with interest, and to judgment here hire, contrary to the articles of incorporation for that additional sum.
and the constitution and by-laws thereof, The decree is accordingly modified and, as and have appropriated $50,000 to be used in modified, affirmed.
the purchase of the boats and payment of subsidies to the owners and operators thereof, to induce them to engage in the carriage
of freight and passengers for hire, for a term GREGG et al. v. LITTLE ROCK CHAMBER of five years; that when the plaintiff subOF COMMERCE et al. (No. 191.)
scribed to the fund it was represented to him (Supreme Court of Arkansas. Oct. 25, 1915.) that it would be collected for the Chamber of 1. CORPORATIONS O374 - POWERS – IMPLIED Commerce, and POWERS. Powers essential to the exercise of the pow
"would be used for industrial and development ers expressly granted are necessarily implied, purposes in Little Rock and vicinity, and that and are as much granted as if expressed.
the principal part of said fund would be used [Ed. Note.- For other cases, see Corporations, ing the resources of the city of Little Rock,
for the purpose of locating factories and developCent. Dig. $$ 1517, 1518; Dec. Dig. Om 374.] and Pulaski county, and incidentally of adver2. CORPORATIONS ww447 – POWERS – Con- tising the resources of the state of Arkansas and TRACTS.
the opportunities for the development of manuThe power of a corporation to make and facturing and other industries in the city and take contracts is restricted to the purposes for state.” which it is created, and cannot legally be exercised by it for other purposes.
It was alleged, further, that it would be a [Ed. Note.-For other cases, see Corporations, diversion of the fund from the purpose for Cent. Dig. $$ 1786, 1788, 1807; Dec. Dig. Om which it was raised, and so reduce the fund 447.]
as to create an irreparable injury, and asked 3. CORPORATIONS O 447-CHAMBER OF COM- an injunction to prevent it. MERCE-POWERS.
The Chamber of Commerce admitted the The Little Rock Chamber of Commerce, incorporated under Kirby's Dig. &$ 937–943, pro- allegations of the complaint as to its incorviding that such corporations shall have, for poration and powers, and that it was about carrying out their object, such powers as are to execute the contract granting the subsipossessed by other corporations, and which
dies for a boat or boats to navigate the Armay be necessary to their management and purposes, and whose constitution declared its ob- kansas river, as alleged in the complaint, but ject to be the upbuilding of the city, the encour- denied that it was contrary to its articles of aging of its public improvements and education incorporation or beyond its powers; denied al advantages, and the development of its industries, and whose by-laws provided for an in- any representations to the parties subscribdustrial committee to have exclusive control of ing to or donating lands in aid of the fund, the industrial fund and the power to grant aid that such fund would be used solely in locator subsidies for public purposes, did not exceed its powers by granting a subsidy for the con- ing factories and developing the resources of struction of boats and the navigation of the the city of Little Rock and incidentally adriver from the city to Memphis, with a view to vertising the resources of the state; alleged lowering prevailing freight rates.
that the contracts donating the lands and [Ed. Note.-For other cases, see Corporations, purchasing them from it were in writing. 447.]
The object and purpose of the Little Rock
Chamber of Commerce is stated in article 2 Appeal from Pulaski Chancery Court; Jno. of its constitution, as follows: E. Martineau, Chancellor.
The object and purpose of this organization Suit for injunction by Frank B. Gregg and shall be the upbuilding of the city of Little others against the Little Rock Chamber of Rock, Argenta, Pulaski county and the state of Commerce and others. Decree for defend- Arkansas, encouraging and assisting in public
improvements of all kinds therein, including ants, and complainants appeal. Affirmed. streets, highways, sewers, public buildings, and This appeal challenges the power of the any, and all things which are for the public
good; locating schools and colleges, libraries, Little Rock Chamber of Commerce and its and all things which look toward higher and industrial and development committee, to better educational advantages; locating and degrant or give the funds and property donat- veloping and assisting in the location and de
velopment therein of manufactures and other ed to the Chamber of Commerce for the pro-industries; buying, owning, developing and sellmotion of the general welfare of the cities of ing property, real and personal, borrowing' monLittle Rock and Argenta, the county of Pulas- ey and issuing bonds and other evidences of inki, and the state, in educational, commercial, debtedness, and executing mortgages or deeds of
' and industrial ways, for subsidizing and es- association, which will bring merchants and partablishing a boat line for the navigation of ties engaged in trade in closer association and the Arkansas river from Little Rock to Mem- work for the mutual advantage and protection
of the same, conducting a board of trade with phis, Tenn.
all the necessary adjuncts, conducting a real The complaints allege that the Chamber of estate exchange, which shall unite under rules of Commerce is about to make a contract for business and justice the business of buying, the purchase of a steamboat, to cost approx-conduct and control of brokers, agents and others
selling and exchanging real estate and for the imately $30,000, to be operated on the Ar- engaged in that line of business; for organizing kansas river, between Little Rock and Mem- and conducting any other bureau or bureaus, Ark.)
GREGG v. LITTLE ROCK CHAMBER OF COMMERCE
exchanges, which the board of governors may de- He stated the purpose of the contract was cide shall be beneficial or necessary in the build- for the purchase of the boat, that it was the ing up of said cities and state, and for the best intention of the committee to navigate the interest thereof and of this organization; shall have full power to do any and all things deemed river and, if necessary, to purchase a boat necessary in carrying on any and all of the above to engage in the freight and passenger trafobjects; to foster and promote the commercial, fic between Little Rock and Memphis, and: industrial, physical and moral development of the cities' of Little Rock, Argenta and vicinity. tle Rock and Memphis will enable citizens of
"The operation of a boat line between LitArticle 10, 8 6, of the by-laws provides:
Little Rock to demand of the Interstate ComAn industrial and development committee of merce Commission a river and rail rate to all the Chamber of Commerce is hereby created. points in the United States, the same as other Said committee shall have exclusive control of cities on navigable streams." the disposition of the industrial and development fund raised by the Chamber of Commerce, and
The terms of the contract for the buildthe fund shall be paid out only upon drafts or ing of the boat were shown in evidence. No warrants of said committee. The committee financial benefit was to be derived by the shall have the right to make investments of Chamber of Commerce from the operation of said funds, to make donations and grant aids or subsidies and use it in any manner which a ma- the boat, no profit to be paid it, nor loss to jority may determine upon for public purposes, be sustained by it. The section further provides that the committee shall consist of six members, and provides for
D. K. Hawthorne, of Little Rock, for aptheir term of office, and that it may have the pellants. Mehaffy, Reid & Mehaffy and Lawright to establish by-laws, rules and regulations rence B. Burrow, all of Little Rock, for apfor the control of its meetings.
pellees. It appears from the testimony what representations were made by the canvassers
KIRBY, J. (after stating the facts as securing the donation and subscriptions to above). The Chamber of Commerce was not the “million dollar fund” and Mr. Frank B. organized for pecuniary profit or dividend Gregg, who was president of the Chamber of making or sharing, but under the statute proCommerce at the time, stated that it was viding for the organization of corporations represented to him, as an inducement to sign for benevolent purposes, and as boards of a contract for the purchase of certain lands trade or chambers of commerce, which profrom the Chamber of Commerce, that the provides they shall have, for carrying out the ceeds would be used for industrial and depurposes and objects of their organization, velopment purposes by bringing factories to such powers as are possessed by other corLittle Rock. The money was to be used to porations and which may be necessary to. induce factories to locate in Little Rock. He their efficient management and the promotion said:
of their purposes. Sections 937-943, Kirby's “At the time the million dollar fund was rais- Digest. ed in 1912 by the Chamber of Commerce, it
It is insisted that because the terms of the was not contemplated by the officers of the Chamber of Commerce that any part of the fund charter designating the purposes of the orwould be used in inducing navigation on the ganization do not expressly state that the Arkansas river. It was contemplated that the corporation shall have power to grant a subfund, when it was raised, would be used in giving bonuses to factories and giving sites, part sidy for the operation of boats on the Arkanpaying for sites, for factories, and advertising sas river, the contemplated action is beyond Little Rock and vicinity; in fact, in any way its powers. The statement of the object and that would help the industrial development of the city.”
purposes is broad and inclusive: Mr. Carl J. Baer testified that he was in- Rock and Argenta, Pulaski county and the state
"For the upbuilding of the cities of Little dustrial commissioner of the Chamber of of Arkansas, encouraging and assisting in pubCommerce and made the campaign for the mil- lic improvements of all kinds therein, including lion dollar fund. He said there were no con- streets, highways, sewers, public buildings and tracts made with the plaintiffs, except those any and all things which are for the public
good; locating schools and colleges, locating, in writing. He states generally what was developing, and assisting in location and develnecessary to the industrial development of opment therein, manufactures and other indus
tries, * * conducting a merchant associathe city, and:
tion, board of trade, real estate exchange * "Freight rate is the real hindrance to the de- for organizing and conducting any other bureau. velopment of Little Rock. Money could not or bureaus, exchanges, which the board of govbe spent in a more advantageous way than in ernors may decide will be beneficial or necessary securing cheaper transportation. The object in in the building up of said cities and state, for subsidizing the boat was to secure cheaper rates, the best interest thereof and of the organization, and thereby to improve conditions in Little shall have full power to do any and all things Rock. Without effort to get cheaper transpor- deemed necessary in carrying on any and all tation the Chamber of Commerce would be very of the above objects to foster and promote the much hindered in the development of Little commercial, industrial, physical and moral deRock, and the money expended would not re- velopment of the cities of Little Rock, Argenta. sult in material advantage in anything like it and vicinity.” would if it expended the money in securing lower rates. Cheaper transportation is necessary
Thompson says: in locating schools and colleges and industrial “The powers of the corporation are to be plants, and all things of that kind and character measured by its charter, read in connection with that go to build up a city. Was familiar with the general laws applicable to such corporaLittle Rock and its surroundings, and in his tions, and whatever under the charter and genopinion there was no way to secure low rates eral laws, reasonably construed, may be fairly