Fisher & Carozza Bros. v. MacKall

Thomas, J., delivered the opinion of the court. The bill of complaint in this case was filed in Circuit Oourt No. 2 of Baltimore City on the 13th of July, 1920, by The "Fisher & Carozza Brothers Company, a corporation “engaged in general contracting and road and bridge building,” against John N. Mackall, Omar D. Orothers and C. D. Weinbrenner, constituting the State Roads Commission, and the McLean Contracting Company, a corporation engaged in the contracting business. It alleges, that, prior to. the 5th of November, 1919, the State Roads Commission, hereinafter referred to as the Commission, invited proposals, for the erection of a concrete bridge in. Somerset and Wicomico Counties, across the Poeomoke River, at Poeomoke.

City, Maryland, in accordance with the specifications, form of contract and “proposal form” of the Commission, and that on November 5th, 1919, the plaintiff “was awarded the contract” at the price of $67,-153.00, and a formal contract was executed by the plaintiff and the Commission on the 29th of November, 1919. That the principal part of the work to he. done under the contract was the building of two “trunnion piers * * " which were to he carried solid from an elevation of 12.25 feet below the datum line to an elevation of 1.0 feet above datum,” and that the approximate quantity of concrete to he used in said piers ⁵⁸⁸ was 925 cubic yards. That on March 16th, 1920, John bT. Mackall, who at that time was. the chief engineer of the Commission, made certain alterations in the plana and character of the work by lowering the foundations of the piers, and requiring them to> be “of hollow construction, with steel reinforcement, instead of solid construction,” which alterations, notwithstanding the increase in the depths of the foundations, reduced the amount of concrete required from 925 to 806 cubic yards.

That the contract and specifications reserved to the engineer the right “to make such alterations in the plans or in the character of the work as may he considered necessary oa- desirable from time to time to complete fully and perfectly the construction of the roadway,” and further provided: “Should such alterations in the plans result iu any increase or decrease of the quantity of work to he performed, the contractor shall accept payment in full at the contract unit price for the actual quantities of work done; or should such alterations in the character of the work be productive of increased cost or result in decreased cost to the contractor a fair and equitable sum therefor, to be agreed upon in writing by the contractor and the Commission before such, work is. begun, shall he added to or deducted from the contract as ihe case may he. bTo allowance will he made for anticipated profits.” That said alterations in the plans made a material change in the character of the work and indicated “a greatly increased cost” to the plaintiff; that as originally proposed the piers were without steel reinforcement, and could have been built iu a box constructed for the purpose of holding the concrete-in place until it set, but that the revised plans required, if the work was to he properly done, the erection of a watertight coffer dam, from which the- water1 could be pumped and the inside kept dry so that the steel reinforcement could he accurately placed, and the inside forms could he erected within the coffer dam to hold in place and mold the walls of the hollow pier. That the plaintiff was advised by competent engineers that the cost of preparing' for concrete under the original plans would have been $6,944, hut that the cost for ⁵⁸⁹ preparing for concrete under the revised plans would he in excess of $22,961, and that there should also be an allowance of $5,500 to cover the risk of coffer dam work in deep’ water and soft mud. That after the execution of said contract, and prior to March 1st, 1920, the plaintiff entered into contracts for the furnishing of materials to he used in the construction of the bridge, contracted for1' the use of a pile driver, employed an engineer, superintendent and foreman, secured the “necessary constructing force,” and was prepared to proceed promptly with the prosecution of the work and to complete the same before November 1st, 1920, as provided in the contract. That prior to March 1st, 1.920, the plaintiff requested permission of the engineer to begin the work, and was advised that “the completed plans” were not ready; that thereafter, on March 16th, 1920, the plaintiff received from the engineer the revised plans, and after making the necessary examination and calculations wrote to the Commission on March 16th, 1920, calling attention to the changes referred to above and stating that it was ready to start the¡ work at once on the original plans, hut that the revised plans would greatly increase the cost of the work, and that a, fair and equitable sum to be paid therefor “should he agreed upon in writing by the contractor and Commission beforei the work under the revised plans could he begun.” That “thereafter certain correspondence ensued” between the chief engineer of the Commission, wherein the engineer contended that the revised plans “did not entail a different form of construction from that originally intended” and the plaintiff contended that the proper method of construction was as has been stated; that as the result of said correspondence the plaintiff and the Commission reached an agreement by which the plaintiff was to’ do the work and receive certain additional compensation,, and that in order to comply with the provisions, of the contract requiring agreements for extra compensation to ha in writing before the work was begun, the Commission, on May 5th, 1920, submitted to the plaintiff for its “signature” a supplemental contract purporting to contain said agreement.

That ⁵⁹⁰ on the 8th of May, 1920, counsel for the plaintiff wrote to the Attorney General, or his assistant, as the attorney for the Commission, saying that the plaintiff would uot execute the supplemental contract unless certain modifications were made, and that after the Attorney General received the letter the plaintiff received a letter from the Commission, dated May 14th, 1920, advising the plaintiff that the Commission had “terminated” the contract with the plaintiff of Hovemher 29th, 1919, and had awarded the contract for the construction of the bridge to the defendant, the McLean Contracting Company. That the Commission, in attempting to terminate said contract, pretended to be acting in accordance with paragraph 63 of the specifications and contract, which contains the following provision: “63. Annulment of Contract. “If the contractor fails to begin work under contract within the time specified * * * the engineer shall give notice in writing to the contractor and his surety of such delay, neglect or default, specifying the same, and if the contractor within a period of ten days after such notice shall not proceed in accordance therewith, then the Commission shall upon written eertificate from the engineer of the fact of such delay, neglect or default, and the contractor’s failure to comply with such notice, have full power and authority without violating the contract to. take the prosecution of the work out of the hands of said .contractor.” The bill further alleges that the Commission attempted to award a contract for the work as altered to the McLean Contracting Company “without advertisement or competitive bidding,” and without complying .with the provisions of Section 36 of Article 91 of the Code, which “provides for the manner in which” such contracts shall he awarded, and has agreed to pay the McLean Contracting Company a sum in excess of $85,000. That the Commission threatens to' hold the plaintiff for the difference between the amount it pays the McLean Contracting Company and the original contract price, has ⁵⁹¹ taken possession of the materials furnished by the plaintiff, and has agreed to permit the McLean Oontraeting Company to us© the same at a price to be agreed upon by the Commission and said company.

That the McLean Contracting Company is about to proceed with the erection of the bridge under said pretended contract, and the Commission proposes to pay over to it the money appropriated for said work; that such action constitutes a fraud upon the rights of the plaintiff, and unless the Commission and the McLean Contracting Company are restrained from proceeding* with siaid work the plaintiff will suffer irreparable loss, the value of its contract with the Commission will he destroyed, and the money out of which it might otherwise be paid will he dissipated and lost. The bill prays (1) that the Commission he enjoined from paying' to the McLean Contracting Company “any sum or stuns of money out of any monies appropriated for the purpose of constructing” said bridge, or “out of any funds available for such purpose”; (2) that the Commission “be commanded by decree” of the court “to execute- said supplemental agreement with the modifications proposed by the” plaintiff; (3) that the plaintiff “he allowed such further sum in addition to .the price or- prices allowed in said contract or said supplemental agreement as may compensate it for the lossy damage and delay occasioned by the failure of” the Commission “to permit” the plaintiff “to- proceed with the erection of said bridge at the time or times mentioned in said contract and supplemental agreement”; (4) “that the alleged agree> ment between the” Commission “and the McLean Contracting Company for the erection of said” bridge “he declared null and void”; (5) that the McLean Contracting Company be restrained from proceeding with the erection o-f said bridge, “and interfering with” tbe plaintiff “in tbe erection thereof, and that it he commanded to remove therefrom all equipment, material and supplies!, which it may have caused to he de>posited upon the site of said work,” and (6) for general relief. ⁵⁹² 'In response to- an order requiring the defendants to- show cause why the relief prayed should not be granted, the defendants filed separate demurrers to the bill, and this appeal is- from the decree of the court below sustaining the demurrers and dismissing the bill. The contention of the appellant is that the State Hoads 'Commission is an agency of the State, against which a suit to recover damages for the alleged breach of its contract with the plaintiff cannot be maintained, and that unless the juris'diction of a court of equity can be invoked to declare the contract with the McLean Contracting Company null and void, and tO 'compel the Commission to execute the supplemental ■ agreement, without the objectionable features referred.to, and 'to allow the appellant to build the bridge, the appellant will be without any remedy for the loss it will sustain, while it is insisted on behalf of the Commission (1) that its immunity -from suit is absolute, and that in the absence of statutory authority, the Commission cannot be sued, either in law or in equity, and (2) that, if this contention is not sound, the plaintiff has a complete and adequate remedy at law for breach of its contract. Prior to its amendment by Chapter 536 of the-Acts of 1916, Section 78 of Article 91 of the Code provided that the '¿ircuit court of any county where